 apologize for the late start, but this is the time of year where attorneys are in short supply. And it's gone between two areas at once. And so David, you're with us. And I've also got Ellen down. So I don't know what part of this bill you did, how it's divided up. But if you can walk us through part of it, then we can go on to the other testimony we're assuming that Ellen is probably on the house floor because they're taking up pretty heavy duty agenda this afternoon. So before yours, David. Hi, David Hall Legislative Council. I had sent to Faith a summary table for this bill that we could work from if you would prefer. It's up to you. Okay, that might be helpful. We just got copies. Faith, I don't think the summary table made its way here. David, I don't have the summary table. I apologize. Do you like to share your screen and I will get it posted while you do that? I can do that. I will email it to the committee as well. I just emailed it and I'm happy to share my screen. Okay, so here's that. Okay, and we can make it just somewhat bigger. Well, so Ellen is on the house floor and the first six sections are hers, but I'm not sure that they are too much of a worry for you as far as finance specific issues. They all relate to changes in title 24 and 10. Basically, there are land use provisions concerning zoning in Act 250. You're going to have to, you can read the summary if you want to know in a nutshell what's going on here. But for more details, you're going to have to turn to her. I'm afraid. So there's that. Section seven, first generation home buyers, I'll just tell you, you're probably aware that the down payment assistance program is a thing that exists within VHFA. They are allowed a certain amount of tax credit allocations every year to sell into the market to raise the pool of funds. And then there's a program through which they can extend loans for down payment assistance and closing costs. And those loans are repayable upon sale or transfer of the property. What this addition in section seven does is it's a very short addition, but it says that VHFA has the authority to make some of its financial assistance in the form of grants to first time home buyers who are also first generation home buyers. So it does not change the financial implications of the program to the extent that it increases the amount of the program. It just, it does though change the form of the assistance. And again, it would allow grants in some cases instead of loans for, which means that obviously any money that's granted out would not revolve in the same way that a loan would. So there's the financial implication there. Okay. I want to define first generation. It is not defined in the bill and presumably it would be up to VHFA to, you know, put the final shape on it. But I think the intention has always been that it is the first person in your family to own a home. So my great-grandfather owned a farm. It went belly up and we haven't owned any for three years. I think you're three generations. I think we might need to tighten that up a little better. We'll talk tomorrow. Okay. Let's see. Other questions. We keep going. All right. Section eight, the manufactured home relocation incentive program is an ARPA appropriation for grants for various purposes for manufactured homes. You'll see in the summary here, there's a pie for small scale capital grants. There's a small for home pool for home repair grants and a pool for foundation grants. But those are ARPA appropriations. Okay. Section nine, the affordable housing tax credit for many in manufactured housing. This okay. So this does increase the annual allocation of the affordable housing tax credit from 425,000 annually to 675,000. And then it specifies that $250,000 of those monies shall be used for manufactured housing purchase and replacement. Is this the section that was in 437? Yes, and that's 101 as well. Okay. What's 250,000 shall be used for manufactured housing purchase and replacement. So I remember those cost about 50 grants in five, five, and one more home. One, let's go. There's a multiple fire tax. This is the family property that we actually have. We put $25,000 in for here. It keeps replicating from five years forward to ultimately there's an increase of 1.25 million over that period. I think we were talking about a last recent like, homes or homes over the period. Okay. There's a lot more money from mobile homes above that. Yeah, I was just looking at the actual bills. All right. Section 10, I think we can go on to. Sure. So section 10 is really an authorization to VHCB to devote up to 5 million of its funding for three different purposes. One is the commercial property conversion. Another is matching grants for large employer housing. And the third is part of a multi-agency neighborhood development plan, which there's other details there, but basically for coordinating and funding neighborhood developments among multiple with participation by municipalities and multiple agencies and departments within the state government. Okay. So so far, all I've seen in our jurisdiction is that tax credit. The two of them, I guess, I mean, section seven and section nine. Nine is a tax credit. Okay. That's right. That was a tax credit when we did it. All right. Section 11 through 13 are not tax credits. They are. This relates to the municipal bylaw modernization grant program. And it's both an appropriation and a statutory set of changes to authorize how those grants are used. Any questions on that one? No. Okay. Well, sections 14 through 20 are all tax credits. And I got to tell you that out of here today. So I got to keep score because this is money. We're not, this is money that's going to come out of available revenues. And I hear the budgets are already under water. So wait, can I ask, I'm sorry. Yeah, like David, sorry. Did you do section 11 yet? Yes. You said they're their grants, but they are from revenue from the property transfer tax, right? Looks like Ellen's here and just in time because these are all her sections. Oh, these are all her sections. Okay. Okay. Why don't we let Michael finish up his and then we'll go back with it. David, I'm ready and done. Okay. So we're doing tax credits. So far, allows Michael, we've done 200,000 in the first instance, right? You increase it from 425 to 675. 250. Right. Okay. Section seven is not a financial impact one way or another, except on you're looking to keep track. The first one just does not affect the revenues of the state. It does down the road potentially impact how much is left over in the world. Okay. That's out of the revolving waterfront. All right. Let's go back down to the next bunch of sections that do tax credits. Okay. We're back up at 11. Can we go to 14? Yeah. All right. We're 14. That's it. Five million. I'm sure I'm trying to follow along with the sections. So we're in section 14 now, you'd like us to talk about? 11, he said it was Ellen. So I wanted to go through David's and then we'll go to Ellen because he's just arrived. Well, so if you just want to stick with me and let me finish my part, then you're actually going to jump down to section 24. That's what I thought. All right. So section 24, not a tax credit. This is $15 million in appropriations and it's a subsidy program through VHFA to provide funding to develop quote unquote missing middle housing. And I mean, there's a lot of detail, but that's the thrust of that one. Sections 25 through 30 should look familiar. It creates a registration in the certification framework and OPR for residential construction contractors. And I suppose there is still a nexus to finance. There are of course registration fees as there were in the bill in which this first appeared. Any questions on 25 through 30? Hold on. I'm still trying to get there. This is confusing. So 24, that's an appropriation of $15 million to VHFA. Right? Yes. All right. And we create a program that would be subsidies for new middle income, affordable housing. That's Mark. So section 25 looks like it's just findings. 25 is, and then 26 through 30 implement the residential contractors program and OPR. Is this exactly the same as what we passed earlier? It is not exactly the same because the dollar thresholds for registration and for the written contract requirement have increased to $5,000. What were they originally? $3,500. Well, I mean, originally, the bill that you passed, there were $3,500. Okay. And that's the bill that got veto, right? Okay. So we raise the threshold and we put that back in here. And there is a fee. What's the fee? It's the insurance requirement. Yeah, but there is in terms of already page 40 there's fees of $7,500, $200. Okay. All right. Let's, so we've got fees on page 40. Okay. All right. So basically the changes in 31 and 32 are contingent changes to S210 as you have passed it and specifically within the Vermont Rental Housing Investment Program. And what these two sections here would do would be to allow that the creation of ADUs within that program, if it becomes law, would be able to avail themselves of grants up to $50,000 for the conversion or creation of ADUs. And then the other part of the section 32 says that of the amounts that are appropriated to that program in S210, DHCD would use up to 20% of that funding to assist homeowners in the creation of ADUs. And this is those ancillary units we used to call mother-in-law apartments. Exactly. Okay. Accessory dwelling unit. So this would let me add a wing on the back of my house to rent out to the public. Is that what we're thinking now? Not my mother-in-law? Well, the only way that they're restricted here is that they cannot be used for short-term rentals. Yeah. But they're already allowed in law and it started out like a long history with this where it was just your relatives. But that changed over time. That's what I thought. So we're not changing the law in that respect at all. And there wasn't talk about whether we would continue to require that the people developing these ADUs be owner-occupied or not. And that was pretty controversial and just left the law as it is. So it still has to be owner-occupied to qualify for this program or to build one. Okay. So to get the loan, they have to be not doing short-term rentals. Not to go to permanent also. Existing will, you have to be owner-occupied. Existing will. To do an Airbnb? No. Accessory dwelling unit. Or you could do that as an Airbnb. But if you want the grant. There's nothing that prevents me from, if I'm allowed to build an ADU, I could put it on Airbnb. Right on the present law, you could. Yeah. This doesn't change that. Except what this does, if you take state money, you can't. And this talks about 25% of the 20 grand, 20 million goes to ADUs. What happens with the other 50 million? That's the VGA program, which is conversion of some standard housing to regular units. Okay. And ADU, people say stuff like, oh, I built an apartment or a garage or, but can it be a brand new and entirely separate new structure on your property? I think it can, but it has size restrictions. It has to be like no more than 500 square feet. Okay. But it does have to meet levels of incentive. Okay. Okay. So, all right. So we on, we've done 32, right? Which is where the rest of the money is going. All right. The section 32 is, so section 30, where's the 25%? It's at 20% or, there's something that says 25%. It goes to assist home owners. 25% for ADUs and then 20% of the 25% for. I'm trying to find 25% of this truck, does it say it anywhere there? Yeah. Not on that term, but it says that in the language. Okay. Yeah. So there's $20 million, 25% is $5 million goes to ADUs, which a part of this program where we're just saying, give them that car amount. And then 25, 20% of the $5 million, $1 million goes for other assistance that is not financial assistance. It's very important to us in terms of constructing these ADUs. And we have a lot of hand holding. As you can find this navigator that can help you through the process, the part of the process, the finance, all this stuff. So a million dollars for regional people to help average citizens build an ADU. That seems like a lot of money, a million bucks. It's important to get people. Okay. Who are the regional people? I think that's it. You can ask Chris Cochrane, I think we'd like that to be determined. Okay. So David, that gets us to the end, or do you just need to flip down your screen some more? Oh, that's it for me. And that's the end of the bill. And then that puts you back in Ellen Land. And Ellen Land. Okay. So Ellen, walk us through your sections. Sure. Do you want me to put the chart back up on the screen? Yes. Okay. So Ellen, check out the Office of Legislative Council. I handle Act 250 and municipal zoning, as I think you all are aware. So the sections in this bill that relate to that are what I have drafted. So let me zoom in for you here. So the first sections one through six, these are pieces of language that relate to amendments to municipal zoning, as well as Act 250. You heard about some of them yesterday in S-234. None of them have direct money impacts. So I don't know. Did you want to hear the overview of them or just go to the money sections? I would love to have an overview just so I know what's in the bill. Sure. So this first page of the summary chart is what I walked you through yesterday in S-234, the Act 250 bill. So section one is a finding section related to housing. Section two amends 2793E, entitled 24, which is the statute that sets the requirements for designated neighborhood development areas. It changes some of the requirements for a town to achieve a NDA designation. It allows for towns to file joint applications for NDAs. It includes flood hazard areas in NDAs. That is a change if they are suitable for infill development as defined in ANR's rules. If they do have flood hazard areas, the local bylaws have to adopt flood hazard area bylaws consistent with ANR's model bylaws for flood hazard area protection. It also strikes the requirement that an NDA have a municipal wastewater sewer infrastructure. I don't want to ask a question, sorry. Yes. I think you touched on this yesterday, but I still just cannot wrap my head around this. Why are we authorizing the building of housing and flood hazard areas? Aren't they trying to move houses away from flood areas? So I would just say that this bill is not authorizing the construction of housing and flood hazard areas. That is something that is already allowed in statute as long as a builder gets the proper permits and meets ANR's existing standards related to that. They can already do that. What's happening in this bill is that they're being added to areas in the neighborhood development area, which means that they will be areas that are now eligible for incentives. There are a number of incentives available to NDAs and a few of them are actually amended and expanded in this bill. So if anything, it would be incentivizing construction within the flood hazard areas, but it's not such a significant change that it's allowing something that wasn't already allowed. It's extending incentives to these areas now. Okay. So it's incentivizing building houses and flood areas. That just seems crazy to me. It's totally counterintuitive. So what's going on? It's in your bill too. It's because it's not just any flooding. It's flood hazard protected and driven by codes that make sure that there is not added flooding as a result. And some of the incentives is to improve those areas in terms of flood protection. ANR has new codes related new laws, rules around construction, flood lanes, flood lanes. And so it includes things like pardoning the structures. And they do a whole geofluvial analysis to make sure they're not accelerating rivers by eliminating filling in spaces. And then there's also going to go to pardoning existing structures to make them more built in that same space. So it does sound pretty specific counterintuitive. But based on their new rules, they actually are quite confident that they're not doing anything worse than it would have any adverse impacts when a flood does occur. And that the buildings constructed will be constructed in such a way as to move much more flood-free. It's so skeptical. I mean, is there money in the bill to move housing out of flood plains? Because I know for example in Huntington, they're looking for money to help move houses out. Can we find this for discussion? Sure. Sure. Back to this. Absolutely. Right. So still within the NDA requirement statute, it's striking the requirement that NDAs have either municipal sewer or an approved alternative wastewater system. It then also amends the required densities required for an NDA to be four residential units of any kind. Section three uses that nearly identical language in the new town center designation program, clarifying that new town centers must have a density of at least four residential units within any of its zoning districts. Section four states that site plan permits or conditional use permits shall not expire in less than two years. So that's creating just that currently there's no deadline. So towns have a variety of lengths of time that they use. Sections five is an Act 250 amendment. As I mentioned yesterday, currently priority housing projects are exempt from Act 250. There are a number of criteria that need to be met in order for a project to be a priority housing project. Currently in the smallest towns, only up to 25 units of housing are exempt from Act 250. This is raising that cap to 50 units. So with in towns with 6,000 people or less up to 50 units of housing, priority housing projects can be exempt from Act 250. It also has a technical correction to fix the definition of mixed income housing to match the definition that VHFA uses. In addition, it expands the definition of priority housing projects so that priority housing projects in neighborhood development areas can now include mixed use projects instead of just only housing projects. And then section six amend the exemption section of Act 250 related to priority housing projects and just clarify is that no or changes that no permit or permit amendment is required for a priority housing project. In recent years we've looked at this similar language and I think we I think I was part of a crew that successfully in one case anyway had an amendment to make it clear that these buildings is housing units that are exempt from Act 250 now, newly