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Issue Updates from the State House | Week of February 24, 2026

February 27, 2026February 27, 2026

Issue Updates from the State House

Week of February 24, 2026

A weekly snapshot of key legislative activity impacting Vermont’s business community.

Commerce Budget: The House Commerce and Economic Development Committee finalized its annual budget letter to Appropriations, outlining funding priorities across housing, workforce, and economic development. Key requests include continued support for VHIP, workforce training through Advance Vermont, the International Business Office, and expanded Downtown and Village Tax Credits to spur redevelopment. Several proposals include one-time funding components, particularly within housing, workforce, rural technical assistance, and economic development initiatives.
Housing: The Senate Economic Development, Housing, and General Affairs Committee continued work on S.328, adding accessory dwelling units to the list of uses that must be permitted under homeowners association bylaws and reviewing the bill’s broader budget implications. As housing affordability and economic growth remain closely tied to population trends, securing and sustaining funding for these initiatives will be critical as budget negotiations advance.
Housing Solutions: The House General and Housing Committee advanced H.775, legislation aimed at promoting more efficient housing development and strengthening access to residential health care services. The bill now moves to the House Ways and Means Committee for further consideration.
Yield: The House Ways and Means Committee continues to weigh how much one-time funding to use to buy down this year’s property tax increase and whether relief will be split evenly between homestead and non-homestead properties. The Vermont Chamber is advocating for fiscal responsibility and equitable treatment to avoid shifting long-term burdens onto employers.
Liquor Liability Insurance: The House Government Operations Committee heard testimony on language that would repeal the mandatory liquor liability insurance requirement. The proposal responds to ongoing instability in the national casualty insurance market, which has driven significant premium volatility in Vermont’s small and concentrated hospitality sector. Repeal would maintain existing civil liability and regulatory safeguards while restoring regulatory proportionality during a period of market disruption.
Event Ticketing: The House Commerce and Economic Development Committee advanced H.512, legislation aimed at curbing excessive resale of event tickets and strengthening consumer protections for venues using online ticketing platforms. The bill now moves to the House Floor for further consideration.
Culinary Institute Study: The Senate Economic Development, Housing, and General Affairs Committee continued work on S.327, adding a study to explore the creation of a culinary institute in Vermont. The Vermont Chamber is a named stakeholder. The proposal aligns with broader efforts to expand workforce pipelines and support long-term talent development in the restaurant and hospitality industries.
Career and Technical Education (CTE): The House Commerce and Economic Development Committee reviewed draft legislation to reform Vermont’s CTE system in coordination with broader education changes. While timelines, funding, and governance structures remain in development, expanded access and improved alignment with graduation credits signal progress toward strengthening Vermont’s future workforce pipeline.
Family Leave: The House General and Housing Committee continued testimony on H.459, which would prohibit certain employers from counting workers’ compensation leave toward Vermont’s family and medical leave requirements. The change would require these leave systems to run sequentially rather than concurrently. Adjusting how these programs interact carries implications for job protection timelines, return-to-work planning, and staffing predictability for employers.
Health Care: The House Health Care Committee continued work on H.585, which proposes reforms to Vermont’s insurance structure, including allowing association health plans to provide additional coverage options for employers and self-employed Vermonters. Lawmakers are evaluating whether expanded plan flexibility could help stabilize markets and address affordability pressures.
Private Equity: The House Health Care Committee reviewed an updated version of H.583, which would establish a new statutory framework governing acquisitions and changes of control involving health care entities, including transactions with private equity firms. The revised bill adds additional layers of oversight, raising concerns about limiting potential solutions to Vermont’s health care challenges and increasing uncertainty for privately owned providers.
Land Use: The Senate Natural Resources and Energy Committee continued review of S.325, a bill proposing targeted updates to land use and permitting policy. The proposal would extend certain Act 250 exemption sunsets to 2030 in order to support housing development and maintain momentum on broader permitting reform timelines. The committee will continue collaborative discussions in the weeks ahead on this significant housing and development initiative.
Current Use: The House Environment Committee began discussion of H.70, which would include land enrolled in the Use Value Appraisal Program within the statutory definition of conserved land for purposes of the state’s conserved land inventory. The proposal could help Vermont advance its conservation goals while recognizing the importance of balanced, smart growth.
Rodenticides: The Vermont Chamber testified before the House Agriculture, Food Resiliency, and Forestry Committee on H.758, which would broadly ban the use of anticoagulant rodenticides commonly used by food manufacturers, restaurants, and other food-related facilities to prevent rodent infestations. The bill is expected to be amended to replace the proposed ban with a study on rodenticide alternatives.
Swipe Fees: The Senate Finance Committee reviewed S.135, which would prohibit credit card fees on the tax and gratuity portions of transactions and require retailers to accept cash for purchases under $500. The proposal has drawn renewed attention following a recent ruling in Illinois, though the committee signaled it will wait for further legal clarity before advancing the bill.
Bottle Bill: The House Environment Committee advanced H.915, proposing changes to Vermont’s beverage container redemption program. A similar version was vetoed in a prior session, and concerns remain regarding potential cost increases for the beverage industry. Significant revisions are expected as the bill moves forward.
Education: The House and Senate Education Committees continued discussions on education reform and district mapping, weighing mandatory consolidation against more limited voluntary models. As crossover approaches, advancing durable reform will require difficult, and potentially unpopular, decisions to ensure long-term quality, operational efficiency, and cost sustainability within Vermont’s education system.

