State of Vermont, SEC File Lawsuits Over Misappropriation of Economic Development Funds at Jay Peak

There’s a storm brewing over Jay Peak, a four season resort in Northern Vermont, close to Canada and Burlington. However, this storm is bringing less snow and more trouble in the form of state and federal civil actions filed by the U.S. Securities and Exchange Commission (SEC) and the Vermont Department of Financial Regulation (DFR).

VT DFR Jay Peak lawsuit

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The State’s lawsuit was filed in Washington Superior Court, in coordination with the SEC’s case filed in federal court in Florida. Both lawsuits allege investor fraud dating back to 2008 at EB-5 economic development projects run by Florida resident Ariel Quiros and Bill Stenger.

To be specific, the complaints allege that Quiros and Stenger misused more than $200 million of investor funds intended for EB-5 funded economic development projects in northeastern Vermont.

In a typical EB-5 project, investor funds are raised and used to complete a specific project described in the project’s Private Placement Memorandum (PPM) or offering document. The complaints allege that, following the misappropriation of investor funds to purchase Jay Peak Resort in 2008, later investor funds were misused and comingled, and used for personal enrichment by Quiros, including for purchase of an apartment at Trump Place in New York City.

Gov. Shumlin had in September 2014 asked the Agency of Commerce and Community Development (ACCD) and DFR to develop a partnership to better oversee EB-5 projects in Vermont. ACCD is the lead Vermont economic development agency, and it was actively involved with DFR to oversee EB-5 projects.

Not to mention the fact that Vermont’s EB-5 Regional Center, established in 1997, is unusual in that it is one of two active centers administered by a state for the purpose of economic development, instead of a for-profit private entity.

Gov. Shumlin said in a statement that “This is obviously a difficult day for Vermont and for the many people, myself included, who are so invested in growing jobs and economic opportunity in the Northeast Kingdom.”

ACCD Secretary Patricia Moulton added that “While this is a very disturbing day for the investors and Vermonters impacted by these projects, my staff and I will be working as hard as we can to preserve jobs and economic opportunities for the people of that region and to assist the Department in protecting investors.”

The EB-5 program, created in 1990, provides green cards to foreign residents who invest at least $1 million ($500,000 in a high-unemployment or rural areas like Vermont) in a U.S. business or project that then creates a certain number of jobs.

Vermont’s EB-5 Regional Center, which is housed within the ACCD, remains open and available to EB-5 projects unaffected by this case.

Here’s the State of Vermont complaint, and you can see the SEC complaint here.

Vermont Gets $46M USDA Assistance For Rural Economic Development Through Energy Projects

The U.S. Department of Agriculture has awarded $46 million in federal assistance to the Vermont Energy Investment Corporation (VEIC) to support energy efficiency and renewable energy improvements in rural areas across the state.


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The financing is being provided under the USDA’s Rural Utilities Service (RUS) Energy Efficiency and Conservation Loan Program (EECLP).

EECLP provides funds to expand efforts to help consumers save money, help strengthen rural economies through job creation for energy efficiency and conservation projects, reduce the need to purchase or generate energy, and reduce emissions from generation of electricity.

This is the largest EECLP project in terms of both financing and scale that the USDA’s RUS has made since the program’s launch in December 2013.

VEIC will in turn operate and administer their program through Efficiency Vermont, an energy efficiency utility with a state-wide and predominantly rural service territory. Efficiency Vermont dedicates a portion of its annual budget to services for low-income residents.

EIC’s partnership with Efficiency Vermont serves as a model of how utilities can enable large-scale energy efficiency and renewable investments.

In addition to reducing the burden of energy costs, this $46 million USDA loan is expected to provide Vermont economic development benefits to residents, businesses, and communities in rural parts of the state. For example, reducing energy costs for farmers and food manufacturers, including family run dairies and maple syrup producers, can help them remain competitive.

Agriculture Secretary Tom Vilsack said in a release that this loan will reduce barriers to energy investments by lowering the upfront costs, spreading these costs over 20 years, and by making financing more available. “It also will help residential, commercial, agricultural and industrial consumers in rural Vermont reduce energy use and meet state and national energy goals,” added Sec. Vilsack.