exempted, would still have to have the stretch codes. So tight buildings, that code applied. Is that in here? Yes, that hasn't been changed. Because we've applied it somewhere else? Yes. Okay, thank you. Yeah, so we're this bill really just expands the definition of priority housing project. It doesn't restrict it in a way like that. Thank you. All right, so that's the end of the municipal zoning and Act 250 changes. Sections 11 through 13 then create this new or create the municipal bylaw modernization grant program. So this is a new grant program. It builds on an existing program that's in statute in 24 VSA 4306. That statute establishes the municipal and regional planning fund, which is a pot of money that exists for regional planning and municipal planning. Those funds come from the property transfer tax. And it's pretty broad currently what those grants can be used for just as long as they're for planning. So section 12 adds a new type of grant that is part of the municipal planning grant fund now. And it's for bylaw modernization. And there is language in section 12 that spells out exactly what is meant by bylaw modernization. It's largely to increase density and housing opportunity and affordability and choice in areas of towns. So towns will apply for a grant to update their bylaws to do these things to increase density and housing choices. And so there's language around that. And there is an appropriation for $650,000 to the municipal bylaw grant program. But I think I think this might technically be in your jurisdiction because this is an existing grant program. And it's adding a new type of grant. And this grant program is funded by the property transfer tax. No questions on that? Not seeing any. Okay. So then the other big section of this bill that is related to your area are the tax credits, the downtown and village center tax credit program. So this bill makes a few different changes to that program. First, as you probably remember, the downtown tax credit program has a cap on the number on the amount of tax credits that can be awarded yearly. That cap is currently $3 million. I believe you raised it to $3 million last year. This bill proposes to raise it to $5 million. And of that $5 million, up to $1 million of tax credits can be used for projects in neighborhood development areas. So that's one of the other changes. Currently, the tax credits are only available for buildings in downtowns or village centers. And this is adding neighborhood development areas as another area that can receive tax credits. In addition, it also adds a new type of tax credit called a flood mitigation tax credit. So currently under the program, there are three existing types of tax credits for different types of projects. They're for code improvement, facade improvement, or for building rehabilitation. So this is adding another type of project eligible for tax credits, and that's for flood mitigation projects. Okay, where is that? Well, here is a qualified flood mitigation. So that's on age 23, but that's not... I've not done that. You have seen this language before. It was in S-101 last year, and that's the bill that was passed last biennium by the Senate, but never made it fully across the finish line. You did work on this last year. I thought that sounded familiar. Okay, so so far, we're upping two million dollars in the downtown tax credits and then saying that they can be up to a million to go into neighborhood development areas. And we're doing the same that you can also use this money for flood mitigation. I think, as it said, a hearty. Thank you, Madam Chair. I just can't get over this flood thing. So this paragraph six on page 23, that the qualified flood mitigation project, these are two existing buildings. Yeah, or you're not allowing to use these tax credits to build new buildings, right? Correct. And they're for older buildings. They have to be at least 30 years old. Okay, that sounds familiar. Okay. All right. I just don't feel like I don't want to double and triple down on floodplains. All right, so Senator Hardy, I do think it's fair to point out here in relation to your first question. So NDAs are being added to this tax credit program. In the first few sections of the bill, NDAs were being expanded to now include flood hazard areas. So now those areas are eligible for this incentive if you were to pass these tax credit sections. And those areas would be eligible for the priority housing project exemption that I mentioned in the Act 250 sections as well. But in that section, that's actually building new housing in Florida. Chris is just fixing buildings that already exist there. Correct. Right. Okay. So that's the difference. I mean, putting new things in floodplains makes me nervous. But okay, let's no question so far. Let's move on. All right. So my set, I'm almost done with my sections. So then sections 21 and 22 should also sound familiar to you because they were, I think, multiple prior bills. This section 21 would add an exemption from ANR's wastewater connection permit if the municipality issues a wastewater connection permit. And so then section 22 goes on to add some specific requirements on that to make sure that the munis to put some requirements on what the municipality must do first. So if the municipality meets those requirements, projects in that town are exempt from meeting an ANR wastewater connection permit. Okay. So we've done that before. I've been trying to do that for almost 25 years. Yeah. It was on the same bill last year as the, I guess, that's 101. Do you think that the veto last year or did it have to be made? We don't buy the house. Yes. Yeah. That was in one of your bills, right? Yes. Yeah, that's my thought. Okay. That's fine. Was this the one that bounced around in an act of 50 and ended up in here? This language has been around in a few different bills. I know I've seen it before. All right. Okay. And then finally, section 23 is related to accessory dwelling units. This is amending language entitled 24 to prevent towns from requiring more than one parking space per bedroom for an accessory dwelling unit. As you talked about before, towns currently are not allowed to prohibit accessory dwelling units. However, they can put in their bylaws that there's a certain number of parking spaces required for an accessory dwelling unit. So this is putting a limitation on that. I'm not required. Oh, all right. Okay. Not our jurisdiction parking zoning. Okay. So far, what I've got is the outing of the $2 million increase in the tax credits in section 14. How did, do we have any witnesses that will tell us how, when we doubled it just a moment ago, it went well and now we need to set it again. Well, we doubled it a few years ago and now we're last year, last year, the Senate opted to $470,000. That $470,000 which the governor this year requested $500,000 and we went along with that. But a few years ago it was 1.5 and we did it three years ago. Are you asking about the downtown tax credits? I think so. Okay. Yeah. If you give me, well, I have that in my file somewhere. I don't know if Patrick has it closer, but I do have it in my file if you'll give me a minute. It's okay, Ellen. I'm looking for people to tell us why we need to kind of continue the intention, not the history. And remember, this is revenue we are not collecting and it is essentially bank revenue with few insurance companies. It's not tax exemptions for downtown business. So, well, banks buy the credits and then they can't, but the practical impact. It is a revenue loss because the banks without the credits would have paid the revenue to the state. Well, the product probably wouldn't happen. That's also a testimony. I'm not arguing that. Okay. I'm just saying that the people across the hall. No, it is definitely revenue losses. Yes, they are. Getting a little panicked this year on both sides of the body. Sandra Siracan. I just want to suggest and answer a bunch of questions that might be good to have. Chris Copper. I'm just where I'm going to go next. Okay. So, I have, oh, Chris, I've got you here. Do you have a time crunch? Can I go to the other witnesses and are you still available? I'm all yours, Madam Chair. Okay, then we're going to go on to Chris Corcoran and Caitlin Corkins. Ellen was trying to say something about Ellen. I have, I do have the numbers of how, so of the tax increase over the last 16 years, if that's information you want. But I don't, I don't know. I didn't, I wasn't sure if that was, I have the numbers in front of me now if you would like them. Sure, that would help. Sure. So when the downtown tax credit program was created in 2006, it was set out $1.5 million. In 2007, it went up to $1.6 million. In 2009, it went up to $1.7 million. In 2014, so then there was a five-year gap, it went up to $2.2 million. So it went up half a million dollars. In 2017, it was raised to $2.4 million. In 2019, it was raised to $2.6 million. And then in 2020, it was raised to $3 million. Okay. In the last five years, it's doubled. Okay. Are those cumulative or annual amounts? Annual. Annual. So $5 million annually is what this would do. Okay. Yeah. Yeah, that's a big chunk. It's a big chunk. So this would be the largest increase that has happened. It's been smaller increases in previous years. Okay. So Chris and Caitlin and I'm assuming you have a presentation together. Yeah. Okay. Laura's yours. Thank you very much, Madam Chair. Chris Cochran and Caitlin Corkins here from the Agency of Commerce and Community Development. We had a larger slide presentation. We're going to just try to truncate it so we can catch up on time. This is a graph of revenues from income taxes. I'm not sorry, not income taxes, sales taxes. Sales and units. Yes. And a lot of this, the big chunk of this is from online sales. It's terrific that you guys may change this several years ago to ensure that we collect sales taxes on online purchases. But many of these online purchases are coming at the expense of our downtowns. And I guess that's the point. Okay. Chris, we're going to have trouble hearing you. Hearing me. All right. I will speak up later. A little bumpy, so maybe you could get closer to the mic. Okay. I think I'm just going to stand up. How about that? Is that any better? Yeah. Okay. So these taxes have gone up a good bit during the pandemic. But our downtowns and billet centers, if you know, have suffered because they've lost a lot of retail sales. A lot of our restaurants are struggling because of this. And I put the slide up here just to make the point, you know, our communities are suffering. And it would be terrific if we could use some of this surge to reinvest in our communities and help them bounce back from the pandemic. I'm going to switch quickly over to Caitlin Corkins, who's going to... Oh, I'm sorry. Here's the next slide. This is our different types of designation. And I think this gets to Senator Pearson's question about why the increases are occurring. We have several different designations. Currently, right now, the village centers and downtowns are the only ones that are eligible for the downtown and village center tax credits. Makes sense. We have increased significantly the number of village centers. Every year, it's about 20 to 25 more village centers have become designated. This is a good thing because we want to help these communities. We want this program to help all over Vermont. But it does increase demand on the program because they have buildings that need to be improved. We have other designations that do other things. Newtown centers are helping communities without a center. And what this proposal is doing this year is, since we have such a terrific need for housing, especially in our complex centers where people want to live, it's proposing to expand the benefit area to the neighborhood development areas. And these are the areas around downtowns and village centers. When we designate a downtown or village center, we just designate the very small little core of the business district. The benefits don't accrue to the housing. But we have significant housing needs in and around those centers. And housing quality is a real challenge in many of our communities. I'm going to hand this over to Caitlin. And she's just going to kind of walk you through the downtown and village center tax credit program. And then I'm going to make a brief presentation on kind of the changes that we're proposing. I'd be happy to answer questions after that. Thank you. Thanks, Chris. Can everyone hear me okay? Yes. Great. Hi, everyone. I'm Caitlin Corkins, tax credit and grants coordinator for the Department of Housing and Community Development. And really appreciate the opportunity to be here today with you folks. So as Chris mentioned, I'm just going to go quickly through sort of the basic high level overview of the program as it exists today. It's now over 20 years old. As you just heard from Alan, the program has been expanding. I think when it was very the very first year that it was initiated, we had about 300,000 in funding annually. And today's cap is up to 3 million. This slide here shows a sort of snapshot of the past five years. You can see that we've funded projects to 128 projects in 62 different designated communities. Because this program is accessible. It's a state program. It's easy to use. It's often some of the first funding that goes into large and complex development projects in our communities, such as the new happening project in St. John's Bay that you can see on the slide here. So the current program has three different types of credits that we offer. And this was sort of outlined earlier by Alan. This slide just goes through those very quickly. We have a 10% credit for rehabilitation of historic buildings. This is tied to a similar federal program. And so to qualify for this tier of credits through the state program, an applicant has to also have applied to the federal program and have an approved application. For smaller scale projects, we also offer a 25% facade credit. And then we also have code credits at 50%. These are definitely the most popular credits that we offer through the program to help bring our older building stock up to current codes. This can include large investments, things like elevators and sprinkler systems, but also small things, just upgrades to electrical systems or a fire alarm, providing new means of egress or making accessibility upgrades, that kind of thing. We try to collect data as much as we can to understand the program's impacts by surveying the participants of the program. And on this slide, I have some of those numbers that we've collected in the past five years, again, self-reported from users of the program. You can see jobs created, businesses created, businesses expanded. Overall, we've received really positive feedback on this program. People appreciate that the tax credits are easy to apply for, that we keep the paperwork to a minimum. And so it's accessible even for folks that don't regularly apply for grants or public funding. I wanted to highlight just a few different projects that we funded recently to give you sort of an idea of some trends that we see for types of projects that are being funded through the program. The first is this redevelopment of a large office block in Burlington, which was converted into housing. As I mentioned, we see this as a real trend in many of our downtowns. In a post-COVID world, how do we continue to transform our downtowns and keep them vital? We know that downtowns are hurting. Chris alluded to that from online retail and loss of foot traffic, as many people are now teleworking. At the same time, we know we have this huge housing crunch. So the tax credit program is poised to support this type of project that converts unused office space into housing on both a large scale in a community like Burlington, but also in smaller communities as well, where even 10 units of housing would make a really big difference. Another type of project that we have seen a lot in the past five years through this program is the general store, especially in smaller communities. These businesses play a huge commercial and community role. A general store is more than a place that you just pick up a cup of coffee in the morning. They really become the center of community for a lot of places in Vermont, a lot of smaller municipalities. But this is a tough business to be in, and many of these general stores are older buildings that need a lot of investment to keep them going and viable. Can I happen to know that building? What did you do for $417,000 and when? So this project is not yet complete. They're actually still going through finalizing the plans for the construction. But the credits in this case will go to making code improvements that are required before the store can reopen, as well as making some facade improvements, particularly to that front entry porch. The building will end up being accessible, fully code compliant. In addition to the general store itself, this building has three units of housing on the upper floor. Is also a house attached to the back of it, right? There are apartment units in this building as well. It's a multi-use. Okay. Thank you. Yeah, I can't just tell that for five years. I'm very familiar with it. There you go. These are just a couple other general store projects. It's one of our favorites. In communities around the state, East Cales, we just saw, Albany, Norwich, each one of these projects is really a reflection of the community that it's in. And the tax credit funding was a key piece of the funding to support these communities supported enterprises. So the good news and the bad news is that this program's really popular and demand is high. So here are the numbers from our most recent round of funding, which is back in July. We had 1.5 million unfunded requests through the program. The downtown board that makes the funding decisions for us, for the program, have to make some really tough decisions every year. And there are unfortunately really good projects that we just cannot support because we don't have enough funding available. For those of you that like charts, I have a couple here just to reinforce this. It's a chronic issue for the program. If you look back over the last 10 years, this chart shows the number of applications per year in the light green versus the applications funded in the dark green. In a majority of the past 10 years, we've funded less than half the applications that we received. And then finally, a few public applications. That's not really applications for the tax credit because those are sold to essentially banks and insurance companies. That's application for what is to the organization applying essentially free money, right? They get it as a grant. The tax credit goes to the institution that is buying the tax credit. In some cases, yes, it depends. There are applicants that use the credit as a tax credit to offset their own tax liability. And then there are some either they don't have enough tax liability to use the credit themselves, or if it's a nonprofit organization, obviously they don't pay state income tax. And so in that case, yes, they would be selling that credit to either a bank or an insurance company. Yeah. Do you have a number about how many projects actually use the credits themselves and how many are sold to other institutions? I don't have the exact numbers for you. That is something I could certainly get. I would question that most of them were sold. I would estimate somewhere around 50%, but I can get you the exact numbers. Okay. We'd be happy to do that. Okay. Good. Thank you. Can you just help me make sure I have this right when we talk about them being sold? Yes. A bank has a big tax liability. And so I'll just use the example. Do they pay somebody a credit holder $90 and get $100 worth of tax credit? Is that the basic construct? Yeah. So typically when they're sold, they are bought at a slightly discounted rate. It's typically around $0.90 on the dollar, but as I tell all of my applicants, that is negotiable. There are people that are getting $0.95 on the dollar for them. I think there have even been a few projects for nonprofits where the bank has bought them at 100% value. So it depends on the project. But yeah, roughly $0.90 on the dollar is what the sales price for these tax credits are. Thanks. Yep. Absolutely. Sorry, I'm standing up. Well, maybe this is a question for later when we talk about, and we talked about this last year. If that's the case, which what Senator Pearson just reminded us, then why don't we just take $5 million one-time funding and put it in? And then the projects would get $5 million instead of $4.5 million or $4.9 million or whatever. That presumes this $5 million in one time. In most years, we don't have it. And so I understand in past years why we went the tax credit direction, but now we're going to lose the revenue by giving it, making it a tax credit. So I don't know. There are obviously banks like it, but I'm not sure that it's efficient use of funds. I can try to answer too. There's an administrative efficiency in the tax credit programs. If these went out as grants, we'd need about three more Cailins to administer the program because they come with a lot of contractual obligations that have to be followed through. So it is administratively efficient. I think it's pretty minimal. If they were to flip to a grant, you would pay as much or more in additional staff required to administer the program. So can you describe that part? I'm sorry, I'm chair of this, right? Cailin can talk about it too. We offered Cailin also administers barn and historic preservation grants. And there's a whole grant administration back into that that takes a lot of time and energy to administer. This is pretty quick. This is administratively efficient. The applicants don't earn the credit until the project is done. The state has to inspect the property for code compliance. And once that is done, the credit is released. And in many instances, like as Cailin mentioned, the taxpayer takes it on its own tax bill or he sells it to a third party, a bank or insurance company. Cailin wouldn't be able to administer $3 million in grants singly and do two other grant programs. So if it comes at the end of the project, isn't the point that you need the cash to do the project? Absolutely. What most of these projects need is to look bankable. And banks do not look favorably on these projects until somebody has made an investment in them. So our paper investment allocating a tax credit to these projects makes the bank look at a project they wouldn't fund and look at them differently. Greenlighter project they otherwise wouldn't because they know that if they provide them the financing on this project and the project is completed, they can earn that credit in the end. So it does make the project happen. Can I just add to that, Chris? This is another thing that's sort of different between the tax credit and the grant program with a lot of our grants which are reimbursement grants. Applicants need to have the money up front. They need to have matching money to go ahead and do the project. With this tax credit program, an applicant that is successful that receives a tax credit award can take your award letter to a lending institution to get money for their project in the form of a short-term construction loan up front. And then they do the project knowing that they'll use that tax credit to sort of pay off the loan at the completion of the project. So it's one of the few mechanisms that they have to sort of infuse money into the project at the beginning which is why I think this program is a popular sort of first stop for some of these big complex projects to kind of get buy-in from other funders to help them do these big and important projects. Okay. Okay. So Laura, no. Caitlin, you could keep going. All right. Great. I just had this one last slide which is just another way to look at the same thing I was just talking about. You know, this is showing funding demand over the past 10 years. As you can see, the cap in the blue has increased over the past 10 years. But the demand has continued to keep pace with that. So again, we're still struggling to fund some really good projects that come to us each year because of the cap that we currently have in the funding. And with that, unless there's another question about that, I'm going to let Chris take your home case. Stu, I'm going to just do one more slide. A lot of my summer and fall was spent serving on the Vermont Climate Council. And I just wanted to kind of make a nexus between this investment that you're considering in our downtowns and village centers and related back to, you know, the investments we need to make to make our communities more resilient and reduce emissions related to cars. Cars and traveling to work and to school are one of the largest sources of emissions in the state. And obviously, if we create more housing opportunities closer to where we live, work and shop, we can make a significant bite in our emissions. We also can strengthen the vitality of our community and improve our quality of life. So that is why we want to be able to make an investment in the housing that supports the downtowns and village centers. The strong and vital housing in and around the centers is one way to kind of short circuit the Amazon effect that many of our communities are feeling. The people who live in those communities are the ones who are going to shop in the downtowns and the waters that we're going to support that local business. So that's why we would like to be able to support housing quality and create more housing opportunities in and around our centers. The other change I wanted to mention is the flood resilience tax credit. Both these recommendations, the NDA credits and the flood mitigation credit were recommended in the climate action plan. Many of our coastal communities are already making investments now to ensure that when floods happen, people can bounce back quickly from these events. Vermont is not and we're hoping this incentive will get more communities to consider or more, I guess, property owners to consider opportunities to make flood improvements to buildings. So when the next flood does hit, people in houses, people in downtowned places can bounce back more quickly. I have a few more slides but I think I'm just going to stop there because in the interest of time and then see if the committee has any more questions. Okay, so I have one more thing to add. I'm sorry. Okay, go ahead. Sorry. All of these provisions have been supported by the Senate in several bills. I think we've been working out this, these same provisions since 2020. And I want to thank, you know, Chair Sorokin for his staunch support of these bills and this committee for their support. You passed them before and I do hope because our downtowns have such needs and housing is so critical, I think, to our economy. I hope this is the year we can do it. I'll stop there. Thank you. Okay, thank you. Questions at this point? Chris, Caitlin, that looks familiar. Okay, so I'm going to go up Senator Bright. Yeah, Mr. Coffin or Ms. Corgan, can you remind me of the requirements for winning the Village Center designation? Do you have to have permanent zoning and planning bylaws or is that not a requirement? Yeah, Chris Coffin here. For Village Center designation, it is the easiest designation we have of the five that you saw. The community to qualify for the designation has to have an adopted town plan. They have to identify the village area that they would like to designate in that town plan. But zoning is not a prerequisite for the benefits. The major benefit of the Village Center designation is the tax credits, which improves existing buildings only. Thank you. Was that last piece? The major benefit is for what? The major benefit of the downtown and village center, but in the villages, is the tax credits to improve existing buildings. They don't get any additional benefit. They get priority consideration for other agency grants, but the major benefit is the tax credit to improve buildings. Do you have a chart that shows the amount of town? I know you gave the numbers, but how recent the numbers are in terms of the increase in all these designations of the number of towns that are now competing for these grants? Yeah, I don't have it in front of me. Villages are the biggest, are growth designation. I can send it to you, Senator. I want to say in the past five years, we've seen, I want to say a 30% increase in the number of villages designated off the top of my head, but I'll get you that information and send it to you or Faith. Thank you. Okay, so if I move on to Benjamin Doyle, Preservation. Sorry, I was just going to make a quick comment. While we're on the topic of the downtown and village tax credit program, JFO did review this program in the tax expenditure review report. So if you want any further background information, that could be a good place to go do a little reading. That's right. That was last year. Yeah, it was the 2021 report. Yeah, I would add that JFO's report was favorable about the program at the high level, saying it was meeting its revitalization goals and communities and was spreading the benefits, distributing the benefits fairly well around the entire state. Yeah, we did that maybe two years ago. Was that the last major tax? It was a deep dive report. It looks like Graham is on this call. He wrote the report. Yeah. Okay, I think before we get into, we're going to finish the testimony, then we can argue whether or not they're worth it. Sorry. Yeah, question before we lose these guys. Your slide on the designations, the 260 designations. We might have already answered this, but growth centers, how are you defining growth centers? Well, in Scotch, of course, no. Growth centers, there's not a lot of them. Again, our focus for the tax credits is the downtown and village centers. Growth centers are 20-year areas around the community, and they have to go through a very difficult and extensive process to designate a larger area for potential future growth. We only have six of them in the state, and because the application process is so difficult, I don't anticipate us getting any more. They are not eligible for tax credits. Okay. Okay, thank you. Okay, Mr. Doyle. Thank you so much, Senator Cummings, and I really appreciate the opportunity to speak to the committee. Thank you for your time. My name's Ben Doyle. I'm the president of the Preservation Trust of Vermont. I suspect that many of you knew my predecessor, Paul Brun, who was president of the trust for 40 years and an incredible champion for rural communities in Vermont. I previously was the assistant state director of USDA Rural Development, which is a federal agency that works to increase the economic vitality of rural America. At the Preservation Trust of Vermont, our mission is to build community through the preservation and revitalization of Vermont's historic buildings, villages, and downtowns. Another way to really say that is that we try to help Vermont communities save the places and spaces, the gathering places that they love. And the Preservation Trust has been doing this work for over 40 years. Last year, we worked on 281 separate preservation projects in 144 different communities. So chances are we helped people work on a building in your community. We serve as a close friend to communities in their work, whether it's in providing seed funding for structural assessments of historic buildings, fundraising help, or implementation funding. But the key to everything that we do is about building community. And that's why supporting rural villages and downtowns is really the keystone of our work. Downtowns and villages are where commerce, community, and culture intersect. They're where relationships, not transactions, take place. They're where we connect person to person, whether making a purchase from a rural local retailer, or dining out, or connecting with friends and neighbors at a concert in the park. Villages and downtowns are the places where we strengthen our social ties and build community. They are the engine for creating and preserving local wealth. It's for these reasons that the Preservation Trust of Vermont has always championed the downtown and village tax credit program and why I'm happy to speak in support of it today. I really appreciated the questions and conversations that I heard before my testimony. And I just want to acknowledge that we really recognize that the increase in the program's cap and the proposed expansion into neighborhood development areas is a significant change. But we also recognize that this is a critical moment in Vermont for additional investments for the following reasons. Number one, the Village and Downtown Tax Credit Program is one of the simplest and most effective tools for public investment in villages and downtowns. It is often a funding source that is leveraged by other funders. I can tell you in my time at USDA Rural Development, we often worked in small communities on projects that were a financing stack on a rehabilitation project was really extensive. For example, the East Calus Community Trust, the general store that you folks are referring to, you know, that particular project right now, which is ongoing, I believe at this point has 11 different funding sources in it, including a significant grant from the Preservation Trust for $100,000 for the project. It has Northern Borders Regional Commission funding in the project. It has federal tax credits in the project. None of those funds could be leveraged without the Village and Downtown Tax Credit Program, in my opinion. And I should also say, most significantly, it has incredible support from the local community that has raised philanthropic dollars to help make that project move forward. But as Caitlin referenced, if the tax credit program that is often the first money allocated and then the door, it makes all those other funding sources more accessible. So that was reason number one. Reason number one. Second, I would say that it's so important to invest in this program because the history of the program shows that it is effective in supporting projects in our most rural or economically challenged communities. According to the GFO report that was just referenced that last year that measured the efficacy of the program. Since 2007, the majority of credits have been awarded to projects located in parts of the state where economic growth has been at or below the average for the state as the whole. Of the roughly $28 million in credits awarded since the inception of the program, 18.3 million or 65 percent has been awarded to projects and municipalities located in counties with below average GDP. I think that that's just really critical to remember because this program is accessible, communities that don't necessarily have access to other funding sources and are facing significant economic challenges do have access to this one. And in fact, that's the majority of where the funding goes. And then third, and I think Senator Pearson, I think this, I hope maybe tries to answer some of your questions about why the increase now. I would say perhaps the most compelling reason for increasing the support of the program is the existing housing crisis and the potential for future in migration to Vermont. I firmly believe that in the coming years, we will see an increase in the number of people coming to Vermont either by choice or by circumstance. As broadband availability increases, allowing people to work remotely in rural areas and factors like climate change or COVID make urban life less attractive, people will come here. The question is, where will they go? What kind of community will they encounter? Clearly, we need more housing, all types of housing. And as we meet this challenge, it is important to incentivize new Vermonters to settle in existing development patterns to prevent the kind of sprawl that places excessive burdens on municipal services, adversely impacts our climate, and fundamentally undermines the sense of place and community that makes Vermont unique. An increase in the cap and the expansion into neighborhood development areas will ensure that our downtowns and villages can respond, can continue to be revitalized, and that additional income producing residential properties surrounding the core are brought online, fostering vibrant, accessible, sustainable communities. If I could provide a personal example, if you'll forgive me, I grew up in a small town in the Northeast Kingdom. My family owned and operated a used bookstore in Lindenville for over 30 years. Nobody got rich, but the store weathered the rise of Barnes and Noble. It survived borders. It survived Amazon. It's still going strong. When I was a kid and I'm not, I'm not that old, downtown Lindenville had two banks, a hardware store, two grocery stores, a clothing shop, a five-in-dime store, a drugstore with a soda fountain, a factory that made taps and dies, and another factory that made bag bomb. Many of those downtown businesses have closed or relocated to the outskirts of town on Route 5. Lindenville is a wonderful and vibrant community with great local leadership, but it's important to acknowledge that these changes have placed stress on the sense of community and place that one has existed. Community champions in Lindenville are working hard on revitalization efforts, whether it's by leveraging the emerging recreational economy or rehabilitating the historic built landscape. The tax credit program is a key tool in these efforts, as evidenced by the adaptive reuse of the bag bomb factory I referenced. With the help of two separate tax credit awards, what was a shuttered building in the heart of downtown now houses a first-floor restaurant and a thriving co-working space above. The Darling Inn, which is in downtown Lindenville, is affordable senior housing on Main Street, and that too benefited from the tax credit program that helped make other funding, including USDA funding, available. If you continue down Route 5 past the buildings that have both relocated outside of town and get to St. Johnsbury, it's incredible to see the impact. It's easy to see the incredible impact of this program, whether on the New Avenue project that Caitlin referenced, that utilized the tax credit program to rehabilitate 40 affordable apartments, the Landry Block on Railroad Street, which the program helped save after a fire and has now doubled in value on the grand list, or in the historic Eidmehl, which was threatened for demolition but now is in the process of being rehabilitated by an industrial hemp processing company. These are examples of successful public and private investment that all of Vermont's rural communities should be able to take advantage of. In closing, Vermont in the coming years is going to experience a profound change. At the Preservation Trust of Vermont, we try to preserve historic buildings, but what we're really trying to do is preserve an equitable future for Vermont, of Vermont that thrives. And you know, I can just tell you as someone who's working with rural communities every day across the state, this program is just such a critical tool and it's one of the ones that communities most value. And so I appreciate your consideration of the increase in the expansion in the NDA areas and I appreciate your time and leadership. Thank you so much. Okay, thank you. Any questions for Mr. Doyle? I'll ask you, it's probably one for Chris or Caitlin. Does anyone monitor new businesses going in their survival rate? I think the death rate for small businesses is about 50%. As we're revitalizing, are we watching the stability of those downtown areas? I guess the sure answer is no. The goal of the program is really to repair the building and bring it up to code to make sure that it is a usable and serviceable space. Downtowns are a place of constant insurance. What was built in the 1880s or 1850s as one thing becomes something else. So I think that it is a natural cycle to see a lot of change and turn over. But what we want to make sure is that the buildings are up to code and safe and accessible so people can use them. So if we do lose a business, the space is turnkey and somebody can come in very, very quickly. Okay, that's what I'm wondering is are we monitoring, we've got nice buildings, they're all up to code. Are we monitoring that they're up to code buildings that have a business in them or are they up to code buildings that are vacant? Yeah. And a big part of making sure that we've got a good retail mix and vibrancy in the community is our partnership with the 23 downtown organizations. It is their job when somebody wants to get out of business to make sure that they have a new business coming into that space. They do incredible work and they've been super helpful to many of our communities helping our small businesses fill out all the PPP credit and paperwork and everything to make sure that we've lost a lot of businesses due to the pandemic. But they've been playing an important role ensuring that our key anchor businesses do remain on the landscape. Okay. I probably should have asked this question of my own committee, but the division of the five million, well, we're back up and say, I was first approached about an increase a few years ago by Chris and a bunch of other people. And my first response was, because I wanted to expand it to neighborhood development areas, I said, well, aren't you going to dilute the money that's available for doubt balance? And he said, good point over also trying to get the governor to expand the overall cap. So they got that permission, the governor's budget and off we went. But this bill says five million dollar cap, but it says up to $1 million can be used for neighborhood development areas. And that isn't part of political response to what the house did with this proposal. After we supported this committee 4.75 and the house struggled a little bit with it, but they were thinking that they would do the neighborhood development area as a pilot project, which we did in this bill for five years. And we calmed down a certain amount of money for neighborhood development areas out of the five million one billion out of five. Is that an appropriate level? Do you think given what you expect the demand to be from neighborhood development areas? Chris Cochran, I think it's I liked how it was how you structured it. It says up to $1 million right now. We don't have a ton of neighborhood development areas. We do expect a lot more are in the pipeline, especially with the investment in the bylaw modernization grants that will help more communities achieve that designation. But the way it's characterized, you know, it's up to a million. So if that money is not spent, the balance of the money will go into our downtown's and bill's center. It has a cap with the idea of not diluting the downtown program. That's correct. So there aren't any questions from Mr. Doyle going on in Moira Collins. Welcome. Thank you. I'm Moira Collins. I'm the Executive Director of the Vermont Housing Finance Agency, and I won't be nearly as eloquent as Ben was, but I would be happy to jump around your bill to the sections that VHFA administers or touches that have an impact on tax expenditures. If that's okay. Okay. Section seven does touch the VHFA down payment assistance tax credit, but since there is no fiscal impact and there's no expansion of that tax credit and no new liability to the state, I don't know if you wanted me to speak to your earlier question, Senator Cummings, about the definition of first generation home buyer, or since there's no financial impact, do you want me to move on to the other credits? It's just, I was wondering, do you need authority to set that by rule of it? I am grandfather on the farm, but no one for the last two or three generations, is it just your parents didn't own the house? It's just your parents. This is modeled after a piece of federal legislation that Congress has introduced but not yet passed called the down payment toward equity act. And in that legislation, there is a definition of first time home buyer, first generation home buyer, and it's been VHFA's intent over the years. Legislators have talked to us about if there's a way that we could serve this population and VHFA is always intended to mirror that language, but it's not in this bill as you pointed out. The first generation, the first time home buyer means someone who hasn't owned a home in the last three years, and a first generation home buyer is someone whose parents or guardians never owned a home during that buyer's lifetime when they were living with them. And same with, that would have to apply to a spouse as well if, so if it was two borrowers, it would be to both of them. There are some carve outs that individuals who lived in foster care could still qualify as a first generation home buyer regardless if their guardian foster parent owned a home, as well as if your parent owned a home, but it was foreclosed on or there was a short sale, then you would still qualify. My point is, is that there is a definition to it and your example of three generations ago, someone owned property or a home that they would still qualify as a first generation home buyer. Okay, so pretty wide net. Yes. I will point out that right now, the bill does not have a cap on it allows VHFA to take some of what I call a revolving loan fund and grant it out, which would reduce the amount of the revolving loan funds that are available in the future. I under my leadership, I would never want to reduce that loan fund dramatically because I think that that's an important program that has served over 1500 households and been wildly successful and I didn't, I'm not clear as to the legislature's intent about if there's a target or a cap that should be put in place so that we're all on the same page about how much of the revolving loan funds should be taken offline and granted. I would love at some point in this process, this session, I would love some guidance from the legislature on that. Okay, that's maybe not this committee though. So I just wanted to flag that. Can I ask you a question? Thank you. So how much is the fund, what's the total amount of the fund? So and do you have a recommendation for the amount that you would feel comfortable for these grants? So the fund is still growing because every year we can sell more tax credits and we have the authority to do that through fiscal year 2026 and in the end it will be about 10 million dollars of lendable proceeds in circulation. I do not know what the universe of the need is or I'm sorry, not the need. I don't know what the universe of demand would be. I don't know how many first generation home buyers there are in Vermont. I've never known a program or a mortgage application process to ever ask about your parents' housing status when applying for a loan and so I don't know how much to size this to and I would be happy to start small and report back in a year or something like that but until we roll out a program, I don't know that I could size it in terms of need but I can say, I mean I could give you some stats on the success of the loan program but having this grant funding would be really, really helpful because this would get at the needs that a lot of legislators have called for which would be to provide some equity and wealth transfer to households who have historically not had access to that ability to build up that wealth because of generational home ownership that has been passed on. Okay so I'm watching the time. We purposely gave more of the authority because we have so many unanswered questions and there's a lot of discretion in this program already. She's raised the amount of money as she saw the applications coming so she didn't know how many first generation home buyers were so I said we'll monitor and use your discretion and report back and maybe give you more guidance but we sent it on purpose to give her that description. Is there a report in the bill though or is it just an informal report back? I guess it would be more an informal. I don't think there's a formal report but we see more a lot. I'm wondering if if something were to unfortunately happen to Mora would we be able to put Mora in if she's gone? We're going to have to move on because we will do our final discussion and it's kind of what we want to do here and so Mora I'm going to let you finish and then have Patrick to go through. So section eight speaks to manufacturer's home improvement and replacement. There is some money appropriated money that I'm not going to speak to but there is an expansion of the manufactured home tax credit program that VHFA administers. It's the same kind of tax credits that fund the DPA program the down payment assistance program I just spoke to. This is a statewide program that provides a silent second mortgage to help cover down payment assistance for replacing inefficient manufactured homes with energy star rated manufactured homes or net zero energy modular homes. It's been very successful. This is one where the Champlain Housing Trust administers this across the state. There's been over 250 homes impacted with this program with touching over 530 people. These homes 250 homes have been either purchased or replaced. The average income of people served is $45,000. 26% of the residents in these homes are either elderly or disabled and CHT gets over 100 applications a year but really through this program as funded now is serving I think it's like 30 or 35 homes a year and so the governor the housing advocates everyone has long been supportive of this credit increase. It was proposed last year. I think you saw it last week and another bill that was carried over from last year and I know Patrick has been working on the he has a fiscal impact note in his report that says because these are five-year tax credits it takes a couple years for the full impact to hit the state's balance sheet and once we get to that fifth year so the state is feeling the entire impact of that credit. It will be $1.25 million a year in lost revenue to the state. Are there questions about that program? This is one where I think Patrick is going next but I would just point to there's a chart right toward the end of his report that's on your committee's website that explains how this five-year tax credit is different than the downtown tax credit. The downtown tax credit is a one-year credit you sell the credit you get the money that year they don't have this same complication to explain but ours is a five-year tax credit which means the $250,000 increase means that the state is forgoing $250,000 a year for five years and so we are able to take all of that sell those credits today get the full amount of the value of that and put that into use to buy up these manufactured homes and have the impact today in the marketplace but it's over time that banks are writing off $250,000 each year equally over five years. Okay but it doesn't end after five years. Correct so in year six that that tax credit would have ended but there's new tax credits that we're selling so that's why I say by the by the sixth year the fifth year that is where the state has the the full impact of the credit and it will stay at that level forever forward unless the sunset this program but that's not being proposed so this will stay in effect at the $1.25 million. Okay. All right anything else that you need us to hear? VHFA is very supportive of so many sections of this bill there is a $15 million appropriation for a missing middle home construction program and there are other language fixes and wonderful things and the permitting and the rest of this bill but I think since you're focused on tax credits I think those are the only sections you want to hear about today. Okay thank you any questions for Mark? All right if not I'm going to go to Patrick and Patrick you're going to tell us what this is all going to cost. That's right so Pat Ditterton Joint Fiscal Office for the record I should share my screen so you can look at this table can you see my screen? You're going to make it about four times bigger though. I got this little here we go there we go how's that? Good that is great. All right so let's hop right down to the oh so the yeah this table here so this should help you with your tally sheet on the top here we have the appropriation so in fiscal year 22 that $5 million is coming out of that total of $15 million that's going to the missing middle program and then in fiscal year 23 that includes the additional like the left over $10 million in that program and then the $5 million for the manufactured home relocation program these general fund appropriations are for the municipal bylaw grants and then these $200,000 in appropriations that's coming out of the professional regulatory fund which is for OPR to hire one person to administer and one person to enforce that new contract or registry and so skipping ahead to tax expenditures which I know you care more about no impact in fiscal in this year but starting next year you'll see that $2 million expansion of the downtown tax credit you know threshold increasing so that's a $2 million there it also includes in fiscal year 23 that affordable housing tax credit which you can see here so this had this chart shows that sort of tailed effect that morrow was just talking about and so in year one it's the 250 expansion but over time over five years it'll go up to that 1.25 million there is a little bit of expected revenue in this bill and that pertains to the professional regulatory fund which is for the contractor registries where we estimate so this is a biennial renewal process and so you know we had this is sort of the average the one-year average over two years that we would expect the fund to be bringing in in registration fees so 125,000 in fiscal year 23 and then by 27 that would be up to 340,000 annually and so bottom line of all those revenues and tax expenditures so in fiscal year 23 would expect you know a tax expenditure of a net tax expenditure of 2.1 million and because of the affordable housing tax credit that would expand to about 2.9 million in fiscal year 27. Okay Patrick that 2 million in the downtown and village tax credit that's an additional 2 million because we're already foregoing three so that's right total cost would be 5 million that's right so this is showing the net impact right and yeah and if I'm remembering 2019 we were still at two somewhere around 2 million and we have to do three great to six 19 it was a two six okay we have to do three and now we're going to five is the request okay thank you I think all right um any questions on this one all right thank you um committee I think we were scheduled for great no we are not too bad uh this is crunch week um can I ask you just a question of Michael that the manufacturer housing tax credit that's exactly what we passed last year or what we discussed in here last year right that they are not seeing the same tax 101 they came back with a proposal in that it's a 435 that they read right that part of our building yeah so they stuck it got it okay still sitting there