February 27, 2026

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Federal Tax Policy, Vermont Choices, and the Structure of R&D Policy

The House Ways and Means Committee is considering changes to how Vermont defines taxable income for businesses that invest in research and development. Vermont companies spend millions of dollars each year on R&D across advanced manufacturing, software, biotechnology, and applied research. The tax treatment of those investments directly influences capital allocation, hiring decisions, and long-term competitiveness.

The proposal contains two interdependent components that must be evaluated together. In combination, these changes could materially shape Vermont’s innovation climate, affecting how growth-stage and capital-intensive firms evaluate future investment in the state.

What the Bill Does

The draft legislation makes two significant changes.

First, it adds back federal Section 174 deductions for research and experimental expenses. That means Vermont would not allow businesses to deduct their R&D expenses when calculating state taxable income.

Unlike other areas of the tax code, such as bonus depreciation, the draft does not restore those expenses through state level amortization. As written, R&D costs would not be deductible for Vermont tax purposes.

Second, the bill increases Vermont’s R&D tax credit from 27 percent to 75 percent of the federal R&D credit. That is a substantial increase and would make Vermont’s credit one of the most generous in the country.

These two provisions must be understood together.

What This Means in Practice

There are two primary ways states can treat R&D spending.

One approach is deductibility. Businesses subtract their R&D expenses from taxable income, just like wages, rent, or other operating costs.

Another approach is relying more heavily on tax credits, which apply only to businesses that calculate and qualify for the federal R&D credit and have sufficient tax liability to use it.

Under the existing draft, Vermont would move away from deductibility and rely more heavily on the expanded credit.

For Businesses That Claim the Federal R&D Credit

Businesses that calculate and claim the federal R&D credit would see a larger Vermont credit under the proposed 75 percent rate.

However, because the deduction would no longer be allowed, the total state tax benefit may be smaller than under a system that includes both deductibility and a credit. The outcome depends on each firm’s cost structure and federal credit calculation.

For Businesses That Incur R&D Expenses but Do Not Claim the Credit

Not all businesses that invest in R&D claim the federal credit. Some may not meet the qualification thresholds. Others may not calculate it due to complexity or cost.

Under the draft language, those businesses would lose deductibility of R&D expenses and would not receive the benefit of the credit increase. For those firms, the proposal would result in higher Vermont taxable income.

For Early Stage and Growing Firms

Firms in a loss position or early growth stage often rely on deductions to build net operating losses that can offset future income.

If R&D expenses are permanently disallowed for Vermont purposes, those costs would not be recoverable at the state level, which may affect long term planning and investment decisions.

Timing Versus Permanence

A key distinction in this debate is whether Vermont intends to delay deductibility or eliminate it.

If Vermont required R&D expenses to be amortized over several years, businesses would still recover their costs over time. That is a timing adjustment.

Under the existing draft, there is no amortization restoration. As written, the policy would permanently disallow deduction of R&D expenses at the state level.

That structural difference has meaningful economic implications.

