Appropriations reviews S328 housing and finance amendments; straw poll favors proposal package

Staff briefed the committee on proposal-of-amendment language for S328, a broad housing-and-finance package. Key items included increasing the treasurer's credit facility cap from 10% to 12.5% (making roughly $30 million available under the program), adjustments to an off-site accelerator pilot (and required interagency consultation), and changes to municipal planning and zoning language to strengthen permitted access for multiunit dwellings and accessory dwelling units (ADUs).

Staff said the Senate had removed a House-proposed provision authorizing the treasurer to set an additional 1% credit facility specifically for off-site constructed housing; the difference does not change the overall increase to 12.5% but affects statutory authorization language. The Senate proposal also adds additional consultative entities (for example, the Vermont Economic Progress Council) if the treasurer spends pilot funds.

Land-use changes summarized by counsel include adding "labor" to the list of constraints municipal housing elements must report, making multi-unit dwellings of four or fewer units a permitted use in certain districts rather than merely allowed, and striking owner-occupancy limitations for one ADU per lot in many contexts. Staff noted some of these provisions will have phased effective dates or sunsets in the conference package.

Joint fiscal staff described the fiscal contours: increasing the cap would free up additional investable capacity estimated at about $30 million and, if fully deployed, could reduce foregone interest income by roughly $600,000 at current assumptions. They said other impacts depend on program uptake and project timing. Staff also described adding eligible "new town centers" to step-two/step-three Community Investment Program access, which could expand competition for a capped pool of downtown/village center funds.

The committee also received a committee-of-conference update: the treasurer anticipates roughly $10 million of additional transfers across FY26–27 to the general fund; paired with $2 million from a higher-education trust fund, chairs said that could create a $12 million package for a UVM-related request contingent on fundraising. Committee chairs said they plan to unreserve $3.49 million from a $30 million reserve to fund a statewide benefits-assistance program tied to SNAP/Medicaid transitions.

Members asked procedural and policy questions about municipal authority, permit/regulatory differences between "allowed" and "permitted" uses, and competitiveness for designated-center grants. The committee took a straw poll on S328 proposal language; the clerk read a series of yea/nay responses that the chair said would be forwarded as the committee's position to the floor and to conference staff.