Through its various programs, USDA has invested nearly $2.7 billion in Vermont between 2009 and 2014. This includes more than $680 million in economic development financing to support affordable housing and create jobs. Not to mention more than $263 million in infrastructure development, including electricity, broadband and telecommunications, water, and community facilities; and another $135 million through conservation efforts to protect Vermont’s land, water and air resources.

Since 2009, USDA has provided financing for more than 14,000 energy projects nationwide through $2.1 billion in strategic investments to support rural businesses and American energy independence. These programs have saved more than 10.5 billion kilowatt hours of energy and have produced 160 million gallons of advanced biofuels.

Brattleboro, Vermont Economic Development Agencies Secure GS Precision Expansion

G.S. Precision, a leader in the manufacturing of high-precision machined components and sub-assemblies for the aircraft engine, aerospace, automotive and other industries, broke ground on an expansion in Brattleboro, VT.

GS Precision

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The $17 million expansion is the result of nearly eight months of hard work by Vermont and Brattleboro economic developers and elected officials to keep the company in state.

G.S. Precision, which already supports 300 high-quality manufacturing jobs in Brattleboro, will now create another 100 new jobs as part of this latest expansion.

In a release announcing the groundbreaking at the Exit One Industrial Park, Governor Peter Shumlin said this project has been a team effort to combine federal, state, and local resources to retain and create great jobs in Brattleboro. “This is the kind of public-private partnership that will help ensure Windham County’s economic future,” added Gov. Shumlin.

G.S. Precision worked on this project with the Brattleboro Development Credit Corporation, the Vermont Economic Development Authority (VEDA), Town of Brattleboro, and the VT Agency of Commerce and Community Development (ACCD).

U.S. Senator for Vermont Patrick Leahy said in the release that “I am pleased that Vermont could count on federal programs to partner with G.S. Precision to make this possible. This creative package shows once again that successful economic development is truly a team sport.”

The company’s investment in the expansion is being financed through a number of local, state, federal and private entities and programs, including TD Bank, VEDA financing, CDBG, New Market Tax Credits, Windham County Economic Development Funding, and Vermont Employment Growth Incentives.

BDCC Executive Director Adam Grinold said that BDCC provided leadership in efforts to identify and assemble a number of appropriate federal, state and local supports to accommodate the decision by G.S. Precision to expand in Vermont, and noted that they are thrilled with the result.

G.S. Precision President and CEO Norm Schneeberger likewise responded that “The combined efforts of Senator Leahy, Governor Shumlin, Pat Moulton and her team at the Agency of Commerce and Community Development, Adam Grinold and the BDCC, the Town of Brattleboro and many other individuals have been instrumental in our decision to focus our expansion plans in Brattleboro.”

G.S. Precision’s corporate headquarters are in Brattleboro, but they also have manufacturing facilities in New Hampshire, Mexico and California. Growth opportunities, primarily in the aircraft engine and power generation turbine markets, had G.S. Precision considering the possibility of an expansion out of state.

Brattleboro Town Manager Peter Elwel noted that the Town’s Selectboard unanimously supported Brattleboro’s financial contributions to the project and said that “The Town of Brattleboro is grateful to GS Precision for making this commitment and to the State of Vermont and BDCC for their leadership in making it possible.”

Vermont VEGI Update – $4.3M Job Creation Incentives For Nine Companies Creating 332 Jobs

The Vermont Economic Progress Council (VEPC) authorized job creation incentives totaling $4.3 million for the year under the Vermont Employment Growth Incentive (VEGI) program.

Vermont VEGI incentives program update

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This $4.3 million in Vermont economic development incentives will encourage the creation of 332 new jobs by nine companies.

The jobs created will provide an average annual compensation of $48,250, and will generate a combined 13.5 million in new, full-time payroll, along with a $47.7 million investment in facilities, machinery and equipment in Vermont by 2019.

Each of these companies is growing its business and creating new full-time jobs in Vermont because of the incentives that will be earned during the five-year period.

Governor Peter Shumlin noted in a release that the race among states to lure jobs from one another often leads to wasteful spending.

“Vermont, through the VEGI program, takes a smarter approach that uses funds wisely to create real jobs. And we do it in a way that returns to the state in tax revenue more than is paid out in incentives,” added Gov. Shumlin. “It’s a win for job creation. It’s a win for Vermont business. And it’s a win for the state as a whole.”

