Committee reviews S.60 farm disaster-relief fund; debates eligibility, payouts and governance

A legislative committee spent its meeting reviewing S.60, described in the session as the Fire and Security Special Fund, a proposed special fund intended to reimburse Vermont farms for uninsured or otherwise unreimbursed losses caused by weather events, fire and related emergencies.

Committee members and staff debated core program design questions: which parcels and farmers would be eligible, whether awards should be grants or ‘‘beneficial payments’’ paid upfront, how to calculate awards (the draft ties awards to 50% of uninsured losses and to a modifier based on farm net income), and how the program would be governed and funded.

The discussion centered on eligibility and verification. Staff explained the program language limits eligibility to parcels and farms “subject to the RAPs” (the state’s Required Agricultural Practices), which apply only to Vermont parcels; the committee asked whether and how jointly operated or border-spanning farms would be treated. Members clarified that the eligibility test is physical and parcel-based: a Vermont-based farm leasing land in New Hampshire would not make the New Hampshire parcel subject to Vermont RAPs, and only Vermont parcels subject to RAPs are automatically covered under the draft language. Committee members asked staff to consider whether the bill should expand eligibility beyond parcels formally subject to the RAPs.

The committee pressed the sponsor on the program’s technical thresholds. Staff noted multiple ways to qualify as a farm under existing rules: cultivation on at least four contiguous acres, or production of at least $2,000 in average annual gross agricultural sales, among other paths. Members asked whether small produce farms under four acres would be excluded; staff answered that such farms can qualify by meeting the $2,000 gross-income test. The committee also discussed outlier operations (for example, intensive high-tunnel production on small acreage) and heard that the current definitions would allow such operations to qualify.

Members debated what weather events should be covered and how agencies would verify them. The draft expects the administering agency to verify weather conditions under an existing statutory verification authority (cited in the discussion as section 46 33). Committee members asked whether lightning, isolated barn fires, extreme heat or drought would qualify; staff said the agency could verify and find eligibility for discrete events that caused qualifying damage, but emphasized the language currently frames the program as for weather conditions and emergency events. The committee asked staff to review relevant national and regional weather-service standards and suggested adding clearer definitions or verification procedures.

The committee discussed the form and timing of payments. The bill currently uses grant language; agency witnesses had told members there is a practical distinction between grants (which often require applicants to buy eligible goods and seek reimbursement, and may include withholding of a portion of funds pending final reporting) and what staff called ‘‘beneficial payments,’’ which could be paid up front and more quickly. The committee asked staff to draft an alternative that would treat awards as beneficial payments subject to an auditing requirement rather than full grant-administration rules under Administrative Bulletin 3.5. Members asked the staff to flag the change and analyze audit and reporting needs.

Funding levels and award caps drew substantial attention. The draft lists a maximum award of $150,000 per recipient. Members asked whether that cap should be a fixed statutory number or a percentage of the annual appropriation; staff noted the fund is a carry-forward special fund and that basing awards on a percentage of appropriation raises technical questions about carryover and year-to-year balance. One participant noted that the bill’s initial drafting had imagined a much larger capitalization (the drafter said $200 million had been envisioned at one point) and that the actual appropriation this year could be much smaller, making a $150,000 cap relatively large. The committee asked staff to consult JFO (Joint Fiscal Office) about options for tying award limits to annual appropriations or carryover.

On calculation of awards, the draft ties awards to uninsured or unreimbursed losses and caps a program payment at up to 50% of those losses. Committee members discussed the risk of ‘‘double-dipping’’—applicants receiving full insurance payments plus program money—and directed staff to ensure the application and award calculations account for pending or future insurance payouts. Members also discussed a proposed modifier that would reduce awards for farms that post higher net income on tax Schedule F filings; staff said the modifier is intended to prioritize farms with lower net incomes but acknowledged concerns that a formula could yield counterintuitive results for farms with seasonal or depreciation-driven accounting.

The committee debated the list of eligible loss types: replacement of lost income, costs to replant, replace or repair infrastructure and equipment, replacement of impacted livestock, wages and debt payments, and other losses the secretary may approve after consulting a review board. Some members said the list could be simplified by focusing on ‘‘replacement of lost income’’ and allowing the agency to allocate those dollars to wages, debt, replanting or equipment as needed; others urged keeping explicit categories so applicants and auditors know what is eligible. The committee asked staff to consider whether road repairs needed to access farms—sometimes municipal responsibility—should be eligible in narrowly defined cases.

Governance questions included whether to use an existing advisory board, such as WeLab, or create a new review board that includes farmers and alternates. Committee members expressed concern that an existing large board might be unable to meet quickly or form a quorum to review rolling applications; advocates (represented by a NOFA representative present) urged keeping farmers on a review body because they can provide rapid practical judgment. The draft contemplates the secretary making awards after consultation with a review board; members directed staff to add language allowing alternates and to work with the agency on the best governance model.

Other procedural matters covered the committee’s interest in application cycles (members asked whether semiannual or quarterly windows would protect the fund from early depletion during concentrated weather seasons) and compensation/per‑diem for board members (staff referenced a compensation statute cited as 32 BSA 10 10 for per‑diem and expenses).

No formal vote was taken on S.60 during the meeting; staff were directed to draft revisions addressing: (1) options to treat awards as beneficial payments with audit requirements, (2) clearer verification language for weather events and thresholds, (3) alternatives to a fixed $150,000 cap (including percentage-based approaches or annual cap adjustments), (4) whether to expand or clarify parcel eligibility beyond RAPs, (5) application timing (quarterly or seasonal cycles), and (6) governance language (board composition, alternates and conflict-of-interest safeguards). The committee scheduled additional testimony and follow-up bills drafting.

The session also included brief updates on related items: the sponsor noted ‘‘Right to Farm’’ legislation remained under consideration and that staff would provide another draft in advance of upcoming testimony.

Votes at a glance: none taken; the committee discussed the bill language and requested further drafting and fiscal analysis.