Where the Opportunity and the Risk Sit

The increase to a 75 percent R&D credit is significant. If structured correctly, it could position Vermont as a strong competitor for innovation-based investment.

The risk lies in how the deduction and credit interact. If the credit expansion is paired with preserved cost recovery, the proposal could strengthen Vermont’s competitiveness while maintaining revenue balance. If deductibility is permanently removed, the policy becomes more uneven. Some firms would benefit from the higher credit. Others would see a durable increase in state taxable income.

The Bottom Line

This proposal is not simply about increasing a tax credit. It is about how Vermont defines taxable income for businesses that invest in research and development. Understanding whether the policy preserves deductibility or permanently eliminates it is essential to evaluating its impact.

The Vermont Chamber will continue to work with lawmakers to ensure that tax policy advances affordability, predictability, and long-term competitiveness while avoiding unintended consequences for the businesses that power Vermont’s economy.

February 27, 2026

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Energy Policy: Modernization, Affordability, and Market Signals

February 27, 2026

Energy Policy: Modernization, Affordability, and Market Signals

As the Legislature approaches crossover, lawmakers are advancing several significant energy proposals. While varied in scope, each reflects a shared challenge: balancing Vermont’s climate objectives with affordability, regulatory clarity, and economic competitiveness.

Three proposals have emerged as focal points, each testing Vermont’s ability to modernize its energy framework without eroding affordability or predictability. Together, they underscore a broader question this session: how to advance climate policy while strengthening Vermont’s economic foundation.

Building Energy Standards

H.718 proposes structural updates to Vermont’s residential building energy standards framework (RBES/CBES). The bill would create a stakeholder task force to examine contractor registry updates, evaluate licensure requirements, and better align education standards across trades. It also provides clarity for builders who, in good faith, certified projects under RBES/CBES 2020 pursuant to the Governor’s Executive Order, ensuring they would be held harmless from liability.

Revisions since introduction have improved the bill’s structure and moved smaller-scale builders closer to a more stable regulatory framework. Predictability remains critical. In the Vermont Futures Project Business Climate Survey, employers consistently cite regulatory clarity as essential to housing production and workforce attraction. Housing supply, workforce growth, and energy policy remain structurally linked.

Questions remain regarding funding mechanisms and potential downstream compliance costs. As Vermont works to address its housing shortage, regulatory updates must align with administrative capacity to avoid unintended cost escalation. With crossover imminent and divisions remaining in committee, final adjustments will need to materialize quickly.

Expanding Commercial Property Assessed Clean Energy (C-PACE)

S.138 would expand Vermont’s Property Assessed Clean Energy program to commercial and industrial buildings, allowing businesses to finance efficiency, renewable, and resilience improvements through long-term, fixed-rate property assessments.

At a time when federal incentives remain uncertain, the proposal offers a voluntary, market-based pathway for businesses to invest in efficiency and resilience. In other states, C-PACE programs have reduced operating costs, attracted private capital, and supported job creation. For Vermont employers, the program represents a financing tool rather than a mandate, aligning environmental progress with economic competitiveness.

After sustained stakeholder engagement and multiple revisions, S.138 appears positioned to advance before crossover.

Net Metering

H.716 would remove the adjuster applied to energy generated behind the meter, electricity produced and consumed on-site without reaching the grid. The bill also establishes battery storage goals and directs the Public Utility Commission to account for federal incentive conditions when setting rates.

Earlier language that would have capped the negative adjuster for net-metered energy has been removed, alleviating concerns about immediate cost increases for non-solar ratepayers. However, proposed behind-the-meter and battery-related changes introduce more complex structural questions.

Adjusting this framework outside the established biennial PUC review process could add complexity to one of the most intricate net metering systems in the country. There is also risk that cost shifts could increase rates for non-net-metered customers, undermining affordability for businesses and households alike. Preserving the PUC’s research-driven review process helps ensure that rate decisions remain grounded in economic analysis.

With new language introduced late in the process and crossover near, advancement of the bill in its current form appears uncertain.

What Happens Next

As crossover approaches, compressed timelines and consequential policy choices are converging. Vermont’s long-term energy strategy must remain aligned with economic competitiveness, workforce growth, and housing development.

