Subagency 020 DEPARTMENT OF ECONOMIC, HOUSING AND COMMUNITY DEVELOPMENT

Chapter 001 HOUSING DIVISION RULES PART I: MOBILE HOME PARKS

11-001 Code Vt. R. 11-020-001-X HOUSING DIVISION RULES PART I: MOBILE HOME PARKS

Rule No.1 Authority

These rules are issued pursuant to authority vested in the Department of Housing and Community Development by 3 V.S.A. §§ 801(11), 831, 2452, 2453 and 10 V.S.A. §§ 6205(b), 6231(b), 6252(a), 6253(g), and 6262(b).

Rule No.2 Definitions

The definitions set forth in this Section 2 shall apply to the rules of the Housing Division, Part I, Mobile Home Parks.

2.1 "Commissioner" means the Commissioner of the Department of Housing and Community Development of the Agency of Commerce and Community Development for the State of Vermont.

2.2 "Consumer price index" means the United States Consumer Price Index for all Urban Consumers, Housing Component, published by the United States Bureau of Labor Statistics in the periodical "Monthly Labor Review and Handbook of Labor Statistics," as established annually by the Department of Housing and Community Development.

2.3 "Cost of capital improvements" means the costs of replacement or repair of any major infrastructure systems of the mobile home park that exceed $ 2,500.

2.4 "Department" means the Department of Housing and Community Development of the Agency of Commerce and Community Development for the State of Vermont.

2.5 "Eligible Site" means a mobile home lot that is in conformance with the provisions of 10 V.S.A. § 6238(b) (2) and is available for siting of a mobile home.

2.6 "Good faith" means honesty in fact and the observance of reasonable standards and fair dealing, such that each party shall respond promptly and fairly to offers from the other party.

2.7 "Leaseholder" means a resident lawfully occupying a mobile home owned by the park owner or the owner of a mobile home sited on a mobile home lot in a mobile home park regardless of whether the leaseholder has actual possession of a written lease.

2.8 "Lot rent" means any charge imposed on a leaseholder for rental and occupancy of a mobile home lot, unless specifically excluded by statute or rule.

2.9 "Mobile home" means a structure or type of manufactured home that is built on a permanent chassis and is designed to be used as a dwelling with or without a permanent foundation when connected to the required utilities, and includes the plumbing, heating, cooling, and electrical systems therein, and is:

(a) transportable in one or more sections; and

(b) at least eight feet wide or 40 feet long or when erected has at least 320 square feet or if the structure was constructed prior to June 15, 1976, at least eight feet wide or 32 feet long; or

(c) any structure that meets all the requirements of this definition except for size and for which the manufacturer voluntarily files a certification required by the U.S. Department of Housing and Urban Development and complies with the construction and safety standards established under Title 42 of the U.S. Code. A recreational vehicle or camping trailer is not a mobile home.

2.10 "Mobile home park" means any parcel or contiguous lots of land under common ownership or control on which are sited, or which is designed, laid out or adapted to accommodate, more than two mobile homes. A parcel or contiguous lots owned by agricultural employers providing up to four mobile homes for use by full-time workers or employees, and a parcel or contiguous lots used solely on a seasonal basis for vacation or recreational mobile homes shall not be considered a mobile home park.

2.11 "Mobile home park owner" or "park owner" means one or more owners, operators, officers, managing agents, or other persons with practical authority to establish rules, policies, or other requirements of a mobile home park.

2.12 "Resident" means any individual, individuals, or family who occupy a mobile home in a mobile home park on a permanent or temporary basis.

2.13 "Security deposit" means any advance, deposit, or prepaid rent charged for the purpose of securing a resident's obligation to pay rent and maintain a rented mobile home or mobile home lot, which is refundable to the resident at the termination of the resident's tenancy, as set forth at 10 V.S.A. § 6244.

2.14 "Site improvement fee" means the charge, which in accordance with 10 V.S.A. § 6238 may not exceed $ 8,000, for the cost of establishing a mobile home lot within a mobile home park, including site clearing, grading, construction of a mobile home pad; construction of utility improvements such as those for water supply, sewage disposal, electricity, telephone, cable television, and gas; payment of municipal fees such as school impact fees and sewer connection charges; and payment of other costs associated with improvement of a site.

2.15 "Termination or expiration of tenancy" shall mean any of the following:

(a) the leaseholder removes a mobile home from the mobile home park and terminates the lease for the lot on which the mobile home was located;

(b) delivery to the park owner of an executed bill of sale, or copy thereof, transferring ownership of a mobile home that remains in the park either to a person who has entered into a lease with the park owner or to the park owner;

(d) the date contained in a notice of termination by a resident in compliance with 10 V.S.A. § 6261(d); or

(e) that date agreed upon by the resident and the park owner.

Rule No.3 Registration

By September 1 of each year, every park owner shall register their mobile home park(s), and pay the annual lot fee if applicable. The Commissioner shall establish the annual lot fee, up to the amount allowed by law, that shall be payable by the park owner for each occupied leased lot in the mobile home park. The fee may be charged to leaseholders, and shall not be deemed a lot rent increase.

Rule No.4 Lease Requirements

4.1 Written lease required. The park owner shall provide an initial copy of the lease to each leaseholder of the mobile home park and upon request shall give a leaseholder a copy of the current lease for his or her lot. All terms governing use and occupancy of a mobile home lot shall be in writing, and every lease shall be fair and reasonable; any term which obstructs a leaseholder's ability to act in accordance with 10 V.S.A. Chapter 153 shall be unenforceable. No lease term may require a leaseholder to waive any rights provided by 10 V.S.A. Chapter 153 or these rules, or any other provision of state or federal law or regulation.

4.2 Prospective leaseholders. The park owner shall provide each prospective leaseholder a copy of the proposed written lease with sufficient time for review prior to finalizing any lease. Upon agreement, both the park owner and the prospective leaseholder shall sign the lease and the park owner shall furnish a copy of the signed lease to the leaseholder.

4.3 Uniform enforcement. Any lease term that is not uniformly applied to all leaseholders of the same or similar category shall be unenforceable, with the exception of different lot rent amounts in mobile home parks constructed after June 1, 1995, or new lots in mobile home parks expanded after that date. The park owner shall have the burden of proving the existence of a reasonable basis for categorizing leaseholders or lots.

4.3.1 Admission Policy. A park owner may have an admission policy. To be valid, any admission policy must be in writing, clearly describe all requirements for eligibility, and include a statement that the park owner will not discriminate in admissions for any reason described in 10 V.S.A. Section 6236(e)(3) or (4). Admissions policies shall be uniformly applied to all prospective leaseholders.

4.4 Removal of mobile home. A lease term requiring removal from the mobile home park of a mobile home that is detrimental to other residents for health or safety reasons, or for failure to maintain reasonable aesthetic standards established in the lease, shall be permissible. However, the age of a mobile home, in and of itself, shall not justify a requirement for its removal from a mobile home park. No lease term shall allow the park owner to require removal of a mobile home without written notice to the mobile home owner and a reasonable opportunity to cure the problem.

4.5 Subletting / Sale of Mobile Home. A lease may not prohibit subletting. A leaseholder is required to obtain written consent from the park owner, which shall not be unreasonably withheld, before renting or selling his or her mobile home, or subleasing, or assigning the lease, for the mobile home lot.

4.5.1 Permission to Sublet. A lease may require a leaseholder to notify the park owner in writing of the name and mailing address of any prospective sublessee. No such lease provision shall be enforceable, however, unless the lease also requires the park owner to notify the prospective sublessee and the leaseholder in writing within thirty days of request as to whether consent to the sublease is granted. Notice to the prospective sublessee shall include the reasons for denial, if applicable.

4.6 Rent charges; limits and exceptions. With the exception of proprietary leases in mobile home parks owned by limited equity housing cooperatives established under 11 V.S.A. chapter 14, this subsection 4.6 shall govern all mobile home park leases with respect to rental charges.

4.6.1 Lease terms governing rent charges shall be effective for a minimum of one year. However, provided there is notice at the inception of a new leaseholder's lease, a new leaseholder in a mobile home park in which a uniform rent schedule impacts all lots in the mobile home park simultaneously may be required to pay an increased rent charge at the uniform increase date.

4.6.2 The lease shall provide for a minimum of 60 days' prior written notice of any rent increase.

4.6.3 Notwithstanding any provision of the lease, a park owner may increase rental charges during a year to the extent necessary to cover an increase in operating expenses, but only in the event of an unanticipated increase of 20 percent or more in the mobile home park's operating expenses which is the result of legislative action taken during that year.

4.7 Required lease terms. All mobile home park lot leases shall contain the following:

(a) Amount and schedule for rental and utility charges and other reasonable incidental service charges, if any. Failure to include such charges in the lease shall prohibit a park owner from imposing or collecting the same.

(b) Names and addresses of the park owners.

(c) Notice that the park owner shall not discriminate for reasons of race, religious creed, color, sex, sexual orientation, gender identity marital status, disability, national origin, or due to receipt of public assistance, or because there are minor children in the household.

(d) Notice that the park owner shall not discriminate based on age except as permitted under 9 V.S.A. § 4503(b) and (c). Any permissible age restrictions shall be identified in the lease.

(e) The requirement to obtain permission from the park owner before renting or selling a mobile home, or subleasing, or assigning a lease, for a mobile home lot.

(f) The notice period required from a leaseholder who wishes to terminate a lease.

(g) The effective date of the lease.

4.8 Lease renewal; new lease terms. Any proposed new lease, lease amendment, addition to, or deletion from the lease shall be provided in writing to all residents at least thirty days in advance of the effective date of such change, and shall be signed by the park owner and leaseholder. If the leaseholder does not object in writing by the effective date, the leaseholder shall be deemed to have accepted the new or changed lease terms or new lease. Lot leases automatically renew unless superseded or replaced, or voided due to a termination or expiration of tenancy.

Rule No.5 Charges and Fees

5.1 Entrance fees prohibited. No park owner shall charge an entrance fee to a leaseholder or prospective leaseholder for the privilege of leasing or occupying a mobile home park lot. Nor may a leaseholder or prospective leaseholder be restricted in his or her choice of vendors from whom to purchase goods and services. A reasonable charge for the fair value of services performed in placing a mobile home on a mobile home park lot shall not be considered an entrance fee, but such charge shall not include upgrading any mobile home park utilities in order to comply with state or local regulations, including the Rules for Mobile Home Park Warranty of Habitability, Housing Division Rules, Part III.

5.2 Site improvement fee. A limited equity housing cooperative organized to provide low- or moderate-income housing as defined in 11 V.S.A. chapter 14, or a 501(c)(3) organization, as defined under the federal tax code, or its wholly owned subsidiary, may charge a site improvement fee to the initial leaseholder of an eligible mobile home lot.

5.3 Security Deposits. A park owner may require a leaseholder to pay a security deposit, and shall, in such event, include in the lease provisions consistent with this subsection 5.3 which govern the security deposit. A park owner may be subject to municipal ordinances with respect to security deposits in addition to the requirements of the Mobile Home Park Act and these Rules.

5.3.1 The park owner may retain all or a portion of a security deposit for the following:

(a) Nonpayment of rent;

(b) Damage to the park owner's property as a result of the act or failure to act of the leaseholder, except ordinary wear and tear;

(d) Expenses incurred to remove any articles abandoned by the leaseholder.

5.3.2 The park owner shall, by hand delivery or first class mail to the last known address of the leaseholder, and within 14 days of the termination or expiration of the leaseholder's tenancy, return the security deposit, including any interest accrued as required by the lease or local ordinance, to the resident less deductions, if any, along with an itemization of deductions. Failure to do so within 14 days shall result in a forfeiture of the park owner's right to retain any portion of the security deposit. Willful failure to do so within 14 days shall result in liability of the park owner for double the amount withheld, plus reasonable attorneys' fees and costs.

5.3.3 In the event of sale or other transfer of the mobile home park, the park owner shall transfer all security deposits to the new owner. The new park owner shall provide each leaseholder notice that it has received transfer of the security deposit, the amount transferred, and the new park owner's name and address.

Rule No.6 Lot Rent Increase

6.1 Notice. A park owner may not increase lot rent without first providing at least 60 days' written notice to each affected leaseholder and the Commissioner. The notice shall be provided on a form provided by the Department, and shall include:

(a) the amount, including any capital improvements surcharge;

(b) the effective date;

(d) the percentage of increase from the current base lot rent.

6.1.1 No rent increase shall be given within six months before a park closure notice is issued or at any time while the closure notice is in effect, and any increased rent paid by a leaseholder during the six months prior to a park closure notice shall be refunded within seven days of the closure notice, unless the Commissioner has determined that the rent increase is needed to help remedy an emergency situation affecting the health, safety or welfare of the residents.

6.2 Capital Improvements Surcharge.

6.2.1 Any portion of a lot rent increase attributable to recovery of the park owner's estimated Cost of Capital Improvements as defined in Section 2 hereof, shall be considered a capital improvements surcharge, shall be limited as set forth at 10 V.S.A. § 6251, and shall terminate at the time the actual costs have been recovered.

6.2.2 If a lot rent increase is in any part due to a capital improvements surcharge, the notice shall identify that portion of the proposed increase attributed to the surcharge; the estimated cost of the improvements; and the proposed duration of the surcharge to recover the estimated cost, stated in 12-month increments.

6.2.3 The park owner, with the notice of lot rent increase, shall provide the Commissioner with an affidavit stating the estimated cost of the capital improvement, the expected date of completion of the improvements and the time frame required for the surcharge to provide for recovery of the cost of the improvements.

6.3 Lot Rent Dispute; Mediation.

6.3.1 The Department shall maintain a list of qualified professional mediators compiled in cooperation with park owners and leaseholders in Vermont.

6.3.2 A majority of the affected leaseholders in a mobile home park may request mediation of a proposed lot rent increase that is more than one percentage point above the Consumer Price Index. Such request shall be made by delivering to the Commissioner and the park owner, within 15 business days of the park owner's notice to the Commissioner of lot rent increase, a petition stating that the increase is disputed and bearing the signatures of the affected leaseholders who so request, and the name of the person who will represent the petitioners. However, if it is demonstrated that the park owner failed to send the notice to the most current address provided to the park owner by any leaseholder, and that notice to the leaseholder was delayed for that reason, the petition shall be filed within 15 business days of the date on which it is demonstrated that every affected leaseholder had received notice. Any refusal of a certified mailing of the completed Lot Rent Increase Notice shall be deemed to be receipt. The park owner shall bear the burden of demonstrating that the proposed increase is reasonable.

6.3.2.1 A majority shall be determined by one vote per leasehold, though no leaseholder shall have more than one vote.

6.3.3 The Department shall provide the list of qualified professional mediators to the park owner and the petitioners' representative. The petitioners' representative and the park owner shall select a mediator from the list who is mutually agreeable, and provide the mediator's agreement to conduct the mediation to the Commissioner. In the event that within 5 business days of receipt of the list, the parties have not selected a mediator, the Commissioner shall appoint a mediator from the list.

6.3.4 The park owner shall provide to the mediator and the petitioners' representative all information supporting the proposed increase at least 5 days before the initial mediation session. The park owner shall also provide any documents or information requested by the mediator for the purposes of the mediation. All mediation sessions shall be completed at least 10 days prior to the effective date of the proposed lot rent increase.

6.3.5 Any resolution of the dispute shall be reduced to a written agreement among the parties, setting forth the amount of any increase and its effective date, together with all other matters agreed upon. The mediator shall detail the outcome of the mediation in a report signed by all parties, and provide the same to the parties and the Commissioner.

6.3.6 The selected or appointed mediator shall not have any direct or indirect interest in the mobile home park and shall disclose any experience as a park owner, or resident, along with any other circumstances that may create an actual or perceived conflict of interest. The mediator shall not be competent to testify in any subsequent action regarding the proposed lot rent increase, and the mediator's report shall not be admissible as evidence. The Department shall pay the fees for mediation based on a schedule established pursuant to the Rules for Mediation and Legal Services Payments and Consumer Price Index for Lot Rent Disputes, Housing Division Rules, Part II.

6.4 Abatement; Civil Action. In the event mediation is unsuccessful, a majority of the mobile home park's leaseholders may file suit for abatement of an increase which is unreasonable based upon the park owner's total reasonable or documented expenses, including the cost of debt service and allowance for a reasonable return on the investment, as compared to similar investments. Any abatement action must be filed within 30 days after the effective date of the lot rent increase. No abatement action may be filed if the rent increase is effective following a completed sale of the mobile home park which was contingent upon the increase, provided at least 6 months' notice has been given.

Rule No.7 Mobile Home Park Owner Obligations

7.1 Implied Warranty. In every lease is implied a covenant and warranty on the part of the park owner to provide, throughout the period of the tenancy, premises which are safe, clean and fit for human habitation, including:

(a) Adequate and reliable utility services;

(b) Safe electrical service to a location on each lot from which the mobile home may be connected;

(d) Safe and fit roads, common areas and facilities.

No waiver of the covenant and warranty of habitability shall be enforceable.

7.2 Habitability Rules. Every park owner shall comply with the Rules for Mobile Home Park Warranty of Habitability, Housing Division Rules, Part III.

7.3 Failure to Comply. In the event a park owner fails to comply with the obligation of habitability by making timely repairs after actual notice from a leaseholder, a governmental entity, or a qualified independent inspector, provided the conditions are not the result of the acts or omissions of the leaseholder or resident beyond normal wear and tear, and provided the noncompliance materially affects health and safety, a leaseholder may:

(a) Withhold payment of lot rent for the period of noncompliance;

(b) Seek a court order requiring compliance;

(d) Terminate the lease with reasonable notice.

