Conference committee negotiates capital-bill dollar shifts, adds municipal grant conditions

Senate Institutions and the House Institutions conference committee on May 8 negotiated multiple shifts inside the proposed capital bill, moving small cash items into community grant lines, reallocating bonded and cash major-maintenance funds, and adding language that state dollars be directed to municipally owned or long-term-leased infrastructure only after a grant agreement is in place.

Committee members said they would move a $45,000 cash request for an incubator into the building community grants line so the incubator would apply for grant funding, and accept a $25,000 allocation for fish-and-wildlife walleyes provided new language is added requiring Fish and Wildlife to include propagation funding in future subject requests. The committee also discussed shifting a $35,000 dry-hydrant cash increment and other smaller adjustments into major maintenance and bonds to cover several projects next year.

The committee’s reallocation plan increased the standing major-maintenance cash total from about $600,000 to roughly $645,000 by adding the $45,000 incubator cash. Of that $645,000, conferees agreed to convert $300,000 of bonded major-maintenance money to fully fund five community-grant awards. The remaining $345,000 would be combined with a separate $355,000 pulled from a planned $2,000,000 bonded design-and-construction allocation (for fiscal 2026) to create roughly $700,000 to restore funding for three items in Section 2: a three-acre parcel/stormwater project, a firing range, and work at 32 Cherry Street. Committee members said that restores the $700,000 the House had cut from Section 2.

Alex Carroll, Commissioner of the Department of Housing and Community Development, told the committee that the state would pay grants to municipalities and that municipalities would enter grant agreements with developers or nonprofits to ensure infrastructure built with state money would be completed. "The municipality would then have a grant agreement in place with the developer to make sure the ... infrastructure for the building would get developed," Carroll said.

Members debated who must own eligible infrastructure. The conferees agreed that state dollars should go to municipally owned assets or those under a long-term public lease; committee counsel and members asked for duration language. John Grayhouse of the Westside Council proposed specific statutory language requiring municipal ownership or a municipal lease of at least 30 years and adding: "infrastructure improvements that support the development of new or rehabilitated housing provided that a grant agreement shall be in place between the state and the community prior to the release of funds." Several conferees indicated they preferred to keep the formulation as municipally owned or municipally leased but accepted the 30-year minimum proposal as workable.

Buildings and General Services Commissioner Wanda Manoli confirmed which projects she had previously identified as lower-risk candidates to temporarily backfill funding gaps, and said some projects (notably White River Junction–related work) remain higher priority and must be restored on the committee’s schedule. "My testimony stands," Manoli said when committee members recapped the restoration plan and the need to put some dollars back into later fiscal years to meet permitting and construction timelines.

Committee members noted lingering disagreements about the total cash number agreed in prior meetings (a dispute over whether the cash total was $2.5 million or $3.1 million for a subset of items) and clarified that the conference committee had agreed to pick up $625,000 for three specific projects discussed earlier (a fire truck, a recovery building acquisition, and a Montpelier study) but had not previously resolved the dry-hydrant, walleye, or incubator items until this session.

Conferees also agreed on process requirements: grant agreements must be executed before state funds are released, and the committee requested staff draft the agreed durational and ownership language for inclusion in the conference report. Committee members asked staff to document the numeric moves and bring back precise language; one member said Scott was on his way with further information the committee wanted to see before final sign-off.

The committee did not take a formal recorded vote during the portion of the session captured in the transcript. Members repeatedly described the items as proposals to be reflected in the conference report and asked staff to prepare and circulate the final language and accounting.

The session combined policy and technical discussions — ownership, lease duration and grant agreement timing — with line-item budget moves across cash and bonded major-maintenance and community-grant accounts. The committee planned to reconvene to finalize language and check numbers before completing the conference report.

The committee’s next steps, as discussed on the record, are for staff to draft statutory language that (a) limits grant eligibility to municipally owned or municipally leased infrastructure of at least 30 years, and (b) specifies that a grant agreement between the state and municipality be in place prior to release of state funds. Members asked for written documentation of the cash and bonded shifts that restore the three Section 2 projects and make the incubator eligible under community grants.