Business Success

• Commerce Budget Letter: The House Commerce and Economic Development committee reviewed annual budget requests from statewide agencies and economic development organizations in preparation for sending their annual budget request letter to the House Appropriations committee. Continued focus on investing in economic development tools and programs that will move Vermont toward greater economic growth and competition remains vital for correcting structural issues facing the Vermont economy.
• Vermont Adjutant General: Deputy Adjutant General Henry Harder was elected as the new Adjutant General of the Vermont National Guard by a Caucus of the Whole. He succeeds retiring 2025 Citizen of the Year Adjutant General Knight, who served eight years in the role and built meaningful relationships and trust between the Vermont National Guard, the legislators, and the broader public. The Vermont Chamber extends its gratitude to General Knight for his dedicated leadership and for 43 years of distinguished service to our nation.
• Health Care Costs: The Senate Health and Welfare Committee heard testimony from the Green Mountain Care Board, which is advocating that hospital savings be targeted to specifically reduce costs for those in the state’s qualified health plans. The consequences could be significant for employers in the self-insured and large group market, the latter of which already saw an average 15% increase this year.
• Budget Adjustment: The House took up H.790, , the budget adjustment bill that makes midyear changes to the FY ’26 state budget. The House and Senate Appropriations committees will now meet for a committee of conference to find compromise between the House and Senate versions of the bill.
• Housing Construction: The House General and Housing committee continued discussions on H.775, refining provisions that would direct the Treasurer’s office to support financing for off-site modular homes and authorize the Vermont Housing Finance Agency authority to assist in funding long-term care facilities construction. These initiatives could promote more efficient housing development and strengthen access to residential healthcare services.
• Housing Development: The Senate Economic Development, Housing, and General Affairs committee continued work on S.328, reviewing funding incentives for high-density housing built with union labor and a provision prohibiting common interest communities from banning long-term rentals. While expanding rental markets is a meaningful step toward increasing housing supply, a union incentive could exclude smaller businesses and rural areas with lower union representation.
• Career and Technical Education (CTE): The Senate Education committee continued review of S.313, discussing governance models, expanded access, aligned graduation credits, and integration of adult education programs. A collaborative approach between legislators, CTEs and the Administration will be essential to modernizing CTE and strengthening its role in Vermont’s education and workforce development.
• Commercial Property Assessed Clean Energy: The Vermont Chamber gave testimony to the Senate Finance committee on S.138, a bill proposing to expand the PACE program to include commercial and industrial buildings. The PACE program expansion would allow business owners to finance energy improvements and repay the cost over time through a special assessment on their property tax bill.
• Redistricting: The House and Senate Education committees continued discussion on potential redistricting of Vermont’s education system. With regional models, voluntary merging, and draft map proposals all still under debate after seven weeks of work, substantive proposals and decisions must soon be made to continue on the path toward education reform and cost-saving measures.
• Efficiency Standards: The House Energy and Digital Infrastructure committee continued work on H.718, making significant progress toward a balanced, incremental approach to establishing reliable and predictable residential building code standards. The bill now includes safe harbor language to protect builders and preempt liability arising from the Governor’s Executive Order allowing use of 2020 Residential Building Energy Standards.
• Cannabis Event Permits: The Senate Economic Development, Housing, and General Affairs and the House Government Operations and Military Affairs committees heard testimony in a joint hearing on S.278, which proposes significant changes to cannabis laws, including a pilot program for cannabis events licenses modeled after alcohol events permits. As work continues, potential insurance and liability burdens for venues where cannabis consumption may be allowed must be considered.