7.4 Relocation.

7.4.1 If a mobile home lot or rented mobile home is condemned by a government agency due to willful failure of the owner to comply with any obligations imposed by law, he or she shall be liable for the reasonable relocation costs of the affected leaseholders and residents. Any leaseholder or resident so affected may seek a court order requiring the owner to pay reasonable relocation costs, including court costs and attorneys' fees.

7.4.2 If a park owner commences closure of a mobile home park within one year of receiving a notice from a state or municipal official of a violation of health, safety or environmental laws, or the habitability requirements contained in this Rule or the Rules for Mobile Home Park Warranty of Habitability, Housing Division Rules Part III, the Commissioner may require the park owner to pay up to $ 3,500 in relocation costs to each affected leaseholder, unless the park owner can demonstrate that he or she has no financial capacity to comply.

Rule No.8 Minor Defect; Noncompliance with Law or Lease

If, after 30 days' written notice, a park owner fails to repair a minor defect, or cure noncompliance with the Mobile Home Park Act, or noncompliance with a material provision of the lease which has occurred due to no fault of the leaseholder, the leaseholder may repair the minor defect and deduct the actual and reasonable cost thereof from rent next due, up to one-half of one month's rent. Repair of a minor defect or noncompliance shall not include major work on the park's water, septic, or electrical systems. The leaseholder shall provide the park owner an itemization of the deduction along with the rental payment, and shall be responsible for any damage to property of the park owner caused by such repairs or attempts to repair.

Rule No.9 Mobile Home Park Resident Obligations

9.1 Compliance with Regulations. A resident shall not act in any way which will cause the mobile home park to be out of compliance with building, environmental or housing or health regulations.

9.2 Peaceful Enjoyment. A resident shall not act or allow his or her guests or invitees to act in a manner which would disturb other residents' peaceful enjoyment of the mobile home park.

9.3 No Destruction. A resident shall not deliberately or negligently destroy, deface, damage or remove any part of the mobile home park or its fixtures, mechanical or utility systems or furnishings, nor deliberately or negligently allow another to do so.

9.4 Subletting. No leaseholder may rent or sell his or her mobile home or sublease, or assign a lease, for the mobile home lot without the express permission of the park owner, which shall not be unreasonably withheld.

9.5 Notice of termination. A leaseholder may terminate a lease by delivering written notice to the park owner of the termination date at least one rental payment period prior to the termination date, unless inconsistent with a written lease.

9.6 Penalties. In addition to eviction, a park owner may seek court-ordered damages, costs and reasonable attorneys' fees for violation of the obligations set forth in 10 V.S.A. § 6261.

Rule No.10 Mobile Home Park Owner Access

10.1 Mobile Home Lot. A park owner may enter a mobile home lot under the following circumstances:

(a) with resident consent, which shall not be unreasonably withheld;

(b) between the hours of 7:00 a.m. and 7:00 p.m., provided at least 12 hours' notice has been given, for the following purposes: inspection; to make necessary or agreed repairs, alterations or improvements; to supply agreed services; or to exhibit a lot for sale or rent, or to lenders or contractors; or

(c) without notice or permission upon learning, unexpectedly, in the course of performing repairs in the mobile home park, that entry is necessary to complete the repairs, provided that reasonable attempts to contact the resident were made and the need to enter the lot was not foreseeable.

10.2 Mobile Home. A park owner may enter a mobile home or a mobile home lot without notice or permission upon the reasonable belief that there is a likelihood of imminent injury to person or property, or of interruption in utility services.

Rule No.11 Sale of Mobile Home on Site

11.1 Notification. Prior to selling a mobile home sited in a mobile home park, the mobile home owner shall provide notice to the park owner by certified mail, notifying him or her of the name and mailing address of the prospective buyer. The mobile home owner shall provide a copy of a completed, unexecuted, Vermont mobile home uniform bill of sale to the park owner at least 21 days prior to the transfer or sale of the mobile home, and to the town clerk in which the mobile home is located for his or her endorsement in compliance with 9 V.S.A. Section 2602.

11.2 Acceptance. The park owner shall lease the mobile home lot to the prospective buyer if the buyer and his or her household meet the terms of the lease or qualify under a valid admission policy of the park. Upon approval the park owner shall provide the proposed lease to the buyer. If the buyer does not notify the park owner of any objections to any terms in the lease in writing prior to occupying the mobile home lot, the buyer will be deemed to have accepted the lease.

11.3 Denial. If the park owner determines that the buyer and his or her household do not meet the terms of the lease or qualify under a valid admission policy, the park owner shall notify the mobile home owner and prospective buyer in writing within twenty-one days. The notice of denial to the prospective buyer shall list the specific reasons why the buyer and his or her household do not qualify.

11.4 Deemed approval. Failure by a park owner to provide a written notice of denial, including the reasons for denial, within twenty-one days shall be deemed approval of the prospective buyer to lease the lot on which the mobile home is sited.

11.5 Commission prohibited. No park owner shall charge or collect a commission on the sale of a mobile home in the mobile home park, except pursuant to a written agreement with the mobile home owner for representation in the sale of the mobile home.

Rule No.12 Eviction of Mobile Home Park Resident

12.1 Grounds. A leaseholder may only be evicted by order of court for nonpayment of rent, substantial violation of the lease terms, violation of the leaseholder's obligations as set forth at 10 V.S.A. § 6261, abandonment of the mobile home, or in the event the mobile home park is closed in whole or in part. No leaseholder may be evicted for a substantial violation of the lease terms unless the eviction proceeding is commenced within 60 days of the last alleged violation, or in the case of criminal activity within 60 days after the leaseholder was arraigned on the charges. No leaseholder may be evicted for violation of a lease term that is not enforced against others in the mobile home park. Evictions of subletting mobile home residents shall be pursuant to 9 V.S.A. § 4467.

12.2 Notice.

12.2.1 Nonpayment of Rent or Substantial Violation. The park owner shall provide notice to the leaseholder by certified or registered mail before bringing any eviction proceedings. The notice shall provide the grounds for eviction and the fact that eviction proceedings for unpaid rent may be avoided by paying overdue rent within 20 days of the mailing of the notice. No notice shall be required if the nonpayment of rent or a substantial violation is the second such occurrence within 6 months, and proper notice was provided with respect to the first nonpayment or substantial violation during the period.

12.2.1.1 Notice of Proceedings. A park owner shall serve notice of eviction proceedings pursuant to 10 V.S.A. § 6237 and 12 V.S.A. Chapter 169 to the leaseholder and to any occupants known to the park owner to be residing in the mobile home.

12.2.2 Park Closure. A park owner shall provide notice, delivered by certified mail, to the Commissioner and to each affected resident or leaseholder of the mobile home park at least 18 months before closure of the park or any part of the park that would result in the eviction of any residents or leaseholders or the removal of any or all of the mobile homes. The period of time between delivery of notice and the proposed closure date shall be the "Notice Period." The notice shall include:

(a) a statement that the park owner intends to close all or part of the mobile home park;

(b) the date that the park owner intends to close all or part of the mobile home park;

(c) a statement that no evictions will be commenced during the notice period, except for nonpayment of rent or substantial violations of the lease;

(d) a properly completed and signed Notification to Department of Housing and Community Development of Intent to Close a Mobile Home Park form;

(e) a list of the names and mailing addresses of each of the affected leaseholders and residents of the mobile home park.

The Notice Period shall not commence until the date on which all of the affected leaseholders or residents have received notice in accordance with the requirements of this subsection 12.2.2, except that the commencement of the Notice Period shall not be delayed by a resident or leaseholder's failure to provide updated address or contact information to the park owner. Any refusal of the certified mailing of the closure notice shall be deemed to be receipt.

12.2.3 Notice of Intent to Sell Required. Before giving a park closure notice the park owner shall issue a park sale notice pursuant to section 13 below that discloses the potential closure of the mobile home park, or record a notice in the land records of the municipality where the mobile home park is located prohibiting the park owner from selling the land for a period of five years.

12.2.4 Permission for Shortened Notice Period. Upon request, and if necessary to assure the health safety or welfare of the mobile home park residents, the Commissioner may change the notice requirement by allowing a shortened Notice Period. A request shall be in writing in the form of a sworn affidavit and include:

(a) a statement of the reasons why the shortened Notice Period is requested;

(b) the steps the park owner has taken to correct or mitigate the problem;

(d) any assistance that will be offered to the affected leaseholders and residents due to their proposed dislocation.

Upon receipt of a request for a shortened Notice Period, the Commissioner may contact state and local health officials, the affected leaseholders and residents, and others for further information and comments. The Commissioner shall render a decision within sixty days of the request.

12.2.5 Expiration of Closure Notice. The mobile home park shall be deemed to have closed at such time as at least 18 months from delivery of notice has elapsed, or at the end of such longer Notice Period as may have been identified by the park owner, and fewer than three (3) mobile homes are occupied within what had been the mobile home park, or when every leaseholder and resident has vacated the mobile home park and removed his or her mobile home and possessions, whichever is sooner. However, if the park owner has not completed the park closure or commenced eviction proceedings within 18 months after the proposed closure date or expiration of the Notice Period, whichever is later, the closure notice shall be deemed void, and any attempt to close the mobile home park shall require a new notice process pursuant to paragraph 12.2.2. Notwithstanding the voiding of the closure notice, evictions already commenced may continue.

12.3 No Force or Self Help. A leaseholder shall not be evicted by force or any other self-help measure.

12.4 Illegal Evictions. Willful interruption of any utility service other than for necessary repairs on a temporary basis, or eviction or other denial of access by a park owner to a resident's property other than by order of court shall be considered an illegal eviction. Condemnation of a lot or a mobile home resulting from the acts or omissions of the park owner shall be considered an illegal eviction. This shall not be construed to prohibit disconnection due to nonpayment of water charges by a water system approved by the Vermont Public Service Board, nor to interfere in any way with rights and obligations of an approved water system.

12.5 Remedies for Illegal Evictions. Any leaseholder may bring suit against the park owner for illegal eviction and seek recovery of damages, injunctive relief, costs and reasonable attorneys' fees. A leaseholder may not seek an injunction to allow continued occupation of a condemned lot or mobile home park. A park owner may recover reasonable attorneys' fees for defense of an illegal eviction action that is determined to be frivolous or intended solely for harassment.

12.6 Remedies for Retaliatory Conduct. Any leaseholder may seek a court order against a park owner for changing the terms of a lease or for bringing or threatening to bring an action because of the leaseholder's complaint about conditions in the mobile home park to a governmental agency or town official, or to the park owner about a violation of chapter 153 of Title 10, or because the leaseholder has organized or joined a residents' organization. Such court order may provide damages and reasonable attorneys' fees. Retaliatory conduct by the park owner may be a defense to any court action brought by the park owner against a leaseholder.

12.7 Penalties. A park owner who closes a mobile home park and sells the land within five years without complying with the requirement to give a notice of intent to sell the park shall be liable to the State in the amount of $ 10,000 or 50% of the gain realized from the sale, whichever is greater, unless the Commissioner determines that strict compliance with the notice and holding requirements is likely to cause undue hardship to the park owner, leaseholders, or both.

Rule No.13 Mobile Home Park Sale

13.1 Notice. A park owner shall provide each mobile home owner and the Commissioner notice of intent to sell the mobile home park by certified mail return receipt requested, on a form provided by the Department ("Notice of Intent to Sell"). If the Notice is refused or otherwise undeliverable, the park owner shall send the Notice by first class mail to the mobile home owner's last known mailing address. A refusal of the certified mailing of the completed Notice of Intent to Sell shall be deemed to be receipt. No notice to the Commissioner shall be required when a notice to mobile home owners is not required.

13.2 Notice Date. The Notice Date shall be the date upon which the Commissioner has received notice of intent to sell the mobile home park in accordance with this rule. However, if within 30 days it is demonstrated that the park owner failed to send notice to the most current address provided to the park owner by a mobile home owner, and that notice to the mobile home owner was delayed for that reason, the Notice Date shall be the date on which it is demonstrated that every mobile home owner has received notice.

The Notice shall include:

(a) A statement that the park owner intends to sell the mobile home park;

(b) The price, terms and conditions under which the mobile home park is offered for sale;

(c) A detailed description of the property offered for sale including the location and size of the mobile home park, number of mobile home lots, any buildings including mobile homes, and any other real or personal property, equipment or fixtures included in the sale terms;

(d) A list of the names and mailing addresses of the mobile home owners, and the number of leaseholds held by each;

(e) The status of the mobile home park regarding compliance with all statutes, regulations and permits to the owner's best knowledge, and an explanation for any noncompliance;

(f) A statement that for forty-five (45) days following the notice the park owner will not enter into any agreement to sell the mobile home park that would infringe the rights of the mobile home owners to negotiate for purchase of the mobile home park; and if within the forty-five (45) day period the park owner receives notice from a majority of the mobile home owners that they intend to consider purchase of the mobile home park, that the park owner will not enter into any agreement to sell the mobile home park that would infringe the rights of the mobile home owners to negotiate for purchase of the mobile home park for an additional one hundred and twenty (120) days, except for an agreement with a group representing a majority of the mobile home owners or with a nonprofit entity approved by a majority of the them;

(g) A properly completed and signed Notification to the Department of Housing and Community Development of Intent to sell a Mobile Home Park form.

13.3 Mobile Home Owners Right to Negotiate Purchase. A majority of the mobile home owners in a mobile home park shall have the right to negotiate to purchase the mobile home park by providing a Notice of Intent to Negotiate to the park owner and the Commissioner within 45 days of the Notice Date (the "Notice Period"). Such Notice of Intent to Negotiate shall be a written statement, bearing the signatures of a majority of the mobile home owners. A majority shall be determined by one vote per leasehold, though no mobile home owner shall have more than 3 votes or 30% of the aggregate mobile home park vote, whichever is less. Any dispute as to whether a majority has been achieved shall be resolved by the Commissioner by comparing the list of mobile home owners provided by the park owner to the mobile home owners' notice of intent. Inaccuracies in such list as to the number or identity of mobile home owners shall render the Notice of Mobile Home Park Sale incomplete.

13.3.1 Period of Negotiation. If the park owner receives a Notice of Intent to Negotiate from the mobile home owners pursuant to subsection 13.3 above, then for an additional 120 days (the "Negotiation Period'), starting from the 46 [th ] day following the Notice Date, the park owner shall:

(a) Not enter into any agreement to sell the mobile home park that would infringe upon the rights of the mobile home owners to negotiate for purchase of the mobile home park; and

(b) Fully consider any written offer to purchase from the mobile home owners or their selected nonprofit organization.

(c) If the park owner does not receive a Notice of Intent to Negotiate bearing the signatures of a majority of the mobile home owners during the 45-day Notice Period, he or she has no further restrictions on the sale unless a new notice is required pursuant to Section 13.3.3 below.

13.3.2 Obligations of Good Faith. The park owner and the mobile home owners or the nonprofit corporation selected by the mobile home owners shall negotiate sale terms with one another in good faith as defined in Section 2.6 above. Sale terms include the price and other factors generally given consideration such as financing or closing contingencies.

13.3.3 New Notice Required. Prior to the expiration of the Notice of Intent to Sell, and before making an offer to sell or accepting an offer to purchase the mobile home park, the park owner shall provide a new Notice of Intent to Sell in accordance with Section 13.1 above unless the sale price is:

a) no more than five percent below the price for which the mobile home park was initially offered for sale; or

b) at least five percent more than the final written offer from a group representing a majority of the mobile home owners or a nonprofit corporation approved by them.

13.4 Health and Safety Disclosures. Prior to the sale of a mobile home park, the park owner shall furnish the following to the buyer:

(a) the results of the most recent sanitary survey of the mobile home park conducted by the Agency of Natural Resources;

(b) the results of all drinking water tests required or performed for the mobile home park during the preceding 36 months; and

13.5 Penalties. In addition to any other causes of action or penalties, a park owner that sells a mobile home park in violation of its obligations under this section and 10 V.S.A. § 6242 shall be liable to the mobile home owners in the amount $ 10,000 or 50% of the gain realized from the sale, whichever is greater.

13.6 Applicability of Section. The requirements of this section shall have no applicability to sales or transfers among family members, through foreclosure, to a trust solely benefiting a park owner's family members, among partners who are owners, incidental to financing, among owners as joint tenants or tenants in common, pursuant to eminent domain, or pursuant to a municipal tax sale.

13.7 Expiration of Notice of Intent to Sell. A Notice of Intent to Sell shall expire if sale of the mobile home park has not been completed within 12 months of the expiration of the 45-day Notice Period, except when the park owner has entered into a binding purchase agreement with a group representing a majority of the mobile home owners or a nonprofit corporation approved by them. Any efforts to sell or close on an existing purchase and sale agreement after the expiration of the Notice of Intent to Sell shall require a new Notice of Intent to Sell and renewed rights in the mobile home owners to negotiate for purchase of the mobile home park.

Rule No.14 Penalties; Enforcement

14.1 Notice of Alleged Violation

14.1.1 The Commissioner may issue a notice of alleged violation of the Mobile Home Park Law. A notice of alleged violation must be in writing.

14.1.2 The notice shall include, at a minimum, the following:

a) a description of the alleged violation, including reference to the particular statute and any applicable Housing Division Rule allegedly violated;

b) a statement of the legal authority and jurisdiction under which administrative penalty is being assessed;

c) the amount of the proposed administrative penalty; and

d) a warning that the decision to impose a penalty may become final and the penalty imposed if no hearing is requested within 20 calendar days of receipt of the notice.

14.1.3 The notice of alleged violation shall be served on the park owner by certified mail or personal service.

14.1.4 The park owner alleged to have committed the violation shall have 20 calendar days from the date of service to file a written request for a hearing. If no request for a hearing is filed within 20 calendar days, the notice and penalty shall be deemed a final order of the Commissioner.

