Lawmakers hammer out a range of economic development and employment measures


The nearly-all-in-one "economic development bill" passed after the House and Senate overcame differences about workers’ compensation. The Senate pushed for more generous reforms to injured workers, while the House wanted a more gradual approach to changes, such as lengthening the period of notice before benefits are discontinued.

The rift nearly spiked the bill, but lawmakers, administration officials, and stakeholders from the business and labor communities got together one last time Saturday morning to find common ground. They agreed to a little more leeway before discontinuance.

Another major sticking point was injuries involving third parties -- for example, if a worker is hurt in a traffic accident while on the job. It’s already established that the worker can sue the third party on his or her own behalf for damages, and that the employer or its insurance company should be reimbursed first for any benefits already paid.

The change all parties arrived at Saturday morning limits the amount employers or insurance companies can claw back if the award is less than the full value of the claim, after deducting expenses of recovery.

Another workers’ compensation change raises the cap on burial and funeral expenses an employer or insurer is to pay, from $6,500 to $15,000.

One provision was notably not on the line during the hours when S.220 hung in the balance: Gov. Peter Shumlin’s Vermont Enterprise Fund for incentives to attract or retain major employers. In his closing remarks before the Senate adjourned Saturday evening, Shumlin touted the $4.5 million business incentive as one of the session’s biggest accomplishments.

Another $500,000 will go to an entrepreneurial lending program within the Vermont Economic Development Authority. Target companies are not just technology-based, but any business in seed, start-up or growth stages.

S.220 originally carried both initiatives, but they were later put into the budget bill, instead. Another change: Rather than count on an end-of-year surplus for the initiatives, as Shumlin originally suggested, administration officials ultimately talked lawmakers into channeling excess estate taxes to pay for the program. Shumlin will be able to allocate as he sees fit, with limited legislative approval and retrospective oversight from the state auditor.

Lawmakers on the Senate and House economic development committees, knowing they would not have much money to work with, crafted a broad-reaching set of mostly "targeted" policy solutions to help spur business growth and ramp up workforce development. The provisions that ultimately passed with the economic development bill are outlined below.

Other business and labor issues were addressed in their own targeted ways.


Another product of prolonged negotiations between the House and Senate is a massive telecommunications bill that aims to overhaul the state’s strategy for "connectivity." Among a host of provisions, H.297 sets a 10-year goal of establishing at least 100 Mbps symmetrical broadband capacity for every official address in the state.

A much smaller but more immediate source of funds will come from increasing the Universal Service Fund charge and applying it to prepaid cellphones. Combined with anticipated savings from operational efficiencies in the E-911 Board, H.297 projects starting its new connectivity initiative with about $1 million.The funding path to connectivity is not yet clear, but lawmakers endeavored to keep one option open: bonding authority. The quasi-public Vermont Telecommunications Authority has never used its $40 million bonding capacity since it was established in 2007 to provide last-mile broadband service and cellphone coverage to the state. VTA will be folded into state government at the end of the fiscal year, but technically it will be dormant and ready to revive if and when the state needs telecomm bonding capacity.


Starting Jan. 1, the state’s minimum wage will jump to $9.15 per hour, followed by three more incremental raises to $9.60 per hour in 2016, $10 in 2017 and $10.50 in 2018, and cost of living increases thereafter.

The scenario passed in H.552 is not exactly what Shumlin asked for: a gradual rise to $10.10 per hour by 2017. He’s expected to sign it, nonetheless.Service or tipped employees’ minimum wages will be set at one-half the standard minimum wage -- up from $3.65 per hour now.

And it’s much slower than the nearly immediate dash to $10.10 per hour the House passed, coupled with cost of living increases and a study of what it would take to get to the even higher "livable" wage as calculated by the Legislature’s Joint Fiscal Office.

But with little time left in the legislative session for bargaining, Democrats in the House agreed it would be better to vote for incremental change than risk losing the raise entirely by insisting on more. House Republicans played along, and the bill was pushed through.


More raises might be in store for child care providers who agree to accept state subsidies on behalf of children from low-income families. The cohort was granted the right to unionize late in the session with the passage of S.316. If they do vote to organize, the child care providers will have more leverage in negotiating subsidy reimbursement, professional development options and grievance procedures in their dealings with the state.

Legislative debate among both supporters and opponents largely regarded the provider reimbursements as insufficient, and lamented the Legislature’s own failure to vote for any reimbursement increases beyond 2008 market rates.The contentious legislation allowing the providers to form a collective bargaining unit ultimately passed, despite sustained opposition, primarily from Republicans. They argued that workers should not be forced to pay agency fees for collective bargaining, which they said sidesteps the legislative appropriations process. Some also held that the providers should not have the right to organize because they technically are business owners, not employees.


One bill aims to make it easier for people collecting unemployment insurance to start their own businesses. The Self-Employment Assistance Program allows qualifying individuals to receive an allowance in lieu of regular unemployment benefits.

H.646 also allows people who are partially employed to keep more of the money they earn while collecting unemployment benefits. A similar change is made in H.790 for Reach Up beneficiaries, who also got a one-year extension on child care subsidies.


