Lawmakers, Vermont Economic Progress Council debate extending housing infrastructure TIF pilot and reporting requirements

Jessica Hartleben, executive director of the Vermont Economic Progress Council, told the Economic Development, Housing & General Affairs Committee that VEPC is prepared to administer the bill in its final form but urged lawmakers to give municipalities more runway to build infrastructure and to extend the pilot period from five to 10 years.

Hartleben said municipalities and developers need time to complete infrastructure before private building and for municipalities to begin retaining increment. "It takes about 5 years for infrastructure projects to be built before any building can occur and before any increment could be retained by the municipality," she said, adding that supply-chain issues and other delays can stretch timelines further. She also told the committee, "I think we could probably get this up and running by January, provided we have some direction from the legislature about what kind of metrics you're looking at." (Jessica Hartleben, executive director, Vermont Economic Progress Council)

Why it matters: The amendment now under discussion would change how a municipal tax-increment financing program aimed at stimulating housing is defined, administered and reviewed. Those changes affect when towns can bond, how quickly infrastructure projects proceed, and what information the state will collect to determine whether the program met its goals.

Key changes and debate - Pilot length and sunset: Hartleben urged extending a pilot from five years to 10 years so communities can complete infrastructure and show results. Committee members discussed tying a required legislative check-in to a date a year before any proposed repeal; one participant asked that the sunset be effective December 31, 2035 to allow a full year of applications to be processed before prospective repeal.

- Administration and timing: Hartleben warned that municipalities often wait to file TIF/TIP applications to preserve their debt-incurrence windows. She used Rutland as an example of local timing choices, explaining municipalities may secure local approvals months before formally applying so they do not lose incurrence periods. She said municipalities typically would not begin infrastructure construction until the summer following any successful bond vote.

- Definitions and scope: John Grater of the Office of Legislative Counsel confirmed that a proposed amendment would strike the statutory definition of "affordable housing." "You're asking if this amendment retains the definition of affordable housing. It does not. This strikes the definition of affordable housing," he said. Committee members also debated removing "commercial and industrial facilities" from the statutory list of improvements that qualify for increment funding; supporters said the change clarifies that the statute should list classic public infrastructure (water, sewer, broadband) rather than privately owned commercial or industrial facilities while not preventing developments with mixed uses.

- Affordability and income targeting: The amendment would change the bill's stated purpose to encourage development of "primary residences for households of low or moderate income." Committee members noted "low or moderate income" is not defined in the amendment; Hartleben and others warned that municipalities may adopt different local definitions unless the legislature specifies a standard or directs VEPC on metrics.

- Reporting and oversight: The amendment would add to annual reporting by the Department of Taxes information about housing produced and permitting status, and it would require a five-year check-in report evaluating whether projects pursued under the program met project and location criteria. Committee members discussed whether that five-year check should occur a year before any sunset/repeal so the legislature can assess whether public dollars subsidized seasonal or luxury residences.

What was not decided - The committee did not take a formal vote on these amendments during the session excerpted here. Members agreed to continue coordination with Senate Finance staff, to consider consolidating finance amendments, and to send follow-up emails to Senator Cummings to request changes to the finance amendment. Several members said they intended to revisit the sunset date and the statutory changes in conference with Senate Finance.

Context and next steps Hartleben asked the committee to give VEPC a clear set of legislative metrics so the council can adopt rules and administer the program. Committee members signaled willingness to revisit sunset language, reporting timing and whether the oversight and monitoring authority for VEPC should be retained for existing projects if the program sunsets for new applications. Senatorial and finance committee amendments were expected to follow.