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PO Box 233, Colchester, VT  05446

Phone: 802.876.6200

Email: info@homebuildersvt.com

LEGISLATIVE COMMITTEE BLOG


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  • 04/08/2022 5:37 PM | Anonymous

    Contractor Registry -

    The contractor registry continues on a wayward journey. Governor Scott vetoed a stand-alone bill in February, arguing that the dollar amount in time and materials for a job that would trigger registration was too low ($3,500). Too many small-time contractors would be over-burdened with registry requirements.

    But, the registry was revived when the Senate Economic Development Committee took a different tack and attached the same language to the “must pass” Omnibus Housing Bill. 

    The Governor had been sending signals that his line-in-the-sand amount for registration was $10,000. Last week, in a clear sign of compromise, Democratic and Republican Senators offered an amendment to the housing bill on the Senate floor that raised the registration threshold to $10,000. The trigger for requirement of a written contract is also raised to that amount. Other registry language remains the same, including proof of adequate liability insurance. 

    Now the bill moves through the House. The registry is only one section of an important bill loaded with initiatives to address Vermont’s housing crisis (see below). VBRA’s advocacy has been instrumental in keeping the registry moving forward and will stay engaged. 

    Act 250 -

    Having already passed out of the Senate, the House now begins deliberation of S.234, the Act 250 bill. The bill shares language with the Omnibus Housing Bill that attempts to ease restrictions on development in areas of downtown flood hazard zones where there is pre-existing development. It also extends Priority Housing Projects to designated Neighborhood Development Areas and increases the allowable number of units from 25 to 50 in towns under 6000 population. PHPs are development projects that are exempt from Act 250 review if they are located within a Designated Program area and meet affordability requirements. 

    S.234 also creates new definitions of “forest blocks” and “connecting habitats” intended to address forest fragmentation and sprawl into the states forested regions. Presently, the bill contemplates a new jurisdictional “road rule” that would trigger review in these forest blocks. The road rule says Act 250 is triggered for any road or driveway designed over 800ft., or for any combination of roads or driveways over 2000 ft. In lieu of the road rule, the committee has also discussed an elevation trigger of 1500ft as a possible jurisdictional alternative. 

    The Administration has expressed serious concern over inclusion of the road rule, arguing it may not provide the level of protection proponents desire – developers will still figure out ways around the rule,  and it could even discourage thoughtful, appropriate development. Rather, to encourage development away from forests and into already developed areas, the administration has proposed Act 250 exemptions for downtowns, neighborhood development areas and village centers who have earned Designation Program status. 

    VBRA supports Act 250 exemptions for areas with a high level of local review. Local planning and zoning professionals provide a level of oversight that doesn’t need duplicative Act 250 processes that add cost and time to projects. The Senate and House Natural Resource Committees have been reluctant to adopt exemptions for Vermont’s designated areas. Please consider reaching out to legislators on your district with support for these initiatives. 

    Housing -

    As mentioned above, Omnibus Housing Bill S.226 has also made its way to the House. In addition to the municipal zoning changes related to infill development and PHP language (also seen in S.234) and the contractor registry, the bill has several programs and appropriations designed to spark housing:

    • Changes to the restrictions a municipality may put on the development Accessory Dwelling Units.
    • Programs for first-generation homebuyers, manufactured housing and affordable housing tax credits.
    • Matching grants for large employer housing and commercial property conversion. 
    • Additional grant money for municipal bylaw modernizations. 
    • An extension to NDAs for the successful Downtown and Village Center Tax Credit Program.

    S.226 also exempts a project that receives a water/wastewater connection permit from a local municipality from needing to obtain a duplicative State permit.

    The interplay between the similar language in S.226 and S.234 still needs to be ironed out. 

    Workforce Development -H.703 is the Omnibus Workforce Development bill. It has passed the House with almost $42 million in spending and is now taken up by the Senate Commerce Committee. Specific to contractors, it contains:

    • Work-based Learning and Training Program - $1,500,000
    • Vermont Trades Scholarship Program - $3,000,000
    • Vermont Trades Loan Reimbursement Program $500,000
    • CTE Construction and Rehabilitation Experiential Learning Program; Revolving Loan Fund - $15,000,000.

    More detail can be found in this fiscal note. Many of these programs may be changed or combined as budget pressures become more apparent, and there will be opportunity for VBRA to testify on the current needs in the industry.


    RBES Update -

    The Vermont Department of Public Service will soon begin updating Vermont's Residential Building Energy Standards (RBES) and Commercial Building Energy Standards (CBES), with the target effective date of Fall or Winter 2023. The code update process will include multiple opportunities for stakeholders to provide input and feedback. 

    Vermont's Building Energy Standards set minimum efficiency requirements for new and renovated buildings. The standards are designed to reduce energy use and emissions over the life of a building, saving money in the long term and helping Vermont meet its climate goals. 

    There will be two RBES public stakeholder meetings and two CBES public stakeholder meetings, coordinated with the Energy Futures Group, taking place in April and late May and will be held remotely.  To participate please contact Liz Bourguet at the Energy Futures Group (ebourguet@energyfuturesgroup.com) with any questions. 

    Golf! 

    We have a date for the Annual VBRA Golf Tournament! Friday, September 16th 2022!  This year’s tournament will again take place at the beautiful, family run Cedar Knoll course in Hinesburg, VT. It’s never too early to start practicing your swing! Save the date and stay tuned for more info.


  • 05/27/2021 12:28 PM | Anonymous

    Full report here

    Business

    The unemployment bill formerly known as S.10 - Business owners had their most challenging year in memory. Many hoped that the legislature, knowing this, would have sought to offset their challenges. Unfortunately leveling unemployment tax rates was considered by some to be too much help.  

    State taxing of 2021 Payroll Protection Program funds - Mid-session, the legislature passed H.315, which, among other things, exempted taxes on 2020 PPP but placed a state tax on 2021 PPP forgiven loans.  

    State Economic Recovery Grants limp across the finish line - Businesses, particularly those in the hospitality sector, were hit hard this year. The Governor’s Executive Order severely curtailed their ability to earn a living and for the events industry – shut them down altogether.  

    Economic development bill cut and pasted into budget - H.159 turned into the session’s Christmas tree bill for economic development. Originating as a stand-alone bill, the legislation funded a variety of economic development initiatives with one-time infusions of ARPA and general fund money. As the clock ran out on the session, most of the provisions were salvaged by being folded into the budget bill H.439.  

