[{"_1":2,"_87":-5,"_88":-5},"loaderData",{"_3":4,"_26":27},"root",{"_5":6,"_17":10,"_18":19,"_20":21,"_22":10,"_23":-5,"_24":-5,"_25":10},"user",{"_7":8,"_9":10,"_11":10,"_12":-5,"_13":-5,"_14":15,"_16":-5},"roles",[],"isAuthenticated",false,"isPremium","planName","subscriptionStatus","featureFlags",{},"insightsBudget","isDevelopmentHost","userPreferences",{},"recaptchaSiteKey","6LcvOJcUAAAAAHsB-gPGfGktcRlKpH7OTIU_dMTD","isImpersonating","impersonation","affiliateStatus","isFreedomPortal","routes/v2/article/layout",{"_28":29,"_30":31},"notFound",true,"relatedArticles",[32,75],{"_33":34,"_35":36,"_37":38,"_39":40,"_41":42,"_43":44,"_45":46,"_47":48,"_49":50,"_51":52,"_53":54,"_55":56,"_57":58,"_59":60,"_61":62,"_63":64,"_65":66,"_67":68,"_69":70,"_71":72,"_73":56,"_74":56},"mediaId",6122880,"mediaKeyId","2693731-229a968b5d7c35bf55bc538152401daf","parentId",2693731,"title","VHFA asks for five‑year extension of tax‑credit sales to sustain down‑payment assistance; committee weighs landlord data, short‑term rental tax concerns","audioSeconds",3316,"startMs",3864175,"endMs",7180512,"viewUrl","/Search/View?dp=1&key=2693731-229a968b5d7c35bf55bc538152401daf&start=3864&end=7180","thumbnailUrl","https://assets.pipeline.soar.com/2693731-229a968b5d7c35bf55bc538152401daf/thumbnail_3864175.jpg","articleUrl","/articles/6122880/Vermont/VHFA-asks-for-fiveyear-extension-of-taxcredit-sales-to-sustain-downpayment-assistance-committee-weighs-landlord-data-shortterm-rental-tax-concerns","mediaUrl","https://secure.pipeline.soar.com/6122880-1f723064070242b35d98ba3ae1fb6bb4/orig.mp4?Expires=1771180155&Signature=ZDCnUPUQpvPg-kwjtsi6MUmIMftYixE67nLzwMQI2FNj49DmA~73ijqKrEng-gmBPeaHoYe2rvSjKJNziMP5XH4bTSMxeYHLh3uOiqnQiy5eWF~KREhbpUvc3z2tWJckbFu6m07P4SXATG15k-uiEwmMIUJAUzEFAm2ht8vSH9MwpovHzcu-XLSCypFuBUlWGf5D4bN9LBG206JD-xDcCnTt8fvAxW~epJw0NBPlaH9s1vBfGdd7smTqDbF~DWRG1QGMTRbeyu5PAT8a53MkmRDTod05XLJJ5Q3Aeeufgp0Ahhpv2qfXW7vqDKKhY4Uc3Lj6egGPXiCHgwy-TQ6yXg__&Key-Pair-Id=KUT5TJCACFTXG","author","","date","2025-03-19T07:42:04Z","article","The House Ways & Means committee spent a substantial portion of its March 18 meeting on H.479, a housing bill that would extend and modify state tax‑credit tools VHFA uses to finance down‑payment assistance, create a first‑generation homebuyer grant, and make other tax and administrative changes related to housing.

Maura Collins, executive director of the Vermont Housing Finance Agency (VHFA), told the committee VHFA operates a down‑payment assistance (DPA) program funded in part by proceeds from the sale of a multiyear state tax credit. VHFA sells five‑year tax credits on the market (modeled after the federal low‑income housing tax credit); selling $1.25 million in credits generates roughly $1.1 million in cash at current market rates, staff said. VHFA asked the committee to authorize continued sale of the DPA tax credit for an additional five‑year period beginning in FY27 to keep the DPA program solvent and avoid curtailing assistance. VHFA also requested a standing authorization to issue a smaller volume of five‑year tax credits to fund a permanent first‑generation homebuyer grant program; JFO and VHFA testimony described the first‑generation grant as non‑repayable assistance to first‑generation homebuyers previously funded by one‑time appropriations.

