Vermont Legislature SmartTranscripts:

[Speaker 0]: We're live.

[Marc Mihaly (Chair)]: Thank you, welcome back everyone. This is House General and Housing. Today is the February 11, and one of our August members has a bill that they are introducing.

[Speaker 0]: Go ahead, Elizabeth. Thank you. This is the third time that I have introduced this bill, and maybe three times is a charm. I am introducing today H-eight 61, which is the, asks for the creation of ADA, Americans with Disabilities Act coordinator position. This position is actually required by federal law. It is required for all entities, including

[Mary E. Howard (Clerk)]: Sorry about that.

[Marc Mihaly (Chair)]: Also, say your name again when we come back up.

[Mary E. Howard (Clerk)]: Okay. There's still video.

[Speaker 0]: I won't be based this summer. Mary? I'm clearly going to be late for our speaker.

[Mary E. Howard (Clerk)]: Okay, yes, I will. Okay. We're good? All right, that's okay.

[Marc Mihaly (Chair)]: Elizabeth, we're back. How are you? It's fine.

[Speaker 0]: Hello, my name is Representative Elizabeth Burrows.

[Representative Gayle Pezzo (Member)]: You don't have to be sorry,

[Speaker 0]: it was just on her for the back

[Marc Mihaly (Chair)]: of day. But she didn't say. We're, hey, go ahead.

[Speaker 0]: Hello, my name is Representative Elizabeth Burrows. You may know me as the representative of 201. You do. That's Heartland West Windsor in Windsor. Today I am introducing for the third time a bill asking for the creation of an ADA Records with Disabilities Act Coordinator position. This position is actually required by federal law. The Americans with Disabilities Act Title II, any public entity with 50 or more employees must designate at least one employee to coordinate ADA compliance, and such entity must also adopt and establish grievance procedures. Vermont, as a state government, has thousands of employees. It also operates dozens of agencies, courts, corrections facilities, schools, programs. This is not actually optional or symbolic. Without a coordinator, agencies apply ADA standards inconsistently and the state cannot show good faith compliance if it is challenged. Vermont's statutes are decentralized in a way that the ADA does not allow. It delegates accessibility to local discretion, which is not allowed. It uses statutory silence instead of affirming ADA mandates. An ADA coordinator is necessary to resolve conflicts between local ordinances, state statutes, and federal ADA requirements, which evolve over time. Currently our state law confirms the Americans with Disabilities Act rules only up until the year 2013. And obviously there have been changes in the rules made since 2013, but our state law does not adhere to those. An ADA coordinator could issue uniform interpretations across agencies. It could prevent state actors from relying on Vermont statutes that are preempted by the Americans with Disabilities Act. Without coordination, agencies may comply with state law while violating federal law, which is exactly why the ADA was designed in the first place. Program access should not be managed agency by agency. The ADA Title II is not just about building access, it is actually also about program access, including courts, elections, benefits administration, emergency management, corrections, licensing, and digital services. An ADA coordinator is the only position able to see systemic failures. It's repeated accommodation breakdown, oh, sorry, track repeated accommodation breakdowns, fix problems before they become litigation, and advise on full government policy. Without an ADA coordinator, people with disabilities bounce between offices. Staff deny accommodations out of either ignorance of full ADA requirements or because state statute doesn't require it. With an ADA coordinator, staff training on the supremacy of the Americans with Disabilities Act, an ADA coordinator could provide training on the supremacy of the Americans with Disabilities Act. They could stop unlawful denials before they occur, and they could ensure that Vermont does not rely on outdated or under protective statutes. Vermont's size, rural character and demographics make an ADA coordinator more and not less necessary because Vermont is resource constrained and small. It cannot afford ADA expertise in every agency or inconsistent vendor contracts or repeated mistakes. The Americans with Disabilities Act is built on individualized assessment and consistent access, not ad hoc decision making. Let's see. Without an ADA coordinator, no one owns systemic accessibility. No one reconciles Vermont law with federal law. No one is accountable when access fails. This is exactly, exactly what Congress sought to eliminate when they created the Americans with Disabilities Act.

[Cameron Wood (Office of Legislative Counsel)]: The bottom line is Vermont needs an ADA coordinator because federal law requests. Thank you for listening to me.

[Speaker 0]: For Elizabeth? Are there any questions?

[Marc Mihaly (Chair)]: I do, but do others?

[Speaker 0]: Just a comment. Thank you for your persistence. And, as you know, I very much support this initiative and appreciate that you stay at it. And I hope that we are able to get there today, or now.

[Marc Mihaly (Chair)]: Elizabeth, help me out. First of all, is

[Speaker 0]: this a long form It is currently a one sentence long short form bill.

[Marc Mihaly (Chair)]: Short form bill, okay. Second of all, where do you think this coordinator should live?

[Speaker 0]: I think the coordinator should live inside our state government as an independent

[Representative Gayle Pezzo (Member)]: office.

[Marc Mihaly (Chair)]: So, it would need an appropriation for a it's one FTE. I think it needs support or just one straight FTE would do it.

[Speaker 0]: I really don't know. Guess it depends on what we would do with it. I do think that, in fact, I know that there are suggestions for the position. There are Most states have an ADA coordinator role because it is required by the federal government, so we have lots of models out there for what the position would entail. You know,

[Marc Mihaly (Chair)]: you say this is the third time you've introduced this. Was it always sent here or was it sent to human services? It's always been sent here. Do you think where it should be?

[Speaker 0]: Here? Yeah. Yes, I do. Because it's accessibility. It's accessibility because it's employment, because not just accessibility, but it's also civil and human rights, which our committee, it's a right.

[Marc Mihaly (Chair)]: Do you happen to know if someone, let's say someone who's disabled brings a claim against the state for now following federal law, Rights Commission. It goes to HRC?

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

[Speaker 0]: And really, in the disability community, it's often said that the only reason that somebody hasn't brought a massive lawsuit is because our state keeps people with disabilities so poor that they can't afford it.