As per a cost-benefit analysis, the economic activity approved for these nine projects will generate an estimated $1.7 million in net new tax revenue, even after payment of the incentives. The Council also determined that these projects would not occur or would occur in a significantly different and less desirable manner if not for the incentives being authorized.

For example, the largest VEGI award of $1,336,191 was to Cabot Hosiery Mills, Inc., to secure and facilitate an expansion of their operations to meet the demand created by their premium sock brand, Darn Tough Vermont. As part of this expansion in Northfield, VT, the northeast’s only sock manufacturer has added more than 80 new knitting machines and has brought on more than 115 new employees.

Cabot was the first company approved for the Vermont Enhanced Training Incentive approved by the VT General Assembly. This incentive combines VEGI incentives and Vermont Training Program grants to allow companies to accelerate training for Vermonters filling newly created jobs.

Cabot Hosiery Mills President Ric Cabot said in the release that “The Vermont Enhanced Training Incentive approved for Cabot will allow us to roll out a phased expansion that should set us up well for 2016 and beyond.”

Patricia Moulton, Secretary of the Vermont Agency of Commerce and Community Development (ACCD), added that “The VEGI incentive program continues to ensure Vermont’s businesses remain in Vermont and draws new growth as companies seek out Vermont’s innovative economy.”

U.S. States Lead Under 2 MOU Climate Agreement Expansion at COP21

California not being an official UN member state isn’t stopping Governor Jerry Brown from leading the way at the United Nations Climate Change Conference (COP21) at Paris.

Under 2 MOU event at COP21

Under 2 MOU event at COP21 (press photo – Stéphane Lemouton/

On his second full day in Paris for COP21, Governor Edmund G. Brown Jr. and U.S. Ambassador to France Jane D. Hartley welcomed 15 new signatories to the Under 2 MOU climate agreement at a signing ceremony hosted at the U.S. Ambassador’s Residence in Paris.

The Under 2 MOU is an agreement to limit the increase in global average temperature to below 2 degrees Celsius, the warming threshold at which scientists say there will likely be catastrophic climate disruptions.

This is the level which the COP21 talks are seeking to achieve by getting member states to agree on levels for emissions cuts and clean energy technology investments. California, Vermont and other states and jurisdictions aren’t waiting around for such a global agreement, and have forged their own path towards this goal with the help of agreements such as the Under 2 MOU.

Under this particular agreement, signatories commit to either reducing greenhouse gas emissions 80 to 95 percent below 1990 levels by 2050 or achieving a per capita annual emission target of less than 2 metric tons by 2050. These targets allow each individual government to tailor emission reduction plans to fit regional needs.

Since California first began seeking signatories to the Under 2 MOU in May, a total of 80 jurisdictions representing 22 countries and six continents have signed or endorsed it. Together, the signatories now represent more than 614 million people and $18.6 trillion in GDP, equivalent to nearly a quarter of the global economy.

“Make no mistake, as leaders of the world’s cities, states and regions, we are on the front lines in the battle to combat climate change,” said Governor Brown, in a release issued by the Governor’s Office.

Among the 15 new signatories is Rhode Island, which became the ninth American state to join the Under 2 MOU. Rhode Island Governor Gina Raimondo said in the release that “Rhode Island is making every effort to address climate change and mitigate its impacts on the environment, public health, and the economic strength of our communities… We look forward to working within our borders and with our partners nationally and around the world to achieve a strong, sustainable, clean energy future.”

Vermont Governor Peter Shumlin is one of the three governors attending COP21 in person. Vermont is already a signatory to the Under 2 MOU, and the Governor will be participating in the Driving Climate Action through Compact and Under2 MOU event hosted by the Network of Regional Governments for Sustainable Development and the Climate Group.

“I am proud to join leaders from around the world who are serious about climate action and working towards regional, national, and global agreements that will curb the devastating effects of global warming,” said Gov. Shumlin in a release.

For more information on the agreement, visit

Vermont Approves $46.5M For Economic Development Projects

The Vermont Economic Development Authority announced approval of $46.5 million in loan and bond financing for a number of commercial, agricultural, energy and small business projects across the state.