14.1.5 Notice of alleged violation and penalties issued under these rules shall not limit the authority of the Commissioner to bring a civil action for damages or injunctive relief, or both, to refer a violation to the Attorney General or State's Attorney for enforcement, or to take any other appropriate enforcement action.

14.2 Hearing Process. The procedures set forth in 3 V.S.A. §§ 809 through 813 shall cover all hearings under these rules.

14.2.1 A park owner who requests a hearing regarding a notice of alleged violation shall be entitled to a hearing before the Commissioner within 60 days of filing the request. The 60-day time frame may be extended if the park owner who requested the hearing requests, in writing, additional time to prepare for the hearing.

14.2.2 A hearing notice that includes the time, place, and nature of the hearing shall be delivered to the park owner within 7 days of receipt of a request for a hearing and no less than 15 days prior to the date set for the hearing.

14.2.3 The Commissioner may appoint a hearing officer to hear evidence on the alleged violation, prepare findings, and recommend a decision.

14.2.4 The park owner may appear at the hearing with or without counsel, and may present evidence and examine and cross-examine witnesses.

14.2.5 At the hearing the rules of evidence shall be according to 3 V.S.A. § 810.

14.2.6 Opportunity shall be given all parties to respond and present evidence and argument on all issues involved.

14.2.7 The hearing officer may compel, by subpoena, the attendance and testimony of witnesses and the production of books and records in accordance with 3 V.S.A. §§ 809, 809a, and 809b.

14.2.8 Oral proceedings or any part thereof shall be recorded, and shall be transcribed on request of any party subject to other applicable provisions of law, and upon payment by the requesting party of the reasonable costs thereof.

14.2.9 Nothing in this section shall prohibit the informal disposition of a notice of alleged violation by stipulation, agreed settlement, consent order or default. Informal disposition may proceed with clear and simple documentation without complete adherence to this section.

14.3 Administrative Penalty/Fine. In assessing a penalty, the Commissioner shall consider the degree of actual and potential impact on public health, safety, and welfare resulting from the violation; the number of people affected by the violation; whether or not the violation was corrected after notification of its existence; the economic benefit gained by the violation; the deterrent effect of the penalty; and whether the park owner has been fined for the same or similar violations in the past. Standard penalties shall be based on a schedule maintained by the Department, which shall be made available to the public upon request.

14.4 Decision. At the close of the evidence the Commissioner shall issue a written decision, which shall include, at a minimum, the following:

a) Findings of fact relevant to each alleged violation;

b) Conclusion of law regarding each alleged violation;

c) Amount of the penalty imposed for each violation;

d) Date on which the penalty is due; and

e) Instructions to the park owner on where to file any appeal and the applicable time limits.

14.5 Collection. The Department may collect an unpaid administrative penalty by filing a civil collection action in any superior court, or through any other means available to state agencies, after the time for filing an appeal has expired.

14.6 Civil Action by Resident. In addition to any other rights of action, any resident may file suit against the park owner, after 30 days' written notice by certified mail to the park owner, for violation of 10 V.S.A. chapter 153 §§ 6236-6243 and for violation of 10 V.S.A. § 6242, may seek damages in the amount of $ 10,000.00 or 50 percent of the gain realized by the park owner from the sale, whichever is greater, as well as actual and punitive damages.

History

STATUTORY AUTHORITY: 3 V.S.A. §§ 831, 2452, 2453; 10 V.S.A. §§ 6205, 6231, 6252, 6253, 6262
EFFECTIVE DATE: September 22, 1993 Secretary of State Rule Log #93-67
AMENDED: July 1, 2004 Secretary of State Rule Log #04-25; January 1, 2008 Secretary of State Rule Log #07-050; July 2009 [The Department of Housing and Community Affairs and the Department of Economic Development were merged into the new Department of Economic, Housing and Community Development]; February 1, 2013 Secretary of State Rule Log #13-002; July 1, 2016 Secretary of State Rule Log #16-023

Chapter 002 HOUSING DIVISION RULES PART III: MOBILE HOME PARK WARRANTY OF HABITABILITY

11-002 Code Vt. R. 11-020-002-X HOUSING DIVISION RULES PART III: MOBILE HOME PARK WARRANTY OF HABITABILITY

Rule No.1 Authority

These rules are issued pursuant to authority vested in the Department of Housing and Community Development by 10 V.S.A. § 6262(b), in cooperation with the Agency of Natural Resources, the Division of Fire Safety of the Department of Public Safety, and the Department of Health, to adopt standards for safety, cleanliness and fitness for human habitation regarding the rental of a mobile home lot within a mobile home park.

Rule No.2 Definitions

The definitions set forth in this Section 2 shall apply to the rules of the Housing Division, Part III, Mobile Home Park Warranty of Habitability.

2.1 "Common Areas and Facilities" means any structures, facilities or areas located inside a mobile home park that are intended for the convenience and/or enjoyment of the residents. Common areas and facilities may include, but are not limited to, common laundry facilities, recreation or community rooms, mailboxes, sidewalks that are not used solely for access to a mobile home on a lot, storage areas, dumpsters or facilities for collection and removal of trash, recyclables, and food scraps, pools and playground areas that are owned and/or controlled by the mobile home park owner.

2.2 "Commissioner" means the Commissioner of the Department of Housing and Community Development of the Agency of Commerce and Community Development for the State of Vermont.

2.3 "Department" means the Department of Housing and Community Development of the Agency of Commerce and Community Development for the State of Vermont.

2.4 "Leaseholder" means a resident lawfully occupying a mobile home owned by the park owner or the owner of a mobile home sited on a mobile home lot in a mobile home park regardless of whether the leaseholder has actual possession of a written lease.

2.5 "Mobile Home Park" means any parcel or contiguous lots of land under common ownership or control on which are sited, or which is designed, laid out or adapted to accommodate, more than two mobile homes. A parcel or contiguous lots owned by agricultural employers providing up to four mobile homes for use by full time workers or employees, and a parcel or contiguous lots used solely on a seasonal basis for vacation or recreational mobile homes shall not be considered a mobile home park.

2.6 "Mobile Home Park Lot" means the area established by the owner of the mobile home park as being the area in which the leaseholder establishes a property right by way of a lease. If no area is established the lot shall be the footprint of the mobile home, including any steps, porches or additions attached to the mobile home.

2.7 "Mobile Home Park Owner(s)" means one or more owners, operators, officers, managing agents, or other persons with practical authority to establish rules, policies, or other requirements of a mobile home park.

2.8 "Potable Water" means water free from impurities in amounts sufficient to cause disease or harmful physiological effects and having bacteriological, chemical, physical, and radiological quality conforming to applicable standards of the Vermont Agency of Natural Resources. This definition is intended to create a definable standard under which it can be determined if the water in question causes a health or safety problem. Nothing in this definition is intended to require water testing in a mobile home park, except in cases of dispute, when it is not otherwise required to do so by current Water Supply Rules.

2.9 "Premises" means a mobile home park lot and improvements thereon, and any part of a mobile home park.

2.10 "Resident" means any individual, individuals, or family who occupy a mobile home in a mobile home park on a permanent or temporary basis.

Rule No.3 Applicability

These rules are not intended to limit or otherwise affect the power of any governmental authority with respect to federal, state or local enforcement of any law.

Rule No.4 Responsibility of Mobile Home Park Owner(s)

4.1 General. In any lease, the mobile home park owner shall be deemed to covenant and warrant to deliver over and maintain, throughout the period of the tenancy, premises which are safe, clean and fit for human habitation. This warranty requires the park owner to provide adequate and reliable utility services, including safe electrical services, potable water and sewage disposal to a location on each mobile home park lot from which these utilities can be connected to the mobile home. The warranty also requires the mobile home park owner to assure that the roads, common areas and facilities within the mobile home park are safe and fit for the purpose for which they were reasonably intended. 10 V.S.A. § 6262(a). This obligation shall not apply to property or utility services which are not owned by the mobile home park owner.

4.2 Utilities. No mobile home park owner shall cause to be removed, shut off or discontinued for any leased mobile home park lot, any utility which is required by these rules, except for such temporary interruption as may be necessary while actual repairs or alterations are in process, during temporary emergencies or if health, safety or property is threatened. This rule does not apply to abandoned mobile homes as determined by 10 V.S.A. § 6248 or mobile homes on which a writ of possession has been issued by a court of law. This shall not be construed to prohibit disconnection due to nonpayment of water charges by a water system approved by the Vermont Public service board or to interfere in any way with rights and obligations of an approved water system.

4.3 No Waiver of Implied Warranty of Habitability. No lease shall contain any provision by which the resident waives the protection of the implied warranty of habitability. Any such waiver shall be deemed contrary to public policy and shall be unenforceable and void. 10 V.S.A. § 6262(c).

Rule No.5 Responsibility of Mobile Home Park Resident(s)

No resident shall use or occupy the premises in such a way as to cause any failure to comply with these rules and the standards of habitability set forth in 10 V.S.A. § 6262(a). The resident shall not deliberately or negligently destroy, deface, damage, alter or remove any fixture, mechanical or utility system, or furnishings nor permit any guest, invitee or household member do so. A resident shall not plant any vegetation or trees, nor construct or alter any landscaping on the lot without prior written approval from the mobile home park owner, which shall not be unreasonably withheld.

Rule No.6 Electrical Service

6.1 Mobile Home Park Owner Responsibility. Mobile home park owners are required to provide each mobile home park lot with safe electrical service. The mobile home park owner is responsible for the electrical service and equipment located outside the mobile home including the feeder line from the service disconnect to the mobile home.

6.2 Leaseholder Responsibility. The Leaseholder shall ensure that the feeder line is properly connected to the mobile home.

Rule No.7 Water Supply

7.1 Owner Responsibility. Mobile home park owners are required to ensure that each mobile home park lot is supplied with potable water. Owners whose water systems are subject to the Vermont Water Supply Rules shall operate their systems in conformity with those rules. Owners shall further ensure adequate water pressure to meet the standard everyday needs of the leaseholder(s) and that the pressure is sufficient to prevent a health hazard from back siphonage. Owners are responsible for the maintenance of water lines to a point at which the lines surface under the mobile home.

7.2 Resident Responsibility. Residents shall ensure that the appliances, faucets, and toilets within the mobile home are free from leaks that will cause an unnecessary drain on the water supply. Residents shall ensure that water pipes on the mobile home park lot that are exposed to the elements are protected in a manner that reasonably prevents their freezing during the winter months. Running water shall not be used as a means of preventing freezing without the consent of the mobile home park owner. Running water to prevent freezing is not the preferred solution and should only be performed as a last resort and only in extreme and/or temporary situations.

Rule No.8 Sewage Disposal

8.1 Owner Responsibility. Mobile home park owners are required to provide every mobile home park lot with adequate wastewater disposal that is properly connected to a public sewage system or properly operating subsurface disposal system. A proper disposal system is one that does not affect the potability of the water supply, one that does not cause the wastewater to surface above ground, and one that does not cause backup into any mobile home. Owners are responsible for ensuring that the sewage disposal system is serviced adequately to prevent surfacing or back-up. Owners are responsible for the maintenance of the sewage disposal system to the point where it surfaces from the ground to service the mobile home.

8.2 Resident Responsibility. The leaseholder shall ensure that the mobile home is properly connected to the mobile home park's wastewater disposal system. Residents shall ensure that the appliances, faucets and toilets within the mobile home are free from leaks, and shall not dispose of anything other than normal domestic wastewater in the wastewater system. Residents shall be responsible for damage caused by failing to comply with these requirements.

Rule No.9 Sanitation

9.1 Owner Responsibility. A mobile home park owner shall not prohibit or hinder the removal of household waste by a resident or any contractor hired by a resident. A mobile home park owner may provide trash, recyclables, and food scraps removal, however, residents' use of such service shall not be required as a condition of the lease. Nothing in this rule shall affect reasonable obligations concerning the removal of household waste that may be set forth in a lease.

9.2 Resident Responsibility. Household waste that is placed outside a mobile home shall be stored in animal-proof (to the extent feasible), watertight receptacles of metal or other durable materials with tight-fitting covers and shall be removed and disposed of properly. A resident shall not accumulate or store household waste anywhere on the lot, under the mobile home or in any structure. Nothing in this rule shall affect reasonable obligations concerning the removal of household waste that may be set forth in a lease.

Rule No.10 Insects and Rodents

10.1 Owner Responsibility. A mobile home park owner shall maintain free from rats and reasonably free from all insects, vermin or other pests, all common area structures, abandoned homes, and common trash areas.

10.2 Resident Responsibility. The resident shall maintain the mobile home and lot free from rats and reasonably free from insects, vermin or other pests and shall ensure that the mobile home is properly skirted with weather-tight skirting at all times, except temporarily for maintenance or access. However, if the mobile home park owner owns the mobile home and offers it for rental, the mobile home park owner shall ensure that the mobile home is skirted with weather-tight skirting at all times, except temporarily for maintenance or access.

Rule No.11 Common Areas

11.1 Owner Responsibility. A mobile home park owner shall ensure that common areas and facilities are safe and maintained in a manner that ensures that residents can utilize them for their reasonably intended purpose.

11.2 Resident Responsibility. The resident shall not utilize common areas and facilities in a manner that will cause or prevent other residents from utilizing them for their reasonably intended purpose, nor disturb others' peaceful enjoyment of the premises.

Rule No.12 Roads

12.1 Owner Responsibility. A mobile home park owner shall maintain roads within the mobile home park ("park roads") reasonably free from hazards and in a manner that ensures safe and reliable ingress, egress and use without unreasonable interruption on a year-round basis, including the adequate and timely removal of snow and mitigation of icy conditions. Park roads shall be maintained reasonably free of potholes or depressions in which surface water can accumulate and constitute a health and safety hazard. A mobile home park owner may establish rules pertaining to use of park roads by residents and their guests.

12.2 Resident Responsibility. Residents shall not damage, alter or block any park roads and shall not use park roads in any manner that could endanger any person or property. Pedestrians shall have the right of way over motor vehicles.

Rule No.13 Premises

13.1 Owner Responsibility. A mobile home park owner shall maintain or remove trees as necessary to ensure that they do not create any hazard, danger to persons, or damage to property. A mobile home park owner shall provide adequate drainage to prevent standing pools of water, erosion, or sink holes, and to mitigate flooding to the greatest extent feasible.

13.2 Resident Responsibility. Residents shall notify the park owner of any hazardous, dangerous, or damaging trees promptly. Unless the lease provides otherwise, residents are responsible for snow removal from parking spaces and walkways on their lot.

History

STATUTORY AUTHORITY: 10 V.S.A. § 6262
EFFECTIVE DATE: July 6, 1995 Secretary of State Rule Log #95-41
AMENDED: July 1, 2004 Secretary of State Rule Log #04-25; January 1, 2008 Secretary of State Rule Log #07-050; July 2009 [The Department of Housing and Community Affairs and the Department of Economic Development were merged into the new Department of Economic, Housing and Community Development]; February 1, 2013 Secretary of State Rule Log #13-002; July 1, 2016 Secretary of State Rule Log #16-023

Chapter 003 HOUSING DIVISION RULES PART II: MEDIATION AND LEGAL SERVICES PAYMENTS AND CONSUMER PRICE INDEX FOR LOT RENT DISPUTES

11-003 Code Vt. R. 11-020-003-X HOUSING DIVISION RULES PART II: MEDIATION AND LEGAL SERVICES PAYMENTS AND CONSUMER PRICE INDEX FOR LOT RENT DISPUTES

Rule No.1 Authority

These rules are issued pursuant to authority vested in the Department of Housing and Community Development by 10 V.S.A. § 6252(a) for payment of the reasonable fees for professional mediation services as established by rules, and § 6253(g) for payment for legal representation for mobile park leaseholders who pursue an action in Superior Court.

These rules also establish the procedure for determining the consumer price index and notifying mobile home park owners of the percentage that is one percent more than the index. This is the threshold that is used to determine whether the leaseholders in a park have the right to request mediation of the proposed increase.

Rule No.2 Definitions

The definitions set forth in this Section 2 shall apply to the rules of the Housing Division, Part II, Mediation and Legal Services Payments & Consumer Price Index for Lot Rent Disputes.

2.1 "Commissioner" means the Commissioner of the Department of Housing and Community Development of the Agency of Commerce and Community Development for the State of Vermont.

2.2 "Consumer Price Index" means the United States Consumer Price Index for all Urban Consumers, Housing Component, published by the U.S. Bureau of Labor Statistics in the periodical "Monthly Labor Review and Handbook of Labor Statistics," as established annually by the Department.

2.3 "Department" means the Department of Housing and Community Development of the Agency of Commerce and Community Development for the State of Vermont.

2.4 "Lawyer" means a person licensed to practice law in the courts of the State of Vermont, and may include a professional organization of lawyers such as a partnership, professional corporation or non-profit corporation.

2.5 "Leaseholder" means a resident lawfully occupying a mobile home owned by the park owner or the owner of a mobile home sited on a mobile home lot in a mobile home park regardless of whether the leaseholder has actual possession of a written lease.

2.6 "Mobile home park" means any parcel or contiguous lots of land under common ownership or control on which are sited, or which is designed, laid out or adapted to accommodate, more than two mobile homes. A parcel or contiguous lots owned by agricultural employers providing up to four mobile homes for use by full time workers or employees, and a parcel or contiguous lots used solely on a seasonal basis for vacation or recreational mobile homes shall not be considered a mobile home park.

2.7 "Mobile home park owner" or "park owner" means one or more owners, operators, officers, managing agents or other persons with practical authority to establish rules, policies, or other requirements mobile home park.

2.8 "Professional mediator" means a person who has completed a minimum of 40 hours of mediation training from a recognized mediation school or training program and has 30 hours of mediation experience, and who has completed training provided by the Department or otherwise has demonstrated proficiency in regard to Vermont's mobile home park laws.