[Marc Mihaly (Chair)]: Thank

[Unidentified Committee Member]: you, maybe third time's a charm. I hope. Question, other states, where is their position housed? And would it be suitable for the governor's cabinet or something? Well,

[Speaker 0]: it's hard to say when in others, it's independent in the other states. Would it be a governor's cabinet position? I mean, every state is really structured very differently. So I don't know. But when I have done research on disability related bills, for example, this year, I was really shocked by the number of times our state statute requires a representative of people with disabilities be included on a board and that position is never filled. Or there is a requirement on many boards that a person with lived experience, a person who has a disability be included on a board gubernatorial appointment never ever built. And it goes on and on and on. And the impact of that is that people, regardless of what the statute says, people with disabilities get left out of decision making about themselves constantly and consistently. And surprised me the number of times today in the press conference and other conversations when I heard about Vermont Center for Independent Living, Gayle, and all these different agencies and the housing where we don't have any kind of coordination between services. And it actually is exactly why we have the ADA in the first place. When we don't have one person or one entity who can prevent people with disabilities from being bounced around from agency to agency when it's not necessary. And it winds up costing the state money because it takes up always the time of these different agencies instead of having one centralized thing. It winds up costing the state money when we lawmakers don't pass laws that people with disabilities are included in. It costs us time and money when we create programs without including people with disabilities. And then we get to the execution of the program. And then the cost of actually backfilling instead of including somebody in the first place, it costs our state money and time. When we have towns, when we have the Vermont League of Cities and towns providing misinformation or bad information to towns. We don't know whether it's really impossible to see whether Vermont League of Cities and Towns is providing accurate information. I don't have anecdotal stories about whether that's true or not, but when we don't have a coordinator telling towns what they need to do in order to not run afoul of the ADA, it costs time and money for that to be retrofitted and backfilled.

[Marc Mihaly (Chair)]: Thank you. Yeah, but we've got plenty of ads to do our next thing.

[Speaker 0]: Okay, real quick. As I'm sitting here, and I think I've said this before, I'm getting more and more angry and it is shameful and embarrassing to not mince words that this is still a discussion actually. That we really, I mean, it's just, it's sickening. And especially today being aware and hearing all these stories and like, this is such a minimal act to just be in compliance.

[Marc Mihaly (Chair)]: Well, we want to do something with this, we're going to have to turn it short if the bill will feel well.

[Speaker 0]: And I assume it's Sophie, is the

[Representative Gayle Pezzo (Member)]: We'll talk about that. Ledge count.

[Marc Mihaly (Chair)]: I'm not sure. I assume, but I don't know. We'd have to, we'll find out. If we want to, if the committees decide her, we'll bring her in here, go ahead and we'll talk about it. Thank you. Yep, you're good. Okay, Clarend, we're going to come back now for discussion at least, although we could, but I don't know if we will be able to, Cameron, you want to come up? We're going to, at this point, return to the Manufactured Home and Limited Equity Co ops bill, which we were having markup and discussion. And as I remember, we had gotten most of the way through the bill, but the outstanding discussion that was going on to refresh everyone's memory was that at the end of the bill, there is an exemption from property tax for the property owned by the limited equity co op manufactured home communities, not the buildings, I mean, not the single wides and double wides. And I left it with my co author on this bill to discuss what we wanted to do about this, and I gathered he might have had conversations with counsel. And so how would you, Gayle, how should we proceed?

[Representative Gayle Pezzo (Member)]: So I'd like to have a little bit more discussion about it with the committees, and if they have more questions or comments, see where they stand, and then decide how to move forward with things. But I also thought we didn't wrap up as far as the sublease center.

[Marc Mihaly (Chair)]: It's

[Representative Gayle Pezzo (Member)]: up. Oh yeah, making them whole and the amount, is that what the conversation Right, the last that I remember is we were talking about quite a fair market is valued at rent, but the only comment I have to that is my assumption was quite a fair market meant below. It is below fair market value. It's not as low as low and mod low,

[Marc Mihaly (Chair)]: but it's not actual market, it's below market value.

[Representative Gayle Pezzo (Member)]: So originally, when I had my first meeting with Cameron, I had asked about a 50% AMI. I would like to present that as a number to the committee rather than it's just saying fair market rent.

[Marc Mihaly (Chair)]: Okay. So, just to contextualize this again, remember everyone, both state law and articles of incorporation of many of these co ops either prohibit subleasing outright because it's for residences. Tolls up a low, it should keep stable. Keep stable, low and moderate in the community. Or if they allow it, there's this somewhat strange division that says you can rent, you can sublease, but you could only sublease for what you pay in ground rent, plus 10%. And ground rent is maybe much, much less than the market value. And I'll stop there and ask you So this particular bill simply sort of says it grandfathers people who, you know, all the women at equity co ops that exist and have their articles of incorporation before the date of the bill. And it just says, you can keep subleasing, but it does change the amount, and we're about to hear a change sort of change. And then it says, after that, you know, new limited equity co ops would have to adhere to the general rule, which is no sublease. So, what would you like to do, Gayle? You want to describe what you would like to do here? You'd like to change our bill. Yeah, go ahead.

[Representative Gayle Pezzo (Member)]: I would like to propose changing that language that subletting is permitted under hardship, the board would make that decision and the homeowner could only charge high market value at 50% AMI.

[Marc Mihaly (Chair)]: Do you have a comment, Caledonia? You definitely meaningful

[Cameron Wood (Office of Legislative Counsel)]: here. For the record Cameron Wood, Office of Lipset Counsel, I think we would just need to pencil out what you're thinking. Are you saying fair market rent is a thing, and you're saying you would want to limit it to 50% of fair market rent?

[Marc Mihaly (Chair)]: Define it you wouldn't use fair market rent. You wouldn't use the words fair market. You'd just get rid of that and say at or below 50% of AMI. It wouldn't have anything to

[Representative Gayle Pezzo (Member)]: do with HUD anymore. Why?

[Marc Mihaly (Chair)]: HUD fair market rent. HUD fair market rent, you could do that, I take it back. HUD fair market rent is a number, okay? What do you want to make it? Half of that? That's not the same as AMI. AMI is a state number that varies by county, and it has nothing to do with HUD or HUD's numbers. It's a state number, and when we say 50% of AMI, it depends on the family size, it varies by family size, etc, it's 50%. If that's what you want, leave HUD out of it, just say 50% of AMI. If you want to use HUD's number, then you've to use HUD's number.

