This Update is Created by the Lake Champlain Chamber for Distribution by
February 24, 2023
We’ve got a very long update for you this week, so we’ll jump right in.
In this week’s update;
- Join us for our next legislative breakfast on March 13th
- HOMES Act passes first senate committee; tough road ahead
- Governor calls for local match for federal infrastructure funds
- House Commerce still pondering VEGI revisions
- Senate Committee passes bill giving State Auditor authority over state contracts
- Join Us for Visitor Economy Day in the State House
- Senate Economic Committee looks to end “at-will” employment, raise minimum wage, and more
- House Judiciary Committee takes up Vermont dram shop law issues
- Clean Heat Standard discussion all about legislative accountability
- The Laundry List
Join Us for Our Next Legislative Breakfast on March 13th
Thank you to those Chamber members and legislators who join us on Monday for our first legislative breakfast at Hula! Attendees had the opportunity to hear from, and speak with, Lt. Governor David Zuckerman and Mayor Miro Weinberger, as well as many legislators.
- March 13th – 7:30 to 9:00 a.m. at The Flynn, come get an overview of the status of major legislative discussions from Governor Scott (invited), Treasurer Michael Pieciak, and Burlington Mayor Miro Weinberger at the historic Flynn Theater.
HOMES Act Passes First Senate Committee; Tough Road Ahead Now
The Senate Committee on Economic Development, Housing, and General Affairs passed their omnibus housing bill, which is referred to as the HOMES Act. The bill covers much of what it covered as introduced, spanning changes to local zoning, Act 250, and massive appropriations that will result in housing creation in the state. The fear is now that the carving knives will come out, and the bill will be stripped of much of its content. The Senate Committee on Natural Resources and Energy has traditionally gutted bills from the Senate Economic Committee of any of its work on Act 250 and likely will push back on some of the work on local zoning.
Chief among the changes to Act 250 is changing the 10/5/5 rule, which prevents a developer from building more than 10 units within 5 miles within 5 years, to a 25/5/5 rule, extending the radius.
The bill includes;
- By Right Duplexes – Creates a Statewide zoning standard to treat duplexes as an allowed use in residential zoning districts and up to a four-unit building as an allowed use in areas of residential zoning districts served by municipal water and sewer;
- Cap Minimum Parking Standard – Sets a Statewide zoning standard for minimum parking at 1.5 per dwelling unit.
- Create a Statewide zoning standard for a habitable floor density bonus for qualifying mixed-income residential development in areas served by water and sewer, allowing one extra floor to support mixed-income housing in compliance with the Fire and Building Safety Code.
- Hold accessory dwelling units (ADUs) to the same or similar standards of review established by the municipality for a single-family dwelling;
- Zoning Reporting Requirements – Require that specific information be submitted to the Department of Housing and Community Development when municipalities adopt new zoning bylaws.
- Allow towns to give their administrative officer authority to approve minor subdivisions, so a hearing on them is not required;
- Clarify existing law that the character of the area cannot be appealed in decisions on certain types of housing.
- Require an appropriate municipal panel to provide reasons for adjusting dimensional requirements in permit decisions on housing;
- Prohibit towns from requiring more strict energy codes than the State energy codes, except those with existing authority.
- Prohibit deed restrictions and covenants that require minimum dwelling unit size and more than one parking space.
- Require sellers to disclose if a property is located on a class 4 highway or legal trail;
- Require the Division of Fire Safety to prepare a report identifying potential revisions to the Vermont Fire and Building Safety Code to reduce the cost to develop housing.
- Amend the Vermont Fair Housing and Public Accommodations Act 21 to permit the Human Rights Commission to refer potential violations of the Act to the Attorney General or a State’s Attorney for enforcement, to provide additional time for the Commission to bring an action to enforce the Act, and to increase the criminal penalty for a violation of the Act.
- Direct the Agency of Transportation to update the Vermont State road standards.
The bill also contains a number of appropriations adding up to about $90 million, some of which are also present in the Agency of Commerce and Community Development’s budget proposals. More on the appropriations can be found here.
Governor Calls for Infrastructure Funding Local Match in This Year’s Budget
With the Budget Adjustment Act behind them, legislators are looking to complete the state’s budgeting process. This week, the Governor used his bully-pulpit to implore legislators to plan ahead for matching federal infrastructure dollars by allocating about $150 million in this fiscal year’s budget. The Governor offered that for every $1 the state contributes, the federal government will match with $4 and that the state does not want to leave that money on the table.
