Committee reviews H.398 rewrite of VEDA statute; VIDA seeks employee housing authority and disaster-recovery loan fund

Legislative counsel and representatives of VIDA (the Vermont Industrial Development Authority, referred to in the bill as the authority) presented a walkthrough of H.398 to the House Committee on Commerce and Economic Development on Feb. 26, focusing on statutory clean-up and several substantive new authorities the bill would grant.

Rick Sagle, legislative counsel, told the committee the bill amends the entire VEDA chapter and that many changes are technical housekeeping. "I'm gonna be walking through H 398, which I believe is ready to be introduced, on the floor," Sagle said, opening the committee's review.

Cassie Palimas, chief executive officer of VIDA, said the bulk of the proposal makes the statute easier to use but singled out two material requests the authority seeks: limited authority related to housing and a permanent disaster-recovery loan fund. "We are here to go through some general I'm gonna call it housekeeping type of changes to VIDA's bill," Palimas said, and noted the housing and disaster-recovery provisions as the primary substantive items for discussion.

Major substantive items discussed

- Housing for employees: H.398 would remove a current prohibition on including housing within the definition of an "eligible facility or project" and add a provision to allow certain housing projects designed to house employees of a business to be eligible for VEDA involvement "upon consent of [the] Vermont Housing Finance Agency." Counsel and VIDA staff described the change as narrowly focused on housing tied to business workforce needs rather than general-market housing. Committee members asked whether the language should mirror similar deference provisions elsewhere in statute to reduce ambiguity.

- Permanent disaster-recovery loan fund: The bill adds a new subchapter to create a Vermont disaster-recovery loan fund inside the authority. Vida's CEO characterized this as a new, material financing tool for businesses affected by natural disasters; legislative counsel noted the provision is one of the most substantive changes in the bill.

- Shift from "mortgage" terminology to "secured loan": The draft replaces repeated references to "mortgage" with broader "secured loan" language in subchapter 5 and elsewhere. Counsel and VIDA staff said the edits align the statute with current financing instruments the authority uses.

- Governance and operational edits: The bill would remove obsolete references to a now-repealed subchapter and streamline officer/manager appointment language, remove a requirement that the manager's compensation receive the governor's approval, and allow the authority to set policies that delegate loan approvals to loan officers rather than require manager sign-off on every transaction.

- Bonding and financing technical changes: H.398 consolidates repetitive findings and updates bond-sale and signature language to allow modern digital signatures and to clarify who handles proceeds ("trustee, lender or dispersing agent"). Counsel described these as technical changes that conform to contemporary practice.

Sustainable jobs strategy and statutory cross-references

Sagle flagged a recurring reference in the draft to a "Vermont Sustainable Jobs Strategy" (section 280b) that would inform authority criteria. He told the committee he was not aware the state currently maintains a living strategy in that name and recommended the committee consult ACCD and VIDA about whether the strategy exists and whether to retain the cross-reference. "If there isn't one and there isn't an effective purpose for having it, then you may want to remove this section," Sagle said.

Next steps and procedural notes

Committee members asked VIDA and staff to supply tighter language for the housing consent provision so it dovetails with existing VHFA deference language; VIDA staff indicated they would propose wording consistent with prior statutory language. Members also asked for clarification about records language tied to a repealed subchapter and whether any outstanding mortgage records remain subject to existing retention requirements.

Cassie Palimas and VIDA staff indicated they would return with refinements and those technical edits will be considered at the committee's next scheduled meeting to finish the walkthrough and to position the bill for introduction prior to crossover.

Ending

The committee recessed the detailed H.398 review to a follow-up session, instructing VIDA and legislative counsel to supply replacement language for the housing consent provision and to confirm references to the sustainable jobs strategy and to records-retention language in the bill.