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

[Unidentified Committee Member]: I think what's happening is that one approach would be, what's the value of the property, which would be HUD market rate. The other is what's the income of the person who owns the property. So those are the two ways of approaching keeping something affordable. What makes more sense? Looking at the income. Okay, so then you want to go with average median income. Don't buy the but the value of the property. Okay,

[Marc Mihaly (Chair)]: is that helpful? Yes, so that's gonna have to be worked out by you, right? Yeah. Okay, and the committee, what are your thoughts?

[Cameron Wood (Office of Legislative Counsel)]: My only point would be that now you're missing the part of that you still have lockup.

[Representative Gayle Pezzo (Member)]: Okay. So by all in the box, yeah, there's

[Cameron Wood (Office of Legislative Counsel)]: 50 still a lot percent AMI and plus actual lot rent.

[Representative Gayle Pezzo (Member)]: Why plus actual lot rent? That rental goes to the landlord. It does not go to the cooperative. So whatever that figure is gets paid to the landlord, and the landlord pays Here's the problem.

[Marc Mihaly (Chair)]: These guys were talking last time about a specific problem. Maybe it never happens. The problem is, what if your lot rent is more than 50% of AMI? Does that never happen?

[Representative Gayle Pezzo (Member)]: To stay within the, parameters of affordable housing? Typically not. But the point is it's to keep the LVC affordable. Whatever it's, you know, it's just giving a special accommodation to the homeowner that's in a hardship so that they don't lose their home or they don't get evicted. That's the whole point. Otherwise, if we were to take this out, stays the way that it is, and then the consequences go to the homeowner that's in hardship.

[Unidentified Committee Member]: Is it in conflict, so is it in conflict, I'm just trying to understand, is it in conflict of the LEC that you say that the homeowner can sublease the total expense, is that the barrier for including that? Because what I'm trying to understand is, the same thing, just a different way of asking, I'm not seeing how the homeowner cannot include that in order to be able to pay it to the LEC.

[Cameron Wood (Office of Legislative Counsel)]: So let me jump in. I'm gonna share my screen and we're gonna go back to the Cooperative Housing Ownership Act. Let's orient a few things. So before you look at what's on the page, a cooperative housing corporation is a business structure where the members of that organization or shareholders if you will, are intended, the structure is intended to be the shareholders live in a communal housing circuitry instance, right. So could be a manufactured home community where people live in their own manufactured home, it could be an apartment building where people live in different units, could be any, know, I imagine it could be a four bedroom home that has been zoned for multi family dwelling and multi people living in it. There are restrictions on the leasing of the units because of the intended purpose of the business entity to begin with. It's not intended or designed to be a circumstance where you as members are leasing out your units. And making a profit. The organization structure is intended to be of members of the corporation. So that's why there's a separate limitation that says 80% of the units have to be lived in by members. So you can only, depending on the total number of units, only 20% of them can be sub leased out at any given moment. There is a separate limitation that says you can only sub lease out for one year at a time, because again, the intended purpose here is it's for members only who are members of the corporation that live here. Separate from that, you have the limited equity cooperative model, which is intended to serve low and moderate income individuals. And that is defined as low income individuals who are at 80% of AMI and moderate income individuals who are at 100% of AMI. So since you have this subset, this limited equity cooperative that is intended to be for low and moderate income people, there is an additional limitation on what you can rent if you have to sublease. So that is this subdivision seven here at the bottom, which says that your articles of incorporation, your corporate charter shall require that no sublease shall provide for monthly payments in excess of 110% of the monthly payment unit. This is the kind of key provision that was initially being amended. The challenge here is there are multiple different scenarios we started to talk about last time. In some LDCs, Manufactured home communities, the individual owns their home. And so they may have some sort of additional obligations on top of their proprietary lease costs, their membership costs. Separate models, that may not exist at all. In separate models, you don't actually own anything. You only own the lease, the right to live in the unit. So the monthly proprietary lease costs in that situation may be entirely different than the circumstance that I talked about in the beginning. In the beginning, you own the mobile home. Your proprietary lease says you get this lot. So your lot rent in that instance, the proprietary lease costs may be a few $100 soon. And so separately, you could have a separate situation where the person as we talked about last time, where the person has the right to live in a unit of could be a condo association, could be an apartment building, maybe your proprietary lease cost is $1,000 a month. It all depends on the circumstance and so what this section says is whatever that proprietary lease cost is, you can only sublease it for that plus 10%. And the point is, the reason it's in here, it's not for all corporate housing corporations, excuse me, cooperative housing corporations. It's only for these limited equity cooperatives. The rent is capped at what you can sublease it for because it's intended to be designed for people of low and moderate income. The challenge is there are so many different scenarios, so that cap could be different. And so for certain circumstances, it sounds like for some of these limited equity cooperatives, it's a manufactured home community. If the person owns the manufactured home and they have a mortgage, it becomes a challenge in that situation. So I think what Repetz has been trying to address is how do

[Marc Mihaly (Chair)]: you fix that narrow problem

[Cameron Wood (Office of Legislative Counsel)]: in this grand scheme, if you will. This limitation, this sublease limitation does not exist for all corporate housing ownership. Only for these LEC's, and it's really only going to be for the instances that have been raised. So this would change the entire LAC model for now. We had like, we had tried gearing this away from that in

[Marc Mihaly (Chair)]: Just order to change the LAC mobile home key.

[Cameron Wood (Office of Legislative Counsel)]: The initial Just That's

[Marc Mihaly (Chair)]: the mobile home key. It's gonna amend that section.

[Cameron Wood (Office of Legislative Counsel)]: It amends this section, but it amends it and it specifies only for a mobile home park that is a limited equity cooperative. That's it. You could rent it out for fair market rent. Okay. And then all those structures can be two different ways that you described where you are basically you have a lease, I guess, on all of it or you own the home and lease the property. Yeah, keep in mind You can do both those. It's a cooperative housing corporation and you have a proprietary lease and you're gonna sublease it out, there's no cap on what you lease it for. The only cap comes into place if it's a limited equity

[Marc Mihaly (Chair)]: co Yeah. Okay.