Front of mind in the conversation for the Governor, as well as for business advocates, is the consensus revenue forecast coming from the Governor and Legislature’s economists, which projects a potentially massive revenue downgrade of 9%, worse than what we saw in the 2009 recession. It’s worth noting, Vermont is not alone in this predicament. The Governor is making the case that while revenues are still high, we should plan for them to drop.
House Committee Still Pondering VEGI Revisions
The House Committee on Commerce and Economic Development this week continued their work on H.10, a bill that, as initially drafted, would have crippled the Vermont Employment Growth Incentive (VEGI) program. The Committee has since backed off the more aggressive language and has a new draft. In the new draft, the Committee seeks to extend the sunset of the program and have a third party evaluate the program and other options for economic development incentives.
The proposed legislation will also require the recording of executive sessions to be shared with the State Auditor and the Joint Fiscal Office. This is a major departure from how open meeting law functions in the state. The Committee will redraft the legislation based on feedback received today and will resume discussion next week.
Senate Committee Passes Bill Giving Auditor Authority to Audit State Contractors
The Senate Committee on Government Operations voted out S.9, which would give the State Auditor explicit and direct authority to audit state contractors. The language of the bill, as introduced, was extremely broad and has since been pared back. The new language allows the auditor the;
“discretion to examine the records, accounts, books, papers, reports, and returns in all formats of any contractor that provides services to the State, provided that the examination of records, accounts, books, papers, reports, and returns shall be limited to those that are relevant to the performance of the contract with the State. Any records, accounts, books, papers, reports, and returns acquired by the Auditor pursuant to this subdivision that are not otherwise available to the public are exempt from public inspection and copying under the Public Records Act.”
The Agency of Transportation still opposes the bill because they see it as duplicative, redundant, and potentially problematic, however, they conceded that the bill is better than it was as introduced.
Join Us on March 22nd for Visitor Economy Day in the Vermont State House
LCC is working with a large coalition of business advocacy groups to pull together a full day highlighting the importance of the visitor economy in the Vermont State House. The Vermont visitor economy has a $3.2 billion annual economic impact and employs 10% of the Vermont workforce. You’re invited to join tourism and hospitality industry leaders at the State House to engage with legislators and raise awareness of the collective contributions of these industries to the Vermont economy.
If you’d like to join, please email [email protected] or sign up here!
Senate Economic Committee Begins Work on Multiple, Massive Employment and Labor Bills
With the completion of the HOMES Act, the Committee took up five bills that they intend to move before crossover, which cover many labor and employment issues.
- “Good Cause” Termination – the bill seeks to reverse Vermont’s status as an “at-will” employment state and make it a so-called “good cause” state. other All other US states except Montana are at-will states., The bill would lay out more narrow reasons for employees to be terminated. The bill also,
- Provides for “card-check” elections
- Severance pay – it requires severance pay for employees at a rate of one hour of pay for every 12 and one-half hours worked during the employee’s first year of employment and one hour for every 50 hours worked in subsequent years. Makes changes to protect more speech from employees and prevent employers from communicating to employees on certain issues deemed political.
- Unemployment Insurance and Workers’ Compensation Bill – the bill makes numerous miscellaneous changes to the two programs, such as work search requirements and increasing the dependent benefit for those on temporary long-term disability. The bill also includes the language that is present in H.92, which would expand unemployment eligibility which we’ve already covered in previous updates.
- No Re-Hire Provisions – This bill also proposes to prohibit agreements to settle an employment discrimination claim from prohibiting the employee from working for the employer or an affiliate of the employer. The bill would also change the “severe or pervasive” standard for workplace harassment. This legislation was considered last year in the House, and LCC sat down with our recurring employment attorney roundtable during the session to discuss this bill; you can watch that here.
- Minimum Wage – the bill raises the minimum wage to $15 an hour by 2025, in two 91-cent increases, before reverting to a CPI-linked annual increase. The bill also creates a study committee to look at tipped minimum wage and exemptions to minimum wage law.
The Committee will be getting into the bills in greater detail in the coming weeks, and the Chair hopes to pass all of the legislation in the next two weeks. If you have any concerns about any of these bills, you should share them with your HR team or attorneys and provide feedback quickly.
House Judiciary Has Preliminary Conversation Around Dram Shop Liability
The House Committee on Judiciary took up a short-form bill, H.288, in reaction to what we’ve covered previously around issues of liquor liability and dram shop law.
