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BILL AS INTRODUCED 2007-2008

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H.863

Introduced by   Committee on General, Housing and Military Affairs

Date:

Subject:  Housing; housing development affordable housing; Act 250

Statement of purpose:  This bill proposes to stimulate the creation and preservation of affordable housing in Vermont.  Specifically, the bill proposes to:

(1)  Implement a Vermont neighborhoods initiative designed to help meet the need for more moderately priced housing; support economic development by providing more housing for Vermont’s workforce; strengthen the social and economic vitality of our communities and Vermont’s social and economic centers; improve the public infrastructure and facilities that support housing; and stimulate development that does not cause or contribute to sprawl.

(2)  Revise Act 250 to clarify:

(a)  Criterion 9L (rural growth areas) by including context-sensitive development standards that will facilitate compact, smart growth development in existing and planned community centers, and conservation project design in rural settings.

(b)  Criterion 5 by ensuring that planning for proposed development projects includes consideration of the full range of transportation impacts and needs of the project in order to ease the burden of high transportation costs borne by Vermont residents.

(3)  Create a Vermont land bank program that makes land available for construction of new moderately priced housing to be built adjacent to and of comparable density and affordability to existing housing development that is in or contiguous to designated downtowns, villages, or new town centers.

(4)  Remove the sunset date of July 1, 2008 for the provision that allows the Vermont housing finance agency to finance residential housing projects with a lower threshold (20 percent) for lower and moderate income occupants.

(5)  Increase the amount of money available to the VHFA for affordable housing tax credits, reduce or eliminate the property transfer tax on the purchase price of certain primary residences, and provide other tax incentives for the creation of affordable housing.

(6)  Establish a state rental housing task force to collect data on residential rental units in the state; define habitability and safety standards for residential rental units; develop training standards for licensed rental housing inspectors, develop procedures for inspections, enforcement, and compliance; perform other duties for the preservation of affordable housing in the state; and report annually to the legislative committees of jurisdiction on or before January 15.

(7)  Establish a rental housing safety and habitability fund, direct the department of public safety to establish a rental housing registry, health and safety standards for rental housing, and a rental housing safety inspection program.

AN ACT RELATING TO CREATION AND PRESERVATION OF AFFORDABLE HOUSING AND SMART GROWTH DEVELOPMENT

It is hereby enacted by the General Assembly of the State of Vermont:

* * * Vermont Neighborhoods Program * * *

Sec. 1.  24 V.S.A. § 2793d is added to read:
§ 2793d.  DESIGNATION OF VERMONT NEIGHBORHOODS

(a)  A municipality that has a duly adopted and approved plan and a planning process that is confirmed in accordance with section 4350 of this title, has adopted zoning bylaws and subdivision regulations in accordance with section 4442 of this title, and has a designated downtown district, a designated village center, a designated new town center or a designated growth center served by municipal sewer infrastructure or a community or alternative

wastewater system approved by the agency of natural resources, is not required to apply for designation of a Vermont neighborhood and all the land of the Vermont neighborhood located within the designated downtown district, designated village center, designated new town center, or designated growth center shall be deemed a Vermont neighborhood, for the purposes of this section.  For the purposes of this chapter, a Vermont neighborhood that is in compliance with this subsection shall be referred to as an “automatically designated Vermont neighborhood.” 

(b)  A municipality that does not have a designated growth center and that proposes to create a Vermont neighborhood that is not in compliance with subsection (a) of this section and is therefore not an automatically designated Vermont neighborhood may apply to the expanded downtown board for approval of one or more Vermont neighborhoods that is outside but contiguous to a designated downtown district, designated village center, or designated new town center.  The application for designation shall include a map of the boundaries of the proposed Vermont neighborhood, including the property outside but contiguous to a designated downtown district, village center, or new town center and evidence that the municipality has notified the regional planning commission and the regional development corporation of its application for this designation. 

(c)  Within 45 days of receipt of a completed application, the expanded downtown board shall designate a Vermont neighborhood if the board finds the applicant has met the requirements of subsections (b) and (d) of this section.

(d)  The applicant shall demonstrate that the proposed Vermont neighborhood is consistent with all the following:

(1)  The municipality has a duly adopted and approved plan and a planning process that is confirmed in accordance with section 4350 of this title, and has adopted zoning bylaws and subdivision regulations in accordance with section 4442 of this title.

(2)  The cumulative total of all Vermont neighborhood land outside a designated downtown district, designated village center, or designated new town center is not more than 200 percent of the total acreage of the designated downtown district, village center, or new town center.

(3)  The contiguous land of the Vermont neighborhood complements the existing designated downtown district, village center, or new town center by integrating new housing units with existing residential neighborhoods, commercial and civic services and facilities, and transportation networks, and the contiguous land, in combination with the designated downtown development district, village center, or new town center, is consistent with smart growth principles established under subdivision 2791(13) of this title.

