Courtesy Shouldice & Associates LLC
The 2026 Legislative Session closed tonight around 6:30pm and it was a “doozy”. This legislative session has been unusually contentious because Vermont is confronting several major, interconnected challenges at once most tied to affordability, taxation, and the balance between state authority and local control. At the center is education reform, which remains both the largest driver of property taxes and the most politically sensitive issue. While there is broad agreement that the current system is unsustainable, lawmakers are deeply divided on how to fix it. Proposals involving school district consolidation and new statewide funding formulas have exposed sharp disagreements between the Governor, legislative leadership, and local communities about how far reform should go and who should ultimately make those decisions. In many cases, House Democrats resisted or rejected proposals that emphasized stronger cost controls or structural mandates, reflecting a preference for more incremental change and preserving local governance even as pressure mounted for more immediate tax relief.
Affordability concerns are the throughline connecting nearly every issue before the Legislature. Rising property taxes, housing costs, and everyday expenses are putting pressure on families and businesses, forcing policymakers to consider structural changes that would have been politically difficult in the past. Transportation funding reflects the same tension: the state faces real infrastructure needs, but any new revenue mechanism runs directly into demand for tax relief. This has contributed to growing frustration among stakeholders who argue that workable proposals to contain costs were diluted or blocked, reinforcing a broader sense of gridlock at a time when Vermonters are looking for tangible relief.
The controversy surrounding the Stowe Charter change is a clear example of how these broader dynamics play out locally. What might otherwise have been a technical adjustment became highly political because of concerns that House leadership was effectively trying to “rob Peter to pay Paul” by extracting a disproportionate share of Stowe’s local option tax revenue. That raised fundamental questions about fairness and local control, particularly for a community that depends on those revenues to fund its own priorities. In many ways, the Stowe debate mirrors the statewide education conversation: how much revenue should be redistributed to achieve equity, and how much should remain under local control.
Healthcare reform and particularly the ongoing “eyeball wars” over optometry scope expansion fits squarely into this same pattern. Lawmakers did enact a major structural reform law aimed at reshaping how care is paid for and delivered, but most of those changes will take years to materialize and will not lower costs in the near term. In the larger health care space both primary care and referenced based pricing remained priorities for everyone except how to make reforms that made care more affordable and accessible will never be completely understood or frankly noticeable in rates. This could lower costs but only if it’s implemented carefully and doesn’t create chaos in the system. An eye towards aligning the cost-control and deeply focused on execution risk and practicality.
At the same time, optometrists fought tooth and nail this session to secure scope expansion, arguing it would improve access to care, especially in rural areas, and help bring down costs by allowing providers to practice at the top of their training. That effort ran directly into fierce resistance from ophthalmologists, who mobilized aggressively to block the proposal widely viewed by supporters as an effort to protect both professional turf and existing revenue streams. The result has been one of the clearest examples of how even targeted reforms can devolve into high-stakes battles over control, cost, and who ultimately delivers care. The bill passed the House 93-36 and the Senate 27-3 so why did House Leadership take such exception to modernizing the scope of practice?
Taken together, these issues have made for a session defined less by any single bill and more by overlapping debates about who pays, who decides, and who benefits. Whether the focus is education reform, transportation funding, local taxation in Stowe, health care costs, or scope-of-practice fights, the same underlying tensions are driving the conversation and helping explain why the session has been so contentious and, in many cases, so difficult to resolve.
Signed Legislation
H 723 - An Act Relating To Posting Of Land
House message: Governor approved bill on April 30, 2026 (05/01/26)
H 739 - An Act Relating To Prohibiting The Use And Sale Of The Herbicide Paraquat
House message: Governor approved bill on May 26, 2026 (05/26/26)
Bill Note:
This bill bans the sale and use of paraquat, a herbicide that has been widely used in certain crop systems but is far less common in dairy forage production. Vermont is now the first state in the country to fully prohibit paraquat, though the law does allow narrow, one‑year emergency exemptions if no viable alternative exists for a specific use.
