Ways & Means committee favors amendment to S.127 to reshape CHIP housing program

The House Ways & Means Committee on a straw poll voted in favor of a floor amendment to S.127 that would restructure the state’s CHIP housing-infrastructure provisions, alter eligibility language and program governance, and extend the program review timeline.

The amendment, which committee members favorably polled 10–0 with one member absent, would: replace the separate CHIP board by adding two voting members (the executive directors of the Vermont Housing Finance Agency and the Vermont Housing Conservation Board) and a nonvoting member (the commissioner of the Department of Housing and Community Development) to the Vermont Economic Progress Council; change the program’s definition from “middle income” housing to “mixed income” developments; remove the bill’s prior location criteria so financing decisions are separate from geographic eligibility; keep a $40,000,000 program cap while authorizing VEPC to seek up to $5,000,000 more per year with gubernatorial application and Joint Fiscal Committee approval; require VEPC to act on completed applications within 45 days; and extend the sunset/review date for statewide TIF to match CHIP at Dec. 31, 2031.

Why it matters: the changes would shift governance and approval timelines for the Capital Housing Infrastructure Program (CHIP) and broaden where projects may qualify, affecting municipal applicants, developers and state fiscal exposure, including potential impacts on the Education Fund that several members raised during debate.

Details of the amendment

Representative Charlie Kimball, a sponsor of the amendment, described the definition change from a single “middle-income” target to “mixed income” so that a qualifying development must include multiple income tiers rather than target only a middle-income band. Under the amendment, a development must have at least 20% of units subject to a housing-subsidy covenant in perpetuity to meet the mixed-income threshold; the remaining units may be market-rate.

John Gray of the Office of Legislative Counsel summarized drafting changes and said the amendment reorganizes CHIP provisions so the CHIP sections read together and clarifies application and termination language. Gray explained the 20% requirement refers to units and said the covenant may be targeted to the income levels a municipality chooses.

Governance and process changes

The amendment removes the standalone CHIP board and instead authorizes VEPC to review CHIP applications with two additional voting members (the executive directors of VHFA and VHCB) and the DHCD commissioner as a nonvoting member for CHIP decisions. The amendment requires VEPC to approve or deny a completed application within 45 days; the 45-day clock starts only when an application is complete.

The amendment also removes the bill’s prior location criteria, separating the financial tool from where projects can be built. The $40,000,000 statutory cap on CHIP would remain, but the amendment allows VEPC, upon gubernatorial application and Joint Fiscal Committee (JFC) approval, to increase the cap by up to $5,000,000 in a given year. Committee members clarified that this additional amount is available through the application/approval process rather than an automatic increase.

Rulemaking, tests and eligible improvements

The amendment directs VEPC to develop rules to make the statutory “but‑for” test (to determine whether state investment is necessary to the project) clearer and easier to administer, and it asks VEPC to consider existing rulemaking under Title 32 for TIP districts when developing that test. The amendment replaces language referencing “blight” with more specific terms — vacancy and dilapidation — in prioritization rules.

Committee discussion and concerns

Members asked whether CHIP funds pay for infrastructure only (not buildings) and whether items such as telecommunications are eligible; the amendment retains a list of eligible infrastructure improvements and explicitly added digital and telecommunications infrastructure while discussions removed electrical improvements from the list based on prior testimony.

Several lawmakers expressed concerns about the fiscal impact on the Education Fund and about municipal capacity to complete applications. One member said continued use of the Education Fund for non–K–12 purposes remains a long-standing concern, and others urged more technical assistance for smaller towns. Committee members also debated whether separating location criteria would encourage projects statewide or lead to uneven application by municipalities with differing local capacity.

Outcome and next steps

The committee conducted a straw poll on the Ways & Means amendment to S.127; committee records show the amendment was polled favorably 10–0–1. The transcript indicates committee staff and members reminded participants to monitor further floor activity and phone messages for next steps; the amendment still requires final floor action and any additional legislative steps before enactment.