Department of Economic Development Commissioner Joan Goldstein, with Governor Scott, presented the Vermont Economic Recovery Grant Program on Wednesday. ORCA Media screen grab.
by Timothy McQuiston, Vermont Business Magazine Governor Phil Scott, the Agency of Commerce and Community Development (ACCD), and Department of Tax on Wednesday announced Vermont’s Economic Recovery Grant Program will launch on July 6. The grant program was first proposed by the Administration in May and amended by the Legislature. It utilizes federal CARES Act funding to provide direct cash grants to Vermont businesses who have seen lost revenue because of COVID-19.
The first wave of money is largely directed toward restaurants and retail, which were hardest hit by the COVID-19 shutdowns that began in March. The requirements are relatively strict.
Governor Phil Scott acknowledged at Wednesday's press briefing that many businesses in Vermont can barely hang on at 100 percent of revenues, never mind under the requirements of this program. He wanted more flexibility than what the Legislature provided.
In the initial phase, a business must prove a 75 percent loss in a single month starting in March. This will be lowered to a 50 percent loss in the second phase.
The maximum grant is $50,000. The formula is based on 10 percent of annual revenues. So a business could get all $50,000 as long as it had at least $500,000 in annual revenues.
Department of Economic Development Commissioner Joan Goldstein said she understands that this is not enough money to solve the economic problems suffered by these small businesses. She also expects the program to sell out quickly. However, she also expects to be able to get the money out fairly quickly, within just a couple of weeks after a business applies. This would put it before the end of July.
The second phase gives the state a bit more flexibility and also more money (an additional $96 million). But the formula and maximum amount will remain. The second phase of funding will be available soon.
In any case, a business cannot get more than one grant from the state. However, receiving money from other CARES programs like the PPP does not disqualify a business from getting a state grant.
Goldstein said the grants (these are not loans and do not have to be repaid) come with few strings attached. She also expects the program to run out of money quickly.
Assuming all companies who apply receive the full $50,000, the total number of businesses who could receive grants would be about 3,300 under current funding. The governor wanted $250 million for this part of business recovery assistance, or about $90 million more than the legislative plans provide. There are about 70,000 businesses in Vermont.
However, there is still a pot of unused money that the state received as its $1.25 billion allotment from the CARES Act.
The Legislature has set aside about $140 million. Lawmakers are hoping some of it can be used to offset budget shortfalls, but Congress so far is not allowing CARES funding to be used for that purpose. At least some of that money could be used for more economic relief. The Legislature will reconvene August 25.
ACCD will host a Webinar Thursday (July 2) at 3 pm to explain the detail of the grants.
There are separate pools of money available from the state for health care (hospitals, clinics, doctors' offices, etc) and agriculture and forestry-related organizations with separate application processes (see links below).
“Our businesses and their employees drive our economy, put food on the tables of Vermonters, and make our local communities better places to live,” said Governor Scott. “Helping these businesses survive is essential to the future of our state. These economic recovery grants are a first step to ensuring our economy survives this period, so we can look to thrive in the wake of this pandemic.”
The initial wave of money available for grants will be $50 million administered through the Department of Tax for businesses who pay rooms and meals or sales and use tax. An additional $20 million will be available to all other private businesses and non-profits through ACCD. The grants will be allocated on a first-come, first-serve basis.
Eligibility requirements include:
- Business was open and active before February 15, 2020.
- Business is open at the time of application or is required to have closed due to COVID-19 restrictions but can certify to its intention to re-open when the COVID-19 restrictions are lifted.
- Business has experienced a 75% or greater drop in total revenue in any one-month period from March 1, 2020 to August 31, 2020, when compared with the same month in 2019.
The amount of the grant will be derived by the following formula:
- Indicated/reported gross annual revenue (or annual combined total sales as reported on meals and rooms or sales and use tax returns) multiplied by 10 percent.
- The maximum grant ceiling amount is $50,000.
- Each business or organization applicant may only receive one grant.
Please note, these conditions were added by the legislature in Act 115; the executive branch must adhere to the parameters set in legislation, but they were not part of the Governor’s initial proposal.
All businesses are strongly encouraged to visit the Recovery Grant Resource Center prior to July 6th for full details of the program, eligibility requirements, and documentation that will be needed with applications. Those resources can be found at: https://accd.vermont.gov/covid-19/economic-recovery-grants
A second wave of grant monies is expected, when H.966 reaches the Governor Scotts desk. While that money has different parameters and carve outs, ACCD will use this same system for processing those grant applications.