2.9 "Reasonable legal fees" means fees determined by the Commissioner to be reasonable after consultation with the Vermont Attorney General's Office and other Vermont state government programs that hire outside attorneys.

2.10 "Reasonable mediation fees" means fees determined by the Commissioner to be reasonable after consultation with Vermont state government and court programs that compensate mediators.

Rule No.3 Use of Funds for Professional Mediation and Legal Fees

3.1 The Commissioner may, by grant, award reasonable fees for professional mediation and legal services to a person who qualifies for such payment in accordance with the definition section of these Rules.

3.2 With respect to legal and professional mediation fees, the Commissioner shall determine a schedule which shall represent a per case grant from which the Commissioner may draw to reimburse qualified individuals for services rendered and permitted expenses incurred.

3.3 In order to qualify to receive payment from the grant, a professional mediator or lawyer must submit to the Commissioner an invoice for services rendered that shall include the dates on which the services were performed with respect to a mobile home park lot rent increase mediation or action in Superior Court, the amount of time in tenths of hours spent on each day for such services, and a summary of the services performed. A professional mediator and lawyer shall maintain records that document the services performed in case the Commissioner requires more detail than is provided in the summary of services. Final invoices shall be submitted no later than 90 days from the date of the last mediation session or conclusion of any action.

3.4 If reimbursable service fees or expenses exceed the grant amount, the Commissioner has discretion to award an additional grant to cover such fees or expenses.

Rule No.4 Establishing the Change in the Consumer Price Index

4.1 The Department shall establish on an annual basis the percent that is one percentage point above the change in the Consumer Price Index, as defined in Subsection 2.2 above.

4.2 The Department shall find the annual change in the U.S. Consumer Price Index for all Urban Consumers, Housing Component, published by the U.S. Bureau of Labor Statistics in the periodical "Monthly Labor Review and Handbook of labor Statistics," or its successor index, for the twelve-month period ending in August of each year. The percent change in the Consumer Price Index shall be rounded to the first decimal place, or tenth of a percent.

4.3 The Department shall then add one percentage point to the percent change in the Consumer Price Index and provide the result to all mobile home park owners and leaseholders' advocates, along with an updated Notice of Proposed Mobile Home Park Lot Rent Increase form. The Department shall make the updated Notice available as soon as possible after the first business day in October. The percent result shall be the threshold that is used to determine whether or not leaseholders in a park may request mediation of a lot rent increase effective during the following calendar year.

Rule No.5 Retaining Lot Rent Increase Information

5.1 The Department shall preserve the registration and rent increase information received from each park owner for a minimum of three years, or until the conclusion of any litigation concerning a lot rent increase, whichever occurs later.

History

STATUTORY AUTHORITY: 10 V.S.A. §§ 6252 to 6254
EFFECTIVE DATE: December 22, 1995 Secretary of State Rule Log #95-86
AMENDED: July 1, 2004 Secretary of State Rule Log #04-25; January 1, 2008 Secretary of State Rule Log #07-050; July 2009 [The Department of Housing and Community Affairs and the Department of Economic Development were merged into the new Department of Economic, Housing and Community Development]; February 1, 2013 Secretary of State Rule Log #13-002; July 1, 2016 Secretary of State Rule Log #16-023

Chapter 004 HOUSING DIVISION RULES PART IV: ADMINISTRATION OF THE HOUSING INVESTMENT TAX CREDIT PROGRAM

11-004 Code Vt. R. 11-020-004-X HOUSING DIVISION RULES PART IV: ADMINISTRATION OF THE HOUSING INVESTMENT TAX CREDIT PROGRAM

Rule No.1 Authority

These rules are issued pursuant to authority vested in the Department of Housing and Community Development by 32 V.S.A. § 5830c(d).

Rule No.2 Definitions

The definitions set forth in this Section 2 shall apply to the Rules of the Housing Division, Part IV, Administration of the Housing Investment Tax Credit.

2.1 "Affordable housing" means housing in which:

(a) At least 50 percent of the units shall be occupied by households whose income does not exceed 100 percent of the greater of the state or area median income except when eligible housing charities use charitable investments to finance loans to individual borrowers. In that case, consistent with 32 V.S.A. § 5830c(d) (4) (C) loans made from charitable investments shall not be made to any borrowers with incomes above 100 percent of the greater of the state or area median income. Area median income shall be the county or Metropolitan Statistical Area median income published by the federal Department of Housing and Urban Development.

(b) The goal shall be to provide housing at a cost of no more that 30 percent of a household's gross income. Housing costs for renters shall include rent and utility payments. Housing costs for homeowners shall include mortgage payments, property insurance and property taxes.

(c) The affordability of the unit(s) shall be protected for the duration of the term of any loan made pursuant to 32 V.S.A. § 5830c(d) (4) or at least 15 years, whichever is greater, through a housing subsidy covenant or other legally binding instrument, which shall terminate upon the issuance of a judgment of foreclosure or a transfer of the property in lieu of foreclosure.

2.2 "Bank Prime Loan Rate" means the March average prime loan rate, as of March 31 each year, used by insured United States chartered commercial banks to price short-term business loans, as published in the Federal Reserve Board's statistical release.

2.3 "Charitable Investment" means a loan or deposit made to an eligible housing charity, on which the actual annual rate of return is at or below the charitable threshold rate.

2.4 "Charitable threshold rate" means, for each year beginning July 1, a rate which is the greater of two percentage points below the most recent bank prime loan rate, or one percent.

2.5 "Commissioner" means the Commissioner of the Department of Housing and Community Development.

2.6 "Commissioner of Taxes" means the Commissioner of the Department of Taxes for the State of Vermont.

2.7 "Department" means the Department of Housing and Community Development of the Agency of Commerce and Community Development for the State of Vermont.

2.8 "Eligible housing charity" means either a governmental agency or instrumentality, or a private not-for-profit organization that has applied for and has not been denied tax-exempt status by the United States Internal Revenue Service (IRS) and that is determined eligible by the Commissioner of the Department of Housing and Community Development in accordance with Rule 3. Charities qualifying under this definition must have applied to the IRS for tax-exempt status and must have received conditional approval before the Commissioner will approve its eligibility to participate in this program.

2.9 "Fiscal year" means July 1 through June 30.

2.10 "Tax Year" means January 1 through December 31.

2.11 "Tax credit certificates" or "certificates of eligibility for tax credits" or "certificate of eligibility to receive tax credit investments" are certificates issued by the Commissioner to eligible housing charities authorizing the charity to accept charitable investments pursuant to this chapter in an amount Up to the dollar amount specified on the certificates. These certificates shall not be considered a security under 9 V.S.A. § 4202a(10).

Rule No.3 Application for Status as an Eligible Housing Charity

3.1 Any not-for-profit organization, governmental agency, or instrumentality of the state must qualify as an eligible housing charity to accept charitable investments eligible for tax credits under this statute. Such organizations shall make application to the Commissioner on a form provided by the Department of Housing and Community Development. The Commissioner shall make a determination of eligibility and shall provide written verification of the same if the organization meets the statutory requirements under 32 V.S.A. § 5830c, Subdivision (d) (1) through (d) (5).

3.2 Eligibility to receive certificates will remain valid until such time as the Commissioner revokes it upon a finding that it fails to substantially meet the eligibility criteria.

Rule No.4 Distribution of Tax Credit Certificates among Eligible Housing Charities

4.1 Subject to the availability of tax credit certificates, as defined in Rule 4.3 and the distribution formula as defined in Rule 4. 4, the Commissioner shall issue tax credit certificates to the following organizations:

(a) those which have applied for eligibility as an eligible housing charity;

(b) those which have received written verification of that status;

(d) those which evidence that they have made a good faith effort to ensure each affordable housing project receiving funds under this program meets the planning goals under 24 V.S.A. § 4302(b) and (c) and have attempted to mitigate any potential adverse impacts caused by failure to meet the goals.

4.2 Deleted.

4.3 Availability of Tax Credit Certificates

(a) In no event shall the Commissioner issue or permit to be outstanding more than $ 5,000,000 in tax credit certificates in the aggregate in any fiscal year. Each $ 1.00 in tax credit certificates shall be equal to $ 1.00 in charitable investment funds received by an eligible charity from an investor pursuant to 32 V.S.A. § 5830c.

(b) The certificate amount does not represent the dollar amount of actual tax credits to be received by the investor, nor does it constitute approval by the Commissioner of Taxes of the investor's eligibility to receive tax credits, nor does it constitute approval by the Commissioner of specific affordable housing investments.

(c) An eligible housing charity which is allocated tax credit certificates may designate which of its investors shall claim tax credits pursuant to this statute. A tax credit may be claimed by the investor for the life of the charitable investment, until the eligibility of the housing charity is revoked, or the statutory authority is repealed, whichever comes first.

(d) Tax credit certificates shall be available for re-issuance in an amount equivalent to the amount by which the principal on a charitable investment is partly or fully repaid to an investor or it is determined that the principal will not be repaid. The housing charity shall notify the Commissioner within 30 days of the date such tax credit certificates become available for re-issuance in the case of a loan that is fully repaid or will not be paid, and shall provide documentation of the same. For all others, calculations of the amount by which the loan has been repaid during the tax year shall be made available to the Commissioner on January 31. Said charity may then re-apply for available certificates. Until the Commissioner is notified of the availability of tax credit certificates pursuant to this subsection, the full amount of the tax credit certificates issued to a recipient housing charity shall be considered to be outstanding and not available for reissuance. In no event may the housing charity designate new investors to receive tax credits without receiving a re-issuance of tax credit certificates from the Commissioner.

(e) Any balance between the amount of tax credit certificates issued to a housing charity and the amount of charitable investments actually received by the charity as of December 31 [st ] each year must be reported to the Department by January 31. That portion of the amount of each tax credit certificate issued and unused may be recalled and redistributed to other eligible housing charities, by February 21, in accordance with Rule 4.1 and 4.4.

4.4 Distribution of Available Tax Credit Certificates Among Eligible Charities

(a) On or after the first working day in July of each year, in accordance with Sub sections 4.1 and 4.2 above, the Commissioner shall issue 60% of the available tax credit certificates equally among eligible housing charities, subject to the following limits:

(1) Charities which have loaned or invested $ 50,000 to $ 500,000 in projects which meet the definition of affordable housing as defined in Subsection 2.1 above for the three fiscal years preceding the date of its application for tax credit certificates shall receive no more than $ 200,000 in tax credit certificates, in any given issuance;

(2) Charities which have loaned or invested over $ 500,000 in projects which meet the definition of affordable housing as defined in Subsection 2.1 above for the three fiscal years preceding the date of its application for tax credit certificates shall receive no more than $ 1,000,000 in tax credit certificates, in any given issuance.

(b) The Commissioner may issue the remaining 40% of the available tax credit certificates to eligible housing charities at any time.

(c) In allocating the tax credit certificates, and subject to the above limitations, the Commissioner may consider whether an eligible charity requires a lesser or greater amount of certificates based on past performance and anticipated charitable investments or whether another distribution method is in the best interests of fostering affordable housing. The Commissioner shall make the reason for his or her distribution available to the public in writing.

4.5 Charities may not accept investments eligible for the HITC program in amounts less than $ 1,000.

4.6 Eligible housing charities may return unexpended tax credit certificates to the Commissioner at any time for redistribution in accordance with Subsection 4.4 above.

4.7 The Commissioner shall furnish the Commissioner of Taxes with a list of eligible housing charities with the amount of their respective tax credit certificates by July 15 and March 15 of each year.

Rule No.5 Revocation of Eligibility

5.1 The Commissioner may revoke an organization's status as an eligible housing charity upon finding, after notice and a hearing, that the organization fails to meet substantially all the criteria under 32 V.S.A. § 5830c(d) (1) through (d) (5).

5.2 If eligibility is revoked the effective date shall be no earlier than the date the charity received notice of the revocation. The tax credit certificate shall be invalid as of the date of revocation, but investors shall be eligible for tax credits until the end of the tax year in which revocation occurs.

5.3 If eligibility is revoked, the organization shall reimburse the State for the full amount of any tax credits allowed its investors after the effective date of revocation of eligibility. The reimbursement shall be prorated on a monthly basis with the charity's liability beginning on the first day of the month following revocation.

5.4 The organization shall pay to investors the full amount of any tax credits claimed by the investor, but disallowed by the Commissioner of Taxes due solely to the revocation of eligibility.

5.5 Charities which have had their eligibility revoked by the Commissioner shall not be liable for the value of tax credits to investors in the tax years following revocation.

5.6 Any person aggrieved by the denial or revocation of the eligibility of a housing charity may appeal to superior court.

Rule No.6 Commissioner's Responsibilities

6.1 Under 32 V.S.A. § 5830c(a), the Commissioner shall approve charitable investments in an eligible housing charity. Such approval shall be deemed to have been granted by the Commissioner if:

(a) the sum total of the charitable investment, or the total of all charitable investments accepted by the eligible housing charity does not exceed the amount of tax credit certificates issued by the Commissioner:

(b) the recipient organization has been determined to be an eligible housing charity and the Commissioner has not revoked the eligibility;

(d) the investment is equal to, or more than $ 1,000;

(e) the charitable investment has a fixed term at which time the principal will have been amortized or come due in full.

6.2 Approval of a charitable investment by the Commissioner in accordance with Subsection 6.1 shall not imply approval of a tax credit by the Commissioner or by the Commissioner of Taxes.

6.3 Approval of a charitable investment in accordance with Subsection 6.1 shall not imply that the Commissioner has made an investment offering or has approved the sale of a security. No written information prepared by the Department on the HITC Program shall in any way be considered an investment offering.

6.4 Once the eligible housing charity's status has been determined by the Commissioner under Subsection 3 and charitable investments have been approved in accordance with Subsection 6.1, the Commissioner shall not become involved in the approval of individual investments made by the charity into specific affordable housing developments except in accordance with Subsection 4.1(d).

6.5 The Commissioner shall monitor compliance with the HITC program by requiring:

(a) Eligible housing charities to submit the information required under 32 V.S.A. § 5830c(f) (3) to the Department when it is submitted to the Commissioner of Taxes; and

(b) on or before January 31 and July 31 of each year the eligible housing charity shall submit the following information in a format approved by the Commissioner:

(1) a list of the charitable investments accepted by the eligible housing charity with the interest rate and term of each loan from each investor and the date each charitable investment was made to the charity;

(2) a list of the affordable housing projects in which investors' funds were invested and the degree to which the project meets 32 V.S.A. § 5830c(c) (1) (A) through (C); the interest rate and term of each loan made by the charity in accordance with 32 V.S.A. § 5830c(d) (4); the date funds were disbursed to each project;

(3) evidence of compliance with subsection 4.1(d) and

(4) any other information reasonably required by the Department to administer this program.

History

STATUTORY AUTHORITY: 32 V.S.A. § 5830c
EFFECTIVE DATE: December 4, 1990 Secretary of State Rule Log #90-58
AMENDED: July 1, 2004 Secretary of State Rule Log #04-25 [renumbered from 11 030 005]; January 1, 2008 Secretary of State Rule Log #07-050; July 2009 [The Department of Housing and Community Affairs and the Department of Economic Development were merged into the new Department of Economic, Housing and Community Development]; February 1, 2013 Secretary of State Rule Log #13-002; July 1, 2016 Secretary of State Rule Log #16-023

Chapter 005 RULES FOR THE ALLOCATION AND DISTRIBUTION OF MUNICIPAL PLANNING FUNDS

11-005 Code Vt. R. 11-020-005-X RULES FOR THE ALLOCATION AND DISTRIBUTION OF MUNICIPAL PLANNING FUNDS

Section 1.1 Purpose

These rules establish the means by which municipal planning funds will be allocated and distributed to Vermont municipalities for the purposes authorized by 24 VSA Section 4306(b)(4).

Section 1.2 Definitions

(A) "Commissioner" means the Commissioner of the Department of Housing and Community Affairs.

(B) "Confirmation" is the process set forth in 24 VSA Section 4350 by which a regional planning commission reviews a member municipality's planning activities and establishes that the municipality is (1) engaged in a continuing planning process that, within a reasonable time, will result in a plan which is consistent with the goals contained in 24 VSA Section 4302 and(2) maintaining its efforts to provide local funds for municipal and regional planning purposes.

(D) "Municipality" means a town, a city, an unorganized town or gore, or an incorporated village (a village having adopted its own plan and one or more bylaws) meeting the definition of municipality contained in 24 VSA Section 4303(4).

(E) "Nearby municipality" means any Vermont town, city, unorganized town or gore which is geographically adjacent and connected to another town, city, unorganized town or gore through their mutual boundary by a Class 2 or better Highway.

(F) "Regional Planning Commission" means a planning commission for a region created under 24 VSA Chapter 117 Section 4341.

Section 1.3 Eligibility

To qualify for funds under these rules, a municipality must meet both of the following conditions:

(A) Be confirmed by the regional planning commission of which the municipality is a member.

(B) Have completed the reporting requirements, as set out in Section 1.7(C) of these rules.

(C) Villages becoming "municipalities." In order to be eligible for separate funding from its corresponding town for any state fiscal year, an incorporated village must have adopted its own plan and one or more bylaws by July 1 of that year, as well as meeting the requirements set forth in Subsections (A) and (B).

Section 1.4 Source of Funds

The source of funds for these purposes is the sum appropriated to the Department for assistance to municipal planning from the Municipal and Regional Planning Fund as described in 32 VSA Section 9610(c) and 24 VSA Section 4306.

Section 1.5 Allocation of Funds

The funds appropriated for municipal planning shall be allocated to Vermont municipalities in the following manner (The methodology for the allocation of funds can be found in Appendix A to these rules):

(A) Two-thirds of the funds will be allocated on a per capita basis, using the most recent population estimate published by the Vermont Department of Health.