• Miscellaneous Tax Bill: The House Ways and Means Committee continued work on a committee bill making targeted administrative and policy updates to Vermont’s tax laws. The draft includes several provisions employers should be aware of: repeal of the denial of credits for taxes paid in another state by S corporations, which restores more equitable treatment for pass-through businesses; an increase in the Down Payment Assistance Program credit cap to reflect rising housing costs and support workforce housing access; and an increase in the estate tax filing threshold, which may reduce tax exposure for family-owned businesses and succession planning. Additional technical updates address property transfer tax, current use administration, and grand list timelines. This bill is expected to serve as the primary vehicle for potential federal tax conformity updates this session. Those conformity provisions are not yet included, and it remains unclear where they will ultimately land. The Vermont Chamber continues to advocate for thoughtful conformity to support business investment, modernization, and long-term competitiveness.
• Net Metering: The House Energy and Digital Infrastructure continued work on H.716, a bill revising net metering credits. After stakeholder input and language review, the committee removed a harmful clause that would have capped the negative adjustor for net-metered energy, avoiding potential cost shifts onto non-net-metered ratepayers.
• Economic Development: The Senate Economic Development, Housing, and General Affairs continued work on S.327, eliminating the Business Development Task Force and assigning further responsibilities to the Agency of Commerce and Economic Development. While efficiency and continued focus on developing economic competitiveness remain priorities, continued stakeholder engagement will be vital for ensuring a thorough review of challenges and opportunities facing Vermont businesses.
• Tax Classifications: The House Ways and Means Committee continued work on expanding property tax classifications from two to three categories. Discussion included categorizing short- term rentals in apartment buildings, misclassification penalties, and potential impacts of seasonal workforce housing being included in the same tax classification as second homes and short-term rentals, creating a potential barrier for visiting workers.
• Liquor Liability: The Vermont Chamber testified before the House Government Operations and Military Affairs Committee in support of repealing the mandatory liquor liability insurance requirement. Removing this mandate would eliminate a significant cost burden for businesses while preserving existing accountability standards.
• Streamlined Housing Development: The Senate Natural Resources and Energy and Senate Economic Development, Housing, and General Affairs committees reviewed persistent bottlenecks to housing development, focusing on infrastructure, zoning, and permitting delays. Legislators continue consideration of advancing legislation around pre-approved housing designs, an initiative that could cut build times, reduce permitting delays, and slash housing costs if implemented.
• Convention Center Feasibility: The Vermont Chamber is serving on a statewide task force evaluating the feasibility of a convention center and performance venue in Vermont, and in this week’s meeting examined potential governance and funding models used for building and maintenance. While public-private partnerships and other funding mechanisms were discussed, evidence pointed to additional burdens of state or local funding being necessary for any project to pencil out. Email us to learn more.
• US Supreme Court Tariff Ruling: The U.S. Supreme Court struck down sweeping tariffs set by President Trump under the International Emergency Economic Powers Act, ruling they exceeded constitutional authority. While the decision did not directly address refunds for businesses that paid the tariffs, further guidance or mechanisms for potential reimbursement may emerge.
• Senate Pro-Tempore Retirement: Senate Pro Tempore Phil Baruth announced on the Senate floor that he will retire at the end of the session and will not endorse a successor. With significant time remaining in the session, the announcement is likely to spark early leadership positioning and introduce new dynamics into the legislative process.