“We realize there are a lot of moving parts and multiple pieces of legislation that have been passed over the last few weeks, with different implications for different sectors and creating confusion in the business community,” said Commissioner Goldstein. “We are developing a system where the ACCD grant resource center will work as the central place to direct businesses to the right application and eligibility requirements. It is our goal to distribute these funds as quickly and as seamlessly as possible, within weeks of an approved application.”
On Thursday, July 2nd from 3:00 – 4:00pm and Friday July 3rd at 8 am and 11 am the ACCD and the Department of Taxes will host a webinar to cover eligibility requirements, grant award calculation information, grant application processes, and what documents businesses will want to have prepared and on-hand when applying for an Economic Recovery Grant. Details to attend the webinar: https://accd.vermont.gov/content/emergency-recovery-grants-overview-webinar
Act 115: Signed into law by Governor Scott last month, Act 115 creates a $70 million grant program for employers that experienced a 75% loss in revenue or more for any one month between March 1 and August 31, 2020, as compared to sales in the same month last year. Businesses that collect rooms and meals taxes, such as restaurants, bars, and lodging establishments, are set to receive $50 million in grants while other businesses will receive the remaining $20 million.
H. 966: Passed by the legislature last week and soon to be signed by Governor Scott, this bill includes an additional $96 million in economic recovery grants including programs for Women- and Minority-Owned Businesses, Non-Profit Arts and Cultural Organizations, Outdoor Recreation Businesses as well as restaurants, bars, lodging establishments, and retailers that experienced a 50% drop in revenue in any one-month period from March 1, 2020 to August 31, 2020, when compared with the same month in 2019.
VERMONT EMERGENCY ECONOMIC RECOVERY GRANTS
On Friday, June 19, 2020, Governor Scott signed into law Act 115, “An act relating to creating emergency economic recovery grants.” This legislation includes $70 million to issue Emergency Economic Recovery Grants to eligible Vermont businesses and nonprofits that have suffered severe financial harm from the COVID-19 public health emergency. Additional legislation, H.966, is headed to the Governor for signature and when signed, will provide another $96 million in funding for these Economic Recovery Grants.
The Economic Recovery Grants application process will open on Monday, July 6th.
Please note: The following guidance and eligibility criteria will be updated when H.966 is signed into law.
The Agency of Commerce and Community Development will be administering Economic Recovery Grants, along with the Department of Taxes and other state agencies that received funding from the Vermont Legislature for certain business types and ownership structures. See the section below on “Where and How Do I Apply?” for additional information for specific business sectors.
What are the eligibility criteria for the Economic Recovery Grants administered by ACCD?
An eligible business will be a nonpublic, private organization that:
- Is domiciled or has its primary place of business in Vermont
- Has one or more non-owner employees in Vermont (Women- and Minority-Owned businesses with zero employees will be eligible when H.966 is signed into law).
- Was open and active before February 15, 2020
- Is open at the time of application, or is required to have closed due to COVID-19 restrictions but can certify to its intention to re-open when the COVID-19 restrictions are lifted
- Has experienced a 75% or greater drop in total revenue (or 50% drop in revenue when H.966 is signed into law) in any one-month period from March 1, 2020 to August 31, 2020, when compared with the same month in 2019
- Is not currently in Chapter 7 bankruptcy
- Is in good standing with the Vermont Department of Taxes
- Is in good standing with the Vermont Secretary of State
- Has not received a Vermont Emergency Economic Recovery Grant from another State of Vermont Agency of Depertment
Where and How Do I Apply?
Starting on July 6, the following businesses and nonprofits will be able to apply for Economic Recovery Grants:
- If you are a business that is primarily a restaurant, bar, lodging property that collects the Rooms and Meals Tax, or a retail, entertainment or recreation operation that collects the Sales & Use Tax and report to the Vermont Department of Taxes on a monthly or quarterly basis, you should apply for a grant with the Department of Taxes beginning on July 6, 2020.
EXAMPLES: restaurant, bar, hotel, inn, retail store, online retail, golf course, movie theater
- If your business does not collect the Rooms & Meals Tax and/or Sales & Use Tax, OR if your business reports to the Department of Taxes on these taxes for a minimal amount of your overall revenues then apply for a grant with ACCD. APPLY HERE beginning on July 6, 2020.
EXAMPLES: manufacturer, property management, construction, realtor
- Non-Profit Arts and Cultural Organizations should apply for a grant with ACCD. APPLY HERE beginning on July 6, 2020.
- Women- and Minority-Owned Businesses who don't fall under any other sector specific program should apply for a grant with ACCD. APPLY HERE beginning on July 6, 2020.
- Outdoor Recreation Businesses should apply for a grant with ACCD. APPLY HERE beginning on July 6, 2020.