The central challenge is not whether Vermont advances its climate goals, but whether it does so in a way that reinforces affordability, regulatory clarity, and long-term economic durability. Striking that balance will determine whether this session’s energy reforms strengthen Vermont’s competitive position or introduce new layers of cost and complexity.

February 27, 2026

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Vermont Signature Events Award Winners Announced

February 26, 2026

Vermont Signature Events Award Winners Announced

The Vermont Chamber of Commerce and the Vermont Department of Tourism and Marketing have announced the winners for the 2026/27 Vermont Signature Events program. These signature events offer experiences that fuel the Vermont visitor economy. In 2024, visitor spending hit a record by contributing $4.2 billion to Vermont’s economy.

2026/27 Vermont Signature Events:

Hardwick State (April 17-19, 2026): For one weekend, Hardwick becomes a townwide university where community members teach and learn from one another. Anyone can be a teacher, and everybody is a student, with free or donation-based classes ranging from practical skills like tire changing and chainsaw repair to philosophy, crocheting, cake decorating, and improv comedy.

Battenkill Fly Fishing and Art Festival (April 30–May 2, 2026): Held in Arlington, this three-day festival celebrates the spring-fed Battenkill River with speakers, workshops, fly-tyers, live music, a casting competition, a beer tent, and events centered on history, aquatic life, and sustainability.

M&T Bank Vermont City Marathon & Relay Weekend (May 22–24, 2026): Vermont’s largest single-day sporting event takes over Burlington with a scenic, spectator-friendly marathon course, a sports and fitness expo, youth mini-marathons, and a lively post-race festival at Waterfront Park.

Community Concerts on the Green (May 22–September 6, 2026): In Middlesex, Camp Meade hosts free live music every Friday and Sunday from Memorial Day through Labor Day, featuring local performers, art activities, artisan studios, food, drinks, and a relaxed community atmosphere.

Naulakha Estate and Rhododendron Tour (June 5–7, 2026): Normally reserved for overnight guests, Rudyard Kipling’s historic Dummerston estate opens for self-guided tours, offering rare access to the grounds and the iconic rhododendron tunnel during peak bloom season.

Jeezum Crow Festival (July 10–11, 2026): At Jay Peak Resort, this high-energy summer music festival features national and regional acts, local food and craft vendors, and a laid-back mountain setting. Past performers include Del McCoury, Dark Star Orchestra, and Yonder Mountain String Band.

New World Festival (September 6, 2026): Downtown Randolph hosts this celebration of Celtic and Québécois traditional music and dance, with performances across five stages, street acts, called dances, kids’ activities, and food and drink from local vendors.

Puppets in the Green Mountains (September 11–20, 2026): Based in Brattleboro, this biennial international festival showcases puppet theater for all ages through performances, workshops, and forums that emphasize creativity, compassion, and storytelling.

Vermont Cheese Week (September 13–20, 2026): A statewide celebration featuring cheese-themed restaurant specials, farm tours, dinners, tastings, and special events that highlight Vermont’s award-winning cheesemakers and the landscapes behind their craft.

Cores and Pours (September 18, 2026): In Woodstock, this evening event invites visitors to explore Vermont’s small-batch cider scene with guided tastings led by a local pommelier, meet artisanal cider-makers, and enjoy local food offerings.

Rocktoberfest (September 26, 2026): Morrisville’s Portland Street transforms into a lively fall street festival with live bands, an Adirondack Chair Auction, dance performances, family activities, and food and retail vendors in a free, community-focused setting.

Vermont Circus Festival (November 1–8, 2026): Presented in Brattleboro by the New England Center for Circus Arts, this weeklong festival features circus workshops, performances, community events, and multiple shows ranging from cabaret to experimental circus.

The Vermont Signature Events program offers an invaluable opportunity for events to garner widespread recognition. Signature events are awarded annually and showcase the rich variety of experiences to be had in the Green Mountains. These top-rated events offer a true taste of all that is local, bringing visitors into the heart of communities and serving as an important component in the Vermont visitor economy.

Learn more about the Vermont Signature Events program and access the 2027/28 application here.

February 26, 2026

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BETA Technologies team holding their Coolest Thing Made in Vermont award alongside Lieutenant Governor John Rodgers and Vermont Chamber President Amy Spear at the Vermont Manufacturing Summit.