Vermont (photo – Amy the Nurse/flickr)

The projects that received financing include two manufacturing operations. One of them is an expansion of beer-brewing facilities in Middlebury by Otter Creek Brewing Company.

As part of the $5.2 million multi-phase project, the beer-brewing company will purchase a new 120-barrel brewing system to increase production capacity, and also make improvements to increase seating capacity at the company’s restaurant.

VEDA has approved $230,000 in financing to help facilitate the project, with People’s United Bank providing additional financing. The expansion will enable the company to grow its workforce from 85 to 93.

The other manufacturing project is by Global Values, Inc., a distributor of high-quality, color granite monuments. GVI will now begin manufacturing in Barre, VT, where it has purchased the real estate and the equipment of Houle Brothers Granite Co., Inc.. GVI will upgrade the equipment and manufacturing facility by purchasing more machines, including a new CNC machine.

VEDA has approved $544,000 in financing as part of a $1.5 million project to help Global Values, Inc. Employment at the newly-integrated plant is expected to grow from 31 to 55 positions within three years.

Other projects approved by VEDA are as follows:

Atomic Professional Audio, Inc., North Clarendon – Financing of $920,000 as part of a $2.3 million project to purchase and make leasehold improvements to a new facility for its growing company. TD Bank and Rutland Economic Development Corporation are also providing financing for the project. Employment is expected to grow from the current 20 positions to 28 within three years of the expansion project.

Casella Waste Systems, Inc., Rutland – Approval of $35 million tax-exempt facility bond to fund Casella’s ongoing capital expenditures in Vermont over the next three years. Casella employs approximately 1,950 people across six states, and approximately 545 of these positions are located in Vermont. Employment in the state is expected to grow to 575 within three years of the project.

Circus Smirkus, Greensboro – Approval to a $2.3 million tax-exempt revenue bond that enabled Circus Smirkus, a world-renowned youth circus, to greatly expand its operations and meet increasing demand for its programs. Circus Smirkus currently employs 11 year-round employees, and its Camp employs 44 persons. This number is expected to increase to 47 within three years of the project.

Apart from these projects, VEDA also approved financing for several qualifying renewable energy generation and energy efficiency improvement projects through the Commercial Energy Loan Program, in addition to over $3.2 million in agricultural loans and over $1 million in loans through its Small Business Loan Program which assists growing Vermont small businesses that are unable to access adequate sources of conventional financing.

Vermont Economic Development Authority Approves $12M in State Funding for Projects

The Vermont Economic Development Authority announced approval of $12 million in financing for projects totaling over $32 million. The projects include several manufacturing facility expansions, agriculture projects, energy efficiency and renewal energy generation projects, and entrepreneurial and small business loans.


Vermont (photo – USDAgov/flickr)

VEDA approved nearly $2.4 million in direct commercial financing for three manufacturing expansion projects.

One of these projects is a $4.1 million investment in machinery and equipment by Cabot Hosiery Mills, Inc. in Northfield, VT. The company is expanding its manufacturing operations to meet growing demand for its Darn Tough Vermont proprietary line of premium performance socks.

Cabot already employs 189 people, and that number is expected to rise to 312 within three years of this expansion. VEDA approved $1,215,508 in financing to assist Cabot with this phase of their expansion plan.

The Authority also approved $742,500 in financing for a $2.3 million expansion by wooden toys and gifts maker Maple Landmark, Inc. in Middlebury, VT. The company expects to increase its workforce from 36 to 45 as a result of this expansion.

The third expansion project approved to receive financing was cutting tools and accessories maker Tivoly, Inc., a subsidiary of France-based Tivoly S.A. The company is getting $342,765 in financing to support a planned $856,913 capital expenditures project at their facility in Derby Line, VT. Tivoly expects to grow their workforce here from 155 to 173 within three years of this project.

VEDA also approved $5.2 million through their agricultural loan program, and nearly $2.3 million through their Commercial Energy Loan Program. The latter helps qualifying Vermont businesses raise financing for projects involving energy efficiency improvements and renewable energy generation.

Another $300,000 was approved through VEDA’s Entrepreneurial Loan Program to assist Vermont-based businesses in seed, start-up and growth stages that may not have access to traditional financing. One of these recipients was Hyde Park, VT-based Blog Sparks Network, Inc. The company received $100,000 in working capital to help accelerate their growth.

