Vermont Legislature SmartTranscripts:

[Marc Mihaly (Chair)]: Welcome back everybody, it is still Wednesday, 02/04/2026, and this is still the General and Housing Committee. We've heard really interesting testimony on seven seventy five, which is the Rural Finance Bill, and now we are going to continue that with just committee discussion and markup, and just reminding the committee this is our chance to give, it's not our final discussion, it's not our final vote, it's our chance to give any suggestions to put in a redrafted bill, which then will be put before us. And so it's a chance to have a discussion. I would like to say to the committee, I really appreciate your patience, because you are in the midst of several bills at one time. I mean, we're dealing almost simultaneously with the manufactured home bill, with the rural finance bill, and now we're going to be taking up landlord tenant all at the same time. And part of that, and I know that's difficult to juggle, and I really appreciate everybody's patience, part of the the major reason for that is just these all these bills are going to have a rather torturous path through subsequent committees, and we want to make sure that they just don't die because they don't get done in time for Cross Oak. So, that's it. With that said, counsel, do you want to tell us a little bit or talk to us about this?

[Cameron Wood (Office of Legislative Counsel)]: I can, for the record, Cameron Wood, Office of Legislative Counsel,

[Marc Mihaly (Chair)]: Will you let me in

[Cameron Wood (Office of Legislative Counsel)]: the Let me in. And then I'll pull my bill up.

[Leonora Dodge (Member)]: You can.

[Marc Mihaly (Chair)]: This is actually the bill.

[Leonora Dodge (Member)]: Do people need printed copies or?

[Cameron Wood (Office of Legislative Counsel)]: I'll bring it up as well. Just a second.

[Marc Mihaly (Chair)]: I don't. I'm just trying to be Is there anybody that doesn't have a printed copy? We're talking about July? July. Yeah. That would like one.

[Leonora Dodge (Member)]: 2.1.

[Cameron Wood (Office of Legislative Counsel)]: Okay, just to jump in, just wanna remind or reorient from where we were last Friday. Friday afternoon, we did an initial walk through, myself, John Gray from the Office of Legislative Counsel, reviewed the sections with you all and the Committee on House Commerce together. But just as a quick refresher, and I'm not going scroll through the bill, I'm just going to mention each section briefly. You have the section one, which is the Rural Housing Finance Pilot Program. That's the program that would be run by DHCD, which would provide tax stabilization for up to 300 housing units, certain criteria about affordability, location, must be in a municipality of fewer than 5,000 persons, etcetera. That's one program. Totally separate from that is the provision in section three about the special assessment bonds. So this is where a municipality already has the ability to create special assessments. It doesn't have to be a townwide vote if the property is consent to the special assessment. And what that section would do is specifically in statute authorize those municipalities to issue revenue bonds backed by the special assessment that is put on those properties to help fund infrastructure, so that was another piece of the bill. I just want to add one thing there.

[Marc Mihaly (Chair)]: You remember Michael Gone from the Bond Bank testified on that? One of the reasons Michael's you've seen him before for this committee one of the reasons he's involved and knows all about it is because in other states where cities are bigger and have substantial stamps, there is no bond bank. There is no statewide bond bank. There's just some city, you know, Berkeley, with a population of, I don't know, 300,000 or whatever, it just issues bonds itself. But in Vermont, because we have these tiny towns, the towns don't actually issue the bonds. The bonds are structured and issued by the Farm Bank, so just as a general matter. And so, for example, in this bill, if the town said, oh, we have a developer here who's developing 25 houses and we want to do an assessment district and issue a bond, a revenue bond, it would be the bond bank that would structure and issue the revenue, And then the money would go through from them to its intended purpose. Sorry to interrupt.

[Cameron Wood (Office of Legislative Counsel)]: That's okay. So the next piece, so those are the first two, you kind of think of these in different buckets, that's the first two programs that would be authorized or statutory authority that would be authorized. The third major change was with the state treasurer's office, where currently the state treasurer has the authority to use up to 10% of the state's available cash on hand. I may not have the exact words right in front of me, but they can use that for the purpose of funding mobile home infrastructure projects. The proposal here would be to expand that to 12.5%, so an increase of 2.5. It would authorize the state treasurer to keep the interest from those loans that are given out with those monies. Currently that interest goes into the general fund. State treasurer's office could keep it and use the additional 2.5% and the interest to help purchase off-site constructed modular housing, etcetera. And I could use both for that purpose. The interest would go into a new special fund. It is called the Vermont Housing Special Funds. And again the interest could be used for that purpose.

[Marc Mihaly (Chair)]: Fourth. And a 1% credit facility, 1% tax, an additional 1%. So it increases it to 12.5%,

[Cameron Wood (Office of Legislative Counsel)]: but the way I read the language and I believe the way the treasurer's office is interpreting the language and so this may be a point of clarity and I'll circle back in a second when we get through, but I read it as the 1% that you're referring to Mr. Chair is just a 1% of the 12.5%.