    Miscellaneous tax bill federal tax link ups and TIF District language - The miscellaneous tax bill was one of the last bills agreed to at the end of the session, when the House asked for agreement to add their proposed property yield tax back into H.436 in exchange for an agreement to reserve $14 million of the Education Fund in the budget bill for OPEB pending the Pension Task Force’s actions this summer.  

    Property transfer tax fails despite language in two bills - H.437, a miscellaneous revenue bill previously passed by the House, contains a tax surcharge on the sale of property transferred above $1 million. Currently, properties sold in Vermont (with exceptions) pay a 1.25% transfer tax plus a 0.2% clean water surcharge. An additional 0.5% surcharge would be added to properties over $1 million. The bill also expands the sales tax exemption on manufacturing equipment, and expands an affordable housing credit for manufactured homes. The bill, however, failed to advance out of the Senate.  

    Rental registry bill held up in the last day - Objecting to a registry to monitor rental properties, the minority party in the House refused a procedural suspension of the rules on the last day of the session, which prevented S.79 from passing this year. This is an ambitious bill that included a new short-term rental registry requirement for those who operate unlicensed businesses renting out property on sites such as Airbnb or VRBO. 

    Banking bill requires study of annuities -  S. 88, the insurance, banking and securities bill, requires a report and findings on the effect of raising the interest floor paid to people on forfeited annuities. Currently, under state law, a person surrendering an annuity would receive back what they’ve paid in (minus what they’ve received or loans taken against it) plus interest. The interest is calculated as the Federal Reserve Rate minus 1.25 percent, but no less than 1 percent. The 1 percent floor has kicked in due to low interest rates, the banking and securities industry is pulling back from providing annuities due to the poor economics of the product.


    Read about more business legislation

    General Government

    Covid relief bill becomes law without full support of governor - The legislature took several months at the beginning of the session to draft and pass a covid relief bill in advance of the big budget bill. The bill, H.315, is a $100 million relief package that starts spending some of the $1 billion of American Rescue Plan Act money on its way to Vermont.  

    Big Budget - Before adjourning the first ever fully remote session, the legislature passed a $7.35 billion state budget for FY22 with almost $600 million of federal covid relief fund spending. Budget committee of conference deliberations were complicated by the Treasury’s release of the Interim Final Rule for ARPA spending.  

    Contractor registry stalls - In a flurry of activity during the last days of the session, H.157 passed out of three senate committees and survived second reading with a 20-10 vote. However, the bill stalled before the final vote over the uncertainty of gaining approval from the House on a last-minute amendment exempting businesses that are already licensed or registered by the Office of Professional Regulation or the Department of Public Safety. The bill will remain in the final stages of passage when the legislature convenes next.  

    Low-alcohol spirits will have to wait - Passed by both chambers, H.313 allows for the continued temporary sale of alcoholic beverages by delivery and curbside pickup, creates a new “stand-alone” third class license for establishments that only sell spirits, clarifies requirements for festival permits which are needed for any event that is open to the public and lowers third-class license fees for manufacturers of spirits.


    Read about other general government updates

    Climate, Energy and Technology

    Communication Union Districts get their chance with broadband - The legislature passed H.360, which appropriates $150 million towards the goal of universal high-speed internet access, establishes the Vermont Community Broadband Board, and hires an Executive Director to carry out the task of achieving universal coverage. The Board is comprised of five members: two appointed by the Governor; one by the House Speaker; one by the Senate’s Committee on Committees; and one by the Vermont Communications Union District Association.  

    Investments in energy and climate - The budget bill contains multi-year funding priorities for ARPA including $250 million for climate change mitigation. Of that $250 million, a total of $50 million and $4.5 million in general fund (highlights below) was committed for FY 2022 for thermal efficiency including weatherization incentives, workforce development and to develop an ongoing, accessible financing model.  

    Transportation electrification - The transportation bill includes provisions to reduce greenhouse gas emissions in the transportation sector and expand the state’s fleet of electric vehicles and chargers.  

    Energy storage bill - Energy storage is increasingly deployed in conjunction with renewable energy and to help control the balance of supply and demand on the electric grid. A bill that provides regulatory and taxation structure for the burgeoning use of energy storage in the state’s electric system made it to the finish line. H.431 includes statutory definitions of energy storage and aggregation and clarifies that development of energy storage facilities are governed under Title 30 section 248 similar to other electric generation facilities.


    Read more

    Education

    The year in education - This year in education was marked by students learning remotely, a focus on planning for learning recovery, and on the large amounts of federal money coming to schools.  

    School facilities and radon testing mandate - A bill to assess public school facilities and move towards state support of school buildings through bonding or other funding has been a longstanding priority of the Superintendents Associations and other public school stakeholder groups. Vermont is one of the only states with no state-sponsored ongoing support for its public schools’ physical plant. And many school buildings have suffered from deferred maintenance.  

    PCBs in schools - The legislature added a requirement in the budget bill for all schools built or renovated before 1980 to test for PCB (Polychlorinated Biphenyls) levels by no later than 2024. PCBs were widely used in construction for caulking and other masonry materials through the 1970s. The bill allocates $4.5 million in the Environmental Contingency Fund for the Department of Environmental Conservation for testing, and an additional $500,000 to the Department of Health. 

    Improving literacy - Literacy outcomes are considered a cornerstone of general education and special education. Act 28 provides $3 million and technical support to supervisory unions to improve literacy outcomes and encourages schools to use their ESSER funds for this work. The bill also encourages addressing Covid-related learning loss through summer learning and comprehensive afterschool programs.  

    Integrative services in schools - H.106 creates a pilot program and provides $3 million for public schools to become “community schools” that incorporate integrated services to address out-of-school barriers for students who struggle. Community schools may  provide access to services such as medical and dental care, mental health services, or access to counselors who can assist with basic needs such as housing or transportation.  

      
    Read more


  • 05/07/2021 11:24 AM | Anonymous

    Legislative Chess

    It’s the time of year when the legislature plays chess. Sometimes it even plays speed chess, with programs, initiatives, and tax code changes flying in and out of bills as they move back and forth between chambers. Each chamber attempts to position its priorities to its best advantage, sometimes by holding the other chamber’s priorities as hostage.

