Crossover deadlines passed last week, so lawmakers worked this week to tie up loose ends on bills that made it out of committee in time to advance to the other chamber. While some bills that didn’t make the cut, like the Omnibus Economic Development Bill, H. 159 (formerly S. 263), found another vehicle to keep them alive this session, others, like the UI bill, will likely be dropped entirely until the next biennium. Read on for updates on the bills we’ve been following:
- Omnibus Economic Development Bill
- Omnibus Workforce Bill
- Unemployment Insurance Update
- Creative Sector Recovery Bills
- Other News
Omnibus Economic Development Bill
The Omnibus Economic Development Bill, H. 159 (formerly S. 263), is currently stalled in Senate Economic Development. The VEDA forgivable loan program component of the bill is causing the hold up, as the loan amount which was previously capped at $500K or 6 months of eligible expenses was reduced to $150K or 3 months of eligible expenses. This change has lawmakers debating whether the lower amount will allow the program to benefit more businesses and organizations, or if it the low ROI will result in lower utilization. If you plan to utilize this program, share your thoughts with the committee ASAP!
Wondering if your nonprofit qualifies for the forgivable loan program? Here is an excerpt from the current draft:
Sec. 5. VEDA SHORT-TERM FORGIVABLE LOANS
(a) The Vermont Economic Development Authority shall create a Short Term Forgivable Loan Program to support Vermont businesses experiencing continued working capital shortfalls as a result of the COVID-19 public health emergency.
(b) Eligible borrowers are for-profit and nonprofit businesses with fewer than 500 employees located in Vermont and in operation on January, 27, 2020 that can identify economic harm caused by or exacerbated by the pandemic.
(1) An applicant may demonstrate economic harm from lost revenue; increased costs; challenges covering payroll, rent or mortgage interest; or other operating costs that threaten the capacity of the business to whether financial hardships and result in general financial insecurity due to the COVID-19 public health emergency.
(2) The Authority shall measure economic harm by a material decline in the applicant’s annual adjusted net operating income before the COVID-19 public health emergency relative to its annual adjusted net operating income during the COVID-19 public health emergency.
(3) When assessing an applicant’s adjusted net operating income, the Authority shall consider previous COVID-19 State and federal subsidies, reasonable owner’s compensation, noncash expenses, and other adjustments deemed appropriate.
(c) A loan recipient may use loan proceeds to pay for eligible fixed costs or operating expenses but shall not use the proceeds for capital expenditures.
(d) A loan shall not exceed the lesser of $150,000.00 or three months of eligible fixed costs based on historical financial performance prior to the COVID-19 public health emergency and the cumulative decline in adjusted net operating income during the COVID-19 public health emergency, and the Authority shall not consider the amount of an employer’s reduced compensation that exceeds $100,000.00.
(e) The Authority shall approve loan forgiveness based on documentation evidencing loan proceeds were used to pay for eligible fixed costs or operating expenses.
(g) When considering whether and how to prioritize economic sectors that have suffered economic harm due to the COVID-19 pandemic, the Agency of Commerce and Community Development may designate one or more sectors for priority funding through the Program, including the arts and culture, travel, lodging, tourism, agriculture, and child care sectors.
Other notable changes to the bill:
- Capital Investment Program – The appropriation was reduced to $40M from $50M and the maximum grant amount was reduced from $1.5M to $1M, not to exceed 20% of the total project.
- COVID-19-Related Paid Leave Grant Program – This program was added in to H. 159. VBSR shares that “As written, the bill would appropriate $16.5 million dollars of ARPA funding for the program which would provide 67% wage replacement for lost work associated with COVID-19. Wage replacement would be at a rate of up to $27.50/hour with a cap of $2200/employee during the program period from January 1st, 2022 – December 31st, 2022.”
Omnibus Workforce Bill
H. 703, the Omnibus Workforce Bill, should be voted on by the House tomorrow afternoon as amended by House Commerce with support from House Appropriations and Ways and Means committees. This fiscal note provides an overview of the bill and the final text can be found here.
Unemployment Insurance Update
H. 29, the unemployment insurance (UI) bill, did not make it out of House Commerce in time for crossover. While there is no guarantee that the issue will not be picked up on the Senate side, it seems unlikely that it will advance this year. Thank you to everyone who put time and energy into understanding and advocating around this issue.
It is important to note that even though this outcome delays (or potentially eliminates) these burdensome changes for nonprofits, it also leaves the issue of nonprofit employees not being eligible for UI benefits unresolved, which was never the intention of our advocacy. If and when this issue resurfaces, we will continue to advocate for the runway and support nonprofits need to implement changes of this nature, the need for greater nonprofit sector-specific data to inform decision making, and a path to extending UI coverage to all nonprofit employees.
Creative Sector Recovery Bills
House Appropriations voted H. 624 out earlier this week, keeping the requested $17.5M intact. The House passed the bill on Wednesday, so it’s headed to the Senate.
The Senate version of the bill has been wrapped into the Omnibus Economic Recovery Bill, now H. 159, which is currently stalled in Senate Economic Development. Once voted out, it will go to the House.
- House Appropriations voted the budget out earlier this week. See this document to see how the committee’s budget compares to the Governor’s proposed budget.
- Reach Up funding was reduced in House Appropriations based on anticipated participation rates. Read more here.
- S. 226, the Omnibus Housing bill, made it out of Committee and will be voted on by the Senate (hopefully) later this week.