Administration’s Economic Development Proposal – The Commissioner of Economic Development, Joan Goldstein, briefly updated the Senate Committee on Economic Development this week on the administration’s proposals for this session. While she did not present anything in writing to share with the committee, her list included:

  • New and remote worker incentive – Make this a permanent program with an ongoing $1 million allocation. Asking for $5 million in one-time funds to accommodate robust interest.
  • Marketing and network funding – Asking for $8.46 million targeted for marketing to trades, nursing and other occupations that are needed in the state. This would be funneled through the Chambers of Commerce and the Regional Development Corporations and modeled after the Stay to Stay initiative.
  • Project based Tax Increment Financing Program – Expansion of the TIF Program to support projects in small towns.
  • Grand List Enhancement Program – $20 million to support projects in towns that have experienced a decline in their grand list. There are 150 towns that would be eligible and the criteria would be similar to the Capital Investment Program.
  • Capital Investment Program – New ARPA guidelines from the U.S. Treasury mean that many of the 77 applicants for this program may be ineligible. Consultants are still reviewing these new rules for details.
  • VEDA Forgivable Loan Program – ACCD wants to provide business recovery support through a new VEDA program instead of amending the Economic Recovery Bridge Grant Program’s faulty formula. No details were provided to the committee.
  • Economic Recovery Bridge Grants – Small Vermont businesses were depending on the $26 million promised to them last year but were unable to access the funds due to acknowledged shortcomings of the grant formula. The Commissioner did not advocate for any changes to that formula, though businesses have provided a proposal that would work. Instead, ACCD wants to take the funds for another program.

Vermont’s small business community has serious concerns regarding these proposals and will be following this work closely.

Banking, Security, Insurance bill taken up by House Panel – The House Committee on Commerce and Economic Development has begun work on H.515, a bill that was introduced as a general housekeeping and cleanup bill for banking, insurance and securities, but includes several more substantial provisions.

A section of the bill would amend a current prohibition on rebating in insurance to allow insurers to offer items of value to customers that are tied to the risk covered in the policy. The offer would have to be approved by the Department of Financial Regulation and be clearly aimed at mitigating the risk of loss covered by the insurance. DFR Commissioner Mike Pieciak said that an example of an appropriate offer is a water detection device to alert to flooding in a basement. Red Sox tickets would not qualify as an allowable offer. The proposal includes marketing requirements and a prohibition on inducement of an additional policy purchase.

The bill includes data security requirements for the insurance industry based on the National Association of Insurance Commissioners National Cyber Security Act. Insurers would be required to maintain a written security program, make a plan specific to their entity, identify a point person for cyber security (internal or third-party vendor), and set requirements around employee training. The insurers would have to certify to DFR that they are in compliance with the security provisions.

The bill also includes a whistleblower proposal based on an SEC program. If a new matter is reported to DFR that leads to the successful enforcement of an administrative or judicial action, a portion of the penalty imposed will be paid to the person who filed the complaint. The amount rewarded to the complainant would be at the Commissioner’s discretion, who could consider how involved the complainant was in the investigation and how serious the violation was.

The Vermont Banker’s Association, American International Group, and the American Council of Life Insurers requested that the committee include an annuities provision that was removed from S.88 last session. The provision decreases the statutory minimum nonforfeiture interest rate applicable to individual deferred annuities from one percent to 0.15 percent, a recommendation made by DFR. 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. The committee agreed to the addition, and it will be added to the draft of the bill that the committee hopes to pass out by the middle of this week.

Employment Bills – Bills related to minimum wage, paid family leave, and unemployment insurance were reviewed by the Senate Committee on Economic Development, Housing, and General Affairs.

 S.52, an act relating to increasing the minimum wage to $15.00 per hour by 2025, is seen as a reasonable compromise by a majority of the committee. Over a three year period, where the rate of inflationary increase will be capped at 5 percent (instead of the presently skewed CPI), minimum wage in VT will increase to $13.35 in January 2023, $14.15 in January 2024, and then finally $15.00 in January 2025. 

S.65, the Paid Family Leave bill,would provide employees with 12 weeks of parental leave and 8 weeks of medical leave for a family members. In addition to this coverage, employees would be offered an optional 6 weeks of paid medical leave coverage for their own illness that would be paid for by a .38 percent tax on the employee’s wages.

In S.221, an act relating to unemployment insurance benefits, the Vermont Department of Labor recommends finding other sources to fund unemployment insurance benefits, rather than using ARPA funds reserved for infrastructure.