(B) A minimum base allocation of $ 1,000 will be provided to those municipalities, including incorporated villages qualifying as municipalities, whose per capita allocation under Subsection (A) would otherwise be less than $ 1,000.

(C) One-third of the remaining balance, after Subsections (A) and (B) have been calculated, will be allocated, using the following indicators of growth:

(1) Twenty-five percent according to the absolute change in population, using a three-year moving average.

(2) Twenty-five percent according to the percentage change in population, using a three-year moving average.

(3) Fifty percent according to the percentage change in the equalized grand list, using a three-year moving average. The equalized grand list will be determined by using the most recent aggregate fair market value data as determined by the Vermont Department of Taxes, Division of Property Valuation and Review.

(D) One-third of the remaining balance, after Subsections (A) and (B) have been calculated, will be allocated in accordance with the level of development in nearby municipalities, using an index generated under the indicators of growth in Section 1.5(C) of these rules to indicate the level of development activity in nearby municipalities.

(E) One-third of the remaining balance, after Subsections (A) and (B) have been calculated, will be allocated according to community need, based on a local tax effort index derived by dividing the average statewide per capita income by a town's, city's, unorganized town's or gore's per capita income, multiplied by the town's, city's, unorganized town's or gore's effective tax rate. The effective tax rate is determined by dividing the total taxes assessed by the town, city, unorganized town or gore by the aggregate fair market value. The local tax effort will be calculated using the most recent data published by the Vermont Department of Taxes.

(F) Due to lack of data, incorporated villages qualifying as municipalities cannot be included in the formula calculations (Subsections C, D, and E). Therefore, the corresponding towns' allocations will be adjusted, based on the village's population in proportion to the town's, to include the villages in the final list.

Section 1.6 Use of Funds

The funds may be used to:

(A) Develop the municipal plan as described in 24 VSA, Chapter 117, Subchapter 5.

(B) Develop municipal by-laws as described in 24 VSA, Chapter 117, Subchapter 6.

(D) Acquire development rights, conservation easements, or purchases of lands, areas and structures identified in either regional or municipal plans as necessary to provide needed housing, aquifer protection, open space, farmland preservation or other conservation purposes.

(E) Fund the regional planning commission in undertaking capacity studies.

Section 1.7 Administrative Procedures

(A) Annual Allocation Estimate

On or about January 15 of each year the Department will prepare an estimate, based on the Governor's proposed budget, of the next state fiscal year's allocation for all municipalities. The Department will at that time inform all municipalities of their estimated allocation.

(B) Distribution of Funds

(1) The funds will be disbursed by the Department in two installments, the first on or about August 1 and the second on or about April 1, to those municipalities which met the eligibility requirements of Section 1.3 of these rules as of the date of distribution. It is up to the regional planning commissions to notify the Department each year as to which municipalities have a current confirmation status. A municipality non-eligible at the date of distribution will be sent its allocation at any time during the fiscal year upon meeting the eligibility requirements of Section 1.3 of these rules.

(2) The August installment shall be 70 percent of the municipality's total payment for a given fiscal year. The April installment shall be 30 percent of the total.

On or about May 1 of each year, the Department will mail a questionnaire to each municipality receiving planning funds. The questionnaire shall ask the municipality to describe how the funds have been expended. If the funds have not been expended, the municipality will explain for what purpose(s) the funds are being carried over.

(D) Expenditure of Funds

The Commissioner may withhold funding if the municipality has not expended the prior fiscal year's funds for one or more of the eligible uses set out in Section 1.6 of these rules or has not carried over the funds for future expenditure on one or more of the eligible uses. In making a determination to withhold funding, the Commissioner may request the municipality to produce documentation showing how the planning funds have been expended. Before the Commissioner makes any final determination to withhold funding, the Commissioner or his or her designee shall meet with officials from the involved municipality, if the municipality so requests, to review the matter.

(E) Undistributed Funds

All funds remaining undistributed by the end of any state fiscal year shall revert to the Municipal and Regional Planning Fund.

Appendix A. Methodology for the Allocation of Funds.

In order to demonstrate how the municipal allocation formula is applied, a hypothetical example, using the Town and Village of "Deerfield", is shown below. The numbers in this example are therefore not real, and any resemblance to an actual municipality is purely coincidental. These calculations are based on an assumed allocation of $ 1.5 million for municipal planning.

NOTE: For the purposes of this example, year "A" represents the most recent year for which there is data. Year "B" is the year before "A"; year "C", the year before "B"; and year "D" is the year before "C".

FACTOR 1 - Population

Based on $ 1,000,000 available for Factor 1 (representing 2/3 of the $ 1,500,000 allocation for municipal planning) and year "A" estimated statewide population of 548,000.

Per capita allocation = $ 1,000,000/548,000 = $ 1.82

Town of Deerfield year "A" estimated population = 3,553

Town of Deerfield Factor 1 allocation = 3,553 x $ 1.82 = $ 6,466.46 (Factor 1)

Because the Town of Deerfield is associated with an incorporated village meeting the definition of "municipality", the $ 6,466 allocation will be divided between the two. This is done by population.

Village POP "A" = 1810

Town (including village) POP "A" = 3553

Village of Deerfield allocation = Total town alloc. x Village POP "A"/Town POP "A" = $ 6466 x 1810/3553

Village of Deerfield allocation = $ 3,294

Subtract the Village allocation from the total allocation to determine the Town's share.

Town of Deerfield allocation = $ 6466 - $ 3294 = $ 3,172

Both the Town's and the Village's allocation are above the minimum base of $ 1,000 and therefore do not need to be adjusted upward.

FACTOR 2 - Indicators of Growth --- 33.33% (1/3) of remaining funds

A) Population

Absolute change ( POP) (8.33% of remaining funds (25% of 33.33%))

POP = POP A + POP B + POP C/3 - POP B + POP C + POP D/3

= 3553 + 3490 + 3445/3 - 3490 + 3445 + 3357/3

= 3496 - 3431

= 65

Compare Deerfield's absolute population increase of 65 to the average of all the calculated town, city, unorganized town and gore absolute population increases (in this case the average is, say, 53) to get a normalized factor:

N( POP) = 65/53 = 1.23

This means that Deerfield's absolute population increase is about 1 and 1/4 times the average absolute population increase.

Apply the 8.33% weight:

W( POP) = 1.23 x 8.33 = 10.25 (Factor 2. A.1)

NOTE: Where there is a negative factor (i.e., if there is a loss of population), the value of zero will be used.

Percent change ( POP%) (8.33% of remaining funds (25% of 33.33%))

POP% = POP A + POP B + POP C/3 - POP B + POP C + POP D/3/POP B

POP C + POP D/3 x 100

= 3,496 - 3,431/3,431 x 100

= 1.89%

Compare to the state average by dividing Deerfield's POP% by the average of the other town, city, unorganized town, and gore POP% (which happens to be 3%), resulting in a normalized factor.

N( POP%) = 1.89/3 = .63 (This means that Deerfield's percent population increase is roughly 2/3 that of the average percent increase.)

Since this factor is worth 8.33% of remaining funds, multiply it by 8.33 to get the weighted factor:

W( POP%) = .63 x 8.33 = 5.25 (Factor 2.A.2) Again, if there were a negative factor, the value of zero would be used.

B) Percent change in Equalized Grand List (EGL) (16.67% of remaining funds (50% of 33.33%))

EGL = AFMV/100, where AFMV = aggregate fair market value for Town of Deerfield

EGL D = AFMV D/100 = $ 57,567,625/100 = $ 575,676

EGL C = $ 616,571

EGL B = $ 671,253

EGL A = $ 763,655

Percent Change:

EGL% = EGL A + EGL B + EGL C/3 - EGL B + EGL C + EGL D/3/EGL B

EGL C + EGL D/3 x 100

EGL% = 683, 826 - 621,167/621,167 x 100

= 10.09%

Normalize EGL% by dividing by state average of 21.99% (again, the state average here is the average of all the town, city, unorganized town, and gore EGL%)

N( EGL%) = 10.09%/21.99%

N( EGL%) = .46 The percent change in Deerfield EGL is therefore almost 1/2 of the average percent change in the state.

Apply the 16.67% weight:

W( EGL%) = .46 x 16.67

W( EGL%) = 7.67 (Factor 2B) Again, if there were a negative factor, the value of zero would be used.

FACTOR 3 - Level of Development in Nearby Municipalities -- 33.33% (1/3) of remaining funds

Nearby is defined here as adjacent and connected through the mutual boundaries by a class 2 or better Highway.

Deerfield's nearby municipalities, along with their own Growth Indicators, are as follows:

TOWN	W(POP%)	W(POP)	W(EGL%)	SUM GROWTH INDICATORS
Town of Abbot	0.00	0.50	11.84	12.34
Town of Barrington	0.00	0.00	15.50	15.50
Town of Foxboro	18.74	22.24	12.50	53.48
Town of Eastport	0.67	2.75	16.34	19.76
Town of Hamlin	3.00	5.58	14.67	23.25
Town of Harmony	0.00	0.00	0.00	0.00
Town of Southbury	39.48	8.33	10.50	58.31
SUM				182.64

TOWN

W(POP%)

W(POP)

W(EGL%)

SUM GROWTH INDICATORS

Town of Abbot

0.00

0.50

11.84

12.34

Town of Barrington

0.00

15.50

Town of Foxboro

8.74

22.24

12.50

53.48

Town of Eastport

0.67

2.75

16.34

19.76

Town of Hamlin

3.00

5.58

14.67

23.25

Town of Harmony

0.00

Town of Southbury

39.48

8.33

10.50

58.31

SUM

182.64

Average of the sum of growth indicators (182.64 divided by 7) . . 26.09

Because this figure has already been normalized and weighted, we don't do it again.

26.09 (Factor 3)

FACTOR 4 - Community need --- 33.33% (1/3) of remaining funds based on "local tax effort index" (TE)

A tax effort index is used to measure each community's need. A community's ability to raise revenue through the assessment of property taxes is measured relative to the ability of its residents to pay taxes. This index incorporates municipal aggregate fair market value, the municipal tax assessment, and the municipal per capita income as compared to the statewide average per capita income. Wealthier municipalities will have a lower tax effort index than poorer municipalities. Please note that for the calculations in factor 4, "municipal" means town, city, unorganized town or gore. The formula is as follows:

TE = 100 x municipal taxes assessed/municipal aggregate fair market value x state per capita income/municipal per capita income

for the Town of Deerfield:

TE = 100 x $ 1,054,292/$ 76,365,476 x $ 9,485/$ 9,939

TE = 1.32

Each community's tax effort is then compared to the average of all the calculated community tax efforts in the state (say the average is 1.10) to obtain the tax effort factor:

TE factor = 1.32 / 1.10 = 1.20

The weighted tax effort factor is found by multiplying the TE factor by 33.33.

Wtd. TE factor = 1.20 x 33.33 = 40.00 (Factor 4)

TOTALS

Step 1: Add all of the Town of Deerfield's Factors 2, 3 and 4

Total Factor = 10.25 + 5.25

7.67 + 26.09 + 40.00

Total Factor = 89.26 points

Step 2: A per point allocation is determined by dividing the remaining funds, after the minimum base adjustments from Factor 1 have been made to all municipalities, by the statewide number of points.

Per point allocation = Remaining funds/Statewide points

= $ 495,575.25/24,046.83

= $ 20.61/point

Step 3: Multiply Deerfield's point total by the Dollar value per point. Deerfield allocation factors 2, 3, 4 = $ 20.61/pt x 89.26 = $ 1,840

Step 4: Allocate Village and Town shares for factors 2,3, and 4.

Village of Deerfield allocation = Alloc. (Village POP A)/Town POP A

= $ 1840 (1810)/3553

Village of Deerfield Allocation = $ 937

Town of Deerfield Allocation = $ 1840 - $ 937

Town of Deerfield Alloc. = $ 903

Step 5: The total allocations for the town and the village are calculated by adding the allocation from Factor 1 to the allocation from Factors 2,3 and 4.

Total Village allocation = $ 3294 + $ 937 = $ 4,231

Total Town allocation = $ 3172 + $ 903 = $ 4,075

History

STATUTORY AUTHORITY: 24 V.S.A. § 4306
EFFECTIVE DATE: July 1, 1989 Secretary of State Rule Log #89-25)
AMENDED: July 1, 1992 Secretary of State Rule Log #92-29; July 2009 [The Department of Housing and Community Affairs and the Department of Economic Development were merged into the new Department of Economic, Housing and Community Development]

Chapter 006 RULES FOR THE ALLOCATION AND DISBRIBUTION OF REGIONAL PLANNING FUNDS

11-006 Code Vt. R. 11-020-006-X RULES FOR THE ALLOCATION AND DISBRIBUTION OF REGIONAL PLANNING FUNDS

Section 2.1 Purpose

These rules establish the means by which regional planning funds will be allocated and distributed to the Vermont regional planning commissions for the purpose of assisting these commissions in meeting their responsibilities under 24 V.S.A Chapter 117.

Section 2.2 Definitions

(A) "Commissioner" means of the Department of Housing and Community Development.

(B) "Department" means the Department of Housing and Community Development.

(C) "Municipality" means a town, a city, an incorporated village, or an unorganized town or gore, meeting the definition of municipality contained in 24 V.S.A. Section 4303(12).

(D) "Regional planning commission" or "RPC" means a planning commission for a region created under 24 V.S.A. Section 4341.

Section 2.3 Eligibility

To qualify for funds under these rules a regional planning commission must meet all of the following conditions.

(A) Be established pursuant to 24 V.S.A. Section 4341,

(B) Make progress toward fulfilling the responsibilities assigned by the Vermont Legislature in 24 V. S.A. 4345 and 4345a , including developing a regional plan, as set out in 24 V.S.A. 4348a , inaccordance with a work plan and annual grant agreement as set forth in Section 2.7(B) of these rules.

(D) Complete and file a copy of a financial audit within 180 days of the close of the RPC's fiscal year.

Section 2.4 Source of Funds

The source of funds for these purposes is the sum appropriated to the Department for assistance to regional planning from the Municipal and Regional Planning Fund as described in 24 V.S.A. Section 4306.

Section 2.5 Allocation of Funds

The funds for regional planning shall be allocated to regional planning commissions in the following manner.

(A) Fifty-percent of the funds to be allocated to the regional planning commissions shall be divided among the commissions in equal shares.

(B) The remaining balance of funds will be allocated as follows:

(1) Forty-five percent of the balance will be allocated on a per capita basis, accounting for the number of Vermont residents a regional planning commission serves. The Vermont population of each region will be determined using annual estimates of the Vermont Department of Health, or U.S. Census data, whichever is more recent.

(2) Forty-five percent of the balance will be allocated according to the number of Vermont member municipalities in each regional planning commission as of July 1 of each year.

(3) Ten percent of the balance will be allocated proportionately, based on Property Transfer Tax receipts coming from the region for the preceding four quarters. According to the most recent data available from the Vermont Department of Taxes.

(C) The Vermont Association of Planning and Development Agencies may review the above allocation formula and recommend any changes to the Department.

Section 2.6 Use of Funds

These funds must be used by the regional planning commission for one or more of the following activities.

(A) Carrying out any of the optional and/or required duties of a regional planning commission as described in 24 V.S.A. Sections 4345 and 4345a.

(B) Adopting and amending a regional plan in accordance with 24 V.S.A. Sections 4348, 4348a and 4348b.

Section 2.7 Administrative Procedures

(A) Annual allocation Estimate

No later than April 1 the Department will prepare an estimate of the next fiscal year's allocation for all the regional planning commissions. The Department will at that time inform the regional planning commissions of their estimated allocation in order for them to develop a work plan for the next fiscal year. The Department will provide the RPC with a final allocation upon close of the legislative session and adoption of the budget.

(B) Work Plan and Annual Grant Agreement

No later than June 1 of every year, each regional planning commission shall submit to the Department a copy of their proposed work plan for the next fiscal year. The Department will review these work plans for consistency with the requirements of 24 V.S.A. Chapter 117 and offer a grant agreement to each regional planning commission for the next fiscal year, incorporating the work plan. In order for funds to be distributed that next fiscal year, the grant agreement must be signed by both the regional planning commission and the Department.

A mid-year progress report describing the regional planning commission's activities in carrying out their work plan, including the Commission's progress towards adopting a regional plan that is consistent with the provisions of 24 V.S.A. 4345a, 4347, 4348, 4348a and 4348b, shall be filed with the Department no later than January 31 [ st. ]An Annual Report, coordinated by the Vermont Association of Planning and Development Agencies, shall be prepared and submitted to the Department, all municipalities and the Vermont Legislature, summarizing the work of the regional planning commissions. The Department shall include it as part of relevant reports it makes to the Legislature regarding the activities and funding of regional planning commissions.

(D) Distribution of Funds

Funds will be distributed in advance to each eligible regional planning commission on a quarterly basis. The first quarterly payment of the fiscal year will be made on or about July 1. The next three payments of the year will be made on or about October 1, January 1 and April 1, respectively. The October 1 [ st ] and April 1 [ st ] payments shall be linked to the Department's review of the commission's most recent mid-year progress report. All payments shall be subject to retainage of five percent (5%) to ensure completion of work required under the annual Grant Agreement.

(E) Undistributed Funds

All funds undistributed by the end of any state fiscal year shall be held for one additional fiscal year by the Department of Housing and Community Development for the benefit of the RPC to whom they were originally allocated ("the Holding Period"). The RPC and the Department shall work together to establish and implement a plan to release those funds in accord with the Grant Agreement. If at the end of the Holding Period funds remain in retainage, those funds shall revert to the portion of the Municipal and Regional Planning Fund that supports regional planning commissions for reallocation to all regional planning commissions based upon the funding formula then in effect.