Retail Delivery Fee: The House Transportation committee introduced H.863, a bill that would impose a fee of $0.30 on all retail deliveries. The proposal would raise burdensome and costly new administrative and compliance requirements on Vermont businesses that operate direct-to- consumer services.

Local Option Gas Tax: The Senate Transportation Committee reviewed language allowing municipalities to impose an additional 1 percent local option tax on sales, meals and rooms, or alcohol, with much of the revenue retained by the state for the Transportation Fund. While a long term transportation funding solution is needed, this approach could raise costs for businesses in the visitor economy without resolving the underlying structural challenges.

Tax Credit Opt Out: The House Ways and Means committee discussed opting out of a $1,700 federal tax credit for contributions to scholarship organizations that help pay education expenses for elementary and secondary students. Choosing to forgo this no-cost federal incentive could shut the door on an additional funding mechanism for Vermont’s education system

Income Tax Brackets: The House Ways and Means committee introduced H.732, a bill that would add new income tax brackets at the $200,000 and $400,000 income levels to generate additional revenue for the education fund. Reliance on additional and volatile income taxes to address structural spending problems will not address the underlying affordability crisis facing Vermont, the third most taxed state in the nation.

Tax Classifications: The House Ways and Means Committee continued work on expanding property tax classifications from two to three categories, including discussion of defining employer-provided housing as a nonmonetary employment benefit and limiting property attestation forms to properties with fewer than five dwellings. The committee chair signaled that additional testimony will be taken next week as lawmakers continue to evaluate the structure and potential impacts of the proposal.

Budget Adjustment: The Senate advanced H.790, the budget adjustment bill that makes midyear changes to the FY ’26 state budget. The committee largely concurred with the House proposal to carry surplus funds into the FY ’27 budget for potential use in a property tax buydown once the broader budget outlook takes shape. The bill now moves to the House Floor for further consideration.

Cannabis Event Permitting: The Senate Economic Development, Housing, and General Affairs committee reviewed S.278, a bill that would authorize general event permits for cannabis sales, with limited hours, access-controlled spaces, licensed entity applications, and municipal approval requirements similar to alcohol event permits. With significant implications for venues statewide, careful consideration will be needed before advancing this broad expansion of cannabis use.

Public Safety: The House and Senate Judiciary Committees held a joint hearing on the Chittenden County Accessibility Court pilot, launched in response to record case backlogs. The pilot has resolved over 700 pending cases and will continue at a scaled-back level, with testimony also noting that long-term success in reducing court volume will depend in part on addressing underlying housing instability.

Economic Development: The Senate Economic Development, Housing, and General Affairs committee continued review of S.327, emphasizing the need to improve communication of business resources and clarify Vermont’s branding initiatives. As discussion continues around requiring an administrative report before establishing a Business Development Task Force, it remains important to consider the strong impact a task force working in tandem with this report could have on creating accessible and competitive economic environments.

Alcohol: The House Government Operations and Military Affairs committee continued testimony on an omnibus alcohol bill, hearing overwhelming support from the alcohol industry on improvements the bill would make to distribution allowances, services in farmers markets, consumption levels permitted in tasting rooms and retail shops, and permitting and hours of service for off-site tasting events.

Health Care Recruitment: The Senate Health and Welfare committee reviewed S.142, a bill creating a pathway to licensure for internationally trained medical professionals. With strong stakeholder support, the proposal would help address workforce shortages and strengthen Vermont’s ability to attract and retain skilled healthcare providers.

Health Care: The Senate Health and Welfare committee continued work on S.190, a bill that would put outsourced hospital services under the Green Mountain Care Board’s budget-setting authority and require hospitals to compare their posted pricing to Medicare in preparation of reference-based pricing. These changes aim to continue momentum of cost containment efforts.

Vermont Housing Improvement Program (VHIP): The House General and Housing committee reviewed the VHIP program, which helps property owners bring vacant or code-deficient housing back online in an affordable manner. Without a base funding allocation as requested by the Administration, the future of one of the state’s most effective housing development programs remains uncertain

Agency of Commerce and Community Development (ACCD) Budget: The House Commerce and Economic Development and House Appropriations committees heard testimony on ACCD’s budget proposal, including much-needed funding for the Manufactured Home Improvement Program, International Business Development Office, and a request for base funding to VHIP. No additional funding was requested by the Department of Tourism and Marketing or for economic development programs though investments in both of these areas have returns that help grow the economy.

Net Metering: The House Energy and Digital Infrastructure committee reviewed H.717, a bill that would cap or eliminate the negative adjustor for net-metered energy. If enacted, the proposal could shift additional costs onto non-net-metered ratepayers and disrupt the Public Utility Commission’s established process for regularly updating adjustors based on competitive market prices.

Plastics Prohibitions: The Senate Natural Resources and Energy committee continued testimony on S.247, a bill that would prohibit advanced recycling and chemical conversion technologies and restrict certain materials used in medical equipment. These provisions could add cost pressures to an already strained healthcare system and place the state out of alignment with others pursuing innovative waste management solutions.

