PO Box 440, St. Albans Bay, VT 05481
Full report here
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
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.
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.