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Committee debates BHIP/VHIP design, sales-tax exemption and homelessness priority
Summary
House General and Housing members discussed the Behavioral Housing Investment Program (BHIP/VHIP) design, whether a sales-tax exemption for construction materials should be scored by JFO, and whether the 10-year program should retain a homelessness-priority requirement.
Members of the House General and Housing Committee reviewed BHIP (also discussed as VHIP in testimony) program language in the latest committee bill and asked staff to seek clarifying information from the Joint Fiscal Office and Department of Housing and Community Development.
Committee members raised three related issues: whether the bill’s placeholder language on a sales-tax exemption for construction materials for housing projects needs fiscal scoring from the Joint Fiscal Office (JFO), how to balance a 5-year versus 10-year program design, and whether the 10-year option should retain an explicit priority for people exiting homelessness.
A committee member asked, "Are we planning to hear testimony from somebody from JFO about the impact of the sales tax?" Committee staff responded that JFO had not been scheduled but could be invited. The sales-tax provision appears as a placeholder (page 15 of the draft) and committee members agreed to request a JFO estimate of its impact on the Education Fund.
On program design, members recalled that the original program offered a 5-year option that included a priority for people exiting homelessness; an administration proposal had removed that requirement for the 10-year option. One member summarized the concern: if the 10-year option lacks a homelessness priority, providers might abandon the 5-year slot that requires serving people exiting homelessness and choose the 10-year option instead. Committee members said Commissioner Farrell would present a compromise later in the day.
The group also discussed whether the program should offer loans as well as grants. Witnesses described the program historically as grant-heavy because initial funding came from ARPA; that sourcing influenced earlier choices to use grants rather than loans to avoid federal recapture risk. Committee members asked that DHCD clarify whether loans should be allowed going forward now that the program would be supported with general funds.
Committee staff flagged three questions to ask the administration: (1) whether JFO will score the sales-tax exemption, (2) whether the 10-year program should retain a homelessness-priority requirement, and (3) whether loans should remain an option in addition to grants. Committee members signaled they would await Commissioner Farrell’s proposed compromise and additional materials before taking further action.