[Cameron Wood (Office of Legislative Counsel)]: So it does cap is there for the pricing of the co op. Yeah. I think we have trying to have one solution for two different problems. I was strictly focused on the scenario of owned home. Yeah. Yeah. And that I think is what the initial amendment So I just think

[Marc Mihaly (Chair)]: we need to the community let's see if we can give instructions to counsel and at least get through this. It sounds to me like you leave the basic, I'm just throwing this out, we leave the basic structure that's here, you know, 8A and 8B. 8A is the grandfather clause. I'm not supposed to use the word grandfather, am I?

[Representative Gayle Pezzo (Member)]: Stop. What

[Unidentified Committee Member]: did do we have?

[Marc Mihaly (Chair)]: I'm on page 10. Thank you. 8A is, you know, prior to the date of the bill, AB is after the date of the bill. The only thing Gayle wants to change is she doesn't want to use HUD fair market trend. Gayle, did you want to say 50% or did you want to say like what's it above, was eighty and one hundred?

[Cameron Wood (Office of Legislative Counsel)]: It's low income is 80, moderate income is one Yeah,

[Marc Mihaly (Chair)]: did you want to say 80% low income? I think

[Representative Gayle Pezzo (Member)]: that makes sense. I'm just trying to achieve that under these circumstances that the person who owns the home wouldn't, would be able to pay their lot rent and their taxes so they wouldn't get evicted. That's all I'm trying to Right.

[Marc Mihaly (Chair)]: Okay. The only concern is, and I'm hearing you say it's just lot rent isn't that much. There's this worry that someone would get It's

[Representative Gayle Pezzo (Member)]: all relative. Yeah. Yeah. $550 to someone who has $1,200 a month coming in is a lot of money. So if they had a hardship and they had to leave the state to take care of someone, that's all they've got, and they still have to pay it just so they can pay their lot rent, and pay their taxes, so they wouldn't lose their home.

[Marc Mihaly (Chair)]: Okay, are people comfortable with this?

[Unidentified Committee Member]: The only question I just have is, I don't like, we're using terms and not the potential numbers. And so for me to try to understand which is a better value for the person who would be subleasing, I don't want to say the wrong thing. And I get a little confused if you're talking about fair market value, HUD fair market value, 80% of AMI, do we know which one would be a potential I mean, you can't because they're all different costs. So, I mean, do you decide which one is going to give them the best? Is it 80% AMI that's going give them a better outcome or fair market value?

[Unidentified Committee Member]: I'm jumping in. Please. Can't, it doesn't make sense to me to tie it to the person's income level because that doesn't have any relation to the lot value. It's got to be based on the lot value, not your average median income.

[Unidentified Committee Member]: Based on the LEC though, so that I just want to like,

[Representative Gayle Pezzo (Member)]: you know, I'm just trying to

[Unidentified Committee Member]: pick if you're We're talking

[Unidentified Committee Member]: about the renter, we're talking about the subleasing. So regardless of the subleasing, are you trying to make sure that you limit the kind of sub lessee to a person of low income or are you talking about how much that person will pay for their sublease? Both.

[Representative Gayle Pezzo (Member)]: I want to limit because who lives there needs to be of a certain income level and so that that homeowner does not charge them more than what would be low to moderate income. Doesn't count So

[Unidentified Committee Member]: with the LEC, or is it in the bill here somewhere, do they already have a definition of what that

[Cameron Wood (Office of Legislative Counsel)]: income level is?

[Representative Gayle Pezzo (Member)]: Low to moderate?

[Marc Mihaly (Chair)]: In the bill, well, yes.

[Unidentified Committee Member]: It's already defined.

[Marc Mihaly (Chair)]: Yes, it's 80100%, respectively. Okay.

[Unidentified Committee Member]: Use the same numbers for the subluxation as for the original tenant. Does it make any sense to me?

[Representative Gayle Pezzo (Member)]: That would be lost, but it will never be No. It would be

[Marc Mihaly (Chair)]: That has nothing to do with it. It would just be, you just say, rent to a person of low or moderate income.

[Unidentified Committee Member]: Right, but she's also trying to get to the level of rent, and that we do need to tie to hut. Okay. The renter, the kind of renter, and how much rent can be asked to

[Marc Mihaly (Chair)]: So do people feel comfortable with the idea of our council redrafting this to say that the rent should be renter should be low mod, and that the amount is not at fair market value.

[Unidentified Committee Member]: Yes. Because if that's affordable for the original owner

[Speaker 0]: Yeah. Renter Yes.

[Unidentified Committee Member]: It should be consistent.

[Cameron Wood (Office of Legislative Counsel)]: Should be

[Marc Mihaly (Chair)]: it should be affordable for That's exactly the language. Okay. Plus 10 So you have enough income covered.

[Representative Gayle Pezzo (Member)]: Plus 10%.

[Unidentified Committee Member]: Mortgage, a lot

[Marc Mihaly (Chair)]: of rent. Excuse me for pushing,

[Representative Gayle Pezzo (Member)]: but we're okay. Now we have Just not Village of LEC. K. So we

[Marc Mihaly (Chair)]: have one remaining issue, which we are not going to We have one remaining issue on this, which we're not going to get to today, but will you give us a preview of what you want to do about, or do you not know what you want to do about the section that doesn't apply to LEC's, it applies to everybody, at the end of the bill that says real property owned by the Mobile Home Limited Equity Co operators, as used in this term, shall be exempt from property.

[Representative Gayle Pezzo (Member)]: What did you mean it doesn't apply to LEC's? It applies to everybody. Are

[Unidentified Committee Member]: we on?

[Marc Mihaly (Chair)]: Oh, it does. Excuse me.

[Speaker 0]: I'm sorry. I take it back.

[Representative Gayle Pezzo (Member)]: Yes. Okay. So the only thing as far as if there's no time for more discussion, I would like to,

[Speaker 0]: you have a few questions.

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

[Representative Gayle Pezzo (Member)]: Yes, jump in.

[Cameron Wood (Office of Legislative Counsel)]: We'll have some conversations with Rep. Buzzo. This is about the end of the bill or the last, towards the last sections of the bill where it is addressing the taxes owed for a manufactured home community related equity cooperative. There was a lot of discussion about whether or not reducing their tax burdens to zero. So we discussed We

[Marc Mihaly (Chair)]: do have two or three. Yes, okay, go on. Go ahead, Freddie.

