VT LEG #381708 v.1
H.397 – An act relating to miscellaneous amendments to
the statutes governing emergency management and
flood response
As recommended by the House Committee on Government Operations and Military
Affairs, Draft 2.4
1,i
Bill Summary
his bill proposes numerous amendments to the statutes governing
emergency management. It would, among other things, establish
the Voluntary Buyout and Voluntary Buyout Reimbursement
programs for flood-prone properties, create additional positions at
Vermont Emergency Management, create the Vermont Community Radio
Grant Program, grant additional fiscal authority to municipalities, and make
appropriations.
Fiscal Impact
Section 14 would appropriate $1,705,000 from the General Fund in fiscal year 2026 to support two new
positions at Vermont Emergency Management, provide funding to the Urban Search and Rescue Team and
the Vermont Community Radio Grant Program, and for the Agency of Natural Resources (ANR) to procure
a fire apparatus.
Section 5 would transfer $1,000,000 from the PILOT Special Fund to fund the Voluntary Buyout
Reimbursement Program for flood-prone properties.
Section 12 would allow for municipalities to structure debt repayment through level debt service payments
instead of level principal payments as required by current law. This change could have impacts to debt incurred
in Tax Increment Financing (TIF) projects, which are supported by incremental tax revenues from the
Education Fund. Debt incurred with level debt service payments has lower initial payments (which could
increase the amount of debt that municipalities can afford to incur) and higher overall interest costs. Both
factors could increase the long-run costs of the TIF program to the Education Fund. These impacts are hard
to measure and depend on the size and type of financing chosen by districts that are still able to incur debt
and any new districts authorized by the Vermont Economic Progress Council (VEPC).
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The Joint Fiscal Office (JFO) is a nonpartisan legislative office dedicated to producing unbiased fiscal analysis – this fiscal note is
meant to provide information for legislative consideration, not to provide policy recommendations.
T
This bill would
appropriate $1,705,000
from the General Fund
and $1,000,000 from the
PILOT Special Fund in
fiscal year 2026.
March 18, 2025 Chris Rupe, Associate Fiscal Officer; Ted Barnett, Senior Fiscal Analyst H.397 – An act relating to miscellaneous amendments to the statutes governing emergency management and flood response 2
VT LEG #381708 v.1
Background and Details
The following sections have a fiscal impact.
Sections 3-5: Voluntary Buyout and Voluntary Buyout Reimbursement Programs
Section 3 would direct Vermont Emergency Management and the Agency of Commerce and Community
Development (ACCD) to establish and maintain the Voluntary Buyout Program for flood-prone properties.
The Program would allow a municipality, at the request of the owner of a flood-prone property, to apply
for funding to cover the purchase price (full fair market value) of the property. The municipality would be
required to maintain the acquired property as open space with a deed restriction or covenant prohibiting
development.
Section 4 would establish the Voluntary Buyout Reimbursement Program to reimburse municipalities for
the value of forgone municipal property taxes associated with the flood-prone properties acquired by a
municipality and preserved as public open space.
On or before September 1 of each year, the Commissioner of Public Safety would be required to certify
eligible properties to the Commissioner of Taxes along with any other information required by the
Commissioner. To be eligible for reimbursement, a municipality must have acquired an eligible property on
or after July 1, 2023 and preserved the property as public open space with a deed restriction or covenant
prohibiting development of the property.
The Commissioner of Taxes would be required to certify payment amounts to the Secretary of
Administration, who would then make an annual payment to each municipality for each eligible property to
compensate for the loss of municipal property tax. The payment would be calculated using the grand list
value of the acquired property for the year during which the property was either damaged by flooding or
identified as flood-prone by the Commissioner of Public Safety, multiplied by the municipal tax rate,
including any submunicipal tax rates, in effect each year. This payment would be made on or before January
1 of each year for five years, after which a municipality would be eligible for payments equal to one-half of
the initial annual payments for ensuing five year periods.
Payments for the Voluntary Buyout Reimbursement Program would come from the PILOT Special Fund
and be disbursed only after all other requirements of subchapter 4 are met (the payment of PILOT funds
to municipalities for State-owned properties). If the PILOT Special Fund balance is insufficient to pay the
full amount of all payments authorized under the Program, then payments would be reduced
proportionately.