Applicants for the Economic Recovery Grants for the business types and ownership structures listed above will input their required information into an online application and submit the application. Upon time-stamped submission, that application will be put into the “review queue.” Grants will be awarded on a first-come-first serve basis. Applications will be reviewed in the order in which they were submitted, cross checking data fields and verifying the required documentation to either approve, deny, or return to applicant for more information and/or correction.
Businesses and nonprofits for sectors and the business types listed below should refer to the identified Agency of Department for more details on eligibility, timing and process to apply for funding:
- Agricultural Producers should apply for funding through the Vermont Agency of Agriculture, Food and Markets (AAFM). AAFM will be providing $35 million to the agriculture industry, including dedicated funding for dairy farms and dairy processors. AAFM is also administered $5 million in Working Lands Enterprise Grants for all other agriculture providers. Additional information about applying for these grants will be available online at https://agriculture.vermont.gov/vermont-covid-agriculture-assistance-program.
- Healthcare Providers should apply for funding through the Agency of Human Services (AHS). AHS is administering a $275 million Health Care Provider Stabilization Grant Program for a broad array of healthcare providers including: hospitals, private medical practices, dentists, health centers, laboratory and imaging centers, mental health providers, substance abuse disorder treatment providers, emergency medical service and ambulance providers, physical therapists, podiatrist, optometrists, chiropractors, and other health care providers licensed by the Board of Medical Practice or the Office of Professional Regulation. This also includes home health and hospice agencies, pharmacy services, and long-term care providers. Organizations can learn more about this program online at https://humanservices.vermont.gov/.
- Child Care Providers, Summer Camps, After School Programs should apply for funding through the Agency of Human Services (AHS). The Agency of Human Services received $12 million to provide additional restart grants and other costs to child care providers, summer camps and after school programs. Organizations should apply online at https://dcf.vermont.gov/cdd.
- Goverment Entities should apply for funding through the Agency of Administration. The Agency of Administration will administer a special grant fund for the purpose of issuing grants to units of local government to reimburse eligible COVID-19 expenses incurred on or before December 30, 2020, including hazard pay, supplies and equipment, sanitation, facility alterations, overtime compensation, redirection of staff for first-response needs, and any other eligible COVID-19 expenses not covered by other funding sources, including funding provided by the Federal Emergency Management Agency. More information will be available soon at https://aoa.vermont.gov/.
Please note that there will only be one grant allowed per applicant.
How will Economic Recovery Grant amounts be determined?
The below award formula is the same for Economic Recovery Grants administered by the Agency of Commerce and Community Development and the Department of Taxes. Grant funding from other State of Vermont Agencies and Departments may differ.
The amount of Economic Recovery Grants administered by the Agency of Commerce and Community Development and the Department of Taxes will be derived by the following formula:
- Indicated/reported gross annual revenue (or annual combined total sales as reported on meals and rooms or sales and use tax returns) multiplied by 10 percent
- The maximum grant ceiling amount is $50,000
Each business or organization applicant may only receive one grant.
What should my business do in preparation for the ACCD application?
Here is some basic information about what to get ready for to complete your grant application. You’ll need to know several pieces of information about your business:
- Your Vermont Account Identification Number (used by the Vermont Department of Taxes) and Federal Employer Identification Number (FEIN)
- The appropriate NAICS code for your company. (Non profits may not have an appropriate NAICS code and are exempt from this requirement.) The North American Industry Classification System (NAICS) is used by the United States, Canada, and Mexico to classify businesses by industry. Each business determines its six-digit NAICS code number based on the majority of activity at the business. When you file your federal income taxes, you provide a “business code” that is based on the NAICS number and the information for your business tax filing includes a table of those codes.
- Amount and source information about any compensation you have already received from insurance, PPP, EIDL, or any other federal program for economic damages incurred as a result of COVID-19
- Whether you are in good standing with the Vermont Department of Taxes. Good standing for your business means that all required tax returns are filed and that all taxes are paid, OR if you owe any taxes that are past due, you are in a payment plan for those taxes. If you have any unpaid taxes for your business, you can call (802) 828-2518 to request a payment plan. Any taxpayers who are not in good standing may be deemed ineligible for the grant.
The application will also require uploads of financial statements and tax information. Applicants should prepare PDF versions of the following documents and have them ready to upload before you start filling out the application.
Applicants will upload a total of 5 documents during the application process.
- 2019 income statement broken down by month
- 2020 income statement broken down by month
- 2019 federal tax return
- 2019 Vermont state tax return
- W-9 (signed)
If you want to receive notification when the Economic Recovery Grant application goes live, sign up for ACCD’s COVID-19 Economic and Community Response newsletter.
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