VEDA also approved $1.8 million through their Small Business Loan Program to assist small businesses that are unable to access traditional financing sources. One of these recipients was Stone Corral Brewery, LLC. The micro-brewery is getting $120,000 to relocate from their family farm in Huntington, VT to new leased space in Richmond, VT.

Vermont Economic Development Authority CEO Jo Bradley said in a release announcing the funding approvals that the variety of projects for which VEDA has approved financing is impressive.

Gov. Shumlin Signs Comprehensive Vermont Economic Development Bill Gov. Shumlin Signs Comprehensive Vermont Economic Development Bill

Vermont Governor Peter Shumlin has signed an economic development bill that covers everything from expansion of job creation incentives to a marketing campaign to attract talent, and measures supporting startup growth and attraction of tech companies.


Vermont (photo – Amy the Nurse/flickr)

The Governor signed the bill (S.138) at the Darn Tough Socks facility in Northfield, VT where the company is in the process of expanding and creating 300 new full-time jobs, aided through state incentives under the Vermont Economic Growth Incentive (VEGI) program.

One of the changes made through S.138 is that businesses creating jobs in parts of the state with high unemployment will find it easier now to access Vermont economic development incentives under VEGI. That’s relatively speaking, because Vermont’s unemployed rate has dropped to a low of 3.6 percent.

The bill also hikes the cap on non-licensed lending from $75,000 to $250,000. This means that people will be able to lend larger amounts without having to register as a bank or lending organization, and startups will find it easier to raise more capital.

S.138 also eliminates the cloud tax, sending a clear message to tech companies that Vermont is a tech-friendly state and an emerging tech hub ideal for locating and growing tech companies.

Also included in the bill is a $200,000 allocation for a Vermont economic development marketing campaign designed to showcase the Vermont story and recruit businesses, entrepreneurs and talent to the state. Another $100,000 is allocated in the bill for a business recruitment campaign that targets businesses across the border in Quebec, Canada.

A home buyer down payment assistance program in the bill offering up to $5,000 to first-time home buyers is meant to make it easier for employers to attract and retain talent by encouraging renters and those new to Vermont to put down roots in the state.

Gov. Shumlin said in a release announcing the bill signing that Vermont is a great place to live, work, and raise a family. “This legislation will help us build on the job growth we have seen in recent years, spur businesses to innovate the next big thing right here at home, train Vermonters for the jobs we have, and attract those from out of state to fill the jobs employers are continuing to create,” said Gov. Shumlin.

The Governor thanked the VT House Commerce Committee and Senate Economic Development Committee, noting that S.138 would not have been possible without their hard work. Gov. Shumlin also mentioned House Speaker Shap Smith and Senate President Pro Tem John Campbell who championed the legislation.

Vermont House Speaker Shap Smith said in the release that this bill seeks to strengthen Vermont’s workforce, invest in employers, and market the state’s strengths throughout the country. Speaker Smith added that by providing new tools to grow the state’s economy and attract businesses, they remind their neighbors that Vermont is ready for the 21st century.

Vermont Jobs For Independence Pilot Program Pairs SNAP Grant With Jobs Training

Vermont was one of the ten states awarded federal grants last week by the U.S. Department of Agriculture to fund and evaluate pilot programs aimed at helping Supplemental Nutrition Assistance Program-eligible participants transition from SNAP food assistance to jobs.

SNAP pilot program grants

SNAP pilot program grants

The Vermont Department for Children and Families (DCF) was awarded $9 million for a three-year pilot program called Jobs for Independence.

The JFI program will work with Vermonters on food assistance who face significant barriers to employment. This includes the homeless and those suffering from or recovering from substance abuse or mental health problems, and those who have prior criminal convictions.

Governor Peter Shumlin said in a release announcing the pilot program that they know that most Vermonters on food assistance would rather have a full-time job that will allow them to provide for themselves and their family, adding that this pilot program will help them help those Vermonters get the support and training they need to make that a reality.

“That’s good for struggling Vermonters, it’s good for our economy and workforce, and it’s good for taxpayers,” said Gov. Shumlin.

The pilot program will make use of the Progressive Employment approach. It provides job seekers a sequence of low-risk opportunities like company tours and short-term training placements which they can try out before a formal hire. These short-term experiences will provide real work experience, and also give the job seeker an opportunity to get used to the work environment and expectations.