[Marc Mihaly (Chair)]: Okay so that wouldn't be a third. Okay

[Cameron Wood (Office of Legislative Counsel)]: so the fourth kind of program is section six on page 12. I should have been giving you some views along the way, my apologies. But on page 12, section six is the Off-site Construction Accelerator Pilot Program. This is where the Agency of Commerce and Community Development working with BGS would work with a municipality that's willing to participate to try to pilot the concept of doing bulk purchasing of off-site modular construction to then place in that municipality. And then the last pieces, there were some changes to the VHIP program to allow the department and its organizations that it uses to fund the money through to developers to provide those loans or grants up front as opposed to throughout the life cycle of the rehabilitation. So those are the sections. I will also comment, we already have some changes that are, I would say more, I don't want say they're not substantive, but a little administrative. If you recall the conversation, the Commerce Committee wanted to make some clarification on the location of the rural housing pilot to make sure, remember there was discussion about the location, could it be located in a CHIP district currently in the language housing development site. That committee wanted to tighten that language a little to make sure it's not available in an area that had been designated for the CHIP program. The Vermont Leagues of Cities and Towns wanted us to clean up reference to municipal ordinance instead of municipal bylaw. So there's some minor language tweaks there that we were asked to make. Michael Gaughan mentioned providing some technical amendments to the special assessment bonds, which I have not coordinated with John Bray as to whether he's received them or not. But we've been asked to make some changes in that section from the bond bank. And then as I was just mentioning, and I'll go ahead and start jumping around the pages so you can follow along. This is where in the credit facility piece, I'm going to reach out to the state treasurer's office because I want to clarify a few things. For starters, this is the language that's currently in statute. You can see on line seven, this is where it's increasing from 10% to 12.5%. When you look at sub B, it says that the financing is available for infrastructure projects in Vermont Mobile and Parks. That's the limitation on that credit facility. My understanding is the credit facility is being used to loan out for housing projects as a whole or in general. So I just want to touch base with the treasurer's office to make sure, do they have authority somewhere else for that? Does it need to be added in here if you all choose to make sure they have the legal authority for that purpose? You're following along with me?

[Marc Mihaly (Chair)]: In other words, this is just, this is a problem not with this bill. Right. It's just that in reading statute, we discovered that it's not very well worded. It's one of these situations where it seems to say one thing and the treasurer for years has been doing something else. So, we're

[Leonora Dodge (Member)]: Can I ask you about that?

[Joseph Parsons (Member)]: Yes.

[Leonora Dodge (Member)]: Well, above in A, mentions that they need to make the investments following guidelines in 32 BSA, four thirty three B and C. What are those?

[Cameron Wood (Office of Legislative Counsel)]: I can pull that up. Those are just about general principles regarding investment of state funds.

[Leonora Dodge (Member)]: Like, are you going to get paid back?

[Marc Mihaly (Chair)]: Is this

[Leonora Dodge (Member)]: person credit worthy? It's not guidelines about housing goals or so the fact that it says a B treasurer may use, but remains silent on what other things they may use it on, you're saying that legally means, oh, it should have been limited?

[Cameron Wood (Office of Legislative Counsel)]: So this is what I want to talk to them about or I want to ask. The question came up in your testimony, Mr. Chair, you actually asked the question and I don't know that the treasurer was very specific in the answer. I just wanted to check-in with them on what authority they believe they have to take these monies to invest them in housing projects. Because when I read that section, it says they may use them for infrastructure projects in Vermont Mobile Park. A May, but that doesn't allow them authority to invest in anything else that's not on the list. They need statutory authority to do that, and so that's just what I want to clarify with them.

[Marc Mihaly (Chair)]: So that's not in this bill, it's just we happened on this problem Yeah. Yeah. Yeah. Which, by the way, given that I just had a bill, which you all voted out and the house voted out clarifying that a statute on the books for thirty years in California that was flatly illegal under federal law, nobody noticed. I am not surprised to discover this, but we thought we'd at least bring it up. I think

[Joseph Parsons (Member)]: there's a very glaring difference between the two. One was enacted upon. One is wildly being acted upon. Okay,

[Cameron Wood (Office of Legislative Counsel)]: so that's one piece. The other piece that I want to discuss with them is it's really more of a clarification. It's for you all, but Mr. Chair, you had kind of mentioned it and I I want to make sure the language is clear. When you get to the subsection F so this is where the treasurer this is line six moving forward the treasurer made these amounts available under this subsection and the subdivision E2, which is where you have the interest paid on the loans coming from the credit facility, may use those monies to aid in the purchase of off-site constructed housing units. So it says the treasurer shall have the authority to create a credit facility of up to 1%, on line four here of the state average cash balance pursuant to the total funding allocation under sub A. Sub A creates the 10%, so as I read that language, I'm reading it to say of the 10% proposed to be 12.5, you can use 1% of that for this purpose. Which is

[Marc Mihaly (Chair)]: what they're telling you. Yes,

[Cameron Wood (Office of Legislative Counsel)]: think they were, I think we're on the same page, I just think the language can be cleaned up a little bit to make sure it's not interpreted as you have the 12.5% over here. Now you get another 1%. Now we're at 13.5%. Pretty big difference. I just want to make sure I think it could be I would probably reword the language to just say of the total amount under subsection A, the treasurer may use 1% of that amount for this purpose. So there's just a little out there that I think would be helpful.