Issues of Church and State and Public Tuition – The Senate Education Committee continues its work on  S.219,  a bill that seeks to add clarity to whether and how public tuition may or may not be paid to religious schools. Vermont’s educational ecosystem includes many secular independent schools and within this system, public funding cannot be withheld from a religious school solely on the basis of religious status. Senators’ expressed objective is to disallow public funding to support any schools that would discriminate against protected classes such as sexual orientation or gender identity in enrollment or hiring practices. But conflicting Constitutional principles of the Free Exercise Clause and the Establishment Clause, and evolving case law do not provide a clear roadmap for how to restrict public funds from religious schools.

Oliver Olsen, Chair of the State Board of Education, proposed that a new approval process tied to Act 173 for independent schools, currently in rulemaking, may provide a roadmap. Currently local school boards make decisions about tuitioning to religious schools and those decisions are applied inconsistently throughout the state. The new State Board approval process explicitly requires independent schools, including religious schools, to demonstrate compliance with the public accommodations act and the state’s labor laws addressing discrimination in an employment context. Independent schools would also be required to have a statement of non-discrimination on the school’s website and an attestation of such signed by the head of the school. Failure to meet these criteria would exclude schools from being approved. Thus the State Board approval process could provide an eligibility list that local school boards could adopt. The committee hopes to vote the bill out this week.

General Government

House Passes Bill to Close Charleston Loophole – The House of Representatives passed S.30, a gun violence prevention bill. As it came over from the Senate, S.30 prohibits possession of firearms in a hospital. The House approved an amendment from its Judiciary Committee, by a vote of 97 to 49, that changes the default proceed provision in a firearm sales federal background check from three days to thirty days. By tightening the default proceed, the bill addresses the “Charleston Loophole” in which a too-short default proceed enabled a prohibited person to possess a gun that was later used to murder nine people at a church in South Carolina.

The Vermont Crime Information Center testified to the Judiciary committee that 27 firearms were transferred in the state without a successful criminal background check. Nine of those guns are at-large and law enforcement has been unable to retrieve them.

The bill codifies that doctors and mental health professionals may notify law enforcement for extreme risk protection orders (ERPO) without violating HIPAA if they believe an individual may be a risk to themselves or others; and it clarifies that judges may order relinquishment of firearms in cases of domestic violence relief from abuse orders.

The Senate Judiciary Committee will review House changes to the bill this week.


Act 250 in the Senate – Big Picture – With the housing crisis driving many discussions in the State House, and the clock ticking on the spending of federal dollars, there’s a sense of urgency to finally update Act 250. If the legislature and the executive branch intend to invest large amounts of money in housing, right now is the time to make sure Act 250 isn’t needlessly exacerbating the problem.

While previous attempts for an all-inclusive overhaul of Act 250 have so far failed, the Senate is now focusing on S.234, a balanced bill that attempts to encourage compact and central development by easing Act 250 jurisdiction in areas of the state that already have rigorous local planning and zoning. The bill creates new smart growth designation areas, on top of existing incentives within the state’s designation program, that would receive exemptions from Act 250 jurisdiction.

The Senate bill also increases protection for intact forest blocks, mitigates forest fragmentation and effects of connecting habitats, and adds a jurisdictional trigger for the construction of roads over 2000 feet.

The Senate Natural Resource Committee is also weighing another bill that resurrects an idea to allow municipalities to apply for a master plan permit for designated downtown development districts and neighborhood development areas. Like an industrial park, once an Act 250 permit has been approved for a designated area, additional development within the area would only require an amendment to the permit, not the full application and review of a new Act 250 permit.

Members of the Committee say any lessening of Act 250 regulations must go together with increased protections for the state’s forests. “We’re saying we want to concentrate development ‘here,’ rather than ‘there.’ To concentrate only on the downtown piece does not take into consideration the entire equation,” said Sen. Dick McCormack, D-Bethel.

Act 250 in the House – Governance and Jurisdiction – For its part, the House has focused primarily on a bill that would dramatically alter the appeals process for Act 250. H.492 would move appeals of Act 250 permit decisions from the Environmental Division of the Vermont Superior Court to a new Environmental Review Board, replacing the existing Natural Resources Board. The structure of Act 250 governance had a similar framework for review.