[Cameron Wood (Office of Legislative Counsel)]: That's three. Okay. This, my understanding is the issue and the concern stems from how these entities are how the parcels are divvied up and how they are assessed taxes. So there is a specific section in the limited equity cooperative, excuse me, in the corporate housing chapter. It says

[Marc Mihaly (Chair)]: sixteen ten. Can you explain it? I don't know what the hell it means.

[Cameron Wood (Office of Legislative Counsel)]: I'm going to do my best. This is out of my portfolio figure out. My understanding of reading this section is that it says for a mobile home limited equity cooperative, So just keep the population that we're talking about in mind, only manufactured home community limited equity cooperatives. The individual who is under a proprietary lease is considered a parcel. So the individual who is in the manufactured home itself, along with their interests in the common areas of the cooperative, that's a parcel. That person pays taxes on that parcel.

[Unidentified Committee Member]: So it's their unit and their share of

[Marc Mihaly (Chair)]: land that

[Cameron Wood (Office of Legislative Counsel)]: they have in common with the other individuals. So individuals there, they have a proprietary lease. This next section says each unit held by the cooperative not under a proprietary lease. So now you're in a situation where there's five mobile homes in the park that the LEC owns. Two people live in one one person lives in one, one person lives in the other. There's three that are vacant that the park is trying to find members to Midland. Those can be treated as one parcel. So you take the remainder where people aren't living with the proprietary lease, take all the remainder that gets treated, may be treated as one parcel that the cooperative pays taxes on. And then the last piece is saying, except for those units that are described above, no cooperative property shall be deemed to be a parcel, because you've already divided everything up. Following me so far? So like

[Unidentified Committee Member]: a clubhouse or a pool is not?

[Marc Mihaly (Chair)]: No, the clubhouse and the pool

[Representative Gayle Pezzo (Member)]: is part of community,

[Unidentified Committee Member]: it's not part of this other parcel.

[Marc Mihaly (Chair)]: Not part of the other parcel,

[Cameron Wood (Office of Legislative Counsel)]: It's part of both because it should be, as I understand this, it should be divided up. Individuals have, you're all four members of this cooperative housing LEC, you each live in your own homes and the clubhouse is here, have an in person in the clubhouse, it's divided up and it's added to your parcels. It's my understanding of how this could work. So what we're not going to do is we're not then going to treat the clubhouse as now a separate parcel because it's been divided up into your parcels. Yeah. So that's the question of how you divide

[Marc Mihaly (Chair)]: I'm afraid I have to understand I have to try to say this. Understand it.

[Unidentified Committee Member]: We process it out loud.

[Marc Mihaly (Chair)]: Okay. Yeah. Exactly. So let's say case one. The four of them own our it in the park, and they're members of the Lemon Equity Co op Park. They have units, and we have a swimming pool, and we have a clubhouse, and God knows what we have. We have a playing field, and we have a coat, we have everything. Okay, we're great. And that's it, that's all there is. They're each deemed to own one quarter, their own their own house and one quarter of everything else.

[Cameron Wood (Office of Legislative Counsel)]: If that's what their corporate charter says, for

[Representative Gayle Pezzo (Member)]: simplistic, simply say. And they're being taxed on that.

[Cameron Wood (Office of Legislative Counsel)]: Yeah, says that each unit under a proprietary lease together with any improvements on their proprietary lease and together with their cooperative interest in the common areas and facilities. Okay, so under that theory, or under that theory, statute, they would each pay a quarter of It would be added to their parcel, yes.

[Marc Mihaly (Chair)]: Right, they would be paying taxes on their own house Yeah. And

[Representative Gayle Pezzo (Member)]: A quarter of

[Marc Mihaly (Chair)]: under their house and quarter of the value of everything else. Yep. And there'd be nothing left.

[Representative Gayle Pezzo (Member)]: Not the land underneath the their house because that's not separate. That's part of the cooperative.

[Marc Mihaly (Chair)]: Right, but they own a quarter of it, there's four of them. Okay, and there would be nothing left. Then, category two, is the four of them, same thing, except there's three other lots. Right. Or let's say four other lots that are not occupied or there's a vacant house, whatever. Right. In that case, that would be Lot 2, and the co op would pay the taxes, but they'd pay the, know, so there'd be two lots and it would be just divided up.

[Cameron Wood (Office of Legislative Counsel)]: It would be five lots. Right.

[Marc Mihaly (Chair)]: There would Those other lots could be added together and as one parcel. One parcel that the co op would pay, which means somebody is paying taxes on everything.

[Cameron Wood (Office of Legislative Counsel)]: So the question there is my understanding of this section is about how you divide the parcels up to determine who's paying on what. Yeah, okay. Then there's a separate question that we in doing research including myself not able to get a complete answer on is what is the value of it?

[Marc Mihaly (Chair)]: How is the value of this all this stuff? Because as we've discussed,

[Cameron Wood (Office of Legislative Counsel)]: this is the limited equity cooperative section and we've discussed this piece here where after dissolution of the corporation, assets remaining after retirement of their debts can only be given to a nonprofit or another limited equity cooperative. So if there's no doubt that the land itself, place, the thing is worth something, it has a value. If they dissolve and then you sell it, you're going to get something for it. But this limits what you do with any equity. So after you've paid your debts and you pay people their limited share of their proprietary lease membership, which again has to be capped, if you remember at the very beginning of this section, has to be capped by a limited equity formula which is designed to be affordable to low and moderate income people. Once you pay the individual their membership share, whatever's left can only be given to a nonprofit or some other limited equity cooperative. So it's like a nonprofit in that sense. So the question is, how are the individual listers out there treating these things? My understanding is some of them are being treated as if they have no value because of this limitation. Try part. Others are not being treated that way. So in discussion my recommendation was I think for you all to move forward on this piece, you need that answer. Why are they treated differently? How are they treated differently? And so my recommendation was you could add in, instead of making a change this session with this bill, you could add in a requirement that whoever is best to give you that answer, which my assumption is the tax department, come back to you with a report to say, go out and inventory every limited equity cooperative manufactured home community, tell us how it has been assessed value, and tell us why if there is a different distinction among them. Why are some of them being assessed certain values, others being assessed differently? That would give you some information to be able

[Marc Mihaly (Chair)]: to inform. And even you could ask them for a proposal. Because remember, I had one just to report. I had a conversation with Ways and Means, not whole committee, just their ranking member, Charlie, and I asked him, I was just describing what we were doing in this bill, and I asked him, I told him, in a way, I'm not sure we care too much exactly what the solution is, but we want it to be common statewide.

[Representative Gayle Pezzo (Member)]: Our

[Marc Mihaly (Chair)]: whole approach in this bill is trying to reduce chaos, and so the important thing is that it be statewide, and that's one way of doing it.

[Unidentified Committee Member]: So, to that point of consistency, don't we also, the limited equity housing trusts, like Champlain Housing Trusts, when they have a limited equity building But there must be a consistent way that they get value assessed, and so maybe that is

[Marc Mihaly (Chair)]: must say, I like the A

[Representative Gayle Pezzo (Member)]: parallel Yeah, think it's a percentage.

[Marc Mihaly (Chair)]: A percentage. I don't know, but what I like about The Emirates proposal is that I don't feel like we are ready to do a lot more work at this point. If we want to move this bill, we've to move it. And I think the idea of saying to the tax department, do the investigation and develop a uniform approach to But do we approve what they've developed?

[Unidentified Committee Member]: Do Then we ask don't for a develop and start doing it, but rather bring us your

[Representative Gayle Pezzo (Member)]: elegant solution. And give a time frame? Yeah. January.

[Marc Mihaly (Chair)]: It would be it would be yes?

[Cameron Wood (Office of Legislative Counsel)]: Just a question. I don't know the the Tripark situation.

[Unidentified Committee Member]: Happened. Yes.

[Cameron Wood (Office of Legislative Counsel)]: Was that, like, a I'm just thinking, like, individual tax like, puts in the town votes to tax exempt somebody. Like, if we or to do it at a town meeting or something. Was that something done at the local level?

[Representative Gayle Pezzo (Member)]: It was done in 1989 or whatever. I don't know.

[Cameron Wood (Office of Legislative Counsel)]: The vote

[Representative Gayle Pezzo (Member)]: I didn't speak to the lister. Yeah. I just know that when I spoke to the attorney and the attorney testified, that's the way from the statute that they had decided to do it, because the other two statutes, it's what brought them to that decision.

[Marc Mihaly (Chair)]: That would be it. I don't know. In other words, you wanna know, did it just the lister just do it, if it's always done that way, or did the town actually decide something that they just Yeah.

[Cameron Wood (Office of Legislative Counsel)]: It was across the county.

[Representative Gayle Pezzo (Member)]: There was there was an agreement made between the and they're not alive anymore, but this particular current lister and the attorney for Tri Park said that there was an agreement made.

[Marc Mihaly (Chair)]: Right, but we don't That's all we know.

[Representative Gayle Pezzo (Member)]: That's all we know.

[Marc Mihaly (Chair)]: So how do people feel about asking for a report back? I would say make it by November 15, because people this was my experience this year. I was working on this stuff, a lot of stuff over the summer, and in the fall, particularly in the fall, and you don't want your report due in January because then we're already in session. So, you want to do sometime like November 5, either before or after Thanksgiving, November 15 or December 1. How do people feel about that solution?

[Unidentified Committee Member]: I prefer it because to do an accurate study. We don't have time to do an accurate study right now.

[Representative Gayle Pezzo (Member)]: I didn't hear

[Cameron Wood (Office of Legislative Counsel)]: what you said. I don't think we have time to

[Marc Mihaly (Chair)]: do that. Thorough enough study of the questions put in the bill right now. Okay, so, would you be willing to come back to us with a final version of this bill, and then we can just decide whether we want to support it or not?

[Unidentified Committee Member]: It could be that none of us are back here anyway.

[Marc Mihaly (Chair)]: Let me tell you, I don't want another committee, and I think I'm running again at God.

[Cameron Wood (Office of Legislative Counsel)]: May I just run through something real quick with you all just because it's posted? I shared with Miriam just a bit ago a draft 2.1 of the amendment. And since it's posted, I just want you all to be aware of it and what's there and then I'm gonna make these changes so you'll have a 3.1. This should take sixty seconds. I still have questions about the.

[Marc Mihaly (Chair)]: Okay. Yeah. I got a chance to ask that.

[Cameron Wood (Office of Legislative Counsel)]: Oh, yeah. Yeah. No. Just to no. About this. Alright. I'm still

[Representative Gayle Pezzo (Member)]: just about the sublease?

[Cameron Wood (Office of Legislative Counsel)]: The sublease thing. I still am not I'm either don't agree with it or don't fully understand it.

[Marc Mihaly (Chair)]: So Okay. One or

[Cameron Wood (Office of Legislative Counsel)]: two. Either understand and don't agree with it. Or

[Unidentified Committee Member]: No. You don't understand

[Cameron Wood (Office of Legislative Counsel)]: it. Maybe I'm getting something incorrect.

[Marc Mihaly (Chair)]: I think. Okay. I think I know what you're concerned with.

[Unidentified Committee Member]: Let's not

[Marc Mihaly (Chair)]: assume. But anyway Yeah.

[Cameron Wood (Office of Legislative Counsel)]: So very quickly and then we should have time for questions. This is in the section 2,604 of the just dealing with manufactured homes and the sale of manufactured homes. This isn't about LECs. I've added in here so if you recall, we wanted to strike on both the warranty deeds and the quitclaim deeds substantially the following form. So I've added language to say that the deed may take the following form and then I've just unstruct everything that was there. So all

[Marc Mihaly (Chair)]: that's

[Cameron Wood (Office of Legislative Counsel)]: highlighted is what the form is. And then the only other change that I made, and I apologize for the scroll, but I added in what's not in draft 1.1 that we just looked at all the way at the end just the authority for the Secretary of State to address certain limited equity cooperative registration at the request of the limited equity cooperative so they would not be giving anything unilaterally without being requested to do so. That was the discussion that you all had. I just hadn't had a chance to include it in the first draft, so it's here. Those are the only changes, so on.

[Marc Mihaly (Chair)]: We did get an email from Rachel. Rachel, r a e c h e l, from Cloud. Let me just I haven't it just came in today, did you get it?