H 933 - An Act Relating To Miscellaneous Administrative And Policy Changes To The Tax Laws
Signed by Governor on June 18, 2026 (05/29/26)
Bill Note:
H.933, a miscellaneous tax bill that combines technical tax updates, federal tax conformity changes, and several revenue adjustments to keep the education, transportation, and general funds balanced. The bill includes fee provisions added by the House, redirects a portion of the purchase and use tax to transportation on a permanent basis, increases the rooms and meals tax to protect the education fund, and raises additional general fund revenue through federal tax coupling and decoupling changes. Lawmakers also debated whether to opt into a new federal Scholarship Granting Organization tax credit, ultimately reaching a compromise that allows the governor to authorize SGOs with oversight and a focus on disadvantaged students, while broader concerns remain about future transportation and education funding gaps.
The bill combines technical tax corrections, federal tax conformity changes, and fee updates.
A portion of the purchase and use tax is permanently redirected to transportation funding.
The rooms and meals tax increase helps keep the education fund whole.
About $10 million in added revenue is expected for the general fund through coupling and decoupling changes.
Lawmakers remain concerned about future transportation shortfalls and a possible new education funding gap next year.
The final SGO compromise permits governor-authorized scholarship organizations with public oversight and a focus on disadvantaged students.
H 941 - An Act Relating To Municipal Regulation Of Agriculture
Signed by Governor on June 18, 2026 (05/29/26)
Bill Note:
This bill amends existing statutes, to reestablish that local governments cannot regulate farming practices or the building of farm structures, provided those activities meet state-defined criteria. However, the text outlines specific exceptions, allowing towns to oversee livestock on properties smaller than one acre and manage swine waste in certain designated downtown areas. Ultimately, this serves to protect the autonomy of the agricultural sector while establishing clear boundaries for municipal intervention regarding small-scale operations and public health impacts.
Clarifies municipal authority to regulate certain agricultural activities through zoning, ordinances, and enforcement.
Establishes clearer boundaries between state agricultural jurisdiction and local regulatory powers.
Ensures municipalities can address public safety, nuisance, and land‑use impacts without conflicting with state rules.
Provides a more consistent statewide framework for farmers and towns navigating regulatory responsibilities.
Incorporates multiple negotiated amendments between House and Senate to refine scope and language.
Effective Dates: July 1, 2026
H 942 - An Act Relating To Miscellaneous Agricultural Subjects
Signed by Governor on June 18, 2026 (05/29/26)
Bill Note:
H.942 is the House miscellaneous agriculture bill, a broad housekeeping package that updates statutes administered by the Agency of Agriculture, Food Resiliency, and Forestry. It includes technical corrections, program updates, and regulatory clarifications across weights and measures, consumer protection, agricultural programs, and cross‑agency coordination.
This bill is much different than it was introduced. Of note is the tax department has been charged with studying equine farming and including them in current use. This also directs them to take a bigger look at current use. It will be interesting to see what they come back with and how they will look at current use, although the door is open for changes. We will stay appraised to these discussions and ensure that we are included.
H 951 - An Act Relating To Making Appropriations For The Support Of The Government
House message: Governor approved bill on June 16, 2026 (05/29/26)
Bill Note:
Vermont State Budget Highlights Meeting Budget Agreement & Process
Overall, the budget represents a spending increase while prioritizing targeted investments in higher education, health and human services, housing stability, food access, disaster recovery, and education support across Vermont.
Budget agreement and process: The House and Senate unanimously agreed on the FY26 budget (H951) after late-night negotiations, and final documentation was completed the same night.
Overall budget growth: The budget reflects a 2.88% increase, with total unduplicated appropriations increasing by 2.1%.
UVM multi-complex facility: $12 million was appropriated, including $2 million from the Higher Ed Trust Fund and $10 million from unclaimed property funds, while minimizing impacts on scholarships for Vermonters.
SNAP and Medicaid support: $3.5 million in previously reserved federal funds was allocated to community organizations helping Vermonters affected by federal changes.
Primary care investments: The budget continues loan repayment incentives, provider placement services, and restored funding for free clinics, referral clinics, and primary care payments.
Food and support services: 211 services and Meals on Wheels were fully funded, and $1.4 million was directed to food assistance organizations including NOFA, Vermont Foodbank, and Vermonters Feeding Vermonters.