[Marc Mihaly (Chair)]: There, we received a couple, are you done with those? Yeah, those are

[Cameron Wood (Office of Legislative Counsel)]: kind of changes that we have discussed at least publicly with the committee that you all asked for on last Friday that we've been made aware of things that we noticed that as we're doing the walk through that are deserving of a

[Marc Mihaly (Chair)]: little clarity. Now's the time to tell him what else he should do to Joe.

[Joseph Parsons (Member)]: That 1% of the 10% would have a 1% of the 12 and a half percent. Do we know what that number looks like?

[Marc Mihaly (Chair)]: I would ask them.

[Cameron Wood (Office of Legislative Counsel)]: I think a 120,000,000.

[Marc Mihaly (Chair)]: Let's see. They're they're assuming 1,200,000,000, which is less than they actually have. In other words, on average, 1,200,000,000, I'm thinking out loud, is the amount of the total ash that's running around conservatively, and so 10% of that would be a 120,000,000. 12% would be whatever the hell it is, but let's say it's a 130,000,000.

[Leonora Dodge (Member)]: That was the figure we had.

[Marc Mihaly (Chair)]: Yeah, 130,000,000. Of the 130,000,000, 1% of 130,000,000 would be 1,300,000.0, which is probably plenty.

[Cameron Wood (Office of Legislative Counsel)]: Plus the interest, and I don't recall what

[Marc Mihaly (Chair)]: you We said was the heard today, we heard really interesting testimony today, and Jeff Lubell had two suggestions, both of which I think are pretty innocuous, but nice. One was that the state treasurer at the appropriate point may indicate that the treasurer, perhaps with respect to the credit facility, coordinate with HCD, the four agencies. VHSA, VHFA. You know, the four housing agency. VSHA, VHCB, DHCD, and VHFA.

[Cameron Wood (Office of Legislative Counsel)]: So I will say that my understanding from the treasurer's office is they already run the

[Marc Mihaly (Chair)]: projects, if you will, their investment committee, which has some, but not all of these people are. That's what just

[Cameron Wood (Office of Legislative Counsel)]: want to pull up. It has the state treasurer, the chief executive officer of VIDA, Vermont Economic Development Authority, the chief executive officer of the Vermont Student Assistance Corporation, the executive director of BHFA, the director of the municipal bond bank, and the director of Efficiency Vermont. Right, so it's not the same group. So one thing you could do

[Marc Mihaly (Chair)]: is add them. No, would not recommend trying to change his investment committee. His investment committee was selected because those people are all financially very savvy, but I think if we just coordinate with those agencies, that would be enough.

[Cameron Wood (Office of Legislative Counsel)]: But I think my question would be, what are they coordinating?

[Marc Mihaly (Chair)]: They're coordinating about the credit facility, because that puts them, that's the part in which he's overlapping with the accelerator.

[Cameron Wood (Office of Legislative Counsel)]: Right, so my thought is if, I'm just making sure you understand if we go draft this up. So you have this credit facility. Before they issue out funds, they run them by this investment committee. And then I'm saying, you wanting them to also if they're coordinating, are they coordinating? Consulting with. Okay.

[Marc Mihaly (Chair)]: It's fine. I think that the I'm not even sure that the credit facility would be run by their invest in other words, that board, what do they call it? The Investment Advisory Committee. That committee is they issue issue RFPs. Like they've issued a big RFP for x million, $40,000,000, and then they get responses, and then they give it to LIAC to prioritize them and take them. I'm not even sure. I think the credit facility is something that's going to be designed once and then used with this bulk purchasing system. So, I don't even know if they'll use that entity. They might, I just don't know, but I think that we want them to work. I think it's harmless and wouldn't be a bad thing to require them to consult with those agencies concerning the design of the credit facility.

[Cameron Wood (Office of Legislative Counsel)]: Just the new credit facility for off-site construction or the original credit facility at their current use?

[Marc Mihaly (Chair)]: No. The off-site construction. And who are those entities? They are who who has this memorized?

[Leonora Dodge (Member)]: DHCD. Oh, sorry.

[Thomas "Tom" Charlton (Member)]: DHCD, BSHA, BHFA, and BHCD.

[Marc Mihaly (Chair)]: The other thing that was suggested, think it's also a good idea, relatively easy, if you look at page 13, counsel.

[Thomas "Tom" Charlton (Member)]: Yes, sir.

[Leonora Dodge (Member)]: Line one. This

[Marc Mihaly (Chair)]: Oh, that may be different. Line one. Oh wait, I must have it, this is 2.1. Well, wherever it is, I have it.

[Leonora Dodge (Member)]: It's under 7D. It's a D, item D. The pilot,

[Marc Mihaly (Chair)]: Shell Creek, etcetera, occur in a municipality, Jeff Lubell suggested one or more municipalities.

[Cameron Wood (Office of Legislative Counsel)]: I thought about that from writing.

[Marc Mihaly (Chair)]: Yeah, I mean, it's up to them.

[Thomas "Tom" Charlton (Member)]: If we're going to get a pilot that shows us whether the aggregate ordering is working well, that's what

[Cameron Wood (Office of Legislative Counsel)]: I was thinking, so I just heard.

[Marc Mihaly (Chair)]: Good thing you can read your own writing.

[Leonora Dodge (Member)]: And then do we have to also, on line 15, instead of the grant of the municipality, do we have to pluralize that?

[Marc Mihaly (Chair)]: Yeah, we should.

[Leonora Dodge (Member)]: Eagle Eye Dodge. That's great. I'm really impressed.

[Marc Mihaly (Chair)]: Yeah, I know, now I know what you're gonna do here.

[Leonora Dodge (Member)]: What happens when I eat coffee and banana bread? She's on a roll. Locked in, they call it.

[Cameron Wood (Office of Legislative Counsel)]: So,

[Marc Mihaly (Chair)]: other thoughts or suggestions? Take your time, we have it.

[Leonora Dodge (Member)]: I thought that he, Jeff Lutland also talked about, maybe not in the legislation, but requesting input on statewide building codes. See that F, talk a little bit about reports that will include information on whether to enact the statewide building code off-site construction, and he said to make sure that that code, whatever it is, is set higher than the HUD

[Marc Mihaly (Chair)]: That's a different issue, but it's a very interesting one. If we Yeah, go ahead, Tom.

[Thomas "Tom" Charlton (Member)]: If we leave at the discretion of BCHDI other groups, they may, at their discretion, look at a couple of different codes. Yeah. So they may because that code may

[Leonora Dodge (Member)]: be That's what we're enabling in this or you're saying that's somewhat different?

[Marc Mihaly (Chair)]: Where are we online? Where are we?

[Cameron Wood (Office of Legislative Counsel)]: Just keep So if it's the last two lines, twenty and twenty one, at least representative Dodd referring to the report. Okay, yeah.

[Marc Mihaly (Chair)]: Include information whether an act is statewide buildings code off-site construction. Yeah and off-site construction covers a lot. Covers a lot. So It could be code or codes. That's a great idea. Because the code is gonna govern manufacturer homes. I would assume they would include a recommendation in the report. You know actually, there's

[Leonora Dodge (Member)]: another committee working on some of that stuff too.

[Cameron Wood (Office of Legislative Counsel)]: Two things I would just comment, I mean the state does not have the authority to alter or change the requirements regarding manufactured housing because those are federal regs, but it's important to adopt a separate code that was in alignment with that or addressing other types of off-site construction. But Representative Krasnow just brought up a point that I was also going to mention. This is limited to off-site so that's somewhat I think helpful because you do, there is a committee, they may have already submitted their final report, I don't know, but it was a committee looking at the residential

[Marc Mihaly (Chair)]: and commercial internet still. And that is

[Leonora Dodge (Member)]: what they're trying to work.

[Marc Mihaly (Chair)]: I think that if you just said code or codes, it would be great. And we get out of it with off-site. Right, what because

[Thomas "Tom" Charlton (Member)]: of this statewide building code in general, it's another whole value.

[Leonora Dodge (Member)]: Right, we don't want that beast. Okay. But this says for off-site. Yeah, I was just reiterating this again.