Noncompete: The House Commerce and Economic Development continued work on H.205, bill that would ban non-competes and restricts an employer’s use of retention incentive agreements. The bill continues to take shape into a more workable proposal, with legislators including flexibility, reflecting testimony from impacted employers, and continuing work to remove any unintended consequences.

• Redistricting Map: After a year of contentious debate over the future of Vermont’s education system, the House Education Committee chair released a proposed redistricting map to move the conversation from theory to a more tangible framework for discussion. Framed explicitly as a starting point, the map sets the stage for stakeholder feedback and upcoming testimony, with key questions around governance, cost pressures, local control, and implementation.
• Omnibus Housing Bill: The Senate Economic Development, Housing, and General Affairs committee continued review of S.328, working to ensure that town housing goals continue to integrate with statewide development targets and continuing to develop an off-site housing construction pilot program that could make it easier to create new housing statewide
• Rural Housing: The House General and Housing Committee continued work on H.775, a multifaceted housing production bill focused on incentivizing small-scale rural development by unlocking new financing tools and reducing barriers for small developers. Committee discussion explored the proposal of an off-site housing construction accelerator pilot program that could lead to more efficient, timely, and consistent home creation.
• Land Use Permitting: The House Environment committee introduced H.805, a bill that would allow Agency of Natural Resources-certified engineers to help streamline wetland and stormwater permitting for projects with minor impacts. Modeled after existing wastewater exemptions, the proposal could improve permitting efficiency.
• Omnibus Alcohol Bill: The House Government Operations and Military Affairs committee combined four alcohol-related bills into a single omnibus alcohol bill that would improve operations for alcohol suppliers by increasing distribution allowances, allowing services in farmers markets, increasing consumption permitted in tasting rooms and retail shops, and improving permitting and hours of service for off-site tasting events.
• Vermont Employment Growth Initiative (VEGI): The Senate Finance and Senate Economic Development, Housing, and General Affairs committees continued review of S.225 and S.327, which would remove the sunset of the VEGI program and preserve access to this key economic development tool.
• Outdoor Recreation Day: On Outdoor Recreation Day, committees heard testimony on the outdoor recreation industry’s $2.1 billion contribution to Vermont’s GDP and its support of over 16,000 jobs.
• Health Care: The House Health Care committee continued testimony on H.585, a bill proposing broad reforms to health insurance structures, including the permitting of association health care plans to provide additional choices for employers and self-employed Vermonters. Continued introduction of tools like these remains critical to stabilizing Vermont’s volatile insurance markets and improving affordability for ratepayers.
• Prescription Drugs: The House Health Care committee received updates on legislation passed last session to cap prices on certain prescription drugs to make health care more affordable. The committee also discussed strategies to pool purchasing power and reduce drug costs to help curb systemically high healthcare expenses.  
• Budget Adjustment: The Senate Appropriations committee reviewed H.790, the House-passed budget adjustment bill, which makes midyear changes to the FY ’26 state budget. The committee concurred with the House proposal to carry surplus funds into the FY ’27 budget for potential use in a property tax buydown once the broader budget outlook takes shape.
• Education Spending: The Senate Finance committee continued work on S.220, a bill that would align education spending growth with inflation while implementation of education reform takes shape. While recent compromises in the bill allow for more flexibility in extreme circumstances, it remains unclear if the bill will move beyond this committee as debate continues.