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Nominations Open for the 2026 Vermont Economic Leadership & Impact Awards

February 20, 2026

Nominations Open for the 2026 Vermont Economic Leadership & Impact Awards

The Vermont Chamber of Commerce is accepting nominations for the Vermont Economic Leadership & Impact Awards. Each year, the Vermont Chamber recognizes individuals whose leadership and service advance Vermont’s economy and strengthen our communities. The two award categories include ‘Citizen of the Year’ and ‘Above and Beyond.’

The Citizen of the Year award recognizes an individual who:

Made major contributions to the betterment of Vermont
Been distinguished through outstanding service to the community and region
Typifies the true spirit of service and self-sacrifice in representing the finest ideals of Vermont citizenship.

The Above and Beyond Award recognizes an individual who:

Demonstrate excellence and outstanding achievement through initiative, innovation, or creative problem solving.
Reinforce and elevate the values of their organization through professionalism and dedication.
Lead with integrity, setting a high personal standard and fostering a collaborative team environment.
Go above and beyond expectations through perseverance, accountability, and commitment to results.
Make a meaningful and sustained impact on their industry by sharing knowledge and building strong professional relationships.

Prior recipients of the Citizen of the Year Award include (2025) Major General Gregory Knight, (2024) Tom Dee, and (2023) Senator Patrick Leahy.

Nominations can be submitted online here until March 1.

February 20, 2026

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Act 250 Update: Continued Progress, but Execution Risks Are Becoming Clearer

February 20, 2026

Act 250 Update: Continued Progress, but Execution Risks Are Becoming Clearer

This week’s testimony before the Senate Natural Resources Committee showed continued progress on working toward technical corrections to Act 181, the Act 250 reform adopted in 2024. But it also made clear that execution, not intent, is now the central challenge. Act 181 set an ambitious direction, encouraging housing in planned growth areas while protecting critical natural resources. Whether it succeeds will depend on whether the implementation phase delivers clarity, consistency, and confidence.

Regional planning commissions reported steady movement on Tier 1B mapping, with five commissions having submitted plans and three already receiving feedback from the Land Use Review Board. State level review of regional future land use maps is an important step. At the same time, RPCs were clear that evolving guidance and iterative feedback from the board are creating uncertainty. Regions that submitted early may be held to different standards than those submitting later, not because policy changed, but because interpretation is still developing. That inequity matters, especially when communities are being asked to make long-term planning decisions.

Tier 1B remains one of the most promising elements of Act 181. Eligibility is expected to cover roughly two to three percent of Vermont’s land area, a meaningful expansion from the approximately 0.3 percent previously eligible for downtown and village center incentives but still likely insufficient to meet the state’s housing needs. Tier 1B allows up to 50 housing units without Act 250 review in mapped growth areas. The intent is clear: give communities a real tool to support housing. The risk is that uncertainty in mapping, review standards, or timing undermines that goal.

Housing targets developed by the Vermont Housing Finance Agency and the Department of Housing and Community Development further reinforced that Vermont’s challenge is not hitting a precise unit count, but unlocking the housing market and building momentum. That requires signaling, through policy and implementation, that Vermont is open to housing in the places it has planned for growth.

Tier 3 remains the most concerning element of implementation. The Land Use Review Board described draft mapping and rulemaking focused on habitat connectors and other sensitive areas. While the board emphasized that Tier 3 is intended to be limited in scope and to avoid overlap with existing regulations, even board members acknowledged that many Vermonters do not yet understand how Tier 3 will work or whether it will apply to them. That lack of clarity is not a minor issue. It directly affects landowners, municipalities, and housing developers trying to make decisions now.

The board has asked for additional time to refine Tier 3 maps, narrow affected areas, and conduct outreach, including extending effective dates for Tier 3, the road rule, and Criterion 8C to December 31, 2027.

Tier 1A implementation raised similar red flags. Requiring municipalities to assume responsibility for administering existing Act 250 permits is a real deterrent for communities that might otherwise opt in. Testimony clarified that permits would transition gradually as they are amended, but without clear statutory guardrails, uncertainty remains. Communities need assurance that participation will not come with unmanageable administrative risk.

