Committee reviews S.122; many small‑business investments cut, downtown tax credit held at $3 million

The Economic Development, Housing & General Affairs committee on Thursday reviewed S.122, the senate’s economic development bill as amended by the House, and discussed whether to concur with the House changes. Committee staff said several line items that increased small‑business and arts funding were removed because the additional dollars did not make it into the enacted budget.

Committee staff member Rick Segal, addressing members, said, “So quite a bit has changed,” and summarized the House edits, noting that increases tied to budget language were removed when the money was not appropriated.

The most prominent change involves a proposed increase in the downtown and village center tax credit. The Senate version had proposed raising the combined cap from $3,000,000 to $5,000,000; Segal said the House removed that increase and “it stays at 3,000,000” because the budget did not fund the higher amount.

Several small‑business add‑ons in the senate draft were also stripped or reduced. Segal told the committee that a $350,000 request for a professional network was reduced to $200,000 and that the Vermont Small Business Development Center would receive a one‑time supplemental that the House set at $150,000 above its base appropriation. Other proposed grants and one‑time bumps — including a proposed $250,000 outdoor recreation climate/circularity grant, a requested increase for the Vermont Arts Council, and a Vermont Law School small‑business legal clinic appropriation — were removed from the House version because the additional funding did not survive budget negotiations.

Segal also reviewed the House’s edits to the bill’s international trade and workforce sections: the international trade office expansion was reduced to match the budgeted $150,000 and many of the performance conditions tied to that expansion were removed; the bill retains funding for a Quebec trade office. Sections that create or change task forces and boards were moved around but largely retained in substance, Segal said.

Members asked procedural and timing questions, and Segal walked the panel through effective dates in the bill. He said appropriations and workforce provisions would take effect July 1, 2025, while certain commissions and sister‑state provisions would take effect in 2026 to accommodate planned work such as a sister‑state working group report.

Discussion-only items and next steps: several members said they were inclined to concur with the House edits to S.122’s appropriations language because the House had removed items that lacked budgeted funding. At the same time, members flagged separate sections of the bill for follow up, notably the baby‑bonds pilot language, which prompted a distinct and lengthier debate.

The committee did not register a formal recorded vote on concurrence during the session; members discussed next steps and requested additional briefing and witnesses on items that remained contested.

Ending: Committee staff said they would schedule additional briefings as needed before a final decision on concurrence. Members planned to seek more detail overnight on contested sections and expected to revisit the bill the following day if necessary.