    A House committee may remove a section of a bill that its Senate counterpart spent months discussing. And vice versa. A committee may also attach one of these pieces to a different bill, using it as a “vehicle” to shore up its chances of survival. In non-COVID times, legislators play a version of three-dimensional chess, with players sitting on different floors in the Statehouse working their own individual chess boards.

    When a bill goes to conference committee, the opponents finally sit across from each other and the gamesmanship gives way to final decisions.

    Bill provisions that are of existential importance to an association or company can be deleted at the blink of an eye. What may seem like a callous disregard for the work that went into those bills – the days of testimony and hours of committee deliberation, the effect it has on individual lives and businesses – it is not personal. It’s likely just positioning in the game of legislative chess.

    Vermont Legislative Update Quick Links

    Business

    General Government

    Energy & Technology

    Environment

    Education

    Business

    Unemployment insurance – The House Commerce and Economic Development Committee passed an unemployment insurance bill, S.10, on a vote of 8-2-1. The committee removed 2020 from the UI Trust Fund calculation and removed the Senate's proposed $50 dependency benefit. There is no rate freeze, so employers will pay UI taxes using Schedule 3 next year and Schedule 4 for two years.

    Committee Chair Michael Marcotte, R-Coventry, summarized his committee's changes by saying that eliminating 2020 is not a benefit to employers. It is an adjustment to the UI Trust Fund formula due to the anomaly created by the pandemic. He added that the trust fund is in a $300 million hole, and this has to be repaid by employers. To dig a deeper hole by adding a dependency benefit is unwise at this time. He also felt that childcare issues are best considered by the House Human Services Committee.

    Some still believe that employers are getting a better "deal." Employers who struggled through this pandemic are still responsible for replenishing this $300 million through no fault of theirs. Employers are not benefiting from this change. To say otherwise is disingenuous.

    2021 PPP Taxability – Senate Finance has added language to H.436 in Section 25 that repeals taxes on 2021 forgiven PPP loans.

    Guidelines for bridge grants for "gap" businesses – Among eligibility requirements for bridge grants for “gap businesses, a company will have had to show a tax loss in 2020. That loss will be the ceiling for the grant it may receive. Further guidelines can be found here.

    Economic recovery grants – The Senate is poised to pass limiting language for further recovery grants for businesses in H.159. As with bridge grants for "gap" businesses, to be eligible a business will need to demonstrate a 2020 tax loss. The Senate Economic Development Committee considered the grant formula this week. Sen. Clarkson, D-Windsor, and Sen. Ram, D-Chittenden, wanted more targeted and increased funding for lodging, wedding and events businesses since they were the hardest hit. Sen. Sirotkin, D-Chittenden, said this could be considered in the conference committee.

    There is more than $500 million in unmet need since the government's enforced curtailment of business activities, but the Senate has only allocated $20 million for recovery grants. The health of Vermont's hospitality sector now lies with decisions that the House will make.

    Economic development – The Senate Economic Development, Housing and General Affairs Committee has given initial approval to H.159, an omnibus economic development bill. The bill has become this session’s Christmas tree for economic development provisions. Two significant additions were added this week: a Capital Investment Grants program and economic recovery grants for businesses. Capital Investment Grants are for projects intended to be “transformational” to a region. The $11 million program would be capped at $500,000 per project, prompting concerns from committee members that the awards would not be large enough to have the kind of impacts that are envisioned. Twenty-million dollars would be earmarked for economic recovery grants distributed by the Agency of Commerce and Community Development. As ACCD develops a model for grant eligibility, business groups have expressed concern that the tax-return-based formula will exclude many businesses still suffering due to COVID-19.

    Municipal Bylaws Modernization  S.101 began as a bill to encourage housing development by incentivizing municipalities to update planning bylaws, extending a downtown and village center tax credit program to neighborhood development areas, and eliminating a requirement of duplicative and costly state wastewater connection permits. This week, citing the need for more testimony, the section on wastewater permits was removed by the House Natural Resources, Fish, and Wildlife Committee, and the House Ways and Means Committee abruptly removed language expanding the tax credit program. Language that currently exists in H.437 that is being considered by the Senate Committee on Finance – a new property transfer tax surcharge on home sales greater than $1 million and a manufactured home credit – was added to S.101 as an alternate path for the language in case the Senate committee does not approve H.437.

    Contractor registry – A bill to create a contractor registry, H.157, has been taken up by the Senate Economic Development, Housing and General Affairs Committee. Passed by the House after contentious debate, the bill calls for the modest step of registration for the state’s currently-unregulated builder and contracting profession. Any contractor who performs a residential building or renovation project that will exceed $3,500 in time and materials must register with the state every two years. A written contract and maintenance of liability insurance are also required. Representatives of the Vermont Attorney General’s office, the Office of Professional Regulation and the Vermont Licensed Plumbers Association all testified in support of the legislation. The committee will continue taking testimony next week.

    Tax increment financing districts – The House Ways and Means Committee continued consideration this week of S.33, a bill relating to tax increment financing districts. Advocates spoke in favor of giving TIF’s a three-year extension due to the effects of the pandemic. Development has been slowed by increased material expenses, a shortage of contractors, and potential changes in building use and design due to societal changes caused by the pandemic. The federal government recognized the need to allow time for project completion as reflected by the lengthy timeline for ARPA spending.

    The committee has not yet decided whether TIF Districts will be able to use the proceeds of debt to pay for debt service interest payments for a period of up to five years.

    A pilot for project-based TIFs that would have benefited smaller municipalities was previously stripped out by the House Commerce Committee.

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    Generall Government

    Revenue bill – The Senate Finance Committee continued consideration this week of H.437, the revenue bill, but pulled up short of voting the bill out on Friday. As passed by the House, the bill includes three changes: a 1.75% property transfer tax surcharge on properties worth more than $1 million, clarifications for the sales tax exemption on manufacturing machinery, and an affordable housing credit for manufactured homes. Fiscal Analyst Graham Campbell told the committee the bill is expected to increase overall state revenues by $950,000 in FY 2022, $600,000 in FY 2023 and $250,000 in FY 2024. This impact would be split between the General Fund and Education Fund. The committee paused on their consideration of the bill when they discovered that the House Ways and Means Committee had also added the property transfer tax and the manufactured home credit to S.101.