The Senate Natural Resources Committee appears to recognize these risks. Discussion around S.325 has focused on technical corrections that improve clarity, align timelines, and reduce unintended barriers to housing, rather than reopening last year’s policy debate.

From the Vermont Chamber’s perspective, the path forward is clear. Act 181 can work, but only if implementation prioritizes predictability, consistency, and momentum. That means clear standards from the Land Use Review Board, fair treatment of early and late adopters, realistic timelines, and a permitting system that supports housing in growth areas rather than slowing it through uncertainty.

The Vermont Chamber will continue to advocate for these corrections. It is the difference between a reform that delivers housing and economic vitality, and one that stalls under the weight of its own complexity.

February 20, 2026

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Week of February 17, 2026

A weekly snapshot of key legislative activity impacting Vermont’s business community.

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.

February 20, 2026

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Workforce Regulations: Momentum, Headwinds, and Legislative Outlook

February 20, 2026February 18, 2026

Workforce Regulations: Momentum, Headwinds, and Legislative Outlook

As lawmakers consider new workforce mandates this session, Vermont employers are facing a challenging economic context. Vermont ranks last in the nation for economic momentum and seventh for regulatory burden on the Vermont Competitiveness Dashboard. That broader picture aligns with what employers told the Vermont Chamber in our Business Climate Survey, where regulation consistently ranks among the top concerns.

Against that backdrop, the Vermont Chamber has been actively engaged at the State House this session, testifying on multiple workforce bills. Three proposals in particular highlight where legislation is gaining momentum, where policy and procedural complexity are creating headwinds, and where a proposal appears unlikely to advance this session.

Noncompete Agreements

What the bill proposes
The noncompete legislation would broadly prohibit noncompete agreements, while allowing limited, tightly defined exceptions. These include certain business transactions, severance agreements, and a narrow category of exempt employees, with guardrails around income thresholds, advance notice, and reasonableness standards related to time, geography, and scope.
Vermont Chamber position
The Vermont Chamber has emphasized that any statutory changes should align closely with existing Vermont case law, which already evaluates noncompete agreements using a reasonableness standard. In testimony this week, we noted that outside of health care, it is fair to ask what specific Vermont problem is being addressed beyond what current law already covers. At the same time, the Vermont Chamber has remained engaged throughout the process to help shape language that provides clarity and predictability, reflects how courts have historically evaluated these agreements, and results in an outcome that stakeholders across sectors can live with.
Legislative Outlook: Gaining Momentum

This has been a longstanding priority for the committee, significant time has been invested, and the bill reflects a negotiated outcome shaped by stakeholder input. It is one of the more likely workforce bills to move this session.

Workers’ Compensation and Family and Medical Leave

What the bill proposes
The proposal would prohibit certain employers from counting workers’ compensation leave for a work-related injury or illness toward Vermont’s family and medical leave requirements, effectively requiring these leave systems to run sequentially rather than concurrently.
Vermont Chamber position
The Vermont Chamber’s testimony emphasized that workers’ compensation and family and medical leave serve different purposes and currently work together in a coordinated way. Workers’ compensation provides wage replacement and medical coverage, while family and medical leave provides job protection. Changing how these systems interact has real consequences for both employers and injured workers, particularly around job protection during recovery, return to work planning, and staffing predictability. Testimony made clear that this issue is far more complex than initially anticipated and warrants careful evaluation.
Legislative Outlook: Facing Headwinds With only eight working days before crossover, multiple competing committee priorities, and significant technical and legal complexity involved, advancing this proposal meaningfully this session would be challenging.

Flexible Work Arrangements

What the bill proposes
The flexible work arrangements proposal would substantially change existing law by expanding the types of requests covered and shifting from a right-to-request framework toward a presumption that requests should be granted. It would narrow the circumstances under which an employer could deny a request, require more detailed written justifications for denial, shorten response timelines, and increase documentation and recordkeeping requirements.
Vermont Chamber position
The Vermont Chamber provided the only testimony on this proposal. Vermont already has one of the most comprehensive flexible working arrangements statutes in the country, and available enforcement data show very few employee complaints since the law took effect. From the Vermont Chamber’s perspective, the proposal did not identify a clear problem or evidence that the existing framework is failing employees, making it a solution in search of a problem.
Legislative Outlook: Unlikely to Advance

The flexible work provision has been removed from the bill that is advancing and sent to the Government Operations Committee, significantly reducing the likelihood of action this session.

