Senate committee reviews H.397 amendment on emergency management, voluntary buyouts, municipal borrowing and community radio grants

The Senate Committee on Government Operations on March 14 reviewed draft 2.1 of the committee's amendment to H.397, a bill of miscellaneous amendments touching emergency management, flood response, municipal finance and a community radio grant program, with committee counsel Tucker leading the staff briefing and saying a revised draft (2.2) would be posted later for legal tweaks.

The committee examined provisions that would: require the Division of Emergency Management to present annually to the committee on action items in the All-Hazards Mitigation Plan; establish a voluntary buyout and buyout reimbursement program that requires acquired properties to be maintained as open space; direct a $1,000,000 transfer from a pilot special fund to the buyout reimbursement program in fiscal year 2026; create a Vermont Community Radio grant program with one-time grants administered by the Commissioner of Public Safety; and add municipal finance authorities for unassigned fund balances, limited emergency borrowing, and level debt-service options.

The measures matter because they change reporting lines for state emergency planning, create a new state-funded reimbursement mechanism for municipalities acquiring flood-prone land, and change local borrowing and budgeting tools that towns said they need to respond more quickly to repeated floods. Committee counsel said the annual reporting requirement responds to an auditor recommendation and that some technical language will be adjusted in a later draft to avoid legal issues such as the common-law rule against perpetuities.

Key provisions and committee discussion

Division of Emergency Management reporting: The amendment adds a new subdivision to what counsel identified as 20 VSA section 3A requiring the Division of Emergency Management to provide an annual update and presentation to the committee and the Senate Committee on Government Operations on all action items in the All-Hazards Mitigation Plan, to be delivered on or before the last legislative day in January. Counsel said this aligns information the committee needs with existing federal FEMA planning requirements.

Voluntary buyout and reimbursement program: The amendment continues to authorize municipalities to acquire flood-prone properties at full market value and creates a voluntary buyout reimbursement program within the Agency of Administration to compensate municipalities for lost property tax revenue when acquired properties are preserved as open space. Draft language requires that municipalities maintain acquired properties as open space with a permanent restriction on development. Counsel warned that the permanent restriction clause as drafted could raise a common-law rule-against-perpetuities concern and said he will produce a tweaked version in draft 2.2.

Payment schedule and restrictive covenants: Counsel described a change from a previously proposed "linear decay" to a payment schedule that pays the full calculated amount for the first five years; thereafter, for five-year periods while the property continues to qualify, the municipality would receive 50% of the original payment amount each period rather than ongoing decay. Counsel and members clarified that the property must be preserved as open space (parks, natural areas, flood mitigation) and not repurposed for commercial or residential development.

Pilot fund transfer: The amendment would direct the Commissioner of Finance and Management in FY2026 to transfer $1,000,000 from the pilot special fund to the voluntary buyout reimbursement program. Counsel said this is a transfer, not an appropriation, and has been relabeled per drafting guidelines.

Vermont Community Radio Grant Program: New language taken from H.307 would create a one-time grant program administered by the Commissioner of Public Safety in collaboration with the Vermont Association of Broadcasters. Eligibility is limited to nonprofit, noncommercial Vermont-licensed community radio stations that demonstrate emergency-broadcast capability or capacity to provide it if funded. The draft caps grants at $25,000 for up to seven active community stations and $10,000 for up to three stations under construction, includes a report-back requirement by 06/30/2026, and contains an appropriation of $205,000 for the program. Counsel added that any unexpended funds for the program must revert to the general fund by 07/01/2026.

Municipal finance provisions: Counsel walked the committee through several municipal finance changes in title 24: - Unassigned fund balances: Monies approved by voters but unexpended at fiscal year end could become unassigned fund balances under the control of the municipality's legislative body (selectboard, city council or trustees). Counsel and a municipal official explained this allows local legislative bodies flexibility to invest or expend those funds for public purposes rather than requiring a voter-floor action for each use. - Emergency borrowing: The draft adds authority for a municipality's legislative body to borrow in the municipal corporation's name by issuing notes or orders for expenses or public improvements associated with an all-hazards event or declared state of emergency, for terms not to exceed five years (or the reasonably anticipated useful life of an improvement). Counsel noted statutory definitions in 20 VSA chapter 1 apply. - Level debt-service option: The amendment allows municipalities discretion to structure serial bond payments as substantially level or declining annual debt service, rather than the stricter current timing rules. Counsel described conforming technical edits to existing debt service language.

Testimony and stakeholder remarks

A representative of the State Auditor's office told the committee the auditor's review of the state hazard mitigation plan found the legislature lacked routine information on progress and supported the added annual report to the committee as a low-cost, information-improving change. Josh Henford, identified in the record as policy director for the Vermont League of Cities and Towns, and Samantha Shee (municipal official joining from Hancock) both urged the committee to include the municipal finance provisions. They said the changes address practical recovery challenges towns face after repeated floods, can improve municipal borrowing costs, and give towns tools to respond before federal reimbursements arrive. Shee cited Burlington's past use of an unassigned fund balance to improve borrowing position and said such actions have produced measurable interest-cost savings.

Committee action and next steps

No formal vote on H.397 occurred in the session recorded by the transcript. Committee counsel said he would circulate draft 2.2 later for a technical tweak to the buyout restrictive-covenant language. The committee agreed to reconvene after lunch at 1:15 p.m. to continue discussion and to vote on the amendment.

Ending

The committee left the record with counsel to produce draft 2.2 addressing the restrictive-covenant wording and with members scheduled to return at 1:15 p.m. for a planned vote and any remaining motions.