    Miscellaneous tax bill – The Senate Finance Committee is ready to vote out H.436, the Miscellaneous Tax bill, tomorrow afternoon. With a straw poll, the committee agreed unanimously to repeal language that makes Paycheck Protection Loans taxable. With the change, Vermont would follow federal tax law. The committee also agreed to link up State law to federal tax changes that expand the Earned Income Tax Credit and Child and Dependent Care Credit. The Joint Fiscal Office suggested that the lost tax revenue from the federal linkups could be paid for by ARPA funds due to recent Treasury guidance.

    Post-pandemic Statehouse procedures – The House Rules Committee reviewed a draft resolution to extend the state of emergency and approve remote voting through May 22, 2021 and any subsequent 2021 veto session. The resolution would authorize the committee to adopt procedures for the House to meet, debate, and vote remotely or in a hybrid manner as pandemic-related circumstances require. Members generally support the resolution’s intent and will continue to prioritize public health and safety as their top concerns as they consider next steps.

    Pension reform – The Senate passed H.449, an act relating to the membership and duties of the Vermont Pension Investment Commission and the creation of the Pension Benefits, Design, and Funding Task Force, in concurrence with the latest House proposal of amendment on Thursday. The bill proposes governance changes and best practices to address the state’s $5.6 billion unfunded public pension liabilities that resulted from underfunding, inaccurate return projections, low fund performance, demographic shifts, and healthcare and other retirement costs.

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    Energy & Technology

    Broadband deployment – The Senate Finance Committee unanimously supported a strike-all amendment to H.360, a bill to expand broadband deployment, on Wednesday evening. The committee amendment proposes to reorganize the House bill’s Vermont Community Broadband Authority as a three-member Board and expand grant program eligibility to include small communications carriers in addition to communications union districts. The Senate Appropriations Committee moved to strike the bill’s appropriations section—after confirming that the $100 million ARPA appropriation is included in Sec. G of H.439, the “Big Bill”—and voted unanimously in favor of the bill as amended.

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    ENVIRONMENT

    Water infrastructure – Department of Environmental Conservation Commissioner Peter Walke presented an overview of the state’s $1.9 billion “universe of need for water infrastructure” to the Senate Natural Resources Committee this week. Walke distinguished two of the largest areas of need – wastewater repairs and upgrades ($490 million) and drinking water repairs and upgrades ($374 million) – as already having some existing funding sources and aligning with the anticipated guidelines for the pending American Jobs Act. Other identified areas, such as stormwater-impaired waterways, mobile home park water and wastewater repairs and work on state-owned and privately-owned dams, are, as of yet, unfunded and were included in the governor’s proposal for federal ARPA spending.

    The estimated cost of complying with the state’s 3-acre stormwater regulations is $260 million based on 5,320 total acres and an average retrofit cost of $50,000 per acre. This includes a mix of public and private lands. The funds allocated in the governor’s ARPA proposal would provide engineering support for 3-acre sites to help landowners anticipate construction costs and design projects to meet DEC requirements.

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    Education

    Public tuition for religious schools – The thorny and complex issue of public tuition for religious schools returned to the Senate Education Committee this week. Legislative counsel Jim DesMarais walked legislators through legal principles and analysis of tuition for private religious schools, laying out the sometimes-conflicting case law and constitutional issues. A recent article drew lawmakers’ attention to the fact that Agency of Education guidance to school districts had been quietly rescinded, leaving a gray area. The guidance explained how districts may provide tuition for religious schools by requiring schools to submit certification that public funds were not used for religious instruction or worship. The committee was told that AOE had withdrawn the guidance at the request of the State Board of Education to help settle active litigation.

    The Senate has asked for input from the attorney general on legal options, which may provide some clarity about next steps for legislation. On the other hand, committee chair Brian Campion D-Bennington, said the subject matter is so complex that the Judiciary Committee ought to look at it, and it might be better handled in a summer study committee.

    Radon testing in schools – The Senate has approved H.426, a bill to address public school facilities and construction issues across the state. The bill appropriates $4 million to conduct an assessment of school facility needs and costs. An independent third-party contractor will help schools coordinate pandemic-related health and safety facilities improvements. One-million dollars is available to supplement funding needs for schools to undertake improvements. The Senate added a new requirement for schools to conduct radon testing and report results to employees and students. Senators said that timing for the unfunded mandate was right because schools are receiving federal funding through ESSER.

    The bill contains a new grant program for renewable and efficient heating systems for public and approved independent schools, with the funding source to be decided during the 2022 session.

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  • 04/04/2021 7:58 PM | Anonymous

    Controversial unemployment insurance bill continues on bumpy road

    A controversial unemployment insurance bill that included expanded worker benefits was sent to the Senate floor several weeks ago. In response to strong opposition from Vermont’s business community, the bill was pulled back into the Senate Committee on Economic Development, Housing and General Affairs for revisions. The Committee’s amended bill passed the Senate on Tuesday by a vote of 18-12.

    S.10 freezes employer UI tax rates at Schedule 1 (the lowest UI tax rate for businesses) and removes a proposed 20% increase in weekly UI claimant payments. A new $50 dependent benefit will take effect when the federal COVID UI aid ends and will sunset in 5 years.

    The bill includes a confusing plan to "pay back" employers for their one-year rate freeze using UI trust funds. Since employers fully finance this fund, Sen. Randy Brock, R-Franklin continued to argue that this pay back is not a benefit.

    The formula to calculate the necessary UI Trust Fund balance uses a 10-year average of UI rates. The business community sought to remove 2020 from the formula, arguing it is an anomaly and skews the calculations to require excessive employer contributions. Instead, S.10 includes a study to determine the appropriate balance.

    Sen. Michael Sirotkin, D-Chittenden, intends to take up the issue next year. He said that any recommended UI tax decrease is an “employer benefit,” and therefore UI recipients will need to receive additional benefits as a quid pro quo.

    S.10 now moves to the House Commerce and Economic Development Committee for further work.

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    House Speaker abandons initial pension proposal

    Speaker of the House Jill Krowinski, D-Burlington announced this morning that she was abandoning the initial plan for pension reform that had been put forth by the House Committee on Government Operations. In response to overwhelming reaction from anxious teachers, state employees, and unions who have urged legislators to slow the process down, Krowinski acknowledged a need to engage with interested constituents before making any final pension plan changes.

    The Speaker charged the Committee with establishing a task force to address revenue increases, plan design, benefit changes and employee contributions. The Committee’s proposed $150 million infusion into the system will be held in reserve until legislators are prepared to address healthcare benefits.