History

STATUTORY AUTHORITY: 24 V.S.A. C 117
EFFECTIVE DATE:
June 1, 1992 Secretary of State Rule Log #92-17
AMENDED:
July 2009 [The Department of Housing and Community Affairs and the Department of Economic Development were merged into the new Department of Economic, Housing and Community Development]; December 6, 2019 Secretary of State Rule Log #19-065; April 2020 [correction to chapter name]

Chapter 007 FEDERAL TAX CREDITS FOR LOW INCOME HOUSING; STATE ALLOCATION SYSTEM; JOINT COMMITTEE ON TAX CREDITS

11-007 Code Vt. R. 11-020-007-X FEDERAL TAX CREDITS FOR LOW INCOME HOUSING; STATE ALLOCATION SYSTEM; JOINT COMMITTEE ON TAX CREDITS

Section I Purpose

The Federal Tax Reform Act of 1986 created a new federal tax credit to stimulate the production and rehabilitation of housing for low income persons. The legislation ( 26 U.S.C. Section 42) limited the allocation of tax credit authority to each state from 1986-89 to an annual sum equal to $ 1.25 per capita. Under this legislation, the state, acting through the Issuing Authority, the Vermont Housing Finance Agency, has allocated credits totalling approximately $ 1.48 million from 1987 through 1989.

The tax credit is determined as a percentage of certain qualifying project costs, relating to both the entire project and the units within a project that are dedicated for occupancy by low-income households. In the event that the owner fails to maintain the housing as a qualified project, there are provisions for recapture of sums taken as tax credits.

In 1989 Congress adopted an amendment to the legislation that limits the authority for 1990 to $ .9375 per capita. This amendment also requires the state to establish an Allocation Plan for allocating tax credits to qualifying rental properties, which must also meet specific eligibility criteria established by federal law.

On March 8, 1987, Governor Madeleine M. Kunin issued Executive Order # 42, which designates the State Agency of Development and Community Affairs as the State Housing Credit Agency. On July 16, 1987 the Governor signed Executive Order # 42A, which authorizes the Vermont Housing Finance Agency and the Agency of Development and Community Affairs to make low income housing credit allocations. These Rules implement Executive Orders # 42 and 42A.

Section II Definitions

"Allocation Plan" means the qualified allocation plan required by Section 42(m)(1)(B), as amended.
"Code" means the Federal Internal Revenue Code of 1986, as amended from time-to-time.
"Credit Year" means the calendar year. The first credit year for the Low Income Housing Tax Credit Program commenced on January 1, 1987.
"Eligible Basis" means "eligible basis" as that term is used in Section 42(d) of the Code, determined in accordance with Federal law.
"Issuing Authority" means, for so long as the Memorandum of Understanding is in effect, the Vermont Housing Finance Agency or, after termination of the Memorandum of Understanding, any other entity designated by statute or further order of the Governor.
"Joint Committee on Tax Credits" or "Joint Committee" means the committee established by Executive Order # 42, dated March 8, 1987, to develop policies for state allocation of low income housing tax credit authority.
"Memorandum of Understanding" means the Memorandum of Understanding between the State Housing Credit Agency and Vermont Housing Finance Agency dated April 17, 1987, in which Vermont Housing Finance Agency consents to serve as the Issuing Authority and pertaining to the division of responsibilities between the State Housing Credit Agency and the Issuing Authority, as the same may be amended from time-to-time not inconsistently with these regulations.
"Program" or "Low Income Housing Tax Credit Program" means the public housing program established by Executive Orders # 42 and 42A and these regulations.
"Public Housing Program" as that term is used in 3 V.S.A. Section 2472, includes, without limitation, the state system for allocation of low income housing tax credits established by Executive Orders # 42 and 42A and these regulations.
"Qualified Basis" means "qualified basis" as that term is used in Section 42(c) of the Code, determined in accordance with Federal law.
"Qualified Low Income Housing Project" means projects for residential rental property meeting the requirements of Section 42(g) of the Code.
"Qualified Non-Profit Organization" means an organization described in Sections 501(c)(3) or (4) of the Code exempt from tax under Section 501(a) of the Code, which organization has as one of its exempt purposes the fostering of low-income housing.
"Recipient" means the person or entity to whom a low income housing tax credit is issued by the Issuing Authority, the beneficial owners of any such entity, and its and their successors and assigns.

14 "State Housing Credit Agency" means the Vermont Agency of Developme.nt and Community Affairs (3 V.S.A. Chapter 47).

"State Housing Policy" means such written documents representing the policies of state government with respect to housing needs and allocation of resources as may be promulgated from time-to-time by the Department of Housing and Community Affairs, consistent with 3 V.S.A. Section
"Sunset Date" means that date beyond which low income housing tax credits cease to be authorized under the Code, as the same may be amended from time-to-time.

Section III State System for Allocation of Low Income Housing Tax Credits

Executive Order # 42, dated March 8, 1987, and Executive Order

42A, dated July 16, 1987, establish a system for allocation of federal tax

credit authority for qualified low income housing projects. Pursuant to Executive Orders # 42 and 42A:

--The Vermont Agency of Development and Community Affairs is designated the State Housing Credit Agency for the purpose of carrying out and administering the low Income Housing Tax Credit Program.

--A Joint Committee on Tax Credits is established to develop recommended policies for allocation of state credit authority, and to review performance of the Issuing Authority in implementing Program objectives.

--The State Housing Credit Agency is authorized to contract with Vermont Housing Finance Agency as the Issuing Authority for the purpose of administering the program.

Section IV State Housing Credit Agency; Authority; Responsibilities

The State Housing Credit Agency is authorized to adopt policies for allocation of the state's tax credit authority, to assure that low income housing tax credits are allocated consistently with the Code, any regulations adopted pursuant to Section 42 of the Code, and state housing policy. The State Housing Credit Agency is responsible for submission of annual reports to the Secretary of Treasury concerning the state's credit allocation system, as required by federal law.

Section V Joint Committee on Tax Credits; Authority; Responsibilities

A Joint Committee on Tax Credits is established to advise the Secretary of the Agency of Development and Community Affairs with respect to policies for allocation of state tax credit authority. The Joint Committee shall consist of the Commissioner of Housing and Community Affairs or his/her designee; the Executive Director of the Vermont Housing Finance Agency or his/her designee; the Director of the Vermont State Housing Authority or his/her designee; the Director of Planning, Office of Policy Research and Coordination; and one additional member representing housing interests appointed by the Secretary. The Commissioner of Housing and Community Affairs shall serve as Chair of the Committee.
The Committee shall meet periodically at the call of the Chair, to consider the state's progress in implementing the system of allocation of low income housing tax credits, to review the Issuing Authority's progress in implementing the general policies established by the State Housing Credit Agency, and to recommend for consideration of the Secretary any amendments to the Allocation Plan that may be advisable to assure the Program objectives are met.

Section VI Issuing Authority; Responsibilities; Procedures for Issuance of Credits for Specific Qualifying Projects

The Issuing Authority has sole responsibility for review and approval of tax credit authority relating to specific qualifying low income housing projects, and for execution of the Allocation Plan. In addition to authority to issue tax credits for specific projects, the Issuing Authority shall have the following authority and responsibility:

To establish procedures governing application and eligibility for issuance of tax credit authority to specific qualifying low income housing projects, consistent with the Allocation Plan, the requirements of Section 42 of the Code, regulations adopted thereunder from time-to-time, and State Housing Policy.
To prepare and distribute materials explaining the state policies for allocation of low income tax credits, the Issuing Authority's application procedures, and application documents.
To prepare quarterly a status report for review by the Joint Committee, for purposes of assessment of the performance of the Issuing Authority with respect to state tax credit allocation policies.
To prepare annually any reports required by Section 42 of the Code to be submitted by the State Housing Credit Agency.
The Issuing Authority shall be entitled to charge and retain fees under the Program in amounts reasonably calculated to compensate the Issuing Authority for services and related overhead costs.

Section VII Allocation of State Low Income Housing Tax Credit Authority

Allocation Plan

The Issuing Authority will draft an Allocation Plan for the State Housing Credit Agency that conforms to the requirements of Section 42(m)(1)(B) of the Code. The State Housing Credit Agency will solicit comments from the Joint Committee before distributing the Allocation Plan for public comment. From time to time, the Issuing Authority or the Joint Committee may propose such modifications in the Plan as are required by the Code or are indicated by conditions in the housing situation of the State.

Process for Adoption of the Allocation Plan

The State Housing Credit Agency shall hold at least the minimum number of public hearings required by the Code on the Plan. The draft Allocation Plan and the required Housing Needs Analysis will be distributed upon request prior to the public hearings. The State Housing Credit Agency may revise the Allocation Plan in response to public comment and may request advice from the Joint Committee about such revisions. After finalization of the Allocation Plan, the State Housing Credit Agency shall submit it to the Governor for approval. Any amendments to the Allocation Plan shall follow this process.

Priorities for the Allocation Plan

The Allocation Plan will provide that the highest priority in allocating credits is given to properties with the lowest percentage of costs attributable to intermediaries and that priority is also given to projects serving the lowest income tenants and projects obligated to serve qualified tenants for the longest period and any other priorities established by the Code.

Criteria for Consideration in the Allocation Plan

Additional criteria that will be considered in the state's Allocation Plan include:

(1) project location;

(2) housing needs characteristics;

(3) project needs characteristics;

(4) sponsor characteristics;

(5) consideration of local tax-exempt organizations;

(6) housing for special needs individuals;

(7) the preferential treatment of persons on a public housing waiting list; and

(8) any other matters as may be required by the Code.

Reservation for Projects Involving Qualified Nonprofit Organizations.

Not less than 10% of the state housing credit ceiling for any calendar year shall be reserved exclusively for allocation, whether or not actually allocated, the projects involving Qualified Nonprofit Organizations. For purposes of this paragraph, a project "involves" a Qualified Nonprofit Organization if the Qualified Nonprofit Organization materially participates in the development and operation of the project throughout the compliance period, all within the meaning of Section 42(h)(5)(B) of the Code.

Selection Policies for Competing Projects; Discretion of Issuing Authority; Conditional Commitments.

In the event that the lawful supply of state credit authority for a given credit year is inadequate to meet the demand, the Issuing Authority may allocate the available supply first in accordance with the priorities established by the Allocation Plan and then, as between projects of equal general priority, in its discretion taking into account, without limitation, such factors as:

--The number of units to be set aside for occupancy by low-income families in the respective competing projects;

--The length of time, beyond the qualifying minimum, for which the competing applicants propose to commit their respective projects to rental housing in general and low-income housing in particular;

--The experience, fiscal responsibility, and past management record of the competing applicants.

Commitments to Issue Credit Authority.

With respect to projects not placed in service by the proposed Recipient at the time of application for credit authority, the Issuing Authority is authorized to make tentative assignments of credit authority to particular projects for a current credit year or for any credit year prior to the Sunset Date. Such tentative assignments may be made in the form of commitments, conditioned by their terms on compliance, as of the date the project is placed in service by the Recipient, with Federal law, these regulations, and such other terms and conditions as the Issuing Authority in its discretion shall deem necessary or desireable in furtherance of these regulations and State Housing Policy.

a. Current Year Commitments. In issuing commitments for a current credit year, the Issuing Authority may establish a performance schedule and termination dates consistent with he ability of the Issuing Authority to reallocate the amount of the credit to a different qualifying project within the current credit year.

b. Future Year Commitments. In issuing commitments for a future credit year, the Issuing Authority shall assure that the expiration date for allocation of the credit occurs prior to the Sunset Date. The Issuing Authority may establish performance schedules and termination dates in its discretion.

Section VIII Recipient Responsibility for Accurate Information

As between the Recipient and the Issuing Authority, the Recipient shall be fully responsible for the accuracy of all project information bearing upon the legality and amount of the credit authority allocated to the Recipient's project including, without limitation, information pertaining to the determination of Eligible Basis and Qualified Basis. At the time of application, or such later time prior to allocation of the credit as the Issuing Authority in this discretion may permit, the proposed Recipient shall deliver to the Issuing Authority, in such form as the Issuing Authority may provide, its certificate as to the amount of Eligible Basis and the amount of Qualified Basis for which the project is eligible under the Code and the regulations adopted pursuant thereto. The Issuing Authority and the State Housing Credit Agency shall be entitled to rely upon such certificate, and the Recipient shall indemnify and hold harmless the Issuing Authority and the State Housing Credit Agency for any loss, cost, or expense resulting from any false statement contained in such certificate, whether or not such statement is negligent or willful. This Section VIII shall constitute an implied term of each and every commitment for, and allocation of, tax credit authority.

History

STATUTORY AUTHORITY: Statutory authority not provided.
EFFECTIVE DATE: June 1, 1990 Secretary of State Rule Log #90-26)
AMENDED: July 2009 [The Department of Housing and Community Affairs and the Department of Economic Development were merged into the new Department of Economic, Housing and Community Development]

Chapter 008 RULES OF THE COUNCIL OF REGIONAL COMMISSIONS

11-008 Code Vt. R. 11-020-008-X RULES OF THE COUNCIL OF REGIONAL COMMISSIONS

Rule No.1 Description of the Council of Regional Commissions

1.1 Statutory Authorization

The Council of Regional Commissions (hereinafter referred to as "the Council") was established by Act 200 of the adjourned session of the 1987 General Assembly of the State of Vermont. 24 V.S.A. section 4305.

1.2 Membership of the Council of Regional Commissions

(a) Each regional planning commission established under 24 V.S.A. section 4341 shall appoint one representative to the Council, or fill a vacancy, from among its members who represent municipalities.

(b) The Council shall further be composed of three heads of state agencies or departments appointed by the governor.

1.3 Administrative Support

The Council shall receive administrative support from the Department of Housing and Community Affairs. 24 V.S.A. section 4305(g).

1.4 Responsibilities of the Council

The Council has the following responsibilities:

(a) upon request, to provide an impartial mediator to help resolve disagreements between and among municipalities and regional planning commissions, and between and among regional planning commissions and affected state agencies, with respect to the compatibility of their plans with each other, and related matters;

(b) to review and comment upon proposed regional plans and amendments;

(c) at the request of a municipality, to review a proposed regional plan or amendment for compatibility with an approved municipal plan;

(d) to review and comment upon a proposed plan or amendment, and to prepare a written evaluation of an adopted plan or amendment, of an affected state agency;

(e) at the request of a municipality with an approved plan, to review a proposed plan or amendment of an affected state agency for compatibility with the approved municipal plan;

(f) at the request of a person who has standing, to formally review the sufficiency of an adopted regional plan;

(g) at the request of a person who has standing, to formally review regional planning commission decisions with respect to the confirmation of municipal planning efforts, and the approval or disapproval of municipal plans or amendments. 24 V.S.A. sections 4305(b)-(e).

1.5 Code of Conduct

(a) A member of the Council has an affirmative obligation to conduct the affairs of his or her office, whether as a member of the Council or as a member of a Regional Review Panel, in such a manner as to instill public trust and confidence. Thus, a member of the Council shall take all reasonable steps to avoid any action or circumstance, whether or not specifically prohibited by this rule, which might result in, or create the appearance of:

(1) undermining his or her independence or impartiality of action;

(2) taking official action on the basis of unfair considerations, unrelated to the merits of the matter;

(3) giving preferential treatment to any private interest, or interest of any affected state agency or regional planning commission which the Council member represents, on the basis of unfair considerations, unrelated to the merits of the matter;

(4) using the office of a member of the Council for the advancement of personal interest or the interest of the affected state agency or the regional planning commission which the member represents;

(5) using the office of member of the Council to secure special privileges or exemptions; or

(6) affecting adversely the confidence of the public in the integrity of the Council.

(b) A member of the Council shall not take any official action in any particular matter in which he or she has a conflict of interest or in which there is an appearance of a conflict of interest that, in that member's view, will undermine public confidence.

(c) A member of the Council shall not take any official action that advances the interests of an entity with which he or she is actively seeking employment or has a significant financial relationship.

(d) A member of the Council shall not disclose to any entity any confidential or privileged information for the purpose of advancing his or her, or anyone else's, pecuniary interest.

(e) A member of the Council shall not solicit or receive any payment, gift, or favor based on any understanding that it would influence any official action.

(f) A member of the Council shall not use or permit the use of State property unless reasonably related to his or her official responsibilities.

(g) A Council member who is a representative of a regional planning commission is prohibited by 24 V.S.A. section 4305(e) from participating in certain formal reviews as a member of a Regional Review Panel. Based on the same rationale, a Council member who is a representative of a regional planning comission shall not review the proposed plans or amendments of the regional planning commission which he or she represents, and a Council member who is a state agency or department head shall not review the proposed or adopted plans or amendments of the agency, or the agency which includes the department, which he or she administers.

(h) Any Council member and any participant in a mediation or party to a review or formal review may raise with the Council the issue of whether a Council member should be excused from participating in a matter before the Council because of a potential violation of this Rule 1.5.

(i) The Council may by majority vote determine that a Council member is ineligible to participate in a matter before the Council because of a violation of this Rule 1.5.

1.6 Officers

(a) The Council shall elect annually by majority vote a chairperson and vice-chairperson from among its members. 24 V.S.A. section 4305(a).

(b) The chairperson shall preside over all meetings of the Council and shall be authorized to sign documents with the approval and on behalf of the Council.

(c) The vice-chairperson shall assume the duties and responsibilites of the chairperson in the event of the chairperson's absence.

(d) In the event of the absence of both the chairperson and vice-chairperson, any member may be elected by a majority of those present to preside over that particular meeting and shall be authorized to sign documents with the approval and on behalf of the Council.

(e) The Council shall elect such further officers to perform such duties as it shall decide from time to time.

