VEDA briefs Senate Finance on H.398 technical updates, $2M disaster loan fund and codified sustainable jobs strategy

The Vermont Economic Development Authority (VEDA) presented to the Senate Finance Committee on April 2, detailing H.398, a bill that would reorganize and update VEDA’s authorizing statute, create a small permanent disaster recovery loan fund, and codify the Vermont Sustainable Job Strategy into statute.

VEDA leaders framed the package as three principal components: technical and organizational statute updates, a $2 million disaster recovery loan fund to be held at VEDA for rapid deployment after localized disasters, and explicit statutory language for the Vermont Sustainable Job Strategy that the authority already uses to evaluate high-impact projects. “We are the commercial lender, provider of capital for the state for economic development,” said Cassie Palinas, chief executive officer of VEDA, summarizing the authority’s mission and programs. Palinas told the committee VEDA’s loan portfolio is about $280,000,000 and the authority operates statewide with offices in Montpelier, Burlington and Middlebury.

Why it matters: supporters said the disaster fund — modest at $2 million — would create a standing, rapidly available capital source for localized events that do not rise to large federal declarations or where a small, targeted loan could close recovery gaps. Codifying the Vermont Sustainable Job Strategy (a non-statutory framework the authority has used since 1999) would also make explicit criteria VEDA uses when it authorizes projects that advance state public-policy goals, such as job creation, energy resilience and downtown revitalization.

VEDA staff described the disaster fund as intentionally flexible. “It would be a permanent fund, and the attempt is to allow the language in the statute to be flexible enough that VEDA, along with our partners at ACCD or the Agency of Agriculture, could create the correct structure for those funds at the time that they’re needed,” Palinas said. Committee members asked whether the bill’s phrase “loans and other forms of financial assistance” should be narrowed to avoid creating an unintended grant authority; VEDA said the intent is a loan fund and that the language can be refined.

Committee members also discussed codifying the Vermont Sustainable Job Strategy. VEDA noted the strategy — a 1999 framework referenced in the bill — is a long-used tool that allows VEDA to participate in complex downtown, infrastructure and revitalization projects that other lenders may not underwrite. “This strategy … allows us to do any project as long as it meets the criteria,” Palinas said, explaining how VEDA uses the framework to enable projects that combine multiple capital sources and public-policy goals.

VEDA provided program context and recent results: it said it has lent approximately $2.8 billion over 50 years, operates a $280 million loan portfolio, employs 41 staff, and implements several state and federal programs, including SSBCI-funded interest-rate subsidies and venture-capital partnerships. Committee members asked for clarification on the disaster fund’s permissible uses, whether policies and procedures will be adopted by VEDA (rather than rulemaking), and how the disaster fund would interact with other proposed or existing grant programs for farmers or municipalities.

VEDA staff also described a set of state-administered programs it manages — drinking water and clean-energy financing, the state infrastructure bank and Brownfield revitalization programs — and summarized how SSBCI (the Small State Small Business Credit Initiative) funds flowed to interest-rate subsidies and venture capital agreements with FreshTracks, Quarry/Green Mountain Accelerator and Features Capital. VEDA said the SSBCI interest-rate subsidies brought project rates down by roughly 1 to 2 percentage points and that the authority continues to manage remaining venture-capital allocations.

Ending: Committee members signaled they will refine statutory language around flexibility versus constraints and return to the bill for further consideration. No committee vote was taken during the session.