    Committee Chair Sarah Copeland-Hanzas, D-Bradford, said that the legislature cannot “in good conscience commit the general fund” to future fund payments until the state puts the pension liabilities on a more sustainable path.

    The Committee will continue its pension governance work using recommendations from State Treasurer Beth Pearce and Vermont Pension Investment Committee Chair Tom Golonka. Under those recommendations VPIC would assume sole responsibility for setting actuarial assumptions, including the investment rate of return, inflation rate, and the smoothing method used for calculating actuarial valuation of assets or returns. The recommendations focus on four fundamental principles: (1) VPIC continuity; (2) equal representation; (3) transparency; and (4) independence from the Treasurer’s office.

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    “Fast-track” budget bill slowed by disagreement between House, Senate and Administration

    The so-called “expedited budget bill” took a route this week like a vehicle on a Vermont back road in mud season as it got deeply mired in conflict between the House, the Senate, and the Scott administration.

    H.315, a bill intended to fast-track funds for COVID-related needs, passed the House with $62 million in appropriations, but left the Senate with a $128 million price tag and two additional funding sources – the federal American Rescue Plan Act (ARPA) and the Elementary and Secondary Emergency Education Relief (ESSER). In advance of receipt of the federal funds, the bill authorizes the Commissioner of Finance and Management to make anticipated receipt expenditures.

    When the House Appropriations Committee took up the bill at the beginning of the week to begin working out the Senate and House differences, Commissioner of Finance and Management Adam Greshin told the Committee that the use of federal funds was very premature and risky without detailed guidance from the Department of Treasury.

    Greshin added that the Senate’s use of ARPA funds was “a poke in the eye to the administration and to [him]” because the legislature has directly interfered with the administration’s authority to allocate and expend funds through the statutory excess receipts power. Nonetheless, the Committee agreed with the Senate’s use of ARPA funding where possible, stressing the need to preserve more flexible general fund dollars.

    As the week went on, House policy committees wrestled with their Senate counterparts over differences in the bill, mostly offline and out of public view—in apparent violation of the state’s Open Meetings Law. By Friday afternoon, a draft strike-all amendment was reviewed and approved by the House Appropriations Committee on a vote of 10-1-0, after the Senate Finance and House Ways and Means committees came to an agreement on tax link-up language that exempts Paycheck Protection Program loans from tax deduction eligibility.

    The behind-closed-doors discussions between the House and the Senate ensure that the House proposed strike-all amendment will be accepted by the Senate and a committee of conference will be unnecessary.

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    Gap grants for businesses hit a snag

    The slowdown of the “expedited budget bill,” H.315, is impacting one group in particular. The House approved the administration's request for $10 million in grants for businesses that missed out on previous federal and state recovery grants due to eligibility rules. Any funds remaining would be available for a second category of businesses that received de minimus amounts of federal aid.

    The Senate removed assistance for the second group, which has left many Vermont small business owners without hope of a lifeline. Many are going deeper into debt as they await an announcement of Governor Scott's reopening plans.

    The House and Senate are working out their differences based on a House amendment made behind the scenes that made it impossible for those affected to follow their discussions. COVID stress affects more than people's physical health, and it will take some people years to climb out of the economic hole the pandemic shutdown has created.

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    Senate takes up curbside alcohol sales

    The Senate Economic Development, Housing and General Affairs Committee had its first look this week at H.313, a bill proposing miscellaneous changes to alcoholic beverage laws. Passed out of the House last week, the bill allows for the continued temporary sale of alcoholic beverages for delivery and curbside pickup.

    Introducing the bill to committee, Rep. Matt Birong, D-Vergennes, addressed the issue of packaging for mixed drinks that do not come in a bottle with a cap or cork. When accompanied by a food order, restaurants and bars will be able to sell alcoholic beverages for delivery and curbside pickup that have a securely affixed tamper-evident seal, a label that states that the beverage contains alcohol, and a listing of the ingredients and serving size. The temporary measure would last for two years.

    The bill also creates a new “stand-alone” third class license for establishments that only sell spirits and removes a prohibition on waitstaff sampling of alcoholic products while on duty for purposes of product familiarity.

    Finally, the bill clarifies requirements for festival permits which are needed for any event that is open to the public for the purpose of serving alcoholic beverages. The bill includes different limits for malt and vinous beverages, fortified wines and spirits. A festival goer could be served up to five 12-ounce beers at an event and not more than a combined total of six U.S. standard drinks containing 3.6 fluid ounces or 84 grams of pure ethyl alcohol.

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    In the news

    House Speaker drops pension plan after public backlash

    Governor Scott names cannabis control board members

    Senate chairperson shuts down public meeting

    Biden’s infrastructure plan could mean even more money coming to states

    Governor announces 168 appointments to state boards and commissions


  • 02/26/2021 5:59 PM | Anonymous

    Childcare bill becoming a heavy lift

    The House Committee on Human Services is working through H.171, a bill that would create a comprehensive child care system governed and subsidized by the state. The system would take several years to establish. The work began in earnest last year.

    There are two critical studies in the bill. The first is the creation of an Early Care and Education Systems and Administration Advisory Committee which would ultimately advise relevant state agencies regarding the delivery of appropriate services. This 20-member committee would include representatives of three business-related representatives: the Vermont Business Roundtable, the National Federation of Independent Businesses, and Vermont Businesses for Social Responsibility.

    An Early Childhood Financing Study calls for the State Treasurer, Auditor, Joint Fiscal Office, Commissioner of Finance, and the Commissioner of Taxes to deliver a comprehensive report determining a reliable funding source to pay for the program.

    The House Ways and Means Committee took up this portion of the bill this week and heard from the Auditor, who said he wasn't an appropriate person to participate. The Treasurer agreed to participate but couldn't lead the effort. Joint Fiscal Office said it would provide a critique but would not make decisions or recommendations, and the Commissioner of Finance agreed to participate. The committee discussed the scope of work for the study and expressed concerns about the group's ability to complete its charge in the given timeframe.

    There is a March 19 deadline to move the bill to the Senate, and the legislature is on break next week. Clearly, there is a lot to do in the next two weeks.