Flood recovery support: Northeast Kingdom communities affected by 2025 flooding but not eligible for FEMA assistance will receive support.
Housing stability: The Rental Arrears Assistance Fund was maintained, and the Disabilities Housing Coordinator position was retained.
Restored and added positions: Funding was restored or added for a Labor Relations Board mediator, Ethics Commission staff attorney, flood safety position, immigration attorney for Vermont Legal Aid, and helpline support.
Education funding: $700,000 was added to address an Agency of Education shortfall for the Read Vermont program, along with about $1.5 million for education transformation initiatives.
Rural industrial development: The program was funded with expanded eligibility for properties impacted by flooding or EB-5 issues.
The bill also clarified that the $2 million from the Higher Ed Endowment Trust Fund complied with fund guidelines because it represented a small portion of the overall project and UVM had already secured significant outside matching funds.
S 60 - An Act Relating To Establishing The Farm And Forestry Operations Security Special Fund To Provide Payments For Farm And Forestry Operation Losses Due To Weather Conditions
Signed by Governor on March 26, 2026 (03/26/26)
S 223 - An Act Relating To Water Quality Of The Waters Of Vermont
Signed by Governor on June 18, 2026 (05/29/26)
Bill Note:
S.223 became significantly narrower proposal focused on study, evaluation, and future recommendations rather than immediate statutory changes. The amendment creates:
A Water Quality, Lake Classification, and Antidegradation Study Group charged with evaluating Vermont’s water classification system, antidegradation policy, and regulatory framework for Class A waters.
An ANR report on whether Vermont should establish a certification program for wetlands professionals, including impacts on permitting, service availability, and liability.
The proposal delays any substantive regulatory changes until at least 2027, signaling a preference for additional analysis and stakeholder engagement before altering Vermont’s water quality or wetlands permitting frameworks.
Water Quality, Lake Classification, and Antidegradation Study Group
The House amendment establishes a 13‑member study group with representation from the Legislature, ANR, technical experts, business and industry, and environmental organizations.
Primary responsibilities include:
Conducting a statewide inventory of waters, including current classifications and candidates for reclassification.
Assessing Vermont’s obligations under the federal Clean Water Act, particularly regarding antidegradation requirements.
Evaluating whether current statutes and rules adequately support reclassification of high‑quality waters.
Reviewing whether the existing classification system provides sufficient protection and regulatory certainty for lakes and ponds.
Recommending legislative or regulatory changes.
Administrative details:
ANR provides technical and administrative support; Legislative Counsel provides drafting support.
First meeting must occur by August 1, 2026.
Report due December 15, 2026.
Group sunsets February 15, 2027.
Members receive per diem and expenses for up to eight meetings.
Implications:
This structure signals that the House wants a comprehensive, consensus‑driven review before pursuing changes to water classification or antidegradation policy. It also ensures that both environmental and regulated‑community perspectives are formally represented.
ANR Report on Certification of Wetlands Professionals
The House directs ANR to evaluate whether Vermont should establish a certification program for wetlands professionals who delineate and identify wetlands.
The report must address:
Benefits and drawbacks of certification.
Impacts on permitting timelines and service availability.
Potential cost implications for applicants and clients.
Liability considerations for certified professionals.
If certification is recommended, ANR must outline program design, requirements, and benefits.
Consultation requirement:
ANR must consult with wetlands professionals and others knowledgeable about wetlands permitting.
Report due: January 15, 2027.
Implications:
This provision responds to ongoing concerns about wetlands permitting capacity and consistency. A certification program could standardize practices but may also affect availability of qualified professionals and increase costs.
The act takes effect upon passage.
Key Impacts for Stakeholders
Regulated Community (Contractors, Developers, Engineers)
No immediate changes to permitting or classification.
Potential future changes to wetlands delineation practices if certification is recommended.
Study Group outcomes could influence future regulatory certainty around lake and pond classifications.
Municipalities
Possible future adjustments to planning, zoning, and permitting depending on Study Group recommendations.
Inventory and classification work may identify waters requiring additional local coordination.