What happens next

The legislative session is far from over, and nothing is final until the gavel falls. Committee priorities can shift quickly, amendments can reappear, and issues that cool off one week can heat up the next. These classifications reflect the best read of where these workforce proposals stand today, based on testimony, committee focus, and the time remaining in the session. The Vermont Chamber will continue to stay engaged, track changes closely, and represent Vermont employers as these and other workforce issues evolve in the weeks ahead.

February 18, 2026

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Education Reform is Everything, Everywhere, All At Once

February 13, 2026

Education Reform is Everything, Everywhere, All At Once

Education reform is dominating the agenda at the State House, yet there is still no single clear path forward. As crossover nears, lawmakers are being asked to make foundational decisions about cost, quality, governance, equity, and workforce readiness simultaneously. The pressure to act is colliding with unresolved tradeoffs.

Education spending has become the central policy arena where affordability, opportunity, and long-term economic competitiveness intersect.

Cost and Quality Are Inseparable

Education spending remains the largest driver of property tax pressure, creating real affordability challenges for households and employers. Yet lawmakers are clear: cost control alone cannot be the goal. Reform must protect educational quality, expand opportunity, and deliver equitable outcomes statewide.

Affordability without quality is unsustainable. Quality without fiscal discipline is unattainable.

Act 73 established a foundation-style funding system and statewide property tax framework intended to better align spending with student needs. But many critical implementation decisions remain unsettled. Yield setting, cost allocation, and fiscal modeling assumptions are still under debate as school budget deadlines approach.

Without clarity, communities and employers cannot reliably anticipate property tax impacts, reinforcing broader concerns about fiscal predictability.

Governance and Rural Realities

Governance and redistricting have emerged as some of the most visible and contentious elements of reform. The House Education Committee continues reviewing consolidation models, with cautious support from statewide education organizations for smaller districts than originally proposed. That support remains conditional and focused on minimizing disruption for students and families.

Debate continues over how to structure superintendent oversight and define consolidation metrics. Should it be driven by student population, number of schools, principals, or a blended formula? These questions play out differently in rural and urban communities, where geography, transportation, and staffing capacity vary widely.

For many rural communities, governance reform is not just structural, it is about identity, access, and operational feasibility.

Equity, Choice, and Tuitioning Towns

Equity considerations run through nearly every aspect of the debate. Lawmakers continue to examine the role of independent schools, eligibility standards, and the future of tuitioning towns.

For tuitioning communities, the issue is continuity and access. For the broader system, it is fairness, consistency, and cost exposure. Rural areas emphasize transportation and limited capacity, while more densely populated communities focus on scale and administrative burden.

Durable reform must recognize Vermont’s geographic diversity and avoid one-size-fits-all solutions that create unintended inequities.

Career and Technical Education and Workforce Alignment

Career and technical education remains central to the conversation. Act 73 anticipated additional work to incorporate CTE into the foundation formula, recognizing its role in workforce readiness and economic mobility.

Workforce alignment is not peripheral, it is foundational to Vermont’s long-term competitiveness.

A sweeping proposal would significantly restructure CTE governance and funding through a new statewide education service agency model. Supporters argue it could expand access and better align programs with workforce demand. Legislators have raised unresolved questions about transportation, regional voice, accountability, staffing, administrative costs, and funding flow.

The core question is whether centralization would increase efficiency and consistency, or distance programs from local workforce needs and community partnerships.

Fiscal Uncertainty and Pressure

Fiscal uncertainty has been especially visible in House Ways and Means. Updated school budget data, yield setting, and cost drivers remain under review. Briefings from the Joint Fiscal Office reinforce that unsettled district boundaries, unresolved labor costs, and regional variation limit the reliability of current modeling.

Lawmakers have expressed frustration about evaluating proposals without clear evidence of how they will affect both property taxes and student outcomes, even as expectations for near-term affordability relief rise.

Delivering immediate tax stabilization while redesigning the system presents a significant structural challenge.