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    Limited reopening guidance for the hospitality sector

    Representatives from the Vermont Lodging Association, the Association of Wedding Professionals and events businesses met with the House Tourism Caucus last week. They expressed their frustration with the lack of reopening guidance from the Governor's office. Without this information, the hard-hit hospitality sector will lose its spring and summer business. They need to know by March 1 so they can begin scheduling events. The group has repeatedly told the legislature and governor’s office that they need lead time to schedule, prepare and hire staff. In the meantime, their clients are canceling plans and going to other states.

    Legislators were very receptive and agreed to send a letter of support to the Governor. Hours later, the Secretary of the Agency of Commerce and Community Development sent a memo to hospitality companies stating that businesses can book summer events with a limited capacity of 75 people indoors and 100 people outdoors. While not a help for larger events, it is a start. Secretary Kurrle said the new rules could change if there is a spike in cases or if unforeseen problems arise with vaccinations.

    In the meantime, Congress is finalizing its next and likely last relief bill that includes money the state can use for additional business grants, which continue to be desperately needed. Since last March, many hospitality businesses have been shut down, and their previous grants only helped to pay fixed costs through September. Businesses have struggled with mounting debt and cancelled reservations. COVID has impacted the mental and physical health of more people than those who contracted the virus.

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    COVID Relief Bill on the move

    In an unusual move, the House passed an expedited budget, aka CRF bill, aka COVID relief budget, aka pre-budget bill. For simplicity's sake, we will call it H.315, and highlights are here.

    As its many names imply, the bill has drawn confusion in the legislature. It has been under consideration in multiple committees in the House and Senate, while only the House Appropriations Committee had possession of the bill. This is a unique and somewhat disorderly process, but COVID has created a unique and disorderly year. H.315 appropriates $48.9 million in one-time general funds and $13 million in Coronavirus Relief Funds, and reallocates $17.2 million in earlier CRF money.

    Ten million dollars is provided in economic recovery grants for businesses that didn't qualify for state or federal pandemic aid among the earlier allocations. This line-item is being met with skepticism in the Senate, so work remains to ensure that these businesses receive the lifeline they need to survive the economic shutdown.

    The next round of federal aid should arrive in Vermont in the next few weeks. The American Rescue Plan Act of 2021 is expected to deliver about $1 billion to Vermont and will be one more hurdle for the legislature that is still hoping to adjourn in May. Never has the state been challenged with spending so much money in so little time, all of it via Zoom. The post-COVID research on how the influx of spending affected the state will take years to compile.

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    Welch tells Vermont lawmakers to get ready for more relief

    Congressman Peter Welch addressed members of the Vermont House and Senate appropriations and revenue committees on Thursday to convey details of the new federal COVID relief bill. The U.S. House is expected to vote on the $1.9 trillion package on Friday. Welch said uses of the funds will be much more flexible than the CARES Act, although spending must still be tied to COVID. It will not require a date certain by which funds have to be spent–a big difference from prior COVID funding.

    Many economists have said that when it comes to recovery spending it is best to err on the side of more, and the bill is intended to put states on the road to economic self-recovery once the country reaches herd immunity and states are ready to open up again.

    Vermont is expected to receive $960 million in state and local aid. Provisions in the bill include:

    • Small business relief, summary here
    • Individual checks of $1,400 for income-qualified individuals
    • Extended federal unemployment benefits
    • Funding for vaccines and contact tracing
    • Money for reopening schools
    • Rental assistance

    Sen. Randy Brock, R-Franklin, who has long been a champion of broadband expansion, asked Welch if the new bill will allow for a more long-term spending approach that could foster financing options for building out broadband throughout the state. Brock expressed frustration that lawmakers were being given significant funds but their hands were tied by restrictions when they try to make meaningful long-term investments. Welch acknowledged the challenge but said the bill is COVID-focused. The Congressman said there would likely be an infrastructure bill coming that will contain funding for broadband buildout.

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    Vermont Supreme Court defines “reasonable regulation” of firearms

    The Vermont Supreme Court recently upheld the constitutionality of the state’s ban on large capacity magazines, defined as ten rounds of ammunition for long guns and fifteen rounds for hand guns as part of Act 94 of 2018. That law also required background checks for private sales of firearms to close the so-called “gun show loophole.”

    The Court found that the magazine ban does not violate Article 16 of the Vermont Constitution, which provides that “the people have a right to bear arms for the defence of themselves and the State.” According to the Court’s decision in Vermont v. Misch, “…the proper standard for Article 16 challenges is a reasonable-regulation test.… [W]e will uphold a statute implicating the right to bear arms provided it is a reasonable exercise of the State’s power to protect the public safety and welfare.”

    This is the first time the court has defined the scope of the right to bear arms under Article 16 and set forth the standard to determine whether a law infringes on that right. Legislative counsel walked through the court’s decision with the House Judiciary Committee and its potential precedence for gun legislation.

    Legislative counsel further told committee members that the decision is more deferential to state legislatures than the standards federal courts have used in analyzing Second Amendment challenges.

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    Broadband bill approved by committee

    The House Committee on Energy and Technology voted unanimously this week to pass an accelerated community broadband deployment bill. The bill establishes the Vermont Community Broadband Authority to facilitate the formation and expansion of Communication Union Districts throughout the state, appropriates one-time money towards various broadband connectivity programs, and transfers state-owned fiber assets to the CUDs.

    A key section of the bill involving lending from the Vermont Economic Development Authority was removed. As written, State Treasurer Beth Pearce and VEDA had trouble supporting the bill’s proposed program increase from $10.8 million to $36 million. VEDA is the lender under the current program, but the organization itself does not take deposits. Before moving forward, VEDA’s own primary lender, a private financial institution, requires further negotiations regarding ownership of the moral bonding and loan loss authority under those provisions.

    Committee Chair Tim Briglin, D-Thetford Center, stressed that approval of the bill without language expanding the size and scope of the existing program is temporary. After the town meeting break the committee plans to take further testimony from VEDA and the Treasurer and may offer an amendment to restore increases to the broadband program.

    The bill also establishes the VCBA’s board of directors, authorizing two public persons selected by the Vermont Communications Union District Association and one person appointed by the Governor. An eligible public member may not have a financial interest in, or be an employee or governing board member of, an Internet service provider or CUD to serve on the board.

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    Ways and Means takes another swing at cloud tax

    The House Ways and Means Committee this week took up H.261, an act to eliminate the sales and use tax exemption for prewritten computer software accessed remotely, the so-called “cloud tax.” The committee has wrestled with the issue for years, and this week’s discussion highlighted the difficulty of defining the term “prewritten.”