1.7 Per Diem and Expenses

Council members who are not state officials shall receive per diem compensation according to 32 V.S.A. section 1010, and reimbursement for necessary and actual expenses when away from home or office upon their official duties. 24 V.S.A. section 4305(a).

1.8 Retiring Council Members

A Council member who has participated in all or a substantial portion of a mediation, a review, or a formal review, and who completes his or her term before the matter has been concluded, may remain a member of the Council and Panel, if applicable, for the purpose of completing the mediation, review or formal review. 3 V.S.A. section 849.

Rule No.2 Definitions

The following definitions shall apply throughout these rules. Unless otherwise defined in this Rule 2, the words in these rules are to be construed in the plain, ordinary and usual meaning which is given to them by standard English dictionaries.

(a) "Affected state agency" means a state agency that has programs or takes actions affecting land use, as identified from time to time by executive order. 3 V.S.A. section 4020.

(b) "Affected state agency plan" means a plan or amendment required to be adopted by an affected state agency. 3 V.S.A. section 4021.

(c) "Approved municipal plan" means a plan that has been approved by the regional planning commission according to 24 V.S.A. section 4350 and adopted by the municipality according to 24 V.S.A. section 4385.

(d) "Compatible with" another plan, as used in 24 V.S.A. chapter 117, means that the plan in question, as implemented, will not significantly reduce the desired effect of the implementation of the other plan. If a plan, as implemented, will significantly reduce the desired effect of the other plan, the plan may be considered compatible if it includes the following:

(1) a statement that identifies the ways that it will significantly reduce the desired effect of the other plan;

(2) an explanation of why any incompatible portion of the plan in question is essential to the desired effect of the plan as a whole;

(3) an explanation of why, with respect to any incompatible portion of the plan in question, there is no reasonable alternative way to achieve the desired effect of the plan; and

(4) an explanation of how any incompatible portion of the plan in question has been structured to mitigate its detrimental effects on the implementation of the other plan. 24 V.S.A. section 4302(d)(2).

(e) "Conflict of interest" means a pecuniary interest of a member of the Council of Regional Commissions, or such an interest, known to the member, of a member of his or her immediate family or household or of a business associate, in the outcome of any particular matter pending before the Council or a Regional Review Panel. The salary paid by the State of Vermont to a state agency or department head who serves as a Council member shall not constitute a pecuniary interest for purposes of Rule 1.5 of these rules. "Conflict of interest" does not arise where the interest is no greater than that of other persons generally affected by the outcome of the matter.

(f) "Confirmation of a municipality's planning efforts" means the process by which a regional planning commission consults with its municipalities and determines whether the municipality is engaged in a continuing planning process that, within a reasonable time, will result in a plan which is consistent with the goals established in 24 V.S.A. section 4302, and whether the municipality is maintaining its efforts to provide local funds for municipal and regional planning purposes. 24 V.S.A. section 4350.

(g) "Consistent with the goals established in 24 V.S.A. section 4302," as used in 24 V.S.A. chapter 117, means substantial progress toward attainment of those goals. If a planning body determines that a particular goal is not relevant or attainable the plan shall identify the goal and describe the situation, explain why the goal is not relevant or attainable, and indicate what measures should be taken to mitigate any adverse effects of not making substantial progress toward that goal. 24 V.S.A. section 4302(d)(1).

(h) "Council" means the Council of Regional Commissions.

(i) "Decision" means a decision of a regional planning commission with respect to the confirmation of a municipality's planning efforts, the approval or disapproval of a municipal plan, and the sufficiency of an adopted regional plan or amendment. 24 V.S.A. sections 4305(e) and 4476.

(j) "Formal review" means the contested case hearing process conducted by a Regional Review Panel (hereinafter referred to as a "Panel") at the request of a person with standing to do so. During a formal review, a Panel reviews a decision of a regional planning commission with respect to the confirmation of a municipality's planning effort, the approval or disapproval of a municipal plan, or the sufficiency of an adopted regional plan. 24 V.S.A. sections 4305(e) and 4476.

(k) "Municipality" means a town, a city, or an incorporated village or an unorganized town or gore. An incorporated village shall be deemed to be within the jurisdiction of a town for purposes of 24 V.S.A. chapter 117, except to the extent that a village adopts its own plan and one or more bylaws either before, concurrently with, or subsequent to such action by the town, in which case the village shall have all authority granted a municipality under 24 V.S.A. chapter 117 and the plans and bylaws of the town shall not apply during such period of time that said village plan and bylaws are in effect. 24 V.S.A. section 4303(4).

(l) "Panel" means a Regional Review Panel.

(m) "Party" means a person granted standing under 24 V.S.A. section 4476(b).

(n) "Person" means an individual, a corporation, a partnership, an association, any other incorporated or unincorporated organization or group, a municipality, the State of Vermont or any department, agency or subdivision of the state, or other legal entity. 1 V.S.A. section 128 and 24 V.S.A. section 4303(5).

(o) "Public notice" means the notice required to be given prior to public hearings under 24 V.S.A. section 4305, following procedures set forth in 24 V.S.A. section 4447 or 3 V.S.A. sections 809 or 839.

(p) "Regional plan" means a plan or amendment adopted by a regional planning commission under 24 V.S.A. section 4348.

(q) "Regional planning commission" means a planning commission for a region created under subchapter 3 of 24 V.S.A. chapter 117, hereinafter sometimes referred to as an "RPC."

(r) "Regional Review Panel", hereinafter sometimes referred to as a "Panel", is a Panel established for the purpose of formally reviewing certain decisions of regional planning commissions. 24 V.S.A. section 4305(e).

(s) "Ruling" means the official written statement of a Regional Review Panel presenting its findings of fact and conclusions of law after conducting a formal review of a regional planning commission decision.

Rule No.3 Establishment of Regional Review Panels

3.1 Statutory Authorization

The Council shall establish Regional Review Panels to conduct formal review of certain regional planning commission decisions under procedures set forth in Rule 7 of these rules. 24 V.S.A. section 4305(e).

3.2 Members of a Panel

The members of each Panel shall be Council members.

(a) Membership on Panels shall revolve among all members of the Council.

(b) Each Panel must include at least two representatives of regional planning commissions.

(1) A Council member shall not serve on a Panel which is reviewing the actions of the regional planning commission which he or she represents.

(2) A Council member who is a state agency or department head shall not serve on a Panel where the matter under review involves the agency, or a department within the agency, which he or she administers.

(3) Council members who participate in a review of a proposed regional plan or amendment under 24 V.S.A. section 4305(c) shall not participate in a formal Regional Review Panel proceeding on the same matter.

(4) Council members who have participated in mediation under 24 V.S.A. section 4305(b) shall not participate in a formal review of any issues which were the subject of the mediation.

3.3 Appointment by the Chairperson

(a) The chairperson of the Council shall appoint three members and an alternate to a given Panel with the approval of the Council when the Council deems it to be necessary or:

(1) at the time when any regional planning commission becomes involved in a first option mediation process under 24 V.S.A. section 4305(b) and Rule 4 of these rules, in which one or more Council members serves as mediator; or

(2) at the time when any review of a proposed RPC plan or amendment is begun under 24 V.S.A. section 4305(c) and Rule 6 of these rules.

(b) The alternate may actively participate with the three Panel members in all proceedings of the Panel, but shall have no vote unless one of the Panel members informs the Panel and the chairperson of the Council that he or she can no longer participate on the Panel, and the remaining members do not agree on the resolution of the matters at issue. In that event, the alternate shall have the same powers and obligations as if he or she were an original member of the Panel.

3.4 Presiding Over Panel Proceedings

The Panel members shall select one of their number to preside over the hearings held by the Panel.

Rule No.4 Mediation

4.1 Statutory Authorization

The Council is authorized by 24 V.S.A. section 4305(b) to provide, on request, an impartial mediator to help resolve disagreements between and among municipalities and regional planning commissions, and between and among regional planning commissions and state agencies, with respect to the compatibility of their plans with each other, and related matters.

4.2 Conflict Between Plans in Two or More Regions

Before requesting review by the Council of Regional Commissions or the services of a mediator pursuant to 24 V.S.A. section 4305, with respect to a conflict that has arisen between adopted or proposed plans of two or more regions or two or more municipalities located in different regions, a regional planning commission shall first appoint a joint interregional commission, in cooperation with other affected regional commissions, for the purpose of negotiating differences. 24 V.S.A. section 4345a(16).

4.3 Two Options for Mediation

There shall be two options for mediation.

(a) Under the first option, a municipal planning commission, a regional planning commission, or an affected state agency may request the appointment of one or more Council members to serve as mediator if all other participants agree to engage in the first option mediation process. The participants may request that one or more specific Council members serve or not serve. If the Council agrees to provide the mediation, it shall name the mediator or mediators.

(b) Under the second option, a municipal planning commission, a regional planning commission or an affected state agency may request the appointment of a mediator other than any Council member if all other participants agree to engage in the second option mediation process. The participants shall agree on the selection of a mediator either from a list maintained by the Council of persons and organizations trained or experienced in mediation, or another person or organization upon whose selection all participants and the Council shall agree.

4.4 Costs of Mediation

(a) There shall be no cost to the participants for first option mediation.

(b) The Council shall evaluate the costs of second option mediation and apportion them among the participants in the mediation and the Council on a case by case basis.

4.5 Procedure

The procedure for both options for mediation shall be informal, as the mediator or mediators and the participants shall deem appropriate for the particular circumstances of the case.

4.6 Participation in Both Options for Mediation

If the participants agree to do so, and with the approval of the Council, they may participate first in one and then in the other option for mediation.

Rule No.5 Review and Comment on Proposed Plans and Amendments of Affected State Agencies; Written Evaluation of Adopted Plans and Amendments

5.1 Statutory Authorization

The Council is authorized by 24 V.S.A. section 4305(d) to review and comment on proposed plans and amendments, and to make a written evaluation of adopted plans and amendments, of affected state agencies.

5.2 Entire Proposed Plan of Affected State Agencies

An affected state agency identified by executive order as having programs or taking actions affecting land use must submit a proposed plan to the Council in its entirety.

5.3 Proposed Amendment to Existing Plan

A proposed amendment to an existing, properly adopted plan of an affected state agency may be submitted without the entire plan unless the Council requests the submission of the plan to which the proposed amendment is to be made.

5.4 Affected State Agency Public Hearings; Council Attendance Permitted

At least 30 days prior to the first of at least two public hearings which an affected state agency must hold prior to adopting a plan or amendment, the affected state agency must give the Council notice of the date, time and place of the public hearing. The Council may appear and be heard at all meetings held by an affected state agency with respect to a proposed plan or amendment. 3 V.S.A. section 4020.

5.5 Initiation of Review

An affected state agency may initiate the review by the Council of a proposed plan or amendment with a letter to the Council requesting review.

5.6 Certain Council Members Excluded from Review

A Council member who is a state agency or department head shall not participate as a Council member in the review of the proposed or adopted plans or amendments of the agency or department which he or she administers.

5.7 Scheduling of Council's Public Hearing

The Council shall schedule its public hearing so as to allow public notice as required by 3 V.S.A. section 839. 24 V.S.A. section 4305(d)(1).

5.8 Notice of Public Hearing

With respect to a review of a proposed plan or amendment, and a review of an adopted plan or amendment, of an affected state agency, the Council shall give notice of a public hearing in accordance with the requirements of 3 V.S.A. section 839. 24 V.S.A. section 4305(d)(1).

5.9 Criteria for Review

With respect to an affected state agency plan or amendment, the Council shall determine whether it is:

(a) compatible with the plans of other affected state agencies;

(b) consistent with the goals established in 24 V.S.A. section 4302;

(d) compatible with the approved municipal plans of any municipalities that have requested review by the Council. 24 V.S.A. section 4305(d)(1).

5.10 Testimony by Persons

The Council may hear statements, and accept any exhibits presented by persons who wish to speak at the public hearing to the extent that the Council deems them to be relevant. Persons are encouraged, but are not required, to notify the Council of their desire to speak at least 24 hours in advance of the hearing.

5.11 Written Comments of Persons

In addition, the Council may consider written comments by persons about or objections to the plan or amendment. Persons are encouraged, but are not required, to submit nineteen copies, and to do so before the public hearing.

5.12 Council's Comments and Recommendations

Upon completion of the review, one or more members of the Council shall appear before the affected state agency and present the Council's comments and recommendations. 24 V.S.A. section 4305(d)(2).

5.13 Submission of Adopted Plan of Affected State Agency to the Council

Within 15 days after an affected state agency has adopted a plan or amendment, the agency shall submit it to the Council.

5.14 Council's Public Hearing Regarding Adopted Plans and Amendments of an Affected State Agency

After giving public notice as required under 3 V.S.A. section 839, the Council shall hold another public hearing on the adopted plan or amendment of an affected state agency. 24 V.S.A. section 4305(d)(3).

5.15 Council's Written Evaluation of Adopted Plan or Amendment of an Affected State Agency

Thereafter, the Council shall prepare a written evaluation of the plan or amendment's compliance with the criteria established in 24 V.S.A. section 4305(d). Copies shall be sent to the Governor, the Speaker of the House, the President of the Senate, each regional planning commission and all persons who request a copy in writing. 24 V.S.A. section 4305(d)(3).

5.16 Municipality's Request for Review

A municipality with an approved municipal plan may request that the Council review a proposed plan or amendment of an affected state agency for compatibility with that municipality's plan by following the procedures set forth in this Rule 5. 24 V.S.A. section 4305(d)(1)(D).

Rule No.6 Review and Comment on Proposed Plan or Amendment of a Regional Planning Commission

6.1 Statutory Authorization

The Council is authorized by 24 V.S.A. section 4305(c) to review and comment on proposed regional plans and amendments.

6.2 Submission of a Proposed Plan or Amendment to the Council

A regional planning commission shall submit a proposed plan or amendment to the Council.

6.3 Regional Planning Commission Public Hearings; Council Attendance Permitted

At least 30 days prior to the first of at least two public hearings which a regional planning commission must hold prior to adopting a plan or amendment, the regional planning commission must give the Council notice of the date, time and place of the public hearing. The Council may appear and be heard at all meetings held by a regional planning commission with respect to a proposed plan or amendment. 24 V.S.A. section 4348(c).

6.4 Initiation of Review

A regional planning commission may initiate review by the Council of a proposed plan or amendment with a letter to the Council requesting review.

6.5 Certain Council Members Excluded from Review

A Council member who is a representative of a regional planning commission shall not participate as a Council member in the review of the proposed plans or amendments of the regional planning commission which he or she represents.

6.6 Notice of the Council's Public Hearing

(a) The Council shall give notice of its public hearing as required by 24 V.S.A. section 4447.

(b) No defect in the form or substance of any public hearing notice under this chapter shall invalidate the adoption, amendment or repeal of any plan or amendment. However, the action shall be invalidated if the notice is materially misleading in content or fails to include one of the elements required by 24 V.S.A. section 4447(b)(1), or if the defect is the result of a deliberate or intentional act. 24 V.S.A. sections 4345(c)(1) and 4447(b)(1).

6.7 Criteria for Review

With respect to a regional plan, the Council shall determine:

(a) whether the plan, as amended, contains the elements required by 24 V.S.A. section 4348a;

(b) whether the plan is compatible with the plans of adjoining regions; and

(c) whether the plan, as amended, is consistent with the goals established in 24 V.S.A. section 4302. 24 V.S.A. section 4305(c)(1).

6.8 Testimony by Persons

6.9 Written Comments of Persons

In addition, the Council may consider written comments by persons regarding the plan or amendment. Persons are encouraged, but are not required, to submit nineteen copies, and to do so before the public hearing.

6.10 Council's Comments and Recommendations

Upon completion of the review, one or more members of the Council shall appear before the regional planning commission and present the Council's comments and recommendations. 24 V.S.A section 4305(C)(c)(3).

6.11 Municipality's Request for Review

Any municipality may request that the Council review a proposed regional plan or amendment for compatibility with an approved municipal plan by following the procedures set forth in this Rule 6. 24 V.S.A. section 4305(c)(2).

6.12 Time for Submission to Council

By December 31, 1992 and at least every five years thereafter, all regional planning commissions shall submit regional plans adopted under 24 V.S.A. section 4348 to the Council for review. The Council shall make recommendations to the regional planning commissions with respect to appropriate amendments for consideration by the commissions. 24 V.S.A. section 4348(i).

Rule No.7 Formal Review Procedures

7.1 Statutory Authorization

The Council is authorized by 24 V.S.A. section 4305(e) to establish from among its members a three person Regional Review Panel to conduct formal review of certain decisions of regional planning commissions upon request of a person with standing as defined in 24 V.S.A. section 4476(b) and Rule 7.5 of these rules. The prodedure for establishing a Panel is set forth in Rule 3 of these rules.

7.2 Council Policy Regarding Negotiation and Mediation

The Council has established the policy of encouraging all participants in the planning process to resolve issues through negotiation and mediation whenever possible, and to proceed with formal review only as a last resort.

7.3 Regional Planning Commission Decisions Which May be Formally Reviewed

The Panel may formally review decisions by regional planning commissions with respect to:

(a) the confirmation of a municipal planning effort;

(b) the approval or disapproval of a municipal plan; and

7.4 Issues on Formal Review

To the extent raised by the parties or found necessary by the Panel, the following shall be the issues on formal review:

(a) With respect to formal review of the sufficiency of an adopted or amended regional plan, the Panel shall determine:

(1) whether the plan contains the elements required by law:

(2) whether the plan is compatible with the plans of adjoining regions; and

(3) whether the plan is consistent with the goals established in 24 V.S.A. section 4302.