[Marc Mihaly (Chair)]: Yeah. Here, I want to bring the I want to tell the committee about a discussion with several parties that I had this weekend, which counsel is aware of, that sort of relates to this. Last week, I was made aware of what Jeff Lubell, remember Jeff Lubell at the end of his testimony, he went through two different programs. One was this one, seven seventy five, one was this other program run by the Vermont State Housing Authority. So Kathleen Burke kindly sent me a kind of four page or three page description of this other project there, Duke, and I participated in a conversation over the weekend about what this was because no, on Monday, because I was concerned and Tom was concerned, we just wanted to make sure there weren't contradictions or problems here, and it turns out there really aren't. Our program, this accelerator here, deals mainly with what is currently called off-site modular construction. That's the kind of thing that you heard testimony on today from Jeff, no, from Jason Webster, what Huntington Homes and others do. And they very much would like a statewide building code, because they don't want to deal with different codes in different cities or towns. Other states are doing it, and there's a lot to be gained, not the least of which is not just uniformity, but if you think about it, when you have regular stick built construction and you need, let's say, the code inspector to look at the electricity, it has to happen there and you have to open up the building has to be opened up so that you can see everything, right? When you have Huntington Homes building it, all of that can happen in the factory, where it is. There's no reason to re tear apart the building when it gets delivered to the site, so some local inspector can see it. It should be inspected in the facility, because that's where everything is put together. So anyway, these codes in different states, some of the best ones apparently address this issue of not only what the standard is, but where the inspection occurs. Okay, the Vermont State Housing Authority program is primarily aimed at what we have called here manufactured home, not off-site manufactured homes, which Jeff has indicated to you goes all the way from single wides all the way up to these brass mods, which look like, you know, small regular houses. And those are built to the HUD standard, which we cannot change, but Cameron, what Jeff testified to is there are in fact various different HUD standards, depending on climate situation. So we could specify energy efficient, but we also could specify wind resistance that's high, which he called the Miami version. Apparently, there is a version for that's very high on the wind resistance because of tornadoes or hurricanes, and it's called the Miami version, and he urged us to specify that, which is again up for discussion. I mean, it's just a different

[Cameron Wood (Office of Legislative Counsel)]: Only as long as we put in statute that it has to be the Miami version.

[Marc Mihaly (Chair)]: Yeah, we ain't putting that in statute. No. Okay. I'm just giving background. So as a result of those conversations, we concluded that the language in our bill was more or less okay and just they suggested one extra paragraph that, again, in the modular section, it was just requiring coordination, and I gave that to counsel. But that's it. They felt that otherwise, if the treasurer wanted to get into this other program, that there was sufficient authority to do that. And of course, I would just add from my own perspective, I think these two worlds, the world of manufactured housing and the world of off-site modular or other, there to me slowly, they're both built in factories, they're different factories now, I don't know how long that will be, one has got HUD codes, one has state codes, I wouldn't be surprised if over time they don't all kind of merge, but right now they are different. I don't think they will. They will.

[Thomas "Tom" Charlton (Member)]: One is an affordability option and one is a durability option. They're both available.

[Marc Mihaly (Chair)]: I don't think so. No, I just think that manufactured homes are going to get bigger and bigger and bigger, and modular are going to get more and more flexible, no, I mean, I think that the construction techniques will always be different.

[Leonora Dodge (Member)]: It's good to me.

[Marc Mihaly (Chair)]: How do people feel at this point? Are there any other things that are bothering people that they would like counsel to address or just bothering you?

[Leonora Dodge (Member)]: In life? I am very bothered. So, where have we given the language that we need to give Cameron to, I guess, codify the way that the dollars have been spent

[Marc Mihaly (Chair)]: He's talking so to the Treasury's office. Haven't messed with it. He's talking to them first. Yeah. And that's the thing. Wanna be clear

[Leonora Dodge (Member)]: It's not our job.

[Marc Mihaly (Chair)]: Well, well, yes. Yeah. It will have to come back to us. Yes. That's just

[Cameron Wood (Office of Legislative Counsel)]: thing is is I'm I'm I'm not trying to I just want to ask them, there could be some other provision they can point to that I'm simply not aware of. So that's why I don't, I'm not trying to cause a storm, that's why I just want to ask, hey, my understanding it appears statute is limited here, is there something else that you have that gives you more broader authority? In which case you may not need to do, there may be no change, right, maybe a cross reference to that section or something to that effect. If there is language that should be added to specify, that's where I would probably pencil something out and just bring it to you and yes ma'am, that is where you all would

[Leonora Dodge (Member)]: He has it ready, you have the language ready. And just for the record, it's not that I froze what's been done. I think it's important to, you know, we've heard great testimony on how many units this helped to put the market or to bring those things up. Yeah, thanks.

[Marc Mihaly (Chair)]: I'm gonna turn in.

[Leonora Dodge (Member)]: This is why they go to law school.

[Marc Mihaly (Chair)]: Yes, sir. Okay. Page

[Thomas "Tom" Charlton (Member)]: 10. There's there's two. So there's section authorizing state treasurer to use up to 1% of etcetera, etcetera Mhmm. For basically mobile homes. I think this

[Cameron Wood (Office of Legislative Counsel)]: is Yes.

[Marc Mihaly (Chair)]: And I'm looking for that. My eyes are finding it.

[Cameron Wood (Office of Legislative Counsel)]: So it is on page nine. That that is right here,

[Thomas "Tom" Charlton (Member)]: the sub a and b. Alright. That's 1% of the oh, I'm gonna have that. Percent from. So further down on page 10. Line 16, interest paid on loans under this subsection to provide capital for housing projects. That's the off-site construction house. So I'm just I'm trying to one, picture we have average collected daily balance. We have 12 and a half percent, then we have the 1% available for mobile home rental and so on. I think there's out there's another percent here and there for other things. The interest paid on the 12.5% or the interest paid on the 1%.