VHFA’s data presentation described the DPA product as a 0% deferred second mortgage that is repaid when the property is refinanced or sold. DPA awards are combined with VHFA mortgage products and are intended for first‑time buyers within income and purchase limits. VHFA has increased the DPA maximum over time to match market prices; the agency currently offers up to $10,000 per household in DPA and has used temporary appropriations for supplemental grants for some borrowers (for example, first‑generation grants of up to $15,000 funded by legislative appropriations during the pandemic). Collins said continuing the sale of tax credits for another five years would stabilize the revolving DPA fund and avoid options VHFA would otherwise consider — lowering DPA amounts, tightening asset limits for applicants, or geographically targeting assistance.

Joint Fiscal Office analyst James Duffy summarized the fiscal mechanics and the bill’s revenue effects. In FY26 the first‑generation program as proposed would cost the state about $250,000 in foregone bank franchise tax (the credit reduces bank tax liabilities). The DPA extension does not change FY26 costs because prior authorizations covered that year; if the DPA sales are extended beginning in FY27, the five‑year structure of the credit drives multiyear revenue impacts: new first‑year credits add foregone tax revenue on a rolling basis and peak several years after authorization before phasing down as five‑year credit tranches expire. JFO noted the Ways & Means amendment contains appropriations elsewhere in the companion housing bill that together create a larger FY26 appropriations footprint (JFO quoted a top‑line FY26 gross appropriation number for the bill in committee discussion, largely for programs administered in the Department of Housing and Community Development and the Vermont Housing and Conservation Board).

The committee also considered ancillary provisions in H.479: a revised landlord certificate for renter‑credit administration, and a municipal short‑term rental tax provision. Jake Feldman (tax department) told the committee the redesigned landlord certificate — a single certificate per property with tenant lists and property details — is simple to complete and will give VHFA additional data needed for housing‑market research. The tax department supports the landlord certificate changes and said the renter credit administration has improved significantly since earlier reform efforts.

Will Baker, legal counsel at the Tax Department, raised concerns about a separate short‑term‑rental local tax proposed in the bill. That section would allow municipalities to impose a one‑percent tax on short‑term rentals, using a definition that differs from the statewide rooms and meals tax. Tax Department counsel warned a stand‑alone municipal short‑term rental tax with its own base and exemptions would create administrative complexity and taxpayer confusion, particularly where existing rooms‑and‑meals local option taxes already exist. Counsel pointed to prior municipal stand‑alone taxes that have produced compliance and boundary issues and urged caution; he noted the tax department does not administer the separate short‑term rental tax form as written and that decisions about exemptions and the tax base are not uniform in the draft.

Julie Marks, executive director of the Vermont Short‑Term Rental Alliance, urged the committee to remove the new municipal short‑term rental tax provision. Marks said the proposal unfairly targets small home‑based hosts and local vacation‑rental businesses that employ Vermonters and support local economies. She also reminded the committee that a short‑term‑rental surcharge added to the meals‑and‑rooms tax last year has already been implemented and that reporting on those receipts has not yet been fully available, creating additional regulatory and financial strain on hosts.

Because the DPA tax credit is a five‑year credit, VHFA said it needs authority to sell credits for another five‑year tranche to maintain cash flow that funds DPA loans. Collins described the DPA program as historically revolving — repayments from refinances and sales plus tax‑credit proceeds sustain future awards — and showed that repayments declined as interest rates rose, constraining the agency’s ability to re‑lend. VHFA proposed continuing the sale of $1.25 million in five‑year credits annually (the same volume it sold in prior years) and adding $250,000 of credits to underwrite a recurring $1 million first‑generation grant program. Collins said alternatives — lowering DPA amounts, tightening asset limits (e.g., reducing the $30,000 liquid‑asset cap), or geographically targeting assistance — have downsides she preferred to avoid if authorization were granted.

The committee heard the fiscal summary and directed staff to return with additional details. No final vote on H.479 was taken at the March 18 session; members signaled they would continue consideration at follow‑up meetings.