(4)  The Vermont neighborhood will be served by municipal sewer infrastructure that meets the requirements of section 21, “purpose and policy” and subchapter 300 “towns to demonstrate that the project will serve designated growth centers and that scattered development will not occur” of the municipal pollution control priority system rules adopted by the agency of natural resources; or the neighborhood will be served by a community or alternative wastewater system approved by the agency of natural resources.

(5)  The municipal zoning bylaw applicable to land in a zoning district requires both of the following:

(A)  Minimum residential densities of all the following:

(i)  No fewer than four units of single-family, detached dwelling units per acre, exclusive of accessory apartments.

(ii)  Higher density for duplexes and multi-family housing.

(iii)  The calculation of density excluding land dedicated as open space for recreation or resource protection.

(B)  Neighborhood design standards that promote compact, pedestrian-oriented development patterns that include all the following:

(i)  Pedestrian scale and orientation of development.  Networks of sidewalks or paths, or both, are provided and connect the Vermont neighborhood with adjacent development areas, adjacent sidewalks, paths, and public streets and the designated downtown, village center, or new town center.

(ii)  Interconnected and pedestrian-friendly street networks.  Street networks are designed to safely accommodate both pedestrians and bicycles.  Streets intended for public use have sidewalks on at least one side of the street, on-street parking, and street trees, and may include traffic-calming features, and the streets, sidewalks, and paths are available to the general public.

(iii)  Multimodal transportation.  Where transit is available or planned, a transit stop is within one-quarter mile of the Vermont neighborhood.

(iv)  Layout of buildings.  Buildings are oriented to the public streets and sidewalks.

(6)  In the event the municipality has not enacted either minimum density requirements or neighborhood design standards in its zoning bylaw, the owner of the land within a proposed Vermont neighborhood, in conjunction with the municipal legislative body, may apply to the expanded downtown board for designation of a Vermont neighborhood by submitting locally permitted plans or a development agreement that incorporates the standards set out in subdivision (4) of this subsection.

(e)  Incentives for an automatically designated Vermont neighborhood or one designated pursuant to subsection (b) of this section include the following:

(1)  The agency of natural resources shall charge no more than a $50.00 fee for wastewater applications where the applicant has received an allocation for sewer capacity from an approved municipal system.  Act 250 fees for residential developments in Vermont neighborhoods shall be 50 percent of the fee normally charged.

(2)  Twenty-five percent of Act 250 fees for all proposed development in Vermont neighborhoods shall be paid upon application, and 75 percent shall be paid within 30 days of the issuance of an approved permit.

(3)  No land gains tax shall be levied on a transfer of land in Vermont neighborhoods.

* * * Act 250 Provisions * * *  

Sec. 2.  10 V.S.A. § 6086(a)(5) is amended to read:

(5)  Will not cause unreasonable congestion or unsafe conditions with respect to use of the highways, sidewalks, bikeways, waterways, railways, airports, and airways, and other means of transportation existing or proposed and considers connections to transit, bicycle, and pedestrian flow with the objective of minimizing motor vehicle use.

Sec. 3.  10 V.S.A. § 6086(a)(9)(L) is amended to read:

(L)  Rural growth areas. A permit will be granted for the development or subdivision of rural growth areas when it is demonstrated by the applicant that in addition to all other applicable criteria provision will be made in accordance with subdivisions (9)(A) "impact of growth," (G) "private utility service," (H) "costs of scattered development" and (J) "public utility services" of subsection (a) of this section for reasonable population densities, reasonable rates of growth, and the use of cluster planning and new community planning designed to economize on the cost of roads, utilities and land usage.

Smart Growth.

(i)  Inside existing settlements, downtown development districts designated in accordance with 24 V.S.A. § 2793, village centers designated in accordance with 24 V.S.A. § 2793a, new town centers designated in accordance with 24 V.S.A. § 2793b, growth centers designated in accordance with 24 V.S.A. § 2793c, and Vermont neighborhoods designated in accordance with 24 V.S.A. § 2793d, a permit shall be granted for development or subdivision if the development reinforces  the “smart growth principles” set forth in 24 V.S.A. § 2791(13).

(ii)  In rural areas outside existing settlements, downtown development districts designated in accordance with 24 V.S.A. § 2793, village centers designated in accordance with 24 V.S.A. § 2793a, new town centers designated in accordance with 24 V.S.A. § 2793b, growth centers designated in accordance with 24 V.S.A. § 2793c, and Vermont neighborhoods designated in accordance with 24 V.S.A. § 2793d, a permit shall be granted for development or subdivision if, in addition to all other applicable criteria, the development or subdivision is located and designed to:

(I)  Be consistent with Vermont’s planning and development goals set forth in 24 V.S.A. § 4302(c).

(II)  Provide for rates of growth and overall densities of development that are appreciably lower than the densities and rates of growth in existing settlements, growth centers, and new town centers within the municipality and the region.

(III)  Comply with all applicable criteria related to the protection of natural resources included in subdivisions (1)(A),(D), (E), and (F); (8)(A); and (9)(B) and (C) of this section.

(IV)  Incorporate a clustered or conservation project design that does all the following:

(aa)  Avoids strip development along public highways and scattered development outside existing settlements, designated growth centers, new town centers, and Vermont neighborhoods.  In situations in which a pattern of strip development has already been established, development should reinforce compact in-fill development that reinforces smart growth principles set forth in 24 V.S.A. § 2791(13).

(bb)  Results in a compact site development that promotes the most efficient use of land, energy, roads, utilities, and other supporting infrastructure, while maintaining open space and access to land for outdoor recreation, where feasible.

(cc)  Requires no extension of municipal water or wastewater infrastructure outside existing or planned infrastructure service areas, except as needed to address threats to public health and environmental quality.

(V)  Minimizes conflicts with agriculture, forestry, mining, quarrying, and extraction operations, and other natural resource-based land in the immediate vicinity of the development or subdivision through the use of setbacks, buffers, or other methods that separate resource-based uses from incompatible development types and densities.

Sec. 4.  10 V.S.A. § 6001(3)(B) and (C) are amended to read:  

(3)(A)  "Development" means:

* * *

(B)  Notwithstanding the provisions of subdivision (3)(A) of this section, if a project consists exclusively of any combination of mixed income housing or mixed use and is located entirely within a growth center designated pursuant to 24 V.S.A. § 2793c or within, a downtown development district designated pursuant to 24 V.S.A. § 2793, or a Vermont neighborhood designated pursuant to 24 V.S.A. § 2793d, “development" means:

(i)  Construction of mixed income housing with 200 or more housing units or a mixed use project with 200 or more housing units, in a municipality with a population of 25,000 or more.

(ii)  Construction of mixed income housing with 100 or more housing units or a mixed use project with 100 or more housing units, in a municipality with a population of 20,000 15,000 or more, but less than 25,000.

(ii)(iii)  Construction of mixed income housing with 50 or more housing units or a mixed use project with 50 or more housing units, in a municipality with a population of 10,000 7,000 or more but less than 20,000 15,000.

(iii)(iv)  Construction of mixed income housing with 30 or more housing units or a mixed use project with 30 or more housing units, in a municipality with a population of 5,000 3,000 or more and less than 10,000 7,000.

(iv)(v)  Construction of mixed income housing with 25 or more housing units or a mixed use project with 25 or more housing units, in a municipality with a population of less than 5,000 3,000.

(v)(vi)  Construction of 10 or more units of mixed income housing or a mixed use project with 10 or more housing units where the construction involves the demolition of one or more buildings that are listed on or eligible to be listed on the state or national register of historic places unless the division for historic preservation has determined the proposed demolition will have no effect, a conditional effect, or an adverse effect with mitigation and any imposed conditions are enforceable through a grant condition, deed covenant, or other legally binding document.

(C)  For the purposes of determining jurisdiction under subdivisions (3)(A) and (3)(B) of this section:

(i)  Housing units constructed by a person partially or completely outside a designated downtown development district or designated growth center shall not be counted to determine jurisdiction over housing units constructed by a person entirely within a designated downtown development district or designated growth center.

(ii)  Within any continuous period of five years, housing units constructed by a person entirely within a designated downtown district or designated growth center shall be counted together with housing units constructed by a person partially or completely outside a designated downtown development district or designated growth center to determine jurisdiction over the housing units constructed by a person partially or completely outside the designated downtown development district or designated growth center and within a five-mile radius.

(iii)  All housing units constructed by a person within a designated downtown development district or designated growth center within any continuous period of five years, commencing on or after the effective date of this subdivision, shall be counted together.

(iv)  In the case of  (i)  for a project undertaken by a railroad, no portion of a railroad line or railroad right-of-way that will not be physically altered as part of the project shall be included in computing the amount of land involved.  In the case of a project undertaken by a person to construct a rail line or rail siding to connect to a railroad's line or right-of-way, only the land used for the rail line or rail siding that will be physically altered as part of the project shall be included in computing the amount of land involved.

(v)(ii)  Notwithstanding subdivision (C)(iii) of this subdivision

(3), any affordable housing units, as defined by this section, counting housing units to determine jurisdiction, only housing units in a single project or on a single tract or multiple contiguous tracts of land shall be counted, provided that the housing units are one of the following: 

(I)  Constructed by a person within a designated downtown development district, designated growth center, or designated Vermont neighborhood.

(II)  Affordable housing units, as defined by this section, that are subject to housing subsidy covenants as defined in 27 V.S.A. § 610 that preserve their affordability for a period of 99 years or longer, and that are constructed by a person within a designated downtown development district, designated village center, or designated growth center, shall count toward the total number of housing units used to determine jurisdiction only if they were constructed within the previous 12-month period, commencing on or after the effective date of this subdivision.

Sec. 4a.  MUNICIPAL FEES

(a)  The developer of a project exempted from Act 250 review as a result of the amendments to the definition of “development” in 10  V.S.A. § 6001(3)(B) in Sec. 4 of this act establishing the Vermont neighborhoods program shall pay a municipal fee of $500.00 for each exempted housing unit.  Municipal fees shall be paid to the municipality in which the development is located at the time of the closing of the initial sale of the unit.  Municipalities shall have the authority to collect and enforce municipal fees imposed by this section in the manner authorized for the collection of municipal impact fees under chapter 131 of Title 24.

(b)  Revenues from the municipal fees imposed by this section may be used by the municipality only to improve or create public infrastructure required by the Vermont neighborhoods program; to cover expenses of the planning process relating to the Vermont neighborhoods program; or to create pedestrian and multimodal transportation infrastructure, recreation facilities, or other services deemed necessary by the municipality as a result of new housing units created under the Vermont neighborhoods program.

Sec. 4b.  10 V.S.A. § 6001(27) and (29) are amended to read:

(27)  “Mixed income housing” means a housing project in which at least 15 20 percent of the total housing units are affordable housing units.

(29)  "Affordable housing" means either of the following:

(A)  Housing that is owned by its occupants whose gross annual household income Owner-occupied housing, the purchase price of which does not exceed 80 percent of the county median income, or 80 percent of the standard metropolitan statistical area income if the municipality is located in such an area, as defined by the United States Department of Housing and Urban Development, and the total annual cost of the housing, including principal, interest, taxes, insurance, and condominium association fees, is not more than 30 percent of the gross annual household income purchase price limits established by the Vermont housing finance agency for the target population with a duration of affordability of no less than 15 years.

(B)  Housing that is rented by the occupants whose gross annual household income does not exceed 80 60 percent of the county median income, or 80 60 percent of the standard metropolitan statistical area income if the municipality is located in such an area, as defined by the United States Department of Housing and Urban Development, and the total annual cost of the housing, including rent, utilities, and condominium association fees, is not more than 30 percent of the gross annual household income, and with a duration of affordability of no less than 15 years.

Sec. 5.  10 V.S.A. § 6001(19) is amended to read:

(19)  "Subdivision" means a tract or tracts of land, owned or controlled by a person, which the person has partitioned or divided for the purpose of resale into 10 or more lots within a radius of five miles of any point on any lot, or within the jurisdictional area of the same district commission, within any continuous period of five years.  In determining the number of lots, a lot shall be counted if any portion is within five miles or within the jurisdictional area of the same district commission.  The word "subdivision" shall not include a lot or lots created for the purpose of conveyance to the state or to a qualified organization, as defined under section 6301a of this title, if the land to be transferred includes and will preserve a segment of the Long Trail.  The word "subdivision" shall not include a lot or lots created for the purpose of conveyance to the state or to a "qualified holder" of "conservation rights and interest," as those terms are defined in section 821 of this title.  "Subdivision" shall also mean a tract or tracts of land, owned or controlled by a person, which the person has partitioned or divided for the purpose of resale into six or more lots, within a continuous period of five years, in a municipality which that does not have duly adopted permanent zoning and subdivision bylaws.  For partition or division of land for the purpose of creating any combination of mixed income housing when the land is located entirely within a growth center, downtown development district, or designated Vermont neighborhood, the number of lots that fall under the definition of subdivision shall correspond to the number of housing units set forth in subdivision (3)(B) of this section.  For partition or division of land for the purpose of creating housing that is located entirely within a growth center, downtown development district, or Vermont neighborhood, provided the neighborhood has subdivision regulations, only partitions and divisions of a tract or tracts of land that are contiguous and partitioned or divided for the purpose of resale into 10 or more lots shall constitute a subdivision.

Sec. 6.  10 V.S.A. § 6083a is amended to read:

§ 6083a.  ACT 250 FEES

* * *

(d)  Fees for residential development in a Vermont neighborhood designated according to 24 V.S.A. § 2793d shall be no more than 50 percent of the fee otherwise charged, with 25 percent due with the application and 75 percent due within 30 days after an approved permit is issued. 

* * * Chapter 117 * * *

Sec. 7.  24 V.S.A. § 4471(e) is added to read:

(e)  Notwithstanding subsection (a) of this section, a determination by an appropriate municipal panel that a proposed development within a designated downtown development district, designated growth center, or Vermont neighborhood seeking conditional use approval shall not result in an undue adverse effect on the character of the area affected as provided in subdivision 4414(3)(A)(ii) of this title is not subject to appeal.

* * * Sales and Use Tax provisions * * *

Sec. 8.  32 V.S.A. § 9819(c)(2) is amended to read:

(2)  "Qualified project" means expansion or rehabilitation of contiguous real property that is or will be used at the completion of the expansion or rehabilitation as of a structure in a downtown development district or Vermont neighborhood, designated under in accordance with chapter 76A of Title 24, but only to the extent that the expansion or rehabilitation becomes an integral component of the real property and the project does not seek qualification for either tax credit authorized under subsection 5930cc(a) or (b) of this title. "Qualified project" also means new construction of contiguous real property that will be used at the completion of the construction as a structure in a downtown development district or Vermont neighborhood, designated under in accordance with chapter 76A of Title 24, but only to the extent that the new construction is compatible with the buildings that contribute to the integrity of the district or Vermont neighborhood in terms of materials, features, size, scale, and proportion, and massing of buildings.

* * * Land Gains Tax * * *

Sec. 9.  32 V.S.A. § 10002(p) is added to read:
     (p)  Also excluded from the definition of “land” is any land in a Vermont neighborhood designated in accordance with 24 V.S.A. § 2793d.

* * * Vermont Land Bank * * *

Sec. 10.  10 V.S.A. chapter 18A is added to read:

Chapter 18a.  VERMONT LAND BANK

§ 401.  DEFINITIONS

As used in this chapter:

(1)  “Acquisition of land” or “acquire land” means the acquisition of land or the acquisition of any interest or right in land in Vermont. 

(2)  “Affordable housing” means either of the following:

     (A)  Owner-occupied housing, the purchase price of which does not exceed 70 percent of the purchase price limits established by the Vermont housing finance agency for the target population, in a project in which no less than 30 percent of the units are affordable, and with a duration of affordability of no less than 15 years.

(B)  Housing that is rented by its occupants whose gross annual household income does not exceed 60 percent of the area median income as defined by the U.S. Department of Housing and Urban Development in a project in which no less than 30 percent of the units are affordable, with a duration of affordability of no less than 30 years.

(3)  “Agency” means the agency of commerce and community development.

(4)  “Fund” means the land bank revolving fund created by this chapter.

(5)  “Secretary” means the secretary of commerce and community development.

§ 402.  VERMONT LAND BANK PROGRAM; ESTABLISHMENT;  

   ACQUISITION OF LAND

(a)  The Vermont land bank program is established in and administered by the agency for the purpose of acquiring land that may be available for development of affordable housing. 

(b)  The secretary shall:

(1)  Undertake and complete an inventory of state-owned land that is unused and for which no future use is planned and shall determine whether the available land is appropriate for housing development pursuant to criteria determined by the secretary.

(2)  Design procedures to be followed by municipalities when requesting proposals from housing developers to acquire appropriate state land for construction of affordable housing consistent with the purposes of this chapter.

(3)  Determine criteria and adopt rules to effect the purposes of this chapter.  At a minimum the criteria for development of surplus land shall include the criteria for Vermont neighborhoods pursuant to 24 V.S.A. § 2793d, except that the land need not be located in a designated Vermont neighborhood.

(c)  Land eligible for the Vermont land bank program shall include:

(1)  Any state land inventoried pursuant to subdivision (b)(1) of this section.

(2)  Any private or municipally owned land made available for the purpose of developing affordable housing. 


§ 403.  VERMONT LAND BANK REVOLVING FUND

The Vermont land bank revolving fund is created as a special fund subject to the provisions of subchapter 5 of chapter 7 of Title 32 to be used to acquire land appropriate for housing development.  The fund:

(1)  Shall receive deposits of state or federal funds appropriated for the purposes of this chapter and any payments of principal and interest from persons acquiring state land for the purposes of this chapter.

(2)  Shall be administered by the secretary to purchase land consistent with the purposes of this chapter, and, notwithstanding 32 V.S.A. § 588(4)(A), the secretary may disburse monies from the fund for program purposes without an annual appropriation.

* * * VHFA Sunset Repeal * * *

Sec. 11.  10 V.S.A. § 625(1) is amended to read:

(1)  The residential housing is primarily for occupancy by persons and families of low and moderate income, or qualifies for financing with proceeds of federally tax-exempt obligations, or at least 20 percent of the units are for occupancy by persons and families of low and moderate income;

Sec. 12.  EFFECTIVE DATE

     Sec. 11 of this act shall take effect July 1, 2008.  The prospective repeal provisions of Sec. 7a of No. 189 of the 2005 Adj. Sess. (2006) shall have no force or effect.

* * * Housing Tax Credit * * *

Sec. 13. 32 V.S.A. § 5930u is amended to read:

§ 5930u.  TAX CREDIT FOR AFFORDABLE HOUSING

(a)  As used in this section:

(1)  “Affordable housing project” or “project” means a rental housing project identified in 26 U.S.C. § 42(g) or owner-occupied housing identified in 26 U.S.C. § 143(e) and (f) and eligible under the Vermont housing finance agency allocation plan criteria.

(2)  “Affordable housing tax credits” means the tax credit provided by this subchapter.

(3)  “Allocating agency” means the Vermont housing finance agency.

(4)  “Committee” means the joint committee on tax credits consisting of five members; a representative from the department of housing and community affairs, the Vermont housing and conservation board, the Vermont housing finance agency, the Vermont state housing authority, and the office of the governor.

(5)  “Credit certificate” means a certificate issued by the allocating agency to a taxpayer that specifies the amount of affordable housing tax credits that can be applied against the taxpayer’s individual or corporate income tax or franchise or insurance premium tax liability as provided in this subchapter.

(6)  “Eligible applicant” means any municipality, private sector developer, department of state government as defined in 10 V.S.A. § 6302(a), nonprofit organization qualifying under Section 501(c)(3) of the Internal Revenue Code, or cooperative housing organization, the purpose of which is the creation and retention of affordable housing for lower income Vermonters, and the bylaws that require that housing to be maintained as affordable housing for lower income Vermonters on a perpetual basis.

(7)  “Eligible cash contribution” means an amount of cash contributed to the owner, developer, or sponsor of an affordable housing project and determined by the allocating agency as eligible for affordable housing tax credits.

(8)  “Section 42 credits” means tax credit provided by 26 U.S.C. §§ 38 and 42.

(9)  “Allocation plan” means the plan recommended by the committee and approved by the Vermont housing finance agency, which sets forth the eligibility requirements and process for selection of eligible housing projects to receive affordable housing tax credits under this section.  The allocation plan shall include requirements for creation and retention of affordable housing for low income persons, and requirements to ensure that eligible housing is maintained as affordable by subsidy covenant, as defined in 27 V.S.A. § 610 on a perpetual basis, and meets all other requirements of the Vermont housing finance agency related to affordable housing.

(b)(1)  Affordable housing credit allocation.  Prior to the placement of an affordable housing project in service, the owner, or a person having the right to acquire ownership of a building, may apply to the committee for an allocation of affordable housing tax credits under this section.  The committee shall advise the allocating agency on an affordable housing tax credit application based upon published priorities and criteria.  An eligible applicant may apply to the allocating agency for an allocation of affordable housing tax credits under this section related to an affordable housing project authorized by the allocating agency under the allocation plan.  In the case of a specific affordable rental housing project, the eligible applicant must also be the owner or a person having the right to acquire ownership of the building and must apply prior to placement of the affordable housing project in service.  In the case of

owner-occupied housing units, the applicant must apply prior to purchase of the unit and must ensure that the allocated funds will be used to ensure that the housing qualifies as affordable for all future owners of the housing.  The allocating agency shall issue a letter of approval if it finds that the applicant meets the priorities, criteria, and other provisions of subdivision (2) of this subsection.  The burden of proof shall be on the applicant.

(2)  Upon receipt of a completed application, an allocation of affordable housing tax credits with respect to a project under this section shall be granted to an applicant, provided the applicant demonstrates to the satisfaction of the committee all of the following:

(A)  The owner of the project has received from the allocating agency a binding commitment for, a reservation or allocation of, an out-of-cap determination letter for, Section 42 credits, or meets the requirements of the allocation plan for development of units to be owner-occupied;

(B)  The project has received community support.

(c)  Amount of credit.  A taxpayer who makes an eligible cash contribution shall be entitled to claim against the taxpayer’s individual income, corporate, franchise, or insurance premium tax liability a credit in an amount specified on the taxpayer’s credit certificate.  The first-year allocation of a credit amount to a taxpayer shall also be deemed an allocation of the same amount in each of the following four years.

* * *

(e)  Claim for credit.  A taxpayer claiming affordable housing tax credits shall submit with each return on which such credit is claimed a copy of the allocating agency’s credit allocation to the affordable housing project and the taxpayer’s credit certificate.  Any unused affordable housing tax credit may be carried forward to reduce the taxpayer’s tax liability for no more than 14 succeeding tax years, following the first year the affordable housing tax credit is allowed.

(f)  [Deleted.]

(g)  In any fiscal year, the allocating agency may award up to $400,000.00 in total first-year credit allocations to all applicants under this subchapter for rental housing projects; and may award up to $100,000.00 per year for owner‑occupied unit applicants.  In any fiscal year, total first-year allocations plus succeeding-year deemed allocations shall not exceed $2,000,000.00 $2,500.000.00.

* * * Property Transfer Tax * * *

Sec. 14.  32 V.S.A. § 9602 is amended to read:

§ 9602.  TAX ON TRANSFER OF TITLE TO PROPERTY

A tax is hereby imposed upon the transfer by deed of title to property located in this state.  The amount of the tax equals one and one quarter

one-quarter percent of the value of the property transferred, or $1.00, whichever is greater, except as follows:

(1)  with respect to the transfer of property to be used for the principal residence of the transferee:  the tax shall be imposed at the rate of five-tenths of one percent of the first $100,000.00 $115,000.00 in value of the property transferred and at the rate of one and one quarter one-quarter percent of the value of the property transferred in excess of $100,000.00 $115,000.00; and no tax shall be imposed on the first $115,000.00 in value of the property transferred if the purchaser obtains a purchase money mortgage funded in part with a homeland grant through the Vermont housing and conservation trust fund or which the Vermont housing and finance agency or U.S. Department of Agriculture and Rural Development has committed to make or purchase.

(2)  with respect to the transfer of property which is enrolled at the time of the transfer in a program under chapter 124 of this title, or is otherwise a working farm at the time of the transfer if not so enrolled, the tax shall be imposed in the amount of five-tenths of one percent on the entire value of the property transferred; provided, however that no part of the property is converted to a use which would subject it to the land use change tax or an obligation to repay property tax benefits under chapter 124 of this title for a period of three years following the date of the transfer, or if it is a working farm which is not enrolled under chapter 124, that the property is not taken out of agricultural production for a period of six years following the date of the transfer.  For the purposes of this subdivision, a working farm shall mean a parcel of land actively used by a farmer, as that term is defined under section subdivision 3752(7) of this title.  If the conditions of this subdivision are breached by the buyer, the buyer shall be obligated to pay the full transfer tax in the amount of one and one-quarter percent and this obligation shall run with the land.

(3)  with respect to the transfer to a housing cooperative organized under chapter 7 and whose sole purpose is to provide principal residences for all of its members or shareholders, or to an affordable housing cooperative under chapter 14 of Title 11, of property to be used as the principal residence of a member or shareholder, the tax shall be imposed in the amount of five-tenths of one percent of the first $100,000.00 $115,000.00 in value of the residence transferred and at the rate of one and one-quarter percent of the value of the residence transferred in excess of $100,000.00 $115,000.00; provided that the homesite leased by the cooperative is used exclusively as the principal residence of a member or shareholder.  If the transferee ceases to be an eligible cooperative at any time during the six years following the date of transfer, the transferee shall then become obligated to pay any reduction in property transfer tax provided under this subdivison subdivision, and the obligation to pay the additional tax shall also run with the land.

Sec 15.  EFFECTIVE DATES

(a)  Sec. 13 of this act shall apply to fiscal years 2009 and after.

(b)  Sec. 14 of this act shall apply to transfers on or after July 1, 2008.


* * * Preservation of Affordable Housing * * *

Sec. 16.  20 V.S.A. Part 7A, chapter 181 is added to read:

Chapter 181.  RENtal Housing Safety and Habitability

§ 3201.  LEGISLATIVE PURPOSE AND INTENT

It is the intent of the general assembly to provide for rental housing safety and habitability and to establish a statewide rental housing inspection program and registry to achieve the following goals:

(1)  Promote the health and safety of the citizens of Vermont;

(2)  Facilitate compliance with existing health and safety standards;

(3)  Provide support to municipal health officers;

(4)  Create a resource for tenants and landlords;

(5)  Enable communities to focus on problem properties;

(6)  Encourage a private sector response to a public health and safety need;

(7)  Reduce fire fatalities.

§ 3202.  SAFE RENTAL HOUSING TASK FORCE

(a)  A safe rental housing task force is created to consist of the following 12 members:

(1)  The director of the division of fire safety or designee;

(2)  The commissioner of the department of health or designee;

(3)  The commissioner of the department of housing and community affairs or designee;

(4)  The attorney general or designee;

(5)  The executive director of the Vermont housing finance agency or designee.

(6)  A representative of commercial landlords.

(7)  A representative of nonprofit landlords.

(8)  A tenant representative.

(9)  A municipal inspection program representative.

(10)  A town health officer from a municipality without an exempt program.

(11)  A regional revolving loan fund representative.

(12)  An architect.

(b)  The speaker of the house and the senate president pro tempore shall appoint members of the task force that are not ex-officio and shall designate a chair.

(c)  The task force shall, before January 15, 2009:

(1)  Identify information to be gathered for the rental housing registry, develop a questionnaire for rental unit sites and coordinate with existing data collected by the department of health, the department of taxes, the department of housing and community affairs, and the department of public service.

(2)  Develop a simplified rental housing code, to include lead safety, habitability, and basic life safety standards.

(3)  Establish a priority for inspections based on factors including:  the age of the rental unit, a score of the rental units’ self-assessment, and complaints from rental units at the address.

(4)  Develop procedures for scheduled, complaint-based, emergency and time-of-sale inspections, including a time frame and a priority for scheduled inspections.

(5)  Develop standards for licensed rental housing inspectors, including:

(A)  Training standards;

(B)  A code of professional ethics.

(C)  Curriculum outlines and a delivery mechanism.

(6)  Recommend a fee structure necessary and appropriate to implement the inspection program and registry.

(7)  Establish a procedure for issuing a certificate of habitability.

(8)  Develop procedures to assure enforcement and compliance.

(9)  Make recommendations regarding the role of town health officers in regard to safe rental housing in municipalities without an exempt program.

(10)  Develop training and education resources for landlords and tenants, including all the following:

(A)  A rental housing code self-assessment checklist.

(B)  A one‑stop shopping resource for rental unit owners and managers that provides:

(i)  Lead safety, minimum housing habitability, and basic life safety standards available from one site.

(ii)  Coordinated training across disciplines for owners and managers of rental housing units.

(11)  Recommend incentives and develop a process for nonexempt municipalities to establish an inspection program.

(12)  Establish an implementation schedule, to begin July 1, 2009, to include all the following:

(A)  Training of inspectors and certification by the department of public safety.

(B)  Collection of rental housing information for the registry.

(C)  Collection of fees.

(D)  Commencement of inspections beginning January 1, 2010.

(13)  Recommend staffing levels necessary to establish and maintain the program and provide for enforcement.

(14)  Recommend an appropriation sufficient to fund the certification program, licensing, complaint-driven inspections, enforcement, and the registry.

(15)  Develop a system for coordinating appropriate displacement services.

(16)  Develop a program and identify resources for repair and improvement.

(d)  The task force shall submit a written report on its progress on or before January 15 of each year to the house committee on general, housing and military affairs and the senate committee on economic development, housing and general affairs.

§ 3203.  RENTAL HOUSING SAFETY AND HABITABILITY FUND;

              ESTABLISHED

(a)  A rental housing safety and habitability fund is established in the state treasury for the purpose of creating a statewide rental housing inspection program to be administered by the department of public safety for the purposes of collecting and maintaining data about rental housing units in Vermont and providing education, training, and support to landlords and tenants to assure that the safety and habitability of rental housing are maintained for the benefit of owners, tenants, and communities.  The fund shall provide financing for scheduled, complaint-based, and emergency inspections of rental housing units, the enforcement of orders issued in conjunction with inspections, and enhancing communications among owners, tenants, and compliance personnel.

(b)  Proceeds from fees, grants, donations, contributions, and other sources of revenue that may be provided by statute or by rule may be deposited in the fund.  Interest earned on the fund and any balances remaining at the end of a fiscal year shall be retained in the fund.

§ 3204.  RENTAL HOUSING REGISTRY

The department of public safety in association with the Vermont housing finance agency, the department of health, and the department of housing and community affairs shall manage a database set up by a private contractor to include all rental housing, including rented single-family homes and rental units in owner-occupied multi-family buildings of two or more rental units and excluding vacation homes.

§ 3205.  RENTAL HOUSING SAFETY INSPECTOR LICENSING

               PROGRAM

The department of public safety shall establish and manage a licensing program for rental housing safety inspectors beginning July 1, 2009.

§ 3206.  RENTAL HOUSING HEALTH AND SAFETY STANDARDS

The department of public safety shall adopt minimum standards that apply to existing rental housing.  The standards shall include life safety, electrical, plumbing, and boiler codes, the rental housing health code, and lead paint requirements.


§ 3207.  RENTAL HOUSING SAFETY INSPECTION PROGRAM

The department of public safety shall establish a cyclical and point-of-sale rental housing safety inspection program beginning January 1, 2010.

(1)  Regular inspections shall be carried out by a licensed rental housing safety inspector under contract with the unit owner to assure units meet the rental housing health and safety standards.

(2)  Complaint-driven inspections shall be carried out by a licensed rental housing safety inspector under contract with the state or the municipality.

§ 3208.  RULES

The department of public safety shall adopt rules to implement the recommendations of the safe rental housing task force to carry out the purposes of this chapter.  The department shall propose such rules no later than January 15, 2009.

§ 3209.  EXEMPTIONS

Rental housing units subject to the jurisdiction of municipal housing programs organized pursuant to 24 V.S.A. chapter 123 are exempt from the provisions of this chapter.  This chapter shall not be interpreted to limit or decrease the authority of the exempt municipal housing program in regard to building, housing, and fire safety codes.  A municipal program may lose this exemption if the commissioner of public safety determines that any of the following is true:

(1)  The habitability and enforcement criteria, including standards for issuing certificates of habitability, are less stringent than those of the state program.

(2)  Regularly scheduled inspections of the municipal program are less frequent than those of the state program.

(3)  The municipal program permits rental of units that lack a current certificate of habitability.

(4)  Any other aspect of the municipal program is less stringent than the state program.

Sec. 17.  APPROPRIATION

In fiscal year 2009, there is appropriated from the general fund to the department of public safety the amount of $30,000.00 to be used by the department for the purpose of retaining a consultant to assist the safe rental housing task force in carrying out its duties under chapter 181 of Title 20.



Published by:

The Vermont General Assembly
115 State Street
Montpelier, Vermont


www.leg.state.vt.us