    “Vendor-hosted prewritten computer software” means prewritten computer software that is accessed through the Internet or a vendor-hosted server regardless of whether the access is permanent or temporary, and regardless of whether any downloading occurs.

    A common example is Quickbooks: The bookkeeping software purchased at a store or downloaded from the Internet onto a computer is now a taxable transaction, but a modern version of Quickbooks hosted by the vendor online and accessed remotely–where there is no download–is exempt from sales tax.

    Tax Commissioner Craig Bolio told the committee that the governor does not support repeal of the exemption, citing the difficulty in distinguishing prewritten from custom software. “When does software become custom enough that it would maintain the exemption?” asked Bolio. Abby Shepard from Legislative Counsel responded that custom software is designed and developed by the author to the custom specs of a specific purchaser.

    The committee also discussed a way of defining certain custom software as a manufacturer’s exemption and an exemption for business-to-business transactions.

    Graham Campbell from the Joint Fiscal Office estimated that removal of the exemption would bring in revenues of $9 million in FY 2022, up from a previous estimate of $5 million in 2019, highlighting the fast growth of software as a service.

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    Senate committee considers ambitious weatherization bill

    The Senate Committee on Natural Resources and Energy released a draft weatherization bill on Thursday, while noting that modifications and additions are needed before it’s finalized. Committee Chair Chris Bray, D-Addison, said he is committed to the bill making the cross-over deadline, so committee members will continue to work on the draft over the Town Meeting break.

    As currently drafted, the Vermonters’ Enhanced Energy Savings Act would set a goal of weatherizing 120,000 homes within ten years, establish a thermal energy efficiency charge, and create the Enhanced Energy Savings Study Committee to study the creation of a complete system of delivery for services to reduce the cost of heating homes and businesses while also reducing their greenhouse gas emissions.

    The study committee would also be charged with examining how to develop and sustain a skilled and well-paid workforce sufficient to meet the State’s building efficiency and weatherization goals.

    Various players in the state workforce development field testified before the committee that substantial effort must be made in recruiting and training in order to meet the upcoming need. Sarah Buxton, State Director of Workforce Development for the Department of Labor, said that career pathway development is key to recruiting and retaining the workforce in the weatherization sector. Buxton also suggested adding apprenticeships and stackable certifications.

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    Omnibus economic development bill

    The House Committee on Commerce and Economic Development took up an omnibus economic development bill that contains language from numerous other standalone bills on Thursday. The committee reviewed several key provisions including: creation of the Better Places Program, expansion of Downtown Village Tax Credits, creation of project-based tax increment financing districts - aka “mini-TIFs,” and changes to the Relocated Worker Program.

    The Agency of Commerce and Community Development also pitched the creation of a Tourism Marketing and Promotion Fund. With the smallest tourism budget in New England, an increased investment will allow the Department of Tourism and Marketing to promote Vermont as a global tourism destination. The source of funds would come from a portion of any excess revenue between forecasted and actual rooms and meals tax receipts, and would be in addition to normal annual appropriations. If receipts failed to meet the forecast in any year, there would be no extra appropriation.

    ACCD also proposed an International Business Attraction and Investment Program. The bill would appropriate $300 thousand for an office in Montreal. The agency reported that small and mid-sized businesses in Quebec have a natural inclination to explore Vermont as the site for expansion in the U.S. market. Increased investments in recruiting international businesses can lead to better wages, more attractive job opportunities, and broaden Vermont’s tax base.

    The tourism department would also like to expand and continue the Buy Local Stimulus Program, a consumer purchase incentive program from 2020. The 2021 program would include restaurants, retail stores, entertainment businesses and attractions.

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  • 02/05/2021 3:20 PM | Anonymous

    Project based TIFs would expand rural redevelopment

    The Senate Committee on Economic Development, Housing and General Affairs is considering S.33, a bill that would allow more towns to apply for project-based tax increment financing. TIFs allow municipal governments to fund new private infrastructure projects through the anticipated tax revenue that results from the new projects.

    S.33 would create a pilot program limited to six projects with a $1.5 million cap per application. This bill was considered last year with a higher limit but was lowered to get the support of the Senate Finance Committee chair. Witnesses testified this week in favor of increasing the cap to at least $4 million.

    Legislators continue to grapple with the so-called “but for” qualifier – the requirement that the town demonstrate that the private investment would not have occurred “but for” the TIF financing. The legislature’s economist Tom Kavet and Auditor of Accounts Doug Hoffer expressed skepticism about the program, arguing that all redevelopment would have happened anyway. A fiscal analyst from the Joint Fiscal Office said that there is no way to make that determination.

    The committee heard from the planning commissioner for the Town of Westford who said the TIF program could help finance a much-needed wastewater upgrade. Brian Carpenter, a Middlebury selectboard member, shared a redevelopment plan for the town center that would provide parking, housing, office space and a reconfigured traffic pattern. Carpenter said S.33 could help finance the redevelopment plan.

    The committee will take more testimony, and the bill is expected to move to the Senate Finance Committee.

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    House considers COVID-relief grants for business outliers

    While the federal and state governments have provided substantial support for many businesses that have suffered financial losses due to the pandemic, some businesses have received no assistance due to eligibility requirements. These outliers include new and very small businesses, as well as some that chose an unfortunate time for expansion. The Agency of Commerce and Community Development has asked the legislature for $10 million to provide a lifeline for these businesses.

    Under the proposal, businesses would be required to show that they were ineligible for PPP and EIDL grants and loans, that they did not receive state grants, and that they filed 2020 income taxes.

    The House Committee on Commerce and Economic Development is currently considering this proposal as ACCD continues to gather information from individual businesses. Their stories provide reminders of the many challenges that businesses continue to face. There is no doubt that more financial aid is needed for many Vermont businesses if they are going to survive the pandemic.

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    Senate panel monitoring state data breach

    The Senate Committee on Economic Development, Housing and General Affairs is closely monitoring a recent breach of data by the Vermont Department of Labor. As many as 44,800 1099G tax forms sent to Vermonters last week included the wrong person’s private information, including names, addresses and Social Security numbers.