[Cameron Wood (Office of Legislative Counsel)]: Yeah, so think about it.

[Thomas "Tom" Charlton (Member)]: And it's an addition just to compound things. The testimony we've just heard, which requires that things be built over the winter, That's not a 12, it's not as short of a short term loan as we were originally thinking. It's not a few weeks, it's six months. So does that, I would go with calculating what's available, is it enough to back the 300, well we're talking about 300 homes in Burrows, Validor.

[Cameron Wood (Office of Legislative Counsel)]: So this is my understanding how I respond there. So under the A and the B, currently you have the 10%. Take 10% the average cash balance, they can loan that out. They also have under C the authority to do another 2.5% that is limited to these climate infrastructure and resilience projects that's in the top page 10, lines two and three. So that is current law, you got the 10% for housing, just argued that you have the separate 2.5 for this climate infrastructure and resilience projects. What this new sub e is saying is they can keep interest on both of those facilities not just the 10 which they're proposing to go up to 12 and a half, both of them, they keep interest on all of that which can be used for both purchasing of off-site constructed housing, this is on lines 20. So that's the interest they get to keep interest for both, they're gonna put it in a special fund and they can use the interest for this. How much that is, I would defer to the treasurer's office because my understanding for testimony is some of these loans they're giving out are ten, twenty, fifteen, ten, fifteen, twenty years. So how much interest we're talking about, I would defer to them. And then when you get to the 1%, which can be used, so this is on page 11, now we're in the sub out, the 1% can also be used to facilitate both purchasing and off-site construction. My understanding is that 1% is just a subset of the 12.

[Marc Mihaly (Chair)]: Because it doesn't have 12 which can

[Cameron Wood (Office of Legislative Counsel)]: be for all these housing projects, mobile home infrastructure if the faction says of that 12%, 1% of that can be used for the off-site plus the interest now. So you're taking interest plus the 1%. So you got at least what

[Marc Mihaly (Chair)]: we said 1,300,000.0 at least plus the interest. To be clear, that is an interpretation that is based on the wording of the statute, because the statute for the 2.5% says in addition to the provisions of subsection a. It's very clear, it's extra. The statute in its current form on the credit thing, the 1% doesn't say the words in addition to, so he's interpreting it as part of. However, we should ask the that's what it currently says in words. What we ought to do is ask the treasurer what their intention was. If their intention was that the 1% is extra, well great, you know, that would And so

[Cameron Wood (Office of Legislative Counsel)]: this is clarity you need. My recollection of the treasurer's testimony was they anticipated these changes to get them up to a total of 15% of the credit facility, which if it's a total of 15, the 1% is

[Marc Mihaly (Chair)]: part of it. That's right. Because you have

[Cameron Wood (Office of Legislative Counsel)]: 12.5 plus the other 2.5 for those climate resilience projects, so that would be 15 and that's not I believe we're on the same page, but we just wanna make sure that's what you want, you all, and that the language accurately reflects that.

[Marc Mihaly (Chair)]: I do want to tell the committee, I don't have any idea what's going to happen, but I just want you to be aware that the issue, not the issue of 10 to 12 and a half, not the issue of the two and a half, that's an existing, not the idea of the credit facility or the 1%, that's all fine. What I think is going to be at play in other committees and other committee chairs is the interest, which isn't a lot, I mean, it's like less than a million bucks a year, but it's something. Currently it goes to the general fund. We'll see, and I will be I am having discussions with the chairs of those committees, and we'll be back in touch with you as soon as I know what might happen. So the major part of this is gonna, I think, be okay, but the interest is gonna be a little controversial.

[Thomas "Tom" Charlton (Member)]: But the credit facility is

[Marc Mihaly (Chair)]: not Yeah. As interest. Yeah.

[Thomas "Tom" Charlton (Member)]: That's just It's

[Marc Mihaly (Chair)]: fine without that. We're talking about a lot of money. Yes, George. My

[Joseph Parsons (Member)]: question is something different Yeah. Which would be the point that was made today on depending on the financial structure of somebody building this out, the fewer fewer funding sources seems like more inevitable in rural areas. Not gonna have a a They're not gonna do

[Marc Mihaly (Chair)]: a tax credit deal. They're not

[Joseph Parsons (Member)]: gonna do a wild 15 different funding, which was pointed out that, you know, if this is only used with one other program and then they're funding the rest through the typical bank structure. The cost of the having the two affordable units just transfers over transfers over. Takes the other say, it's a 10 unit thing, takes the other eight units and moves them up the scale and out of possibly closer to hitting that bell curve. And two things would is the money held back in this program to to fund that was part of that to cover that cost

[Thomas "Tom" Charlton (Member)]: to help

[Marc Mihaly (Chair)]: At the moment, there is no reference. Okay. I'll take go on, and then I'll tell you what I think, but I