[Representative Gayle Pezzo (Member)]: Yeah, I got it earlier, I saw that she spent it. Hold on a minute. I spoke to her. Yeah, what's her problem? Does she have a problem? No, I think it had something to do with language or adding something. I don't want to assume without reading it.

[Marc Mihaly (Chair)]: Well, how do we want to handle that? So, I guess we're just going to have to, I haven't read it yet.

[Cameron Wood (Office of Legislative Counsel)]: You can share it if you would like to include it

[Marc Mihaly (Chair)]: in your next draft. Yeah, and I know this

[Representative Gayle Pezzo (Member)]: is a concern for the committee that it's East Rides, but I have been speaking to New Hampshire. The fact is there's not too many banks that will lend, so because East Rides has offered to give us information, other than that, I think there's two other

[Marc Mihaly (Chair)]: Why don't I do that? I will share the email with counsel, and if it's a minor change, we'll include it in the draft for your consideration. If it's a major change, we'll bring it up, but otherwise, we won't. Okay? Thank you. Now, Joe, do you wanna try to articulate your concern? I think I know what it is, but I'm gonna let you share.

[Representative Joseph Parsons (Member)]: Yeah. So I'm I'm just The entire purpose of being able to sublease is for a hardship. Right? Yes. That's only reason.

[Representative Gayle Pezzo (Member)]: Permitted. That's the only reason.

[Representative Joseph Parsons (Member)]: That's reason. That's That's That's the reason. And I see them as having correct me if I you could have three major payments. You have your lot cost. You have a mortgage.

[Speaker 0]: Mhmm.

[Representative Joseph Parsons (Member)]: You have then your taxes on your unit. Well, only thing we're telling them if they're allowed to charge somebody is 80% AMI on that unit.

[Representative Gayle Pezzo (Member)]: Or Which not changing this, and they wouldn't be able to sublet at all.

[Representative Joseph Parsons (Member)]: I know. I'm I'm just saying that, like, we're trying to help somebody in a hardship, and then we're like, you know, now you only lose 500 a month.

[Marc Mihaly (Chair)]: Well, we're keeping You're welcome. But

[Representative Joseph Parsons (Member)]: It just seems like we're capping I don't like, I agree with you. I don't I don't want it to be a profit thing. Right. But, like, can they break even?

[Representative Gayle Pezzo (Member)]: So the LEC is only looking at keeping the, protecting the LEC for Well, you're protecting that

[Representative Joseph Parsons (Member)]: member is what you're doing.

[Representative Gayle Pezzo (Member)]: You're also protecting the LEC so there's not a vacancy and so that they don't lose their home. So if they're able to pay their lot rent and they're able to pay, and I don't care about the amount of money, I really care that they're not the person subleasing, it's not gouge. So if they come before the board and they have some kind of a hardship and it's a temporary situation, then the board is going to allow it. The law is going to say how much they're permitted to charge. So, you allowed

[Unidentified Committee Member]: market rate for that lot, is the LEC in trouble? Because now it's no longer

[Representative Gayle Pezzo (Member)]: Are there maximums that can be charged? It needs to stay between low and moderate. So let's just say for argument's sake Low and moderate what? Income. Low and moderate affordable housing income.

[Unidentified Committee Member]: So if you don't put them, if you don't set a cap on how much you can charge, and you only, and you, even if you've said, like in order, you have no choice about who to rent, who to sublease to, cause that's already the law. It has to be sublease to people who are low and moderate income.

[Representative Gayle Pezzo (Member)]: Yes, because LEC is low.

[Representative Joseph Parsons (Member)]: Was in our current law. The current law is not a limit where you can sublease to. It does so by way of capping how much you can charge.

[Representative Gayle Pezzo (Member)]: By the 110%.

[Representative Joseph Parsons (Member)]: So you can only charge 110% of your proprietary lease costs to the sublease, to the individual you're subleasing to. That

[Representative Gayle Pezzo (Member)]: not So LCC have a what you have to do if somebody has a hardship is look at that law, that's 110%. And all that allows is 10% over the lot rent. And of course, people are not charging that, they're charging much more. So if we don't change it, which at this So

[Unidentified Committee Member]: is 110% of the lot rent, is it accurate to say that that even way below what the market value Way below. Would we're already increasing

[Representative Gayle Pezzo (Member)]: the standard by a lot. It depends on

[Marc Mihaly (Chair)]: the limited executive law. How is that? Do you mean the lot rent could be really high?

[Representative Joseph Parsons (Member)]: That's what I'm saying, depends. This 110% cap applies to all limited equity cooperatives, not just those that are a manufactured home community. So for some of them, the individuals own their home. And so if you're only having to pay essentially a lot rent, if your proprietary lease charge is essentially a lot rent, I agree with you, Rep. Pezzo, could mean a lot of money to some people, but it could be a few $100 versus a separate limited equity cooperative where you're paying significantly more because it's a different type of housing arrangement.

[Unidentified Committee Member]: But aren't we specifying that this is for manufactured housing LEC's?

[Representative Joseph Parsons (Member)]: Yes, but I'm trying to make sure you understand what current you're talking about the current statute, what is current law? Oh, gotcha. It's capped at 110%,

[Speaker 0]: that's only for

[Representative Joseph Parsons (Member)]: your lot rent, that's not that much,

[Marc Mihaly (Chair)]: it depends on the LEC. You see, I think, first of all, things. One,

[Speaker 0]: well, first of all, before I even start, Joe Says it's still full of light.

[Marc Mihaly (Chair)]: Okay, great. And here we go. The first I'm only doing this because I think Joe's onto a problem that I think it's there, but let's start at the beginning. In a lot of limited equity co ops, if I'm in a building that's a limited equity co op, there is no such thing as lot rent, I pay rent. And the rent is, it's got to be set so that I can be there as a low or moderate income person. But that's my rent, okay? So let's say, I'm essentially paying for the whole value of my unit, because I'm renting it, okay, adjusted for what, 30% of my income as a, you know, at 100% of AMI or something like that, that's what I'm paying. The problem that we're dealing with here is this weird situation where the limited equity co op is not a building with the rent paying for your whole unit, it's a mobile home care, it's split in two. You are paying only ground rent, and you're paying the bank for your mortgage on your unit. It's a unique problem that doesn't exist, and that's why the 110%, the intention of the 110% was to allow people to recover their whole rent plus 10% of extra, In a regular co In a regular co op, but here, it just allows you to retain 110 of your ground rent, which is much less than the whole thing. Okay. I think the problem I don't think it's probably hazardous to try to climb into Joe's mind, but I think the

[Representative Joseph Parsons (Member)]: Depends on the day.

