If legislative leaders' predictions hold true, we are about one month out from this session's adjournment. As is custom this time of year, pressure is building in the Statehouse as some of this year's highest-priority bills make their way through final negotiations between the House and Senate. AGC-VT is monitoring the most vital bills: the Fiscal Year 2026 budget; the annual Transportation Bill, due for a Senate floor vote next week (sorry I jumped the gun when I told you last week it would be this week!); and the Capital Bill, which sets the budget for state construction projects for the year. That should be coming to the Senate floor in the next week or two.

 

Also in this category of high-stakes negotiations taking place is housing legislation. The House and Senate each passed their own respective housing plans earlier this year, and have since been tweaking the opposite chambers' work. It seems increasingly clear that the Senate's version of the bill, S.127, is going to be the primary "vehicle" bill, which will ultimately contain the bulk of housing policy change for the year — so that's the bill to watch. Now, what will ultimately end up in S.127 is in flux. Some senators aren't keen on the House's attempt at permit appeals reform — which attempts to raise the bar for appellants, in hopes of reducing the number of frivolous appeals that delay otherwise approved projects — and appear to be willing to kick the can of appeals reform until next year. This has, frankly, really pissed off House members who painstakingly worked on this issue during the first half of session and won't go down without a fight. If you have opinions on Vermont's existing housing appeals processes, or stories about how they have impacted your work, I'd love to hear from you so I can make the case to lawmakers that we need real reforms sooner rather than later.

 

The House is also editing the Senate's tax increment financing proposal, called CHIP, which was designed to allow for smaller-scale TIFs to cover the infrastructure costs for smaller-scale housing projects throughout the state (not just large projects in population centers already eligible for TIF districts). The House Commerce Committee is considering putting serious guardrails around the Senate's CHIP language, including affordable housing parameters — a move that some developers and legislators fear could bog down potential projects. Here's some good coverage from VTDigger on the proposal. Again, if you have thoughts you'd like to share on TIFs and how your housing projects could be impacted by strategic investments in infrastructure, let's talk. It would be great to make our presence as an industry well-known in the Statehouse during these final weeks, while negotiations are most fraught.

Shifting to labor policy and professional regulation: AGC-VT continues to push back against a provision of S.125 that would require contractors and subcontractors working on state construction projects exceeding $100,000 to submit certified payroll records with the state on a weekly basis during the duration of the project. The bill would also require that both the state and contractor retain these records for three years following the completion of the project. Judy Desrochers from J.A. McDonald, along with yours truly, testified to the House General and Housing Committee this week that these regulations would be burdensome to contractors wishing to do business with the state — ultimately squeezing out the smaller operators who don't have the bookkeeping capacity to submit these records every week.

The committee is still considering the legislation and wants to keep hearing from us. Are you a small contractor who would like to do work with the state but don't have the manpower to abide by this requirement? Call or email me!

 

Shifting to national news: You may have seen that U.S. Transportation Secretary Duffy issued a letter yesterday threatening transportation funding to states over "DEI" and immigration. Here's what AGC National's team had to say about this in a memo to us today:

 

"Initial reaction on this, we are going to have to see how this is implemented.

 

From a formula fund perspective, if they do charge forward with this, I think they will get sued and I think they will lose. Title 23 outlines some very specific instances where FHWA is to withhold a small percentage of funding from a state but for very specific instances – like if the state fails meet certain requirements like having a minimum drinking age, zero blood alcohol concentration (BAC) tolerance for minors, and commercial driver’s license provisions. All safety related reasons and prescribed by congress in law. Please let me know if you hear of this happening from your State DOT.

 

From a discretionary grant perspective, I think they will also face lawsuits, and ultimately lose, but it might take us a little longer to figure out if that is what is slowing down a grant agreement – whether it is this directive or whether it is other factors. Of course, please let me know if you hear of this on a specific project.

 

Taking a step back, the Trump administration appears to be doing this across government. Here are two instances where the courts blocked their efforts for withholding funds over DEI and sanctuary cities."

Lastly, you may have read the news this week about eight workers at a dairy farm up north being detained by Customs and Border Patrol. In case it's helpful to anyone, I'll re-up some resources I sent back in February on this subject:

Keep in touch.