Conference committee narrows differences on CHIP tax-increment rules but leaves key caps and sunset unsettled

House and Senate conferees on S.127 on May 29 agreed to a package of technical and definitional changes to the Community and Housing Infrastructure Program (CHIP) but left several consequential policy choices unresolved, including the size and timing of tax-increment retention and the program’s statutory sunset.

Conferees adopted the House wording for what counts as “affordable housing” and accepted other House changes such as removing the word “pilot” from the statute, while preserving the House’s requirement that public funding under the program be tied to primary residences “in perpetuity,” conferees said.

Why it matters: CHIP would allow communities to use property tax increment to support affordable housing; choices about retention percentages, caps and sunsets determine how much revenue localities may redirect and for how long, affecting developers, municipalities and taxpayers.

The committee’s staff discussion, led by a member identified as Charlie (staff member), summarized remaining disagreements and items where the House and Senate already align. John Gray, legislative counsel, told conferees they had a side-by-side document showing differences between the Senate proposal and the House health/CHIP proposal: “What you have is a side by side that shows the differences between the senate proposal from yesterday related to CHIP and the health proposal related to CHIP from this morning,” Gray said.

Conferees listed concrete numeric and procedural provisions under negotiation. The House-side proposal would let the approving body treat a project as meeting eligibility if either (1) at least 65% of the development’s floor area is dedicated to the project’s housing, or (2) the development “meaningfully addresses” the purpose of the statute. Committee staff said the 65% metric will likely need implementation guidance because questions arise about whether parking or podium parking count toward floor area.

On financial limits, conferees discussed a program cap presented as $40,000,000 and noted an additional $5,000,000 available in certain years; conferees also referenced earlier increment-retention figures (60%/80%) and said the House’s counterproposal is 65% and 80% for the two tiers under discussion. Pat Titterton of the Joint Fiscal Office offered to meet with members who want to review the fiscal math.

The committee agreed to a longer agency review timeline for CHIP applications: not later than 60 days following the site visit that is part of application review, with the council allowed one extension of up to 30 days in extenuating circumstances.

Conferees also clarified reporting expectations. The draft would require an annual report describing common reasons applicants failed to secure tax-increment financing and summary data for approved projects; conferees said they removed a prior requirement that would have listed every unit sold or offered and instead adopted a narrower set of reporting items, including sales prices for initial offerings and an evaluation separating grama [sic] growth attributable to housing development from growth attributable to value appreciation.

Timing and guidance remain contingent. The conference language asks the Vermont Economic Progress Council to issue guidance for implementing the subchapter on or before Nov. 1, 2025, to help applicants understand application mechanics. Conferees noted an intent to start implementation Jan. 1 if the conference result becomes law, but stressed that the guidance must be available to make that feasible.

Several policy items outside CHIP remain in negotiation, including appeals processes and universal design provisions; conferees said they would follow up with interested parties (including VHFA) and with members such as Representative Burrows and counsel before reconvening. The committee recessed to continue internal conferring and set an estimated reconvene time.

Direct quotes in this article are attributed only to speakers who appear in the conference record provided to the committee. Charlie (staff member) summarized the conferees’ approach to outstanding points: “we are adopting your version of affordable housing.” John Gray (legislative counsel) described the materials available to members: “You have a side by side that shows the differences.”

What remains: conferees did not take formal votes in the session recorded here and no motion outcomes were announced. Several major policy choices remain open — the statutory sunset date for TIF provisions (conferees referenced both Jan. 15, 2031 and Dec. 31, 2031 in the discussion), final increment-retention percentages and the program cap — and conferees said those items will be resolved after further private consultation with fiscal staff, VHFA and other stakeholders.

The committee scheduled a short recess to continue internal conferring and expected to reconvene later in the morning to continue negotiations.