Environmental and Watershed Organizations
Legislators and Policy Leaders
Overall Assessment
The House Proposal of Amendment to S.223 shifts the bill from immediate statutory action to a deliberate, research‑driven approach. By establishing a broad Study Group and requiring a wetlands certification analysis, the House aims to build a stronger factual and stakeholder foundation before pursuing substantive regulatory changes.
For clients, the key takeaway is that no immediate operational or compliance changes occur, but significant policy developments are likely in 2027 based on the Study Group’s recommendations and ANR’s wetlands certification report.
S 323 - An Act Relating To Miscellaneous Agricultural Subjects
Signed by Governor on June 18, 2026 (05/29/26)
Bill Note:
S.323 is a Senate miscellaneous agriculture bill that updates numerous Vermont Agriculture statutes
Key Provisions for VDPA:
The Agency of Natural Resources and the Agency of Agriculture Food and Markets shall convene a working group of interested parties to provide advice and recommendations on the implementation and transitions of the CAFO permit.
The Working Group shall consist of:
(A) one representative of the Champlain Valley Farmer Coalition;
(B) one representative of the Franklin and Grand Isle Farmers Watershed Alliance;
(C) one representative of the Connecticut River Watershed Farmers Alliance
(D) one representative of the Vermont Dairy Producers Alliance; and
(E) one representative of farmers from the Northeast Kingdom;
(2) three agricultural technical service providers, appointed by the Governor;
(3) three representatives from the environmental advocate community, appointed by the Committee on Committees; and
(4) the executive director or designee from the Vermont Association of Conservation Districts.
Effective Date: July 1, 2026
S 325 - An Act Relating To Regional Planning And Act 250 Tier Jurisdiction
Signed by Governor on June 16, 2026 (05/29/26)
Bill Note:
After the committee of conference was named, they hashed out the differences quite quickly. The debate was really around the “events” allowed that would be on farms. Importantly, no permit or permit amendment is required for an AFOB of educational, recreational, or social events that feature agriculture practices or qualifying products or both. Events can include concerts and farm stays with 5 or fewer dwelling units. To qualify for this exemption the AFOB shall not have noise exceed 70 dB at the property boundaries and have a curfew of 10pm.
Key Points relating to Agriculture in Vermont:
This bill would make corrections and clarifications and adjust the implementation timeline of various parts of Act 181 including:
repealing the “road rule” Act 250 jurisdictional trigger;
repealing the implementation of Tier 2 and Tier 3 areas; and
extending the deadline for rulemaking for and the implementation of forest block and habitat connectors by one year to June 15, 2027 and January 1, 2028 respectively.
expanding the Act 250 exemption for accessory on-farm businesses to include construction of facilities that host educational, recreational, or social events that feature agricultural practices or qualifying products or both;
creating the Joint Environmental Oversight Committee, which would be comprised of five legislative members and would be responsible for oversight over the Land Use Review Board (LURB) and Agency of Natural Resources (ANR) permitting processes through July 1, 2029.
We expect some changes to come next biennium on this, although without Amy Sheldon at the helm of house environment, it could be a more fair discussion.
S 328 - An Act Relating To Housing And Common Interest Communities
Signed by Governor on June 18, 2026 (05/29/26)
Bill Note:
S.328 is a broad housing and municipal‑planning bill that updates Vermont’s land‑use framework, strengthens local planning requirements, adjusts state‑level financing tools, and makes targeted changes to housing incentive programs. The bill aims to improve municipal capacity, clarify planning constraints, and refine state programs that support housing development.
What the Bill Does
Modernizes municipal planning requirements, including clearer expectations for how towns address housing, infrastructure, and now labor constraints in their plans.
Adjusts the Treasurer’s credit facility, raising the cap to 12.5% to expand financing flexibility for state‑supported housing and infrastructure investments.
Removes the off‑site construction housing carve‑out, returning the program to a uniform statewide structure.
Refines the Vermont Housing Improvement Program (VHIP) by striking the Senate’s proposed upfront funding authority.
Reinstates the vegetable gardens study, requiring analysis of how local regulation affects small‑scale food production.
Updates the effective date to January 1, 2028, giving municipalities and state agencies additional time to prepare for implementation.
