The Vermont House overwhelmingly passed an economic development bill on Tuesday that reallocates $725,000 from a fund once earmarked for IBM.
The bill passed in a 141-2 roll call vote after the House gave it preliminary approval in a voice vote on Monday.
The legislation will likely go to conference committee. The main point of contention is the House’s proposal to use the Vermont Enterprise Fund for a first-time homebuyer credit and a campaign to promote Vermont as a good place to do business.
Lawmakers say S.138 would promote workforce development, grow jobs, encourage entrepreneurship, and help young people afford to make a down payment on a home.
But the House Appropriations Committee approved taking money from the Vermont Enterprise Fund, which was created in 2014 to allow Gov. Peter Shumlin to give up to $4.5 million in cash to get companies like IBM to stay in the state.
The Shumlin administration says it has “other uses” for the Enterprise Fund. During the August recession, the administration took $957,000 from the fund, according to Finance Commissioner Jim Reardon.
The administration recommended taking another $1 million from the Enterprise Fund to pay down the $113 million budget deficit, Reardon said. That leaves about $2.5 million.
Currently, the governor has the legal authority to give the money — with approval from the Emergency Board — to companies that may close or leave the state; to companies considering acquiring a company in Vermont; or to companies considering relocating or expanding in Vermont. The money was essentially earmarked for the Essex Junction IBM plant, which has been acquired by GlobalFoundries.
The House’s plan would use $500,000 of that $2.5 million to direct the Department of Tourism and Marketing to “highlight the many positive features that make Vermont a great place to live, work, and do business.”
The House wants $100,000 for changes to the Vermont Employment Growth Incentive. Another $125,000 would go to a first-time homebuyer down payment assistance program, which would give Vermonters $5,000 up front to help cover down payment or closing costs. The homeowner would pay the money back after selling the home, creating a revolving loan fund.
“We want to keep the Enterprise Fund whole for other job creation activities,” Moulton said. “As much as we support more marketing funding, we wanted it to be a formula not from the Enterprise Fund … we have other uses of that fund.”
Moulton did not say what those other uses are. The fund is scheduled to dissolve on June 30, 2016, and the remaining balance would go to the general fund.
House Speaker Shap Smith, D-Morristown, lauded the down payment assistance program. Smith said S.138 takes “significant steps to make Vermont’s economy even stronger.”
The House jobs bill expands on the Senate legislation, which repealed the cloud tax, established special permits for fortified wines, set guidelines for the 9L provision of Act 250, and loosened rules for the Vermont Employment Growth Incentive.
The Senate version also legalized the manufacture of gun suppressors for people licensed by the Bureau of Alcohol, Tobacco, and Firearms in order to benefit the military contractor General Dynamics in Williston.
Here are other major provisions the House added to S.138:
- Vermont would create “ABLE” savings program under the State Treasurer to encourage Vermonters with disabilities to save money without supplanting their Social Security disability benefits.
- The Agency of Human Services would be required to seek an increase to the asset threshold in the Medicaid for Working People with Disabilities Program. The agency would apply by Oct. 1 to the Centers for Medicare and Medicaid Services to increase the threshold to $10,000 for one person or $15,000 for a couple receiving benefits.
- The state would create a “Vermont Liquor Control System Modernization Study Committee” to study the governance of the Department of Liquor Control and how it could “be made more efficient, effective, and profitable for the Vermont economy.”
- The bill would direct the Secretary of State, the Commissioner of Financial Regulation, and the Attorney General to study the “opportunities and risks” of using blockchain technology as an official method for signing state contracts. Blockchain is the same highly mathematical technology that backs up Bitcoin.
- The Vermont Economic Development Authority would be able to make loans to “advanced manufacturers and other Vermont businesses for product development and intellectual property design” under the Vermont Entrepreneurial Lending Program.
- The House also added dozens of pages of intricate changes to contract law. One of those sections would modernize how Vermont processes electronic fund transfers under the Uniform Commercial Code.
