Senate advances bill updating Vermont Economic Development Authority, creates disaster recovery loan fund

The Vermont Senate on the floor ordered third reading of H 3 98, “an act relating to the Vermont Economic Development Authority,” after a committee report and floor discussion that described technical updates to the authority's powers and the creation of a revolving disaster recovery loan fund for businesses and agricultural enterprises.

Senator Chittenden, reporting for the Senate Committee on Finance, told the Senate the bill makes numerous technical and policy updates to the authority’s statute. He said the bill expands definitions of eligible projects, codifies a previously informal “memo from Howard Dean” into statute, broadens the authority’s lending powers beyond mortgage loans to include secured loans tied to equipment or revenue streams, and modernizes governance and administrative rules — including allowing officers to be elected from among authority members and permitting electronic signatures on bonds. “Never seen that before. So I think that's good practice. I'm glad we're cleaning that up,” Senator Chittenden said on the floor.

The bill also, according to the finance committee report, removes the governor’s role in approving the authority’s executive director compensation, replaces an outdated subchapter repealed in 2016, extends the maximum duration of loans for local development corporations from 10 to 20 years, and shields members and staff from personal liability for bonds or contracts except for intentional misconduct.

A new provision creates a Vermont disaster recovery loan fund as a revolving loan fund to provide low-interest loans and other financial assistance to businesses and agricultural enterprises after disasters. The legislation requires the authority to consult with the secretaries of the Agency of Commerce and Community Development (ACCD) and Agriculture before making funds available after a disaster unless the event is declared a disaster by the governor or the president. The bill caps interest rates “necessary to cover the cost of administering this fund,” and specifies that any excess revenue be deposited into the fund. Senator Chittenden said the bill as introduced would provide an initial $2,000,000 appropriation for the fund and that the Joint Fiscal Office and Appropriations Committee identified those funds as coming from unspent Business Emergency Gap Assistance Program (BGAP) allocations used during prior floods.

The Senate Committee on Finance reported its vote to advance the bill as 7-0-0. Senator Westman, reporting for the Committee on Appropriations, explained that the House removed an explicit appropriation from the bill because the funding was reflected in the 2025 Appropriation Act and that $2,000,000 is expected to be drawn from BGAP money appropriated in fiscal 2025.

Senators asked several substantive floor questions before the Senate ordered third reading. A senator from Windham asked whether the bill’s eligible project definitions on pages 26–27 include transit or transportation access as components necessary for employment; Senator Chittenden said he would provide a specific answer at third reading. Another senator asked whether the bill permits the authority itself to designate an event as a disaster for purposes of making funds available, noting concern about delegating to the authority what has typically been a governor- or president-declared threshold. Senator Chittenden said he did not recall a committee discussion specifically authorizing that delegation and offered to clarify or consider revising the language before third reading.

The Joint Fiscal Office’s fiscal note, read on the floor, said it is possible future demand on the revolving fund could require additional capitalization beyond the initial $2,000,000 appropriation.

On the floor vote to order third reading, the chair put the question and the ayes prevailed by voice vote; no roll-call vote was recorded on the floor at that time. The Senate set third reading for the floor session scheduled to reconvene at 9:30 a.m. on Tuesday, April 20, 2025.

The bill contains multiple technical drafting changes and a mix of governance, lending, and liability provisions that committee testimony said align statute with current practice at the Vermont Economic Development Authority.