• Rodenticides: The House Agriculture, Food Resiliency, and Forestry committee reviewed H.758, a bill that would completely ban the use of rodenticides outside lengthy and narrow waiver procedures for applicators in cases of agricultural, environmental, or public health emergencies. Such a ban could significantly affect facilities management, food safety, and operational costs for businesses across sectors, particularly those in food service, hospitality, and manufacturing.
• Tax Classifications: The House Ways and Means committee continued work on the expansion of property tax classifications from two to three, determining property taxation will be based on percentage of property use within in each category. Significant challenges remain, including the verification of property use attestations, administration and collection of forms, and the cost of implementation.
• Leave Policy (H.459): House General and Housing Committee discussed a policy proposal to stop workers’ compensation leave from running concurrently with Parental and Family Leave. Committee members raised concerns about employer costs, particularly for smaller or benefit-rich employers, and questioned whether the bill was overly burdensome. The committee agreed to have the bill drafted with an employer size threshold for further discussion.
• Flexible Working Arrangements: The Vermont Chamber of Commerce testified before the Senate Economic Development, Housing, and General Affairs committee on S.230, a bill that would shift the onus to employers to prove that flexible working arrangements are unworkable. Vermont has one of the most extensive flexible working arrangement laws in the country and this is a solution in search of a problem.
• Non-Compete: The House Commerce and Economic Development committee continued work on H.205, a bill that would broadly ban non-competes and restricts an employer’s use of retention incentive agreements. The bill continues to be shaped into a more workable proposal.
• Franchises: The House Commerce and Economic Development committee continued work on H.733, a bill that would significantly expand state regulation of business-to-business franchise relationships by limiting termination and renewal rights and imposing mandatory inventory repurchase and transfer requirements. The proposal raises serious concerns about government intrusion into private contracts, added compliance costs, and potential impacts on franchise investment and expansion in Vermont.
• Mediators: The House General and Housing committees advanced H.548, a bill that would create a new state position offering mediation services to both public and private sector businesses and their employees’ collective bargaining units. The bill now moves to the House Floor for consideration
• Career Technical Education (CTE): The Senate Education committee heard testimony on risks of applying broad reform to a diverse system of CTE centers while also considering the complexities of creating real solutions to the problems facing CTE centers. Ensuring CTE centers are properly funded, accessible to students, and integrated with broader education reform remains vital for developing Vermont’s future workforce.
• Event Ticketing: The House Commerce and Economic Development committee continued testimony on H.512, a bill aimed at curbing resale of event tickets to improve event attendance and strengthen protections for venues using online ticketing platforms. Questions remain around potential impacts on face-value reselling platforms and possible exceptions for venue-reseller partnerships
• Purchase and Use: The House Ways and Means Committee reviewed the Governor’s proposal to shift the remaining one-third of vehicle purchase and use tax revenue from the Education Fund to the Transportation Fund over the next three years. This transition is important to meet federal match and road maintenance requirements.
• Meals and Rooms: The Senate Finance Committee reviewed S.286, a bill proposing a 2 percent increase to the rooms and meals tax and further raising costs for businesses in the visitor economy. During review, the committee chair emphasized that significant testimony from impacted industries will be needed.