In the case of layoffs, employers may have to provide more notice to the state and their employees. Businesses with 50 or more full-time or part-time employees are affected, and the new requirement is triggered by layoffs affecting 50 or more workers within a 90-day period.

Labor Commissioner Annie Noonan requested the legislation after struggling to respond to sudden mass layoffs at IBM in Essex Junction in 2013. Some in the business community pushed back against what Noonan asked for, saying the regulations would be too onerous, especially for smaller businesses. The resulting legislation focused on larger companies, and provided exemptions for companies acting in good faith.Employers will have to notify the state 45 days in advance, under H.758. Local officials, employees and bargaining agents will require 30 days notice. Employers also will be expected to provide the state with job-specific information about the lost positions.


Shumlin signed a first-in-the-nation pension lending law (S.223) in April, bringing the loan scheme under direct supervision and control of the Department of Financial Regulation.


Pension loans are not banned, as originally proposed. But by requiring licensure for the loans, the state is able to establish a high bar to prohibit predatory practices.

Just as important as the bills that become law in a given session are those that don’t make it through the legislative process. Three significant labor bills died this spring -- after tremendous public displays of support or near-acrobatic legislative maneuvering.

A push for paid sick leave (H.208) ultimately lost to Shumlin’s priority of raising the minimum wage. A related bill that would prohibit employers from retaliating against workers who use their benefits (S.213) also died. And a proposed switch (H.878) in state capital construction wage requirements -- from a state formula for prevailing wages to those set through the federal Davis Bacon Act -- also failed.



* A workforce education and training leadership position is established to better integrate the state’s many disparate workforce development programs. The duties of the state’s Workforce Investment Board also are updated. General authority is given to the WIB and Labor Commissioner to require data-based reporting from agencies involved in workforce development. And the Agency of Commerce and Community Development is ordered to coordinate statewide economic development planning with the Department of Labor’s workforce development plans. Several changes are made to the statutory obligations of the Workforce Education and Training Fund and its grant programs, and to the Vermont Training Program.

* A new Vermont Strong Scholars and Internship Initiative is created to forgive a portion of student loans, for eligible students only, issued through the Vermont Student Assistance Corp. The goal is to encourage students to attend college in Vermont and stay in-state, and to reduce the burden of college debt. The loan forgiveness program is open to Vermont residents enrolled in a qualifying post-secondary institution on or after July 1, 2015. It requires participants to get a job in Vermont within a year of graduation in a handful of sectors that the state deems important for economic activity.


* VEDA’s agricultural credit program is opened up to forestry and silviculture ventures.

* ACCD will hold networking events to connect entrepreneurs and capital providers.

* The Department of Financial Regulation will study the "opportunities and limitations" ofcrowd funding as a source of capital for Vermont businesses.

* DFR will recommend to the Legislature any statutory or regulatory changes that mayremove unnecessary barriers for small businesses seeking access to financial capital.

* DFR will conduct educational outreach regarding small business exemptions from securities regulations. The department also will assess how these exemptions may need to be updated.

* The newly created credit facility established in the Treasurer’s office in 2013 is given leeway to offer longer term credit. The Treasurer can use up to 10 percent of the state’s average cash balance as a credit facility for local investments. And a "local investment advisory committee" is established to advise the Treasurer on local investment funding priorities.


* Municipalities and planning commissions are given a clear path for involvement in the Public Service Board’s consideration of certificates of public good for telecommunications facilities.

* The special provision that allows telecommunications facilities to go through the PSB for a certificate of public good -- instead of going through Act 250 and local zoning permit processes -- sunsets July 1, 2017. It was set to end July 1, 2014.


* A one-stop online business portal will be created.

* Downtown tax credits eligibility is expanded to include technology projects.

* Subject to available funding, a "domestic export program" will help Vermont businesses sell their products across state lines.

* Small-scale mortgage lenders (three or fewer loans in a three-year period) will no longer need to be licensed.

* Interbank clearinghouses are clarified as exempt from unlicensed lending regulations.

* An economic impact analysis is ordered to examine the demographic and infrastructure impacts of private developments being planned in the Northeast Kingdom.

* Industrial park provisions are added or tweaked to several statutes related to economic development, including eligibility for loans or assistance programs.

* The Natural Resources Board is ordered to update its master plan policy.

* Performance-based tourism and marketing programs will be analyzed by their outcomes.


* Best practices are requested to help injured workers avoid the dangers of prescription drug abuse while receiving treatment. The Labor commissioner is also ordered to adopt rules to promote ways injured workers can return to work swiftly in safe and cost-effective ways.

* Several updates to workers’ compensation laws are made, including the primary changes described above.


* Intellectual property regulations between the state and private contractors are updated.

* In the case of a suspected data security breach, communications between law enforcement and private businesses are clarified.

* Penalties for computer crimes are updated and fines increased.

The statute of limitations for violation of trade secrets laws is doubled, from three to six years. In the case of litigation, the substantially prevailing party may be awarded attorney fees.


* A study will investigate the balance between the state’s energy policy compared to energy costs for manufacturers.

* The feasibility of creating a Vermont Products Program will be studied, the goal of the program being to promote and market products and services that are manufactured, designed, engineered, or formulated in Vermont and to minimize confusion when the Vermont brand is used in marketing products or services.


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