Ending: Committee members asked JFO and VHFA to provide further fiscal details and implementation plans (including how tax‑credit sales translate to cash available to lenders), and requested additional information for the municipal short‑term rental proposal should it remain under consideration.","mediaType","Video","parentTitle","House Ways and Means 2025-03-18 1:00PM","oneSentenceSummary","The House Ways & Means committee reviewed H.479 on March 18, which would extend VHFA’s sale of five‑year state tax credits to keep its down‑payment assistance program operating, create a standing first‑generation homebuyer grant financed by tax‑credit sales, and include related tax and administrative changes.","taxTitle","Ways & Means, HOUSE OF REPRESENTATIVES, Committees, Legislative , Vermont","taxId",35157,"location","Vermont","headline","shortSummary",{"_33":76,"_35":36,"_37":38,"_39":77,"_41":78,"_43":79,"_45":80,"_47":81,"_49":82,"_51":83,"_53":84,"_55":56,"_57":58,"_59":85,"_61":62,"_63":64,"_65":86,"_67":68,"_69":70,"_71":72,"_73":56,"_74":56},6122884,"Committee debates H.397: codified buyouts, reimbursement scheme and pilot‑fund shift draw scrutiny",3715,11601,3726780,"/Search/View?dp=1&key=2693731-229a968b5d7c35bf55bc538152401daf&start=11&end=3726","https://assets.pipeline.soar.com/2693731-229a968b5d7c35bf55bc538152401daf/thumbnail_11601.jpg","/articles/6122884/Vermont/Committee-debates-H397-codified-buyouts-reimbursement-scheme-and-pilotfund-shift-draw-scrutiny","https://secure.pipeline.soar.com/6122884-7dfba948491e1bc23ac8f80936436c20/orig.mp4?Expires=1771180155&Signature=fyHGZZOY7GlKLlz6P3pqqs1EAZlMkx7cTCSR7uhNMYK7eNnURTYZqJ~Kajw4ShpfFuIjF7GGcmjKnmpYzxOS2goZRzfM-O8qC77ntqy3GI4iid2ZXiQoSn2nplxjmooXe7bLL8FXa8gyXpNIbAYrgWaDypQmLlqZ9jmPwfMThLS1RyvtXqeQFcW7cldnHIf0xfcf~37Xsu6SbenQhhBx1~2r-kMpfFNp1rusTQTogfSQ3FdZ3ZzePXrcKUEmJBNTAPqaydZCZFldH6SDvV4P7~NdtGLNjIcqtyEX11ypn-vXYoS4E6tSdsOJ9RxmDSgzHsvj3ZY9M5jwSLot~MRwUA__&Key-Pair-Id=KUT5TJCACFTXG","House Ways & Means on March 18 considered H.397, a bill that would codify an existing voluntary buyout program for flood‑prone properties, create a new municipal reimbursement program for lost property tax revenue, add positions within the Division of Emergency Management and alter how local option ‘‘pilot’’ receipts are split between municipalities and the state.

The bill, presented by legislative staff and discussed at length by committee members and Joint Fiscal Office analysts, would require the Division of Emergency Management (VEM) to run a voluntary buyout program and obligate municipalities, at a property owner’s request, to coordinate with VEM to purchase flood‑prone properties at full fair market value. Under the committee’s report, municipalities that acquire those properties would be required to preserve them as open space by recording a deed restriction; those restrictions are currently required by FEMA when buyouts are tied to FEMA grants.

Committee members and staff emphasized why the buyout and reimbursement language matters. Under the proposal, the Commissioner of Public Safety (VEM) must certify eligible properties to the Commissioner of Taxes by Sept. 1 of a given year. Eligibility is defined for properties acquired on or after July 1, 2023, that have been preserved as open space by covenant or deed restriction. Reimbursement payments would be calculated using the municipal grand‑list value for the year the property was damaged or identified as flood‑prone, multiplied by the municipal tax rates (including submunicipal rates). The bill would provide full annual payments for up to five consecutive years; after five consecutive years of full payments, subsequent eligible years would receive one‑half of that calculation. The statute limits total eligibility to a 10‑year period for each property.