[Joseph Parsons (Member)]: don't Okay. To alleviate that, because the this is a fifteen year For the minimum Right. And a ten year,

[Marc Mihaly (Chair)]: yeah, benefit. Okay. Let me try to answer your question as best I can. This bill currently does not say in the treasurer section that the treasurer may use the 12.5% should the treasurer so choose to offset the affordable housing inclusionary costs of the section one. Okay? It could. It doesn't. The second thing I can tell you is I think probably the treasurer has authority to do that already, but it doesn't say, doesn't say it. Third, inclusionary zoning in places where there's not extra money. I had a conversation with Champlain Housing Trust about this, because I was worried that the typical devices, not talking financial, to maintain affordability over time, were simply not available with small projects, that they didn't do it. That CHT, for example, didn't do little projects, you know, with shared equity and all that stuff. I was wrong. He said, no, we do that all the time. We have all kinds of little projects where we do that. But helping a small developer get affordability. On the issue though, the cost, you are right, Jeff in my opinion, Jeff Lubell was, excuse me, Jason Webster was correct that in an inclusionary zoning environment where there is no external funding, what you're doing is raising the price of the market rate units. And I think you are right in that the 2%, 4% or 9% tax credit monies are simply not available on a project that small. I do think my memory is that we went over this somewhat with Chip, and we ended up at a place that had affordable housing requirements because we weren't going to get out of ways and means without. On feeling there that if we were investing public money, this had fear. I am not gonna say anything about the wisdom of all of this. That's the best I can answer. Okay.

[Joseph Parsons (Member)]: Two things could be. One is if this truly is trying to get to our smaller communities, I'm curious how many of those have in community zoning in two, three thousand. Yeah. I doubt it. Yeah. And the other would be how just the math of it being that if you have four units or if you have 13 units, two of them have to be.

[Marc Mihaly (Chair)]: I want only one suggestion at this point. I don't think we have to give counsel instructions on what to do about this possibility because the option is available to strike it. I do think that it wouldn't be a bad thing to ask counsel, with the rest of you agree, to draft a sentence that would give the treasurer express authority to use the money for that purpose. For which purpose? To offset the cost, the inclusionary costs associated in the pilot, in the The first section. Yeah, the first section.

[Cameron Wood (Office of Legislative Counsel)]: The interest or the interest and the 1%?

[Marc Mihaly (Chair)]: You can put interest in 1%. No, it's to use the Just the interest. No, the 12.5%.

[Cameron Wood (Office of Legislative Counsel)]: The whole thing? Yeah. So Is

[Marc Mihaly (Chair)]: this part of his general authority?

[Joseph Parsons (Member)]: I wouldn't

[Marc Mihaly (Chair)]: think that'd be Go ahead. Go ahead, Joe. I mean, what do you think?

[Joseph Parsons (Member)]: That I'm just thinking that that they you're thinking that they could buy down affordability for any program they're doing now?

[Marc Mihaly (Chair)]: They do it all the time. Right now But they do a lot of their housing is affordable, and it uses we can't even say

[Thomas "Tom" Charlton (Member)]: We're why it's affordable. Just

[Joseph Parsons (Member)]: not adding that in here. Okay. I switched that flip flopped the

[Marc Mihaly (Chair)]: two there. In other words, what in other words, language which tries to address the reality that Joe is alluding to, which Jeff, which Jason Webster said, which is that with very small projects, tax credit, a lot of the affordable housing money isn't really available. And so, one thing would be to give the, not saying it solves the problem, but it gives to be overt in giving the treasurer discretion to invest their housing money, whatever I'm talking about, their 12.5% in mitigating the cost of inclusionary zoning with respect to section one. And just see what that looks like and what, you know, just a thought. Mean

[Cameron Wood (Office of Legislative Counsel)]: Do you want me to add?

[Marc Mihaly (Chair)]: Yeah, add that, just so people can see it. I mean, that's, we can always say no, and I think we talk it to the treasurer about it too. And we have a representative of the treasurer here who is recording all our words, so I have a feeling the treasurer will learn about it. Note that there's nodding going on, yes. I have

[Leonora Dodge (Member)]: to get to okay.

[Marc Mihaly (Chair)]: Okay.

[Leonora Dodge (Member)]: I think just more of a broader policy decision than a drafting one, but I guess I'm sitting here wondering whether this program being limited to 300 units, with a limited increase in funds using the cash on hand balance and trying to address a very specific issue in our housing holes. I can't believe I'm going to say this. Are saying Do we want does it make more sense to do market rate increases without the affordability? With the case that these are in areas that already the market rate there will already be more economic than in urban areas where there are other programs available that work to build bigger projects? I

[Marc Mihaly (Chair)]: want to say, first of all, you couldn't be onto a more real policy struggle. That is, if we really want to be dealing with small projects in rural areas and see what happens in a pilot program, it is arguable, it's very arguable that there should be no stress, yeah, inclusionary, that is arguable. As far as I went in the draft, just so you know, is we generally, because the question immediately is, well, a minute, what if they just go in and build the $600,000 houses? You know, and here we are doing a pilot program and it produces a couple of dozen or five, you know, $50.600000 houses bought by people from Massachusetts, and so what I did was I put in that the department that administers this considers when it picks them on projects, their ability to produce affordable units without defining affordable at that part. It's not the inclusionary part, it's just general. But part of my real answer to that question that I've gotten from people was, well, what's to stop just 600,000 ounces is, you know, it's a pilot project, let's do it and see. Let's see what we get. But I hear it's a very real tension.