Supporters of the bill say the new professional board, nominated by committee and appointed by the Governor, would be more responsive to district commissions and would sharpen the body of precedent within the Act 250 criteria. Critics say the new appeals route puts the process under the thumb of the executive branch and is susceptible to political influence.

The Committee on Natural Resources, Fish, and Wildlife is also considering a bill to reverse a recent Vermont Supreme Court decision, covered with in a recent VT Digger article. For towns with minimal land-use laws, Act 250 jurisdiction would be decided based on the amount of land physically disturbed by a project, rather than the size of the parcel the project is located on. The Supreme Court has recently reheard the case. Critics argue if their original decision stands, it would upend 50 years of precedent in Act 250 jurisdiction.

Finally, Rep. Seth Bongartz, D-Manchester, has introduced H.511 which eases restrictions on building in floodways that have preexisting development. Intended to encourage infill development, the bill also increases the number of Act 250 exempt Priority Housing Projects allowed in smaller towns.

Under the weight of desperate calls for housing, both chambers continue discussions on much needed reforms to Act 250.

The Comprehensive Energy Plan and the Clean Heat Standard – As the House Committee on Energy and Technology considers a Clean Heat Standard to address climate and energy concerns in the thermal sector, the Department of Public Service weighed in and provided a primer on the thermal sector recommendation in its new Comprehensive Energy Plan.

The Comprehensive Energy Plan requires the reduction of greenhouse gas emissions in the heating sector, the source of 34 percent of Vermont’s greenhouse gas emissions. The Plan outlines two broad approaches: reducing energy demand through initiatives such as “weatherization at scale”, with its goal of weatherizing 120,000 homes by 2030; and what the Department called its most important  recommendation – the creation of a Clean Heat Standard.

The Clean Heat Standard is a performance standard that would incentivize adoption of low carbon technology and fuel choices, and weatherization. The Energy Plan advocates for a Public Utility Commission study to be completed by 2023 to design important parameters of a CHS such as whether the Standard applies to fuel wholesalers or retailers, and to consider cost and equity implications for consumers. Such a PUC study would necessarily delay implementation by at least a year.

However, the Global Warming Solutions Act Climate Action Plan recommends that the legislature create the Clean Heat Standard and have the PUC design rules afterwards, in to avoid a year-long delay. A careful design process matters since so many details of the Standard have to be shaped, and that takes time. The association that represents Vermont heating companies calls the Clean Heat Standard the most consequential piece of legislation ever contemplated for the heating sector.

Medical Monitoring – The Senate Committee on Judiciary heard further testimony on S.113, a bill relating to medical monitoring, and voted it out of committee. S. 113 would sponsor frequent medical examinations for individuals affected by chemical toxicity and contamination, and is constructed similarly to Judge Geoffrey Crawford’s approved settlement with Saint-Gobain over PFOA contamination in Bennington. 

Business interests’ representatives advocated for the addition of “proximate” in the causation standard, and asked for further clarification on medical monitoring insurance policies. The legislation was amended to include “proximate” and to clarify that exempted businesses had 10 or fewer employees. The amendments passed unanimously, and the legislation was voted favorably out of committee on a vote of five to zero.

Health Care

Health Care Committee takes up Telehealth Bill – The House Health Care committee is continuing to address proposed changes to the Vermont health care system prompted by the challenges of the COVID pandemic. The state temporarily waived licensure for out-of-state providers practicing telehealth in Vermont, and established an Office of Professional Regulation convened working group in Act 21 of 2021 “to compile and evaluate methods for facilitating the practice of health care professionals throughout the United States using telehealth modalities.” The Telehealth Working Group concluded that Vermont should institute a tiered telehealth registration system, a proposal that the House Health Care committee is considering for inclusion in their telehealth bill, H.655.

During testimony to the committee last week, Office of Professional Regulation Director Lauren Hibbert presented details of the Working Group’s recommendation, a three-tiered telehealth registration system. The first tier is a registration, requires a low fee, is valid for up to 120 days and is not renewable within five years, and allows the provider to see up to nine patients. The second tier is a renewable two-year telehealth license that allows the provider to see up to 19 patients. The final and third tier is a renewable two-year full Vermont license or compact membership, and has no limit on patients cared for.

The Vermont Medical Society and Board of Medical Practice testified in favor of the bill, with VMS telling the committee that Vermont providers hope that this bill becomes a model for other states. The committee will hear from insurers and other stakeholders on the proposal this week.

This legislative update was brought to you by Downs Rachlin Martin’s Government Affairs Group.

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