Committee hears H.233 to streamline state grant processes and clarify indirect-cost rules

Representative (name on transcript) introduced H.233, a revision aimed at simplifying how state grants and subgrants are administered, especially for municipalities, sheriffs and nonprofits. She said the bill would create a study group to review agency grant processing and provide a mechanism for applicants to request a higher indirect rate when needed. "This bill is aimed at making those processes, more efficient and beneficial to the service delivery," the sponsor said.

Charlie Baker, executive director of the Chittenden County Regional Planning Commission, told the committee that regional planning commissions rely on grants for most of their budgets and that inconsistent agency practices create administrative burdens. Baker said agencies sometimes require new paperwork or contract processes that duplicate effort and delay work. He described past incidents in which his commission had to escalate indirect‑rate recognition to the secretary level to get approval.

Peter Gregory, executive director of Two Rivers-Ottauquechee Regional Commission, echoed Baker and urged consistent recognition of state‑approved indirect rates across agencies. Both RPC witnesses said prompt agency responses and clearer rules would reduce delays and costs for towns and regional bodies.

Emma Paradis, manager of policy and strategic initiatives at Common Good Vermont, recounted examples from a working group of nonprofits: organizations sometimes wait weeks for reimbursement and may need bridge loans to continue services. Paradis said one organization reported an eight‑week payment delay that forced its executive director to forgo pay for a week; another reported taking a $20,000 bridge loan. She also described an instance in which an organization spent roughly $17,000 preparing to do work and then backed out when contract documentation problems made payment untenable.

Witnesses and the sponsor emphasized that H.233 would not force agencies to allow higher indirect rates but would create a process for applicants and agencies to agree to higher rates where justified. Testimony noted that the Agency of Administration updated guidance to raise a de minimis indirect rate to 15% this summer, aligning better with federal practice, and the bill would provide an appeals or recognition process for other approved rates.

Regional planning commissioners said they sometimes receive federal funds that require timely state matching or administration; delays in state contracting can threaten those federal dollars and local project timelines. Baker proposed exploring language that would allow agencies to directly contract with regional planning commissions where appropriate, to avoid unnecessary bid cycles when an agency has already signaled intent to retain an RPC.

The committee did not take formal action on H.233 during the hearing. Sponsors and witnesses offered to provide draft language and additional examples to refine the bill and to participate in the proposed study group.