[Thomas "Tom" Charlton (Member)]: Hard answer to that, the market rate housing in a rural community is lower than it is in a private community, the construction costs

[Marc Mihaly (Chair)]: aren't. Yeah, so what's happening is it's just not being built

[Thomas "Tom" Charlton (Member)]: to meet the cost of construction.

[Marc Mihaly (Chair)]: In other words, part of the problem of what we're dealing with everyone is that Surprising can I

[Leonora Dodge (Member)]: just respond? That surprises me only because we've also heard testimony that is that because of transportation and like He's saying the market is low. No, know, but the construction But

[Marc Mihaly (Chair)]: it's a construction.

[Leonora Dodge (Member)]: I get that, but I'm also surprised to hear that, given that we were told that urban infill is really, really expensive because you're trucking things in and out, you have nowhere to leave your stuff, whereas It's complex,

[Thomas "Tom" Charlton (Member)]: and that does add to the cost. The material costs are the same, the labor costs are almost always the same. There are you you apples to apples, if you build a home in an urban area at the same home in a rural area, it will cost the same.

[Marc Mihaly (Chair)]: Land is cheaper. The urban infill,

[Thomas "Tom" Charlton (Member)]: you have some additional you know, first of you're

[Marc Mihaly (Chair)]: not probably building the same home.

[Thomas "Tom" Charlton (Member)]: But there does get really complicated. Mean, you don't have room to spread out. You don't have to leave materials there, your foot, you don't want them to vanish. It is a

[Marc Mihaly (Chair)]: little complicated. But the problem that we're facing is, just to put artificial numbers on it, let's say a house costs 600,000 in Burlington and 500,000 in Chester. The problem is that the average group of buyers in Chittenden County can afford, they still can't afford the 600, but maybe they can afford 400, but the same group of buyers in Chester can only afford 300. So, the gap is very real in rural, even though the construction costs are a little lower, the ability to pay, the market is less willing to pay, which is why one of the reasons that we are seeing a paucity of construction in rural areas is that developers can't pencil. They can't make it work. Anything else to tell our counsel? I mean, I think that this is an open area for discussion. And and we I will inform everybody. I'll tell everybody because it will fit into what we're doing, the results of multi party conversations with other committees. I'm trying to avoid a situation where we and commerce that is working with us get a project together that we're happy with, and we send it somewhere where it just doesn't That happen. Yeah. Okay. This afternoon, before we adjourn, which we can do now almost, after lunch, we're going to start landlord tenant, a subject with no controversy whatsoever. And we're gonna start by making sure that the bills that are out there are introduced. There is one more bill that is not before this committee and is not being introduced, but we can talk about it. It's over there across it somehow made its way to judiciary, but it's about the same thing. It's about axe it it's overruling state v Dixon.

[Cameron Wood (Office of Legislative Counsel)]: Oh oh, yep. Yep.

[Marc Mihaly (Chair)]: Yeah. And allowing a trespass. No trespass order against not the tenant, but against visitors who are selling drugs or doing.

[Cameron Wood (Office of Legislative Counsel)]: May I chime in before you, butcher? Yes. I will just highlight for you all as a committee that this afternoon is going to be very dense with a lot of information. There are

[Leonora Dodge (Member)]: Go take it out, mean, we

[Marc Mihaly (Chair)]: should stick to that. There are notes that

[Cameron Wood (Office of Legislative Counsel)]: fuel up as much.

[Marc Mihaly (Chair)]: There a

[Cameron Wood (Office of Legislative Counsel)]: minimum of five bills to review together at the same time. I have done my best to provide you with material that will be helpful. It's not an easy task, so if you find that you need something else, please feel free to let me know and I will work on it. But I'm going to do my best to walk us through it, just pre preparing you all.

[Leonora Dodge (Member)]: Can you share the printouts with us before we get together? He doesn't have them ready.

[Cameron Wood (Office of Legislative Counsel)]: I'm continuing to work on those. While they

[Joseph Parsons (Member)]: were done, they could use an oop at

[Marc Mihaly (Chair)]: the end. He's trying to get us to sympathize with an impossibility, And prepare us for his inadequacies.

[Leonora Dodge (Member)]: No, never know. If anything, it's like, how do I deal with

[Marc Mihaly (Chair)]: this