The JFI pilot program will bring together a number of Vermont state agencies, including DCF and the Agency of Human Services (AHS), along with the VT Department of Labor, Department of Corrections, and the Division of Vocational Rehabilitation. These state agencies will be collaborating with community partners such as Community College of Vermont and the Capstone Community Action.

Service providers will work to provide education and training, financial literacy and job placement services. Access to high-quality childcare, transportation, and transitional housing support will ease the way for participants as they transition from SNAP food assistance to gainful employment.

Deputy Commissioner of Economic Services Division of the Vermont DCF Sean Brown said in a release that by taking a holistic approach to assessing an individual’s unique barriers to employment, the State of Vermont and its community partners look forward to helping Vermont’s most vulnerable citizens obtain the skills and support they need for long-term employment, higher wages, and overall self-sufficiency.

There are currently some 87,000 Vermonters receiving SNAP benefits. As a start, the JFI pilot program is aiming to enroll at least 3,000 participants in the first 16 months.

The SNAP program is already an effective Vermont economic development tool, generating $1.80 in total economic activity for every dollar in new SNAP benefits.

U.S. Senator for Vermont Patrick Leahy issued a statement in which he said that by applying practical help to lift Vermonters out of poverty, the pilot program will change lives one by one, family by family and community by community.

Along with Vermont, the other states whose projects were awarded a total of $200 million in federal grants for the SNAP pilot programs include California, Delaware, Georgia, Illinois, Kansas, Kentucky, Mississippi, Virginia, and Washington.

Agriculture Secretary Tom Vilsack said in a USDA release announcing the grants that helping people find and keep good jobs is the right way to transition recipients off of SNAP assistance and ultimately reduce program costs. Sec. Vilsack added that helping people find good jobs is a far better strategy for reducing food assistance spending than across the board cuts.

Vermont Governor Names New Economic Development Commissioner

Governor Peter Shumlin announced that Vermont Commissioner of Economic Development Lisa Gosselin will be leaving her post and will be replaced by Joan Goldstein, currently executive director of the Green Mountain Economic Development Corporation.

Vermont - The Green Mountain State

Vermont (photo – Amy the Nurse/flickr)

The Vermont Department of Economic Development (DED), along with the Department of Housing and Community Development (DHCD), is a part of the Vermont Agency of Commerce and Community Development (ACCD).

The post of Vermont Economic Development Commissioner had been left unfilled since the Douglas administration, but was reinstated by Gov. Shumlin in July 2013 with the support of the state legislature as part of an aggressive jobs growth and economic development agenda.

As DED Commissioner, Gosselin oversaw the development of Vermont’s first state-wide federally-funded CEDS. She also helped launch the ‘Great Jobs in Vermont’ campaign to attract talent to Vermont’s growing job market, and organized the InnoVaTe annual economic development summit.

She also worked with the Agency of Commerce team to strengthen programs like the Vermont Training Program, EB-5 and foreign trade programs. Gosselin is now leaving her post to become the vice president of media company Addison Press Inc., a family business which she wants to help grow in Vermont.

Gosselin said in a release announcing the move that it’s been a tremendous honor to serve the state under Governor Shumlin, and to work with so many of the state’s growing businesses.

Her replacement, Joan Goldstein, comes to the post after six years as executive director of the Green Mountain Economic Development Corporation.

Under her tenure, GMDC, which serves 30 townships in East Central Vermont, has diversified its activities and the economic development services it offers to include brownfields, flood recovery grants, real estate investments, and innovative workforce development projects and programs.

Before GMDC, Goldstein worked for several years as a business and technology advisor for the Vermont Small Business Development Center. She has also put in stints as an economics and small business management instructor for Community College of Vermont and the Vermont Technical College.

Before moving to Vermont 10 years ago, Goldstein spent more than 20 years in the financial services industry in New York City, working at JP Morgan and Credit Suisse in various roles that allowed her to gain plenty of international sales, marketing, client and project management experience.

Joan Goldstein has an MBA in finance and an undergraduate degree in economics.

Goldstein said in the release that “Economic development is critical for the further prosperity of the state and I am very pleased to have this opportunity to play a role.”

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