VERMONT EMPLOYMENT GROWTH INCENTIVE (VEGI)

1. VERMONT EMPLOYMENT GROWTH INCENTIVE(VEGI)

2. VEGI: WHAT’S IN A NAME? • Vermont: New, qualifying job and payroll creation and capital investment in Vermont. • Employment: Incentive is calculated based on creation of new qualifying payroll for new qualifying jobs. • Growth: There must be incremental job and payroll growth, beyond organic (background) growth, in Vermont, to be eligible for approval and to generate an incentive. • Incentive: Not a grant or lending. Program goal is to incent activity that would not occur, or would occur in a less desirable way, without the incentive.

3. VEGI: What is it? • Cash incentive for new job and payroll creation by: • Existing Vermont businesses • Start-up businesses • Businesses relocating to/expanding into Vermont • Requires authorization to earn incentive based on statutory criteria • Only prospective investments are eligible • Payment of cash incentive requires meeting annual performance requirements

4. VEGI: WHAT KIND OF PROJECT/COMPANY? • Will add new qualifying jobs and payroll because of the incentive • Beyond background (organic) growth • Qualifying = New jobs that are 160% of Vermont minimum wage ($16.80 in 2018), offered certain benefits, FT (35 hours/week), Permanent (not contract, PT, Seasonal), Non-owner (10% or more ownership). (Note: Some regions 140%) • Capital investments: will increase total incentive available, but are not required • Any type of company • Any size company • Any sector • Any location in Vermont

5. VEGI: APPROVAL CRITERIA • But For: Activity would not occur, or would occur in a significantly different and less desirable manner, except for the incentives. • Benefits exceed costs: Fiscal benefits (new tax revenue from all sources) outweigh cost of project and incentive. • Welcome and in Good Standing: Project/Company welcomed by municipality, complies with local and state laws and regulations, project fits municipal and regional plans, business is not a named party in a state action, and is current on state tax liabilities. • No Unfair Competition: Incentives cannot provide unfair competition in limited, local market.

6. VEGI: PROCESS OVERVIEW • Authorized: • Pre-Application and Incentive Estimate - Anytime • Initial Application – First Friday of the month; VEPC approval before project commences • Final Application – First Friday of the month; VEPC approval before end of calendar year • Earned: • Once authorized, a portion of the total incentive is earned by the company each year that new qualifying payroll is created (for up to five years) by meeting economic activity performance requirements for that year. • Performance requirements are: 1) Maintaining base employment and payroll; 2) creating the new qualifying payroll for that year; and 3) creating the new qualifying employment or making the qualifying capital investments for that year. • Paid: • Once the annual incentive is earned, incentive is paid out to the company in five installments. 

7. VEGI: ENHANCEMENTS • Green: Certified by Secretary of Commerce asresearch, design, engineering, development, manufacturing related to: • Waste management; • Natural resource protection and management; • Energy efficiency or conservation; • Clean energy. • LMA: Located in eligible LMA (all Southern VT is eligible) and approved by VEPC Board. • Capped • Must meet LMA Enhancement Criteria • Both enhancements increase incentive and decrease net return to the state

8. VEGI: EXAMPLES • Commonwealth Dairy: Start-up and Expansion • GS Precision: Expansion • Chroma; Expansion • National Hanger: Expansion • JBM Sherman Carmel: Expansion

9. Contact Us Casey Mock, Executive Director Vermont Economic Progress Council National Life Building Montpelier, VT 05620-0501 Telephone: (802)798-2221 Email: casey.mock@Vermont.gov Abbie Sherman Grants Management Specialist Vermont Economic Progress Council National Life Building Montpelier, VT 05620-0501 Telephone: (802) 828-3230 Email: abbie.sherman@Vermont.gov http://accd.vermont.gov/economic-development/funding-incentives/vegi