The Senate gave preliminary approval Tuesday to an economic development bill so whittled down that its lead sponsor couldn’t say whether the new version would do anything to improve the economy.
S.138, the annual jobs bill, was stripped of a dozen sections, including a provision to lower the wage requirement for businesses that receive a cash incentive from the state.
The bill is scheduled for a final vote Wednesday. House Commerce Committee plans to merge the legislation with H.124.
“Right now, I’m not optimistic about the condition of the bill, but that doesn’t mean I’m not optimistic that it will be put back together in the end,” said Sen. Kevin Mullin, R-Rutland, chair of Senate Economic Development and lead sponsor of the bill.
The Senate Committee on Economic Development bill was taken up by three other committees, and each one removed sections of the legislation before it reached the floor.
The Senate Committee on Natural Resources deleted four sections and amended another four. The committee has jurisdiction over language related to Act 250 that weighs the impact of new development on the environment.
Senate Economic Development originally sought new language on Act 250’s section 9L, which passed in 2014. The statute is related to historic settlement patterns. Senate Natural Resources rewrote part of the bill in order to offer more guidance to companies that seek to comply with section 9L.
“I understand that Act 250 can seem very detailed, but these were sections that were within our jurisdiction,” said Sen. Diane Snelling, R-Chittenden, vice chair of Senate Natural Resources. “The statute remains unchanged, but the guidance would be revised.”
Senate Finance removed four changes to the Vermont Employment Growth Incentive, a provision for an angel investment tax credit, a millennial enterprise zone tax credit, and a tax credit for affordable housing.
The original bill would have lowered the wage threshold for businesses seeking cash incentives from the state through the VEGI program.
The angel investment tax credit would have given up to $500,000 in tax credits to investors who put money into certain risky ventures. The percentage of the overall investment would be capped at 40 percent.
The millennial enterprise zone tax credit, the brainchild of freshman Sen. Becca Balint, D-Windham, would have given different credits to people investing in “human, intellectual, physical, or economic capital in building a business in information technology or related fields.”
The section would have developed a handful of tax credits for payroll, capital expenditures, and research and development. The tax credit would be capped at 50 percent of a person’s tax liability in a given year.
Similar to the Vermont Employment Growth Incentive, the millennial enterprise zone tax credit would only be available to people paying wages and benefits that average at least 150 percent of minimum wage and who are creating new, full-time jobs in Vermont.
“The millennial enterprise zone tax credit acknowledges the fact that we’re a changing economy,” Mullin said. “In today’s world … sometimes your business location is wherever you have your laptop.”
Balint said in an interview she proposed the millennial tax credit knowing that Senate Finance would likely strip it from the bill.
“I knew that tax credits are a heavy lift in this building anyway, but I just think we need to expand the boundaries of what economic development is,” Balint said.
Sen. Tim Ashe, D/P-Chittenden, chair of Senate Finance, said on the floor that his committee struck the financial provisions from the bill so it could look at the programs further. Ashe said the committee made a “commitment to come back and look at each piece.”
Senate Appropriations removed a section that would have directed the Agency of Commerce and Community Development to “promote Vermont as both a great place to live and a great place to do business.” The section would have appropriated any rooms and meals tax revenue above projected fiscal year 2016 levels to fund the tourism and marketing initiative.
Sen. Peg Flory, R-Rutland, asked Mullin on the floor whether there was anything left in the bill to promote economic development. Several senators shook their heads.
Flory said striking too many provisions from the bill designed to raise more revenue for the state creates a problem in a Legislature where “none of us like making cuts.”
“The one thing I think we all would agree on is we need to get more people working, more people paying income tax, and [fewer] people dependent on the government,” Flory said.
Mullin told Flory the major remaining sections include a lending study, tweaks to a scholarship program and the Senate Natural Resources Committee’s guidance to Act 250 Section 9L.
“What’s left is a leaned-down bill that hopefully will be expanded in the House,” Mullin told Flory.
What’s left of S.138
Sections 10-11: Findings on the Vermont Strong Scholars loan forgiveness program; changes to the Vermont Strong Scholars and internship initiative.
Sections 12-13: Analysis of advanced manufacturing and information technology programs; establishment of a Governor’s Committee on Employment of People with Disabilities.
Section 35: Creates a neighborhood development area.
Section 44: Directs the Agency of Commerce and Community Development to complete a study on peer-to-peer lending programs.
Section 45: Directs the Agency of Commerce and Community Development to create a media production database to be maintained in partnership with a Vermont college with the end goal of having a go-to resource for filmmakers who want to make movies in Vermont to find production equipment and extras.
Sections 55-57: Makes miscellaneous change to liquor laws and allows the Department of Liquor Control to issue 200 fortified wine permits across the state with a $100 fee.
About 40 empty sections waiting to be merged with H.124.
Provisions removed from S.138
Sections 1-4: Gov. Peter Shumlin’s proposal to expand the Vermont Employment Growth Incentive to make more employers eligible.
Sections 20-21: Angel investor tax credit, millennial enterprise zone tax credit, affordable housing tax credit.
Section 43: Removal of the $100,000 cap on Vermont Entrepreneurial Lending Program loans to “manufacturing businesses and software developers with innovative products that typically reflect long-term, organic growth.”