The Broader Economic Context

This debate is unfolding against a broader economic backdrop. The Vermont Futures Project Economic Action Plan and Vermont Competitiveness Dashboard consistently highlight workforce shortages, demographic decline, cost of living pressures, and tax burden.

Education policy directly shapes workforce development, employer confidence, and long-term growth.

A system that is unaffordable is not sustainable. A system focused narrowly on cost without protecting quality and equity will fail students and weaken Vermont’s long-term economic prospects.

What Happens Next

As crossover approaches, committees are advancing major proposals on governance, funding, equity, and workforce alignment, but many difficult questions remain unresolved.

Education reform will remain the center of gravity at the State House throughout this biennium. The decisions made in the coming weeks will shape school governance, property tax bills, student opportunity, workforce readiness, and Vermont’s long-term competitiveness.

The Vermont Chamber will continue engaging with a focus on affordability, predictability, workforce alignment, and data-informed outcomes that support both students and Vermont employers.

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Senate Begins Coordinated Work on Act 250 Reform Implementation

February 13, 2026

Senate Begins Coordinated Work on Act 250 Reform Implementation

Senators have begun a coordinated review of how Vermont’s Act 250 land use transformation is going after major reforms were adopted in 2024 through Act 181. Act 250 has been a cornerstone of land use and development policy in Vermont for decades, and reform represented a significant shift in how housing and other growth-related developments are permitted. As one of the most consequential land use reforms in recent years, implementation will play a critical role in determining whether the law achieves its intended balance between environmental stewardship and housing production.

Act 181 was designed to encourage housing production in planned growth areas while maintaining protections for critical natural resources. As the law moves from paper into practice, the Legislature is hearing from stakeholders about early implementation challenges and questions about transition timing, consistency, and clarity. This implementation phase is where legislative intent meets on-the-ground reality, and where predictability and administrative clarity become essential for communities and businesses alike.

This conversation started with a joint hearing of the Senate Natural Resources and Energy Committee and the Senate Economic Development, Housing, and General Affairs Committee, where lawmakers heard from the Vermont Chamber as well as planners, municipal leaders, and conservation advocates on how the new system is working and where adjustments may be needed. A second hearing followed that allowed committees to dig deeper into specific areas such as the opt-in of communities into growth areas that will be exempted from Act 250.

In response to input, the Senate Natural Resources and Energy Committee has drafted language that would make targeted, technical updates to address some of the challenges in S.325. This bill approaches corrections by focusing on fine-tuning implementation to match legislative intent and avoid unintended consequences.

The Vermont Chamber has testified three times as part of this process, reflecting its long-standing role as an engaged stakeholder and collaborator in shaping workable policy solutions. Testimony has centered on ensuring that time is taken to get things right which in turn does not inadvertently slow housing production or introduce unnecessary complexity.

As the Legislature continues its review, the Vermont Chamber has encouraged lawmakers to focus on several priority issues:

Maintaining temporary Act 250 housing exemptions while municipalities and regional planning commissions complete the planning and mapping work required under the new law.
Providing additional time before new Act 250 triggers take effect, including provisions related to Tier 3 areas and the Road Rule, to allow for technical refinement and stakeholder engagement.
Clarifying how Act 250 review applies when a project affects a specific natural resource, so projects are evaluated only on the criteria needed to protect that resource, rather than undergoing a full review by default.
Shifting responsibility away from municipalities for administering existing Act 250 permits in Tier 1A areas to ensure that isn’t a barrier for communities that could have Tier 1A.
Studying how to address appeals of municipal zoning decisions in growth areas, with the goal of reducing duplicative or non-material appeals while preserving legitimate environmental and community oversight.

Together, these refinements are aimed at strengthening predictability in Vermont’s permitting landscape while upholding environmental protections and supporting needed housing development.

The discussion now underway reflects a recognition among lawmakers and stakeholders that large-scale reforms succeed or fail on implementation. Act 181 intentionally shifted significant work into the transition period and technical clarification, and adjustments are not unreasonable as the new system is phased in.

The Vermont Chamber will continue engaging with lawmakers and stakeholders as this work unfolds. Practical refinements that balance environmental protection with critical housing production and economic vitality will be critical to Vermont’s long-term affordability and competitiveness.