[Marc Mihaly (Chair)]: Yeah. Depends on the day. Well, I won't even ask what it is on a Wednesday. A problem is this. If we're gonna allow someone to rent at all, whether it's hardship or whether it's because it's an existing co op, and we're gonna reset the 110% to something, Don't we wanna reset it such that they don't lose by having to pay ground rent plus a mortgage, then I can at least recover that. I can recover when I rent it out, my ground rent and my mortgage. So I don't lose money, subletting. And yet, in order to do that, we would have if if that was our goal, we would have to say the rent cannot be any more than the amount of your ground rent, plus, do we say, you know, your mortgage, Or do we say, I thought HUD fair market value was kind of like a convenient substitute for that, you know, just without getting into whether some people have a mortgage or they don't, that HUD fair market value was clearly enough. We're only talking about the people who get through hardship, so I'm not sure it matters too much, but the concern is whatever we do, I think what's being alluded to should be enough to allow people to cover their cost, which is the market. The ground rent and the rent of the box. Whatever and so the question is, how much do

[Representative Gayle Pezzo (Member)]: by ground rent and The ground rent is your The co op membership.

[Marc Mihaly (Chair)]: Your lease, your monthly lease to the

[Representative Gayle Pezzo (Member)]: co op. The lot rent. Lot rent.

[Marc Mihaly (Chair)]: Yeah, yeah, well, yeah, the lot rent. So, it should be enough to cover your lot rent and Taxes. So about your lot rent and the value of this box that you are renting out. You are not just renting out the ground, you are renting out the ground and the box. Isn't that the same as any co op? No. Why? Wait. Because in other co ops, a 100% a 100 your lot rent is everything. Is no separation between

[Speaker 0]: You still have to pay for the

[Marc Mihaly (Chair)]: Common areas. But that's yes. But you're There's

[Speaker 0]: still ownership of the building in an an

[Marc Mihaly (Chair)]: area suspect where the answer is it's a much bigger number. You are paying a much bigger number in a building than you are in a limited equity because co you're paying for your entire unit, whereas in this case, you aren't paying for a unit, you're just paying the lot rent, which is So, the question is, how do you value the box for purposes of rental? One way to do it is just set fair market value. Another way, okay, but there's got to be some, I think that's the problem.

[Unidentified Committee Member]: Can I? You might own your home and so you would be making money if you said fair market value, if you don't owe a mortgage anymore.

[Marc Mihaly (Chair)]: Yeah, but you want to get into each, you want to specify if you own a mortgage, then you get to include

[Unidentified Committee Member]: No, but that's why I think it says costs. Okay. So this is already a process, Like the scenario here isn't like this is an automatic, you're in, you're out. Like there's a whole evaluation process, qualification process. We're asking for people to prove their incomes. So the owner who is trying to sublease would have to tell the co op this is how much I owe each month, this is what my expenses are for maintaining this property And so can we not just tie it to costs? Blah.

[Unidentified Committee Member]: But don't they have to prove they have a hardship?

[Unidentified Committee Member]: They have to prove they have a hardship onto They the should prove how much they've spent.

[Speaker 0]: We leave it as it is, But it's

[Representative Gayle Pezzo (Member)]: I'm fine if committee would agree to leave it as it is. It doesn't solve the problem at all. Which way

[Marc Mihaly (Chair)]: does it? There's two proposals, one to leave it at fair market value, the other is to say you can rent it out at cost.

[Representative Gayle Pezzo (Member)]: Renting it out at cost.

[Marc Mihaly (Chair)]: I think that that would address does that address your concern, Jeremy?

[Representative Joseph Parsons (Member)]: I think kinda gets us there.

[Representative Gayle Pezzo (Member)]: It's

[Representative Joseph Parsons (Member)]: like, but I I think it's gonna be a very hard to cover with one blanket thing because it's like, really, guess. If you don't have a mortgage, then it's not a hardship to pay

[Unidentified Committee Member]: the mortgage.

[Representative Gayle Pezzo (Member)]: So you're renting for That's

[Unidentified Committee Member]: why it should say cost.

[Marc Mihaly (Chair)]: And if it says cost and it's hardship, that gives your I just want the person having

[Representative Joseph Parsons (Member)]: a hardship to be able to at least just break heath.

[Marc Mihaly (Chair)]: Yeah. Right. That's what you wanna do. That's why it's cost. Redraft as cost, you can think about how you want it. Okay?

[Unidentified Committee Member]: He doesn't look happy. This now I'm wearing.

[Representative Gayle Pezzo (Member)]: He's delighted. Guys are delighted. Okay.

[Cameron Wood (Office of Legislative Counsel)]: Know what? As long as I have direction.

[Marc Mihaly (Chair)]: I think he has direction, and I think we bring it back. We'll calendar it.

[Unidentified Committee Member]: Can I just add? And obviously, the person has to prove their income. The lessee would have to prove that they are qualified.

[Representative Gayle Pezzo (Member)]: Putting that in there because there's people that, they may work off the books, so they don't have something to improve their income, the renters. That's a problem for them. If you're trying to protect the elderly status, But the person who's responsible is the homeowner. Only they are responsible for the lot rent and the tax rules, the sub leasing, it's not. The whole idea is just to make it so that that landlord wasn't going to gather. Yeah, but you don't want this to become a vehicle for somebody who could pay more. No, absolutely not. Okay, Gayle. Absolutely.

[Unidentified Committee Member]: I have raised faith in humanity today, apparently.

[Marc Mihaly (Chair)]: Okay. You have your instructions. We'll we resolved everything.

[Unidentified Committee Member]: Love it. I trust Perfect.

[Marc Mihaly (Chair)]: And now we are adjourned until tomorrow at what time?

[Representative Gayle Pezzo (Member)]: 9AM. 9AM.