Most states establish liability on negligence, while Vermont establishes liability on strict liability, meaning that the defendant is liable for damages even if he or she was not negligent or at fault. The Committee is being pushed to adopt language from Maine, which allows for distinguishing negligence and reckless service of alcohol as well as removing landlords from the chain of liability.
It is imperative that the legislature acts on these changes, or we risk having much of the industry being uninsurable within the next year. If you are experiencing issues around this, please contact your Representatives or those you have a relationship with on the House Committee on Judiciary or reach out to our team at [email protected].
Clean Heat Standard Mostly About “Check-Back” And Accountability Moving Forward
How much will it cost? If it costs too much, will you stop it from going forward? Those are the questions plaguing the Clean Heat Standard, or as it’s been renamed, the Affordable Heating Act (AHA). This week, the Senate Committee on Appropriations considered the bill passed out of the Senate Natural Resources and Energy Committee on Friday.
The bill will effectively create a cap and trade system in which all fossil fuels, with the exception of transportation fuels, in the state will need to participate. Under this program, those who import fossil fuels into the state are defined as “obligated parties” and are required to reduce greenhouse gas emissions attributable to the Vermont thermal sector by retiring required amounts of tradeable clean heat credits, which they can either purchase or deliver eligible clean heat measures, to meet the thermal sector portion of the greenhouse gas emission reduction obligations of the Global Warming Solutions Act.
As described above, the bill’s structure makes it relatively impossible to judge the cost of the legislation now because the Legislature is not laying out any of the credit markets and instead giving the Public Utilities Commissions the authority to create the program. It is unclear how the PUC will decide many of the details. In interaction with the Committee that crafted the bill, the PUC had even suggested language that would make the credit market into essentially a credit parking lot when they suggested they could not be traded. Furthermore, while the program marches forward under the banner of “heating” and “thermal” use while, through its definitions, pulling in all fuels, including “process fuels,” which will add cost to sectors such as farming, construction, and manufacturing.
The only analysis of cost was offered by the Secretary of Natural Resources, who was forthcoming with the restrictions of her modeling and subsequently had her intellectual honesty weaponized against her by environmental advocates. Her analysis projected the program resulting in about 70 cents per gallon of heating fuel.
All of this has some Senators, potentially enough to sustain a veto of the bill, considering language that would require the Legislature as a whole to sign off on the program via a legislative act once the program is created by the PUC. This is referred to as a “check-back” and will be the crux of the debate henceforth. Last year, the Governor requested such language, which the Legislature said they accommodated, only to have him veto the bill stating that the process was not robust enough.
Expect this conversation to always be under the surface as the bill moves forward and the legislative leadership wishes to understand if they have the votes to override a potential veto.
The Laundry List
There are many moving pieces, and we do our best to add the ones that don’t get a section in the newsletter yet should be on your radar here. On any given day in the State House, there are about 175 hours of committee time outside of floor time, and then the hallway, cafeteria, or other time spent legislating.
- Read past updates here – week 1, week 2, week 3, week 4, week 5, week 6, week 7, and the last session’s wrap-up.
- S.45, a bill enabling the workaround on the state and local tax (SALT) deduction, passed the Senate Finance Committee unanimously Wednesday and will be on the Senate floor on Tuesday of next week.
- Town Meeting Day is just around the corner, and you should plan to participate. There are many important decisions on the local ballots about who leads your local community, as well as issues affecting the economy, such as the so-called “just cause evictions,” that will be considered in Brattleboro, Essex, Essex Junction, and Winooski.
- Governor Phil Scott has made a formal request for federal disaster funds to assist communities, and public utilities in recovering costs for repairs and power restoration following the December 22-24, 2022, winter storm which federal assessors identified nearly $3 million in program-eligible costs incurred by public and non-profit utilities and communities in recovering from the storm.
- The House Committee on Commerce and Economic Development took up H.217, which would make miscellaneous amendments to workers’ compensation. The bill will remove the need for the Legislature to pass legislation setting the base rate for the state each year.
- The House Committee on Commerce and Economic Development continued its work on H.55 with a new draft.
- The House Healthcare Committee has passed H.230 requiring safe storage of firearms in homes with children and a 72-hour waiting period to purchase a firearm, as well as the ability for a family or household member to petition a court to remove firearms from a person’s possession.
- The House Ways and Means Committee now has H.66, which would create the most generous paid family and medical leave in the country.
Bills of Interest Thus Far
We follow a wide range of bills each session, as any issue that affects the day-to-day operations of our employers warrants monitoring. While many bills are still awaiting release for introduction, here are some on our radar.