Section 5 would direct the Commissioner of Finance and Management to transfer $1,000,000 from the
PILOT Special Fund to the Voluntary Buyout Reimbursement Program in fiscal year 2026 for
administration.
Section 6: Division of Emergency Management Positions
Section 6 would create two full-time, exempt positions at Vermont Emergency Management:
• Municipal Grant Liaison: dedicated to grant research, grant applications support, coordination
between municipal corporations and the Federal Emergency Management Agency (FEMA), and
direct assistance to municipal corporations for the acquisition of grants and other funding sources
for all-hazard relief and recovery efforts.
• All-Hazards Mitigation Technician: dedicated to providing or supporting engineering analyses for
all-hazard mitigation projects, oversight of municipal remediation and recovery projects, and
managing technical assistance to municipal corporations for all-hazard recovery. H.397 – An act relating to miscellaneous amendments to the statutes governing emergency management and flood response 3
VT LEG #381708 v.1
Section 14 would appropriate $275,000 from the General Fund to the Department of Public Safety (DPS)
in fiscal year 2026 to support these two positions.
Section 9: Vermont Community Radio Grant Program
Section 9 would establish the Vermont Community Radio Grant Program to provide one-time funding to
community radio stations for the purpose of:
• Upgrading equipment and infrastructure necessary for reliable emergency broadcasting;
• Procuring and installing backup generators; and
• Enhancing operational sustainability through software improvements and technical training.
The Program would be administered by the Commissioner of Public Safety or designee, in collaboration
with the Vermont Association of Broadcasters.
Grants would be allocated as follows:
• Up to $25,000 per station for seven active community radio stations; and
• Up to $10,000 per station for three upcoming stations currently under construction.
To be eligible for a grant, an applicant must:
• Be a nonprofit, noncommercial community radio station licensed in Vermont;
• Demonstrate a history of providing emergency broadcasting services or show the capacity to provide
those services upon funding; and
• Submit a detailed implementation plan for the proposed use of grant funding.
Community ratio stations that receive a grant would be required to report to the Commissioner of Public
Safety on or before June 30, 2026 detailing the use of grant funds, improvements achieved in emergency
readiness and operational capacity, and impact on community service and engagement.
Section 14 would appropriate $205,000 from the General Fund to DPS in fiscal year 2026 to fund the
Program.
Sections 10-12: Municipal Finance and Indebtedness
The following sections pertain to municipal finance but do not have a direct impact on the State budget:
Section 10: Unassigned Fund Balance
Section 10 would amend Title 24 to stipulate that funds in a voter-approved municipal budget that remain
unexpended at the end of the fiscal year shall be under the control and direction of the legislative body of
the municipality and may be carried forward from year to year as an unassigned fund balance. Unassigned
fund balances could be invested and reinvested and expended for any public purpose as established by the
legislative body of the municipality. This language could give municipalities greater flexibility and ability to
establish reserves to meet future emergency or other needs. Unassigned fund balances are generally viewed
as credit positives and fiscal best practices.
Section 11: Emergency Borrowing Authority
Section 11 would amend Title 24 to permit municipalities to borrow money by issuance of its notes or orders
for the purpose of paying municipal expenses or public improvements associated with an all-hazards event
or a declared state of emergency. The notes or orders shall be for a period of not more than five years or a
term not to exceed the reasonably anticipated useful life of the improvements or assets financed by the notes
or orders. Under current law, municipalities are limited to borrowing for up to one year without a town vote.
This language would give municipalities the ability to borrow, on a limited basis, in emergency situations for
up to five years without requiring voter approval in advance.
H.397 – An act relating to miscellaneous amendments to the statutes governing emergency management and flood response 4
VT LEG #381708 v.1
Section 12: Debt Service
Section 12 would permit municipalities to issue bonds with level debt service payments – annual payments
that reflect principal and interest are level throughout the amortization period. Under current law,
municipalities are required to structure their bond payments with level principal payments. This leads to higher
payments in the initial years, which then decline over time. Level principal payments lead to more rapid
amortization of principal, and lower total interest cost to municipal taxpayers over time. Level debt service
payments cost less in the initial years than level principal payments and stay at the same amount over time,
but typically at higher total interest costs over the repayment period.