    In response, Governor Scott appointed a task force led by Deputy Chief of Staff Brittney Wilson, to work with Labor Commissioner Mike Harrington to address the issue. Wilson reported to the committee on Friday that they have identified the error, where it happened and how it occurred, but are “not going to give the specifics of that because (we) don’t want to start casting blame or get into the nitty gritty of how the data was jumbled.” She said steps have already been taken to improve quality control, including electronic verifications done by the Agency of Digital Services and the Tax Department and electronic and physical verification by Department of Labor staff of the data and the lists used to create the 1099G forms.

    The labor department will mail out postage-paid, pre-addressed envelopes so that 1099Gs with the wrong information can be returned. The state is also procuring a firm to provide complete identity theft protection for those affected. The administration is estimating that the cost of the data breach remediation could be as much as $7 million but is examining what costs the state’s insurance policy will cover.

    The governor also asked Vermont Auditor Doug Hoffer to investigate what went wrong. Hoffer told the committee on Friday that he is likely contracting with an outside firm that the state already works with to perform the review.

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    Unemployment Insurance Trust Fund report shows future rate hike

    The Senate Economic Development Committee reviewed this week the Vermont Department of Labor’s recently released Unemployment Insurance Trust Fund Report. If there is no change to how the tax rate is determined, the historic payout of the trust fund this year and resulting 50 percent fund reduction will triple the tax rate for most employers by increasing the tax rate schedule from schedule 1 to schedule 5.

    In order to prevent a rate hike during the pandemic, Governor Scott is proposing a one-year freeze on the rate schedule and base wage. If the proposal is enacted, the state would collect $110 million from employees, as opposed to $146 million under the current statutory framework. The administration argues that it would help the state’s economy if the $36 million foregone fund revenue remains in employers’ hands to enable them to bring employees back to work.

    The committee will continue to take testimony on the issue, but Chair Mike Sirotkin, D-Chittenden, indicated that he would like relief not only for employers, but employees as well.

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    Senate panel grapples with major changes to school tuition policies

    The Senate Education Committee heard from constitutional law scholar Peter Teachout this week that the longstanding practice of denying tuition to private religious schools may no longer stand.

    Teachout testified that several recent state and federal rulings and an emergency injunction issued on January 22nd require that the state revisit policies regarding tuition to religious and other independent schools. He recommended that districts take immediate action to bring tuition reimbursement policies into compliance with the U.S. Supreme Court case of Espinoza v. Montana Department of Revenue, without violating the Compelled Support clause in the Vermont Constitution. Districts should announce that they will reimburse tuition upon receipt of a certification from the receiving school that the tuition will not “be used to support religious instruction, worship, other religious activity, or the propagation of religious views.”

    The recent rulings suggest that requests for tuition reimbursement from all participating independent schools without regard to religious affiliation or status are valid as long as they can complete the certification. Teachout also said that the state’s dual enrollment program should not be withheld from students attending religious schools, as has been Vermont’s longstanding practice.

    Committee members will consider whether to take legislative action or direct the Agency of Education to require districts to act. Legislators noted that there will surely be more court cases challenging any stopgap measures, and legislative counsel agreed.

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    Building energy labeling the focus of weatherization in senate committee

    In testimony to the Senate Committee on Natural Resources committee, Richard Faesy, Principal, Energy Futures Group, Inc. presented an overview of Act 62, which established working groups to make weatherization recommendations to the legislature. The Residential Building Energy Labelling Working Group sought to create an easy to understand way to convey the entire energy picture of a home, and recommended the use of the Vermont Home Energy Profile label for efficiency rating.

    Faesy argued that energy labeling transparency benefits both the buyer and seller of a home, and that the real estate market values premium energy performance. Under the working group’s recommendation, energy rating information would be consolidated in the HELIX platform, a third-party database that automatically populates home efficiency information into MLS listings. Faesy said the intention of the label is to incentivize investments in energy efficiency, and doesn't believe that a poor rating would necessarily kill a real estate transaction.

    Not everyone who served on the working group agrees. Peter Tucker, Director of Advocacy and Public Affairs, Vermont Association of Realtors, acknowledged the recommendations put forth by the group as a whole, but criticized HELIX’s automated model that uses assumptions to estimate energy ratings. “A poor rating will stigmatize a property and crush its value,” said Tucker. Sen. Chris Bray, D-Addison, questioned whether a bad rating would actually affect the sale price of a home. Tucker replied that last minute investments in a home rarely affect the sale price.

    In his budget address, Governor Phil Scott outlined $25 million in one-time weatherization spending: $20 million to accelerate weatherization in low and moderate-income homes, and $5 million for the State Energy Management Program to help municipalities make efficiency upgrades.

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    House committee wrestles with broadband expansion coordination

    As the state grapples with expanding broadband fiber to underserved and unserved areas of Vermont, the House Committee on Energy and Technology continues to hear testimony from existing private service providers and from newly established Communication Union Districts. The legislature authorized the creation of CUDs to help make high-speed broadband available in areas of the state that may not be financially viable for local for-profit service providers, the so-called “last mile” of customers.

    Most of Vermont’s smaller telecommunications providers rely on a Broadband Expansion Loan Program through the Vermont Economic Development Authority. Loans of up to $4 million may be made and can cover up to 90 percent of project costs. A bill before the committee incentivizes cooperation between CUDs and existing providers by making the VEDA loan program only available to CUDs. If an existing provider needs access to VEDA capital, it must partner with a CUD.

    F.X. Flinn, chair of the Vermont Communications Union Districts Association and ECFiber, testified about the problem facing CUDs: in order to borrow the millions of dollars necessary to complete projects, CUDs must first raise investment capital to show that they are viable. Bond markets often want to see two to three years of financial performance before loaning funds. Flinn said ECFiber struggled to raise $6-8 million in investments before it could get to the bond market. Access to the VEDA program will be necessary for many of the CUDs.

    Addressing concerns from incumbent service providers, Rep. Heidi Scheuermann, R-Stowe, confronted a sense of dismissal of the concerns of existing companies. Scheuermann asked, “How can I assure these folks that a CUD isn't going to come in and compete with them using public dollars that they’re not able to get?” Scheuermann also took issue with any requirement that private businesses must disclose confidential financial information when partnering with a CUD.

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    In the news:

    Weatherization investment in the state

    Treasurer Pearce discusses the troublesome state of pensions

    Department of Labor data breach will result in an investigation

    Biden’s call for a $15 dollar minimum wage stymied by some moderate democrats

    Offensive comments made by Vermont “journalist” at Governor Scott’s press conference results in his ouster from the press call-in list


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