(b) With respect to formal review of a regional planning commission decision on the confirmation of a municipal planning effort, the Panel shall determine:

(1) whether the municipality is engaged in a continuing planning process that, within a reasonable time, will result in a plan which is consistent with the goals contained in 24 V.S.A. section 4302; and

(2) whether the municipality is maintaining its efforts to provide local funds for municipal and regional planning purposes.

(c) With respect to formal review of a regional planning commission decision on the approval or disapproval of a municipal plan, the Panel shall determine:

(1) whether the plan is consistent with the goals established in 24 V.S.A. section 4302;

(2) whether the plan is compatible with its regional plan; and

(3) whether the plan is compatible with approved plans of other municipalities in the region. 24 V.S.A. section 4476(d).

7.5 Standing

(a) The following have standing to request formal review of a decision of a regional planning commission or to become parties to any formal review:

(1) a person owning title to property affected by a decision of the regional planning commission who alleges that that decision imposes on that property unreasonable or inappropriate restrictions that significantly impair present or potential use under the particular circumstances of the case;

(2) A municipality whose planning effort is the subject of a decision by the regional planning commission, any other municipality within the region, any municipality which adjoins the region, or a regional planning commission which adjoins the region;

(3) any agency, department, or other governmental subdivision of the state owning property or an interest therein within a municipality listed in subdivision (2) of this subsection, and the Agency of Development and Community Affairs;

(4) any 20 persons who, by signed petition allege that the decision, if confirmed, will not be in accord with the requirements of 24 V.S.A. chapter 117, and who own or occupy real property within any combination of the following:

(A) any municipality whose planning effort is the subject of or subject to a decision by the regional planning commission; or

(B) any municipality which adjoins a municipality whose planning effort is subject of or subject to a decision by the regional planning commission. 24 V.S.A. section 4476(b);

(b) The regional planning commission whose decision is under formal review shall be entitled to participate in the proceedings, including calling and cross-examining witnesses.

A request for formal review must be made to the Council of Regional Commissions within 21 days after the issuance of the decision or the adoption of the plan or amendment by the regional planning commission. 24 V.S.A. section 4476(a).

7.7 Time for Requesting Party Status

A request for party status must be made to the Regional Review Panel no later than at commencement of the prehearing conference, or if there is no prehearing conference, no later than at commencement of the first hearing.

7.8 Initiation of Formal Review

(a) Any person claiming standing under Rule 7.5 of these rules may initiate formal review of a regional planning commission decision by conveying in writing clearly and concisely the following information to the Council:

(1) the reason the person claims to have standing, under 24 V.S.A. section 4476 and subsection 7.5 of these rules;

(2) all reasons why the person claims the plan or decision is in error;

(3) all issues which the person claims to be relevant;

(4) the name and address of the person requesting formal review or the individual representing that person for the purpose of this formal review who shall receive correspondence and documents from the Panel and from other participants with respect to these proceedings. 24 V.S.A. section 4476(c).

(b) Any person requesting formal review shall submit 7 copies of the information required by subsection (a) of this Rule 7.7.

(c) Unless the Panel determines that fairness so requires, the Panel shall consider only those issues raised in the information which initiated the formal review.

7.9 Service

(a) The person requesting formal review shall be responsible for serving upon the regional planning commission whose decision or plan is being reviewed a copy of the documents initiating formal review.

(b) Service may be made by delivering copies of the documents to the regional planning commission office and obtaining the signature of an agent of the commission acknowledging receipt of the documents delivered, or by certified mail, return receipt requested.

7.10 Notice of Formal Review

(a) Within 30 days after the Council has received the information which initiates the formal review, it shall set the date, time and place for a public hearing on the formal review.

(b) The notice of formal review shall constitute the public hearing notice as required by 3 V.S.A. section 809, as follows:

(1) In accordance with 24 V.S.A. section 4476, the Council shall send by mail a notice of formal review, and a statement prepared by each person requesting review, of all reasons why the plan or decision is thought to be in error, and all issues which the person claims to be relevant, to:

(A) the municipalities within the region;

(B) the regional planning commission; and

(2) In addition, the Council shall send written notice of the date, time and place of the hearing, and of the place where further information may be obtained, to all individuals and organizations that had requested notice from the regional planning commission under 24 V.S.A. section 4348 relating to the adoption of a regional plan.

(3) The notice shall be given in accordance with 3 V.S.A. section 809.

(c) The person requesting formal review shall furnish to the Panel the names and addresses of all persons entitled to notice under 24 V.S.A. section 4476, along with sufficient copies of the information required to be supplied to them.

(d) The person requesting formal review shall be responsible for the costs of publishing and posting all public notices with respect to the formal review. If there is more than one such person the costs shall be shared pro rata. 24 V.S.A. section 4476(c).

(e) No defect in the form or substance of any public hearing notice under 24 V.S.A. chapter 117 shall invalidate the Panel's ruling. 24 V.S.A. section 4447(c).

7.11 Timing of Public Hearing

The hearing shall be held within 45 days of the Council's receipt of the information which initiated the formal review. 24 V.S.A. section 4476(c).

7.12 Prehearing Conferences

A designated member of the Panel may conduct prehearing conferences, upon due notice to all parties and no later than 7 days before the scheduled public hearing, to help expedite the Panel's proceedings by clarifying the issues in controversy; identifying documents, witnesses and other offers of proof to be presented at a hearing; and obtaining such stipulations of parties as to issues, offers of proof and other matters as may be appropriate. The Panel member who conducts the prehearing conference shall encourage the parties to resolve issues through negotiation or mediation whenever possible, pursuant to Council policy set forth in Rule 7.2 of these rules.

7.13 Preliminary Rulings

The Panel member who conducts the prehearing conference may make such preliminary rulings as to matters of notice, scheduling, party status, and other procedural matters, including interpretation of these rules, as are necessary to expedite and facilitate the hearing process. Any preliminary ruling may be appealed to the Panel.

7.14 Prehearing Orders

The Panel member who conducts the prehearing conference may issue a prehearing order stating the results of the prehearing conference. Any such order shall be binding upon all parties to the proceeding who have received notice of the prehearing conference if it is forwarded to the parties at least 5 days prior to the hearing. However, the time requirement may be waived upon agreement of all parties to the proceeding; and the Panel may waive a requirement of a prehearing order upon a showing of cause, filing a timely objection, or if fairness so requires.

7.15 Conduct of Hearings

(a) The Panel shall conduct formal review proceedings according to the provisions for contested cases in 3 V.S.A. sections 809-813. 24 V.S.A. section 4476(c).

(b) A majority of the Panel is a quorum. A majority of the Panel must agree on any decision. 1 V.S.A. section 172.

(c) The designated chairperson of the Panel shall preside over all Panel hearings; and, after consultation with the other Panel members and unless a party objects, rule on questions of evidence and offers of proof, and do whatever is necessary and proper to conduct a hearing in a judicious, fair and expeditious manner.

7.16 Evidence at Hearings

(a) Admissibility of evidence in all cases of formal review before the Panel shall be determined under the criteria set forth in 3 V.S.A. section 810.

(b) Documents submitted for the record shall be subject to evidentiary objections by parties to the proceeding.

(c) The Panel shall receive evidence and testimony on the issues under review, including issues of standing under 24 V.S.A. section 4476 and Rule 7.5 of these rules, in whatever order appears to the Panel to be most expeditious and equitable. Upon conclusion of an offer of proof regarding an issue, unless otherwise directed by the Panel, all other parties shall at that time present whatever evidence and testimony they intend to offer on the issue before proceeding to another issue.

(d) The Panel may upon its own motion or on the request of any party require prefiled testimony in writing by any party. Such testimony must be clearly organized with respect to the issues that are addressed.

(1) Notice and distribution. A party utilizing prefiled testimony must notify the Panel and all other parties of the issues to be addressed and the witnesses to be used at least 14 days prior to the hearing at which this testimony will be offered. At least 7 days prior to the hearing, the offering party must submit one copy of the testimony to each party and 7 copies to the Panel. These time requirements may be waived by the Panel upon a showing of good cause.

(2) Hearing procedure. Prefiled testimony is intended only to facilitate presentation of a witness's direct testimony. The witness must appear at the hearing to present his direct testimony in writing and to affirm its truthfulness. Objections to the admissibility of the testimony will be heard when it is offered. The witness must remain available for cross-examination. If the parties have received copies of the testimony in accordance with this rule, the Panel may require that cross-examination proceed immediately.

(e) Prehearing submissions. The Panel may direct, by way of a prehearing conference order or otherwise, that all parties to a contested case submit to the Panel in advance of any scheduled hearing date, 7 copies of all proposed exhibits, of lists of all proposed witnesses, of summaries of all proposed testimony, or of such other information as the Panel deems appropriate.

(f) The Panel may compel, by subpoena, the attendance and testimony of witnesses and the production of documents in accordance with 3 V.S.A. section 809(h) upon a written request of a party stating the reasons therefor and representing that reasonable efforts have been made to obtain voluntary compliance with its requests. Costs of service, fees and compensation shall be paid in advance by the party requesting the subpoena. The Panel may also issue subpoenas for the attendance of witnesses or the production of documents on its own motion.

7.17 Dismissal

The Panel may, on its own motion or at the request of a party, consider the dismissal, in whole or in part, of any matter before the Panel for reasons provided by these rules, by statute, or by law. At the request of a party or on its own motion the Panel shall entertain oral argument prior to considering any such dismissal; such argument shall be preceded by a notice to the parties and to the municipalities within the region, the regional planning commission and the Agency of Development and Community Affairs unless dismissal is considered at a regularly convened hearing on the matter.

7.18 Recesses

A party may petition for a recess at any time prior to the adjournment of a hearing. A recess may be called by the Panel pending the convening of further hearings, receipt of submissions from parties, gathering of further information, review of evidence in the record, deliberation or any other reason the Panel may deem fit. During such period, any party may, with due notice to all parties, move to re-open the hearing on any issues for the purpose of offering further testimony and evidence.

7.19 Record

All formal review proceedings shall be recorded by either a qualified stenographer or an electronic sound recording device. The record shall include:

(a) all pleadings, motions, intermediate rulings;

(b) all evidence received or considered;

(d) questions, offers of proof, objections, and rulings thereon;

(e) proposed findings and exceptions; and

(f) any report, ruling or order.

7.20 Informal Disposition

Informal disposition may be made of any contested case by stipulation, agreed settlement, consent order or default.

7.21 Ruling

(a) A written ruling shall be issued by the Panel within 20 days of adjournment of the final hearing, following completion of the record, receipt of proposed findings of fact and conclusions of law, review of the record, deliberations, and preparation of a decision. The ruling shall approve, conditionally approve, or disapprove the regional or municipal plan or amendment, or confirm or deny confirmation of the municipality's planning efforts.

(b) The ruling shall contain findings of fact (based exclusively on the evidence and on matters officially noticed), conclusions of law and an order.

(c) Within 15 days of the date of a final Panel ruling, a party may file a motion to correct manifest error in the findings of fact or conclusions of law. The Panel shall act upon such motions promptly. The running of the time in which to appeal to the Supreme Court shall be stayed by timely motion filed under this rule. The full time for appeal shall commence to run and is to be computed from issuance of a ruling on said motion. It is entirely within the discretion of the Panel whether to hold a hearing on a motion for a corrected ruling. The Panel may, on its own motion, within 15 days from the date of a final Panel ruling, issue a corrected ruling. Corrections shall be limited to instances of manifest error, mistakes, and typographical errors and omissions.

7.22 Stay

The filing of a notice of formal review shall not stay the effect of the plan or decision of the regional planning commission unless so ordered by the Panel. However, any party aggrieved by a regional planning commission decision may request a stay by written notice filed with the Panel, stating in detail the grounds for the request. In deciding whether to grant or deny a stay, the Panel may consider the hardship to parties, the impact, if any, on the goals and provisions of Act 200 and any effect upon public health, safety, or general welfare. The Panel may issue a stay containing such terms and conditions as it deems just.

7.23 Appeal to Supreme Court Before Ruling of Regional Review Panel is Issued

(a) Upon approval of the Panel, any party may appeal to the Supreme Court from any interlocutory (preliminary) ruling or order of the Panel if the ruling or order involves a controlling question of law as to which there is substantial ground for difference of opinion and an immediate appeal may materially advance the formal review process.

(b) The motion for permission to appeal a preliminary ruling or order shall be filed with the Panel within 10 days of the issuance of the ruling or order.

(d) Within 5 days of receipt of a copy of such a motion, any other party may file a response to the motion with the Panel, concurrently mailing a copy to all other parties.

(e) The motion shall include a statement of the question of law asserted to be controlling, the facts necessary to an understanding of the question, and the reasons why an interlocutory appeal should be permitted. V.R.A.P. 5(b).

(f) The matter shall be determined upon the motion and any response without hearing unless the Panel otherwise orders.

(g) If permission to appeal is denied by the Panel, any party may ask the Supreme Court to hear the interlocutory appeal.

Rule No.8 Appeals to the Supreme Court

(a) Appeals with respect to Regional Review Panel rulings shall be to the Supreme Court. 24 V.S.A. section 4476(f).

(b) Appeals shall be based on the record of all hearings on the matter before the Regional Review Panel.

Rule No.9 Stay

The filing of a notice of appeal with respect to a ruling of the Regional Review Panel shall not stay the effect of the ruling unless so ordered by the Panel. However, any party aggrieved by a Regional Review Panel ruling may request a stay by written notice filed with the Panel, stating in detail the grounds for the request. In deciding whether to grant or deny a stay, the Panel may consider hardship to the parties, the impact, if any, on the goals and provisions of 24 V.S.A. chapter 117, and any effect upon public health, safety or general welfare. The Panel may issue a stay containing such terms and conditions as it deems just.

History

STATUTORY AUTHORITY: 24 V.S.A. § 4305
EFFECTIVE DATE: April 13, 1990 Secretary of State Rule Log #90-12
AMENDED: July 2009 [The Department of Housing and Community Affairs and the Department of Economic Development were merged into the new Department of Economic, Housing and Community Development]

Chapter 009 ADMINISTRATIVE RULES JOB DEVELOPMENT ZONE PROGRAM

11-009 Code Vt. R. 11-020-009-X ADMINISTRATIVE RULES JOB DEVELOPMENT ZONE PROGRAM

Section 1 Purpose, Authority, Definitions

A. PURPOSE

The purpose of these rules is to clarify the administrative procedures for a municipality to apply for and obtain interest reimbursement on bonded debt for economic development related infrastructure projects under the Job Development Zone Program.

B. AUTHORITY

The authority to adopt these rules is granted in subsection 695 of 10 V.S.A. Chapter 29.

C. DEFINITIONS

"Economic development related" means associated with the process of positively influencing the creation of wealth through the mobilization of resources to generate marketable goods and services.

"Highway facility" is the roadway adequate to provide safe passage to existing and proposed traffic according to relevant highway standards.

"Municipal facility" means any land and/or premises purchased by a municipality for lease or resale, in whole or in part, with or without further improvement, to a commercial or industrial entity for commercial or industrial uses.

"Pollution abatement facility" means a municipal sewage treatment plant, pumping stations, interceptor and outfall sewers, and attendant facilities as prescribed by the Vermont Department of Environmental Conservation to abate existing or prevent future pollution of the waters of the state.

"Water supply facility" means the municipal water source, water treatment plant, structures, pipe lines, storage facilities, pumps and attendant facilities necessary to develop a source of water, and to treat and convey it in proper quantity and quality for public use.

Section 2 Determination of Eligibility

The job zone municipality shall contact and review the proposed project with the staff of the Agency of Development and Community Affairs. Upon recommendation by the Agency, the municipality and the job zone board shall submit a letter to the Secretary of the Agency requesting a determination of eligibility. The request shall contain the following information:

a. Description of the proposed project.

b. Estimated costs of the project which may reference engineering studies.

c. Proposed bond rate and term.

d. Rationale for the project or a portion of the project being "economic development related".

The Secretary will review the above information and whatever other material is applicable and make a final determination. This determination will be communicated to the municipality in writing within 15 days of receipt of all information requested.

Section 3 Reimbursement Procedure

The State will reimburse job development zone municipalities each year for interest payments made on bonded indebtedness for eligible projects. The bonded debt eligible shall be limited to one million dollars for each zone.

Between July 1 and September 30 each year, the Municipality shall bill the state for interest payments made during the prior State fiscal year. This statement shall include:

a. the amount of the bond

b. the date of the approval vote

c. a complete schedule of payments for the life of the bond, and

d. proof of payments made.

In order to qualify for reimbursement the project bond vote must be approved by the voters after July 1, 1986 and prior to December 31, 1992.

History

STATUTORY AUTHORITY: 10 V.S.A. § 695
EFFECTIVE DATE: May 31, 1992 Secretary of State Rule Log #91-19
AMENDED: July 2009 [Renumbered from 11 030 006; the Department of Housing and Community Affairs and the Department of Economic Development were merged into the new Department of Economic, Housing and Community Development]

Chapter 010 TAX INCREMENT FINANCING DISTRICTS

11-010 Code Vt. R. 11-020-010-X TAX INCREMENT FINANCING DISTRICTS

Section 100 Statutory Authority

Vermont statute [1] charges the Vermont Economic Progress Council with adopting rules for the purpose of providing clarification and detail for administering the provisions of law regarding the creation, implementation, administration, and operation of Tax Increment Financing Districts. [2]

Section 200 Statement of Purpose of Rule

The purpose of this rule is to address issues relating to creating, implementing, administering, and operating Tax Increment Financing (TIF) Districts (herein referred to as "Districts"). Act 80 of the 2013 legislative session (as amended by Act 174 of 2014) clarified tax increment financing laws and specified a process for future oversight and enforcement. The Vermont Economic Progress Council (herein referred to as "Council") was granted the authority to adopt rules in accordance with the Vermont Administrative Procedures Act [3] to provide further clