House committee hears Commerce-backed changes to CHIP housing tax-increment plan

Members of a House committee on Wednesday heard a presentation from the House Commerce and Economic Development Committee on S.127, the proposed Housing Infrastructure Tax Increment Financing program known as CHIP, and questioned sponsors about how the bill would be applied and enforced.

Representative Michael Marcotte, chair of the House Commerce and Economic Development Committee, summarized the changes to the Senate draft and told the committee the Commerce committee’s work "put some guardrails around this program" because it involves "taxpayer dollars." He said the bill seeks to make infrastructure funding available so municipalities can develop housing, including through new construction and by renovating existing buildings.

The central changes the sponsors described include: a minimum requirement that at least 60% of a project’s gross floor area be housing for projects that seek automatic approval; new language requiring housing units supported by CHIP to be offered as "exclusively primary residences" for the life of the financing; a fallback review process for projects that do not meet the 60% threshold (to be handled by a new advisory board); and a limited route for projects outside mapped ‘‘Tier 1’’ areas to access CHIP if they have secured necessary Act 250 permits at the time of application.

Why it matters: sponsors said the 60% floor-area rule and the primary-residence requirement are intended to focus limited taxpayer-backed financing on projects that actually add housing and to limit speculative use such…