House committee reviews strike-all draft of S.127, delays final action after debate on TIF, VHFA report and community-index weighting

The House General & Housing Committee met April 24 to review a draft strike‑all amendment to S.127, the Senate housing bill currently under consideration, and paused final action to gather additional testimony and incorporate outstanding sections.

Committee members and staff said the draft reflects a mix of language from the House H.479 and the Senate S.127 and highlighted remaining issues including tax increment financing (TIF) language, brownfields provisions, the Vermont Infrastructure Sustainability Fund (a bond/revolving loan program), and an optional Vermont Housing Finance Agency (VHFA) report on off‑site construction contingent on funding.

The draft amendment was presented by Cameron Wood of the Office of Legislative Council, who described the document as a working draft that “strikes all after the enacting clause and inserts in lieu thereof the following,” and cautioned it had not completed editorial review. Wood walked the committee through provisions retained from the House bill (H.479) and language brought over from the Senate, and noted several sections were left as reserves because related language is being handled in other committees.

The committee discussed several substantive points the draft would change or preserve. Under the BHIP (broad housing investment) program, the draft keeps the option for five‑year forgivable loans that the House version supported; Wood flagged minor phrasing fixes for staff review. A set‑aside requiring a minimum 30% of certain units for identified populations remains in the draft; members debated shortening the window that unused set‑aside funds revert to other loan pools from 12 months to nine months to speed project use. One member said shortening the timeframe “is a good idea,” noting construction seasonality and the desire to make funds available when building activity ramps up.

On tenant priority and coordination, the draft requires landlords using certain grants or five‑year loans to lease to defined populations and to “coordinate” with nonprofit housing partners and coordinated entry systems to identify eligible individuals. Committee members discussed whether the coordination language would inadvertently allow people who were displaced out of state to qualify; one member said the coordination requirement was intended to make the tool more likely to reach Vermont residents identified by local systems.

The draft also retains the landlord‑certificate and landlord‑reporting sections passed by the House, restores a land‑bank reporting requirement and incorporates appeals language the House approved in April without substantive change.

The Vermont Infrastructure Sustainability Fund drew detailed discussion. The draft would allow the bond bank to provide low‑interest loans and to support municipalities issuing bonds to finance municipal water and wastewater systems, and it adds application criteria that include community ranking on the Vermont Community Index. The committee asked whether that index is maintained and used; Douglas Farnham, chief recovery officer in the Agency of Administration, testified the index “does still exist. It has not been updated with the most recent data,” and said the index could be maintained and updated if the municipal technical assistance program (MTAP) receives funding. Farnham said the index has primarily been applied to MTAP and used as a secondary weighting factor for some federal programs, and that “being down at 4 or 5 on the list … makes sense” as a weighting element rather than a primary driver.

Michael Gaughan, who previously testified on infrastructure provisions, provided recommended language edits captured in the draft. One suggested change would allow award covenants to encumber improved properties or other project property to further secure loans or bonds; committee counsel said she had included that language for the committee’s consideration.

Committee members also discussed interfund transfers for the bond bank and how repaid funds would be returned to revolving funds. Wood said he planned to draft clearer interfund transfer language before the next meeting.

Housing‑finance program matters in the draft include a rental housing revolving loan program provision that would cap annual rent increases for units built under the program at 3 percent “or an amount otherwise authorized by the Agency,” language added to allow flexibility if the agency authorizes a different limit.

Two study committees proposed in the draft received attention: a Universal Design study committee and a Housing and Residential Services Planning Committee (focused on housing for individuals with developmental disabilities). The committee amended draft membership language to expressly request at least one designee with lived experience be appointed through the Vermont Center for Independent Living’s slot and discussed adding similar lived‑experience language for family‑member or parent groups on the planning committee.

The draft also includes brownfields prioritization language, two reserved sections related to tax increment financing (to be determined after further inter‑committee work), and two sections on smoke and carbon monoxide alarms that would allow photoelectric or UL217‑compliant detectors.

Members pressed VHFA staff about a previously proposed VHFA off‑site construction study. The draft makes VHFA’s reporting conditional on resources: the agency would issue a report “provided there are sufficient resources,” with the draft proposing a December 15, 2026, final report. Committee members asked to add a short interim update earlier; Samantha Duran (finance agency) confirmed the agency’s understanding that VHFA would continue work as resources allow. Committee counsel recommended either adding an interim date or changing the requirement to “as soon as practicable” if no appropriation is provided, and the committee left that language to be resolved in future drafting.

What the committee decided and next steps The committee did not take a final vote on S.127. Members directed staff to schedule a follow‑up session (the chair indicated they would “come back to 01:27” after the floor) to hear the tax increment financing presentations, to ask the chair or vice chair of the House Commerce committee (or designee) to present TIF language, and for Cameron Wood to incorporate agreed brownfields and other cross‑committee edits. The chair said the goal remains to move a reconciled bill forward to Ways and Means, the House floor, then the Senate and, if necessary, to conference negotiation before adjournment.

Ending The committee paused S.127 work to await additional testimony, edited language and possible intercommittee agreements; members scheduled a continuation after floor business.