Tim Barnett of the Joint Fiscal Office told the committee the new reimbursement schedule interacts with the pilot special fund that pays existing pilot grants. If the pilot fund balance is insufficient to cover all program obligations, payments under the new reimbursement section would be reduced proportionately. Barnett and other staff modeled the pilot fund’s near‑term outlook and said the amendment before the committee proposes shifting the local option pilot split from 70/30 (municipal/pilot fund) to 75/25. Under JFO’s estimate of local option tax receipts for FY26 (roughly $59.18 million), the 75/25 split would yield a little more than $14 million to the pilot fund, compared with about $16.8 million under current rules; JFO noted the FY26 base pilot appropriation in the governor’s recommendation was about $12.2 million and estimated the new buyout reimbursement program might cost roughly $550,000 in FY26, leaving the math near balance under the proposed split.

The committee also reviewed appropriation items included in the Ways & Means amendment to H.397: two positions in VEM (a municipal grant liaison and an all‑hazard mitigation technician) with an appropriation of $275,000, $950,000 for the state urban search and rescue team, $205,000 for a Vermont Community Radio Grant Program (to support emergency notification capabilities), and $275,000 to the Agency of Natural Resources for procurement of a fire apparatus. Committee staff said effective dates vary; the flood‑related reimbursement portion is retroactive to Nov. 15, 2024, while other sections take effect July 1, 2025, or on passage as specified in the amendment.

A substantive amendment from Representative Waszak and staff proposed striking the clause that would require municipalities to record a deed restriction preserving acquired property as open space in perpetuity. Supporters of that change said removing the perpetual restriction would allow municipalities flexibility to use non‑FEMA funding to acquire properties and then redevelop sites with flood‑resilient structures in some cases. Opponents and counsel warned of two linked risks: without the deed restriction the buyout would not meet FEMA grant requirements (so FEMA funds would not be available for those acquisitions), and the reimbursement program as drafted requires the deed restriction for a municipality to be eligible for the tax‑loss reimbursement. In short, an acquired property could be eligible for a state‑funded buyout but then not be eligible for the municipal reimbursement payments unless the covenant were recorded. Committee members repeatedly asked staff to reconcile those effects and to consult the Joint Fiscal Office before final action.

The bill also adds authority for municipalities to borrow for emergency improvements without a voter referendum in certain all‑hazard circumstances, and it changes local municipal borrowing rules (including permitting level‑principal debt service). Joint Fiscal Office analysts explained how level debt service principal would change the fiscal dynamics of TIF districts: level principal payments can allow municipalities to borrow more in the near term but raise total interest costs and reduce the surplus that would otherwise be remitted to education funds at a district’s closeout.

Representatives and staff pressed for more information on funding sources, including whether the buyout program would rely on FEMA, pilot special fund revenues, or a dedicated state appropriation. Staff repeatedly recommended consulting JFO and departmental finance officers; the committee deferred a final vote and scheduled more work ahead, with members planning to return to the bill the following morning.

Despite debate on funding and the covenant question, committee leadership signaled an intent to move the bill quickly: members were told the committee has a vote warrant and several bills must clear appropriations by Friday. No final vote on H.397 was recorded at the March 18 meeting; staff said they would return with revised language and fiscal analysis.

Ending: Committee members asked staff to rework language addressing the covenant/eligibility tension, to confirm pilot fund math with JFO and to consider moving the TIF‑related debt language into a separate TIF bill for fuller review. The bill remained under active consideration with a planned vote in the next committee session.

Speakers quoted or cited in this article appear in the accompanying speaker list below.","House Ways & Means members reviewed H.397 on March 18, which would codify a voluntary flood‑prone property buyout program, set a municipal reimbursement schedule for lost property tax revenue, create emergency‑management staff positions and move pilot‑fund allocations; committee members flagged FEMA eligibility, funding sources and effects on municipal finance.","actionData","errors"]

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VHFA asks for five‑year extension of tax‑credit sales to sustain down‑payment assistance; committee weighs landlord data, short‑term rental tax concerns

Committee debates H.397: codified buyouts, reimbursement scheme and pilot‑fund shift draw scrutiny