• Omnibus Housing Bill Advances: The Senate Economic Development Committee advanced a comprehensive housing bill that takes important steps to increase housing supply by strengthening municipal housing planning requirements and modernizing zoning to allow more duplexes and small multi-unit homes where infrastructure exists. As the bill moves forward, the Chamber will focus on ensuring that new labor incentives, rent regulations, and added requirements do not unintentionally drive-up construction costs or slow the pace of housing production needed for Vermont’s workforce.
• Rural Housing: The House General and Housing Committee reviewed H.775, a multifaceted housing production bill focused on incentivizing small-scale rural development by unlocking new financing tools and reducing barriers for small developers. Committee discussion explored governance and financing mechanics, accessibility considerations, and how these tools could support housing production across rural communities.
• Recycling and Material Innovation Ban (S.247): The Senate Natural Resources and Energy Committee reviewed provisions of S.247 that would prohibit advanced recycling and chemical conversion technologies, effectively closing the door on emerging recycling innovation and related investment in Vermont. This type of blanket ban sends an anti-business signal that puts Vermont out of step with states pursuing circular economy solutions and modern waste management strategies.
• Health Care Supply Impacts (S.247): Separate sections of S.247 also include restrictions on materials used in medical tubing and solution containers that could increase costs and limit supply options for health care providers. These changes risk adding pressure to an already strained health care system, with downstream cost impacts for employers and patients.
• Land Use and Housing: The Senate Natural Resources and Energy Committee held multiple hearings this week to understand the state of the housing discussion and its intersection with land use, including updates on mapping, Act 181, and the community housing investment program.
• Budget Adjustment: The House advanced H.790, a bill making adjustments to the FY ’26 budget. While the Governor proposed using surplus funds to immediately buy down projected property tax increases, the House version would carry the funds into the FY ’27 budget for potential use in a buydown or for other priorities. The bill now moves to the Senate for consideration.
• Yield Bill: The House Ways and Means Committee reviewed projected FY ’27 property tax rates but will wait to set rates until school budgets are finalized. With a funding gap exceeding $100 million, a combination of buydowns and rate increases is expected, directly impacting employers and affecting economic predictability as runaway costs continue.
• Alcohol: House Government Operations committee took testimony on H.672, H.655, H.647, and a committee bill, a flight of alcohol-related legislation that would expand permissions for sale, total distribution, and number of establishments allowed in the alcoholic beverages industry. These changes could streamline the sale and distribution of alcohol for licensees.
• District Consolidation: The House Education committee continued reviewing school district consolidation as a strategy to reduce education costs. Despite earlier legislative goals to adopt a new district map by the end of the month, delays indicate a continued lag in policy committees to adopt key cost-saving measures.
• Mileage-Based User Fee: The Senate Transportation committee continued testimony on implementation of a mileage-based user fee for electric vehicles, putting forward a system that would charge EV owners based on odometer readings. While this change would help recoup some revenue for the flagging Transportation Fund, additional action will be needed to ensure Vermont’s roads remain adequately funded and maintained.
• Dental Workforce Development: The House Government Operations and Military Affairs committee heard testimony on H.588,  a bill that would create a temporary license for visiting dental students. This licensure update could help expand Vermont’s dental workforce by making it easier for students to practice, certify, and remain in the state.
• Tax Classifications: The House Ways and Means committee continued work on the expansion of property tax classifications from two to three. Many challenges still need to be addressed, including the verification of property use attestation forms, administration and collection of forms, and the cost of implementation. Dwelling and employee housing definitions also remain in flux.
• Career Technical Education (CTE): The Senate Economic Development, Housing, and General Affairs committee reviewed S.313, a bill outlining goals to align CTE with workforce needs, expand access, reduce barriers, and better integrate CTE courses with graduation requirements. While the bill marks a strong start to CTE reform discussions, continued focus is needed to ensure students have the opportunity build skills necessary to meet the needs of Vermont employers.
• Event Ticketing: The House Commerce and Economic Development Committee reviewed an updated version of H.512, a bill aimed at curbing the resale of event tickets. If advanced, the bill could improve event attendance and strengthen protections for venues using online ticketing platforms.
• Energy Codes: The House Energy and Digital Infrastructure Committee continued testimony on H.718, a bill that would push enforcement of existing residential and commercial building energy codes, require new disclosures and training for contractors, and allow municipalities to enforce energy codes alongside the state. If advanced, this bill could add regulatory layers and administrative complexity, a move that directly conflicts with the urgent housing crisis.
• Flexible Working Arrangements: The House General and Housing Committee introduced H.726, a bill that would require employers to grant employee requests for flexible working arrangements, shifting the onus to businesses to prove these arrangements would not work.
• Non-Compete: The House Commerce and Economic Development Committee took up testimony on H.205, a bill that would broadly ban non-competes and restricts an employer’s use of retention incentive agreements. While some improvements have been made as a result of the Non-Compete Agreements Study Committee report released this past fall, additional changes are needed to make the bill balanced and workable.
• Franchise Agreements: The House Commerce and Economic Development Committee reviewed H.733, a bill that would significantly expand state regulation of business-to-business franchise relationships by limiting termination and renewal rights and imposing mandatory inventory repurchase and transfer requirements. The proposal raises serious concerns about government intrusion into private contracts, added compliance costs, and potential impacts on franchise investment and expansion in Vermont.