Committee reviews housing omnibus draft 7.2; members debate 30% set‑aside for 5‑year grants, reporting and tax options

Cameron Wood of the Office of Legislative Counsel presented draft 7.2 of the committee’s housing omnibus bill (draft request 250838) on March 11, a wide‑ranging package that includes programs for rental housing improvements, set‑asides for short‑term and longer‑term forgivable loans, a universal‑design study, expanded data access for the Department of Taxes, landlord certificate reporting, short‑term rental municipal taxing authority language, and multiple appropriations.

Wood described edits since draft 6.1 and highlighted new or revised sections. One of the central policy questions that drew sustained discussion was a provision that would require the Department to establish a minimum annual set‑aside for 5‑year grants and forgivable loans. The draft language reads that the set‑aside “shall be a minimum of 30% of funds dispersed annually.” Members asked whether that 30% was intended as a durable annual minimum or as a starting point (30% for the first year) with administrative adjustment afterward.

Wood said that departmental staff told him their intent was for 30% in year one and the department would be able to set the amount above or below that level in subsequent years, but the submitted draft implements a perennial 30% minimum. Several committee members asked to confirm the department’s intent with the administration; committee leadership suggested the chair (Chair Mahali) should discuss it with administration staff before the committee adopts final language.

Members and staff discussed program mechanics: the draft requires a minimum allocation targeted to households exiting homelessness, refugees and related priorities; the language currently requires that the Department work with local coordinated entry lead agencies and homeownership centers to direct referrals for those prioritized to be housed under the 5‑year grants or forgivable loans. The draft also provides that funds from the set‑aside not utilized after one year become available for 10‑year forgivable loans.

Committee members raised operational concerns about finding eligible households, landlord uptake, and the longer‑term status of units after the affordability term ends. One member said the committee should require an annual report from the Department showing usage of funds, status of units after 5‑year terms expire and a comparison of post‑term rents to market rents; staff and administration indicated willingness to produce data and reports and committee staff said they would draft reporting language for consideration.

The committee discussed other bill sections in the same walkthrough: the universal design study (added representative from the Department of Disabilities, Aging, and Independent Living and a $15,000 appropriation for per diems), manufactured home repair and manufactured housing off‑site construction study, changes to the landlord certificate and an annual reporting requirement, and a new local option to tax short‑term rentals (the draft preserves existing municipal taxing authority and adds clarifying language to avoid conflict with existing municipal charters). Appropriations flagged in the draft include $4,000,000 for a rental housing improvement program, $2,000,000 for a manufactured home improvement repair program, and $500,000 for NeighborWorks‑affiliated homeownership centers; the draft also includes funds for a VHFA‑led manufactured housing study and other smaller grants.

Members debated data‑sharing language that would give the Department of Taxes access to an extract of municipal account data (the transcript references a “Sysore” account system). Committee members expressed concern that municipalities do not collect identical fields and that the statute should not require towns to collect new data fields; staff suggested clarifying language to limit the department to data ‘‘available in the system’’ and to prohibit the director from requiring additional municipal collection beyond existing fields. Members noted statutory enforcement mechanisms (notice and potential withholding of payments) and asked staff to confirm language that preserves municipal limitations and does not create new collection burdens.

On short‑term rental taxation, staff said they placed the new authority in the local option tax framework to avoid impairing municipalities that already tax short‑term rentals; Ways and Means would be asked to advise whether municipal administration or Department of Taxes administration is preferable. A stakeholder (representative of a short‑term rental association) had asked to testify but staff recommended that testimony be directed to Ways and Means.

No formal vote was taken. Committee staff said they will produce a revised draft incorporating agreed edits and additional reporting language; the committee scheduled further review and plans a walkthrough/testimony session the next morning at 10:30 a.m. before preparing a new draft (noted in the record as draft 8.1 or similar).