Section 14: Appropriations
Section 14 would appropriate $1,705,000 from the General Fund in fiscal year 2026. DPS would receive
$1,430,000; appropriated as follows:
• $275,000 to support the two positions at Vermont Emergency Management. This would be an
ongoing base expense in future years.
• $950,000 to support the Urban Search and Rescue Team created pursuant to 20 V.S.A. § 50.
• $205,000 to fund the Vermont Community Radio Grant Program.
The bill would also appropriate $275,000 to ANR to procure a fire apparatus.
Summary of Fiscal Impacts
Voluntary Buyout Program
According to data from Vermont Emergency Management, since July 1, 2023, 227 properties have been
submitted on applications for the State-managed buyout process. The approximate municipal property tax
value of those properties is estimated at approximately $550,000 per year in the initial five-year period of the
program when municipalities would be reimbursed at the full tax value of buyout properties as proposed. Two
competing pressures could influence this estimate. First, the buyout program is voluntary and some applicants
may drop out of the program before the municipality closes on the transfer of property. This would decrease
the annual cost of the program. On the other hand, municipalities may offer to buy out additional properties
once lost property tax value is reimbursed through the proposed program. This pressure could drive up the
cost of the program in future years, but it is unlikely in the near term, as the program only reimburses
municipalities once they own flood-prone property and it takes time to complete transfers under federal grant
programs.
Section 5 would direct the Commissioner of Finance and Management to transfer $1 million from the PILOT
Special Fund for program administration. The PILOT Special Fund, which makes payments to municipalities
for the value of State-owned buildings, receives revenue from 30% of local option tax (LOT) collections.
Broader macroeconomic trends and an increase in the number of municipalities adopting LOTs have
substantially increased revenue going into the Fund. In fiscal year 2024, the difference between Fund revenue
($14.9 million) and expenses ($11.6 million) was over $3.3 million. The Fund had a balance of $10.3 million
at the end of fiscal year 2024.
Positions and Appropriations
The two positions created in Section 6 would be an ongoing base expense in future years. It is possible that
additional funds will be required in future years to continue supporting the Urban Search and Rescue Team
and Vermont Community Radio Grant Program.
Municipal Finance and Indebtedness
Section 12 would give greater flexibility for municipal debt service repayment. As noted previously, a bond
structured with level debt service payments has lower initial payments, but higher total interest costs. This
change could increase the costs of the TIF program to the Education Fund. The size of these impacts H.397 – An act relating to miscellaneous amendments to the statutes governing emergency management and flood response 5
VT LEG #381708 v.1
ultimately depends on the scope of debt incursion in TIF districts that are still able to incur debt (e.g., Barre,
Hartford, Killington). It would also apply to any newly approved TIF district, such as Rutland.
TIF uses the growth in incremental property values to finance public improvements, such as water and sewer
infrastructure, streetscaping, or brownfield remediation. Under current law, municipalities can retain 70% of
the incremental education property tax revenue generated above the district’s original taxable value, and 85%
of the municipal tax increment. When municipalities are crafting their financing plans, the amount of debt
they can incur is constrained by the size of debt service payments relative to the estimated amount of
increment that will be generated by improvements in the district. Lower debt service payments initially,
compared to a structure with level principal payments, means that municipalities could afford to incur more
debt compared to current law. This is especially important given that in the early stages of a TIF district,
incremental growth in property values is generally lower, as anticipated developments have not yet
materialized.
In addition, the change in Section 12 would result in higher overall interest payments over the course of a
repayment, which would require more incremental education property revenues to service the debt, leaving
less surplus revenue at the end of the district. Any surplus incremental education property tax revenues not
used for debt service by the end of the TIF district are repaid to the Education Fund. Higher overall loan
costs could result in less money returning to the Education Fund at the retirement of a TIF district.
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The bill as introduced can be found here: https://legislature.vermont.gov/Documents/2026/Docs/BILLS/H-0397/H-
0397%20As%20Introduced.pdf
The full fiscal note history is available on the fiscal tab of the bill page on the General Assembly website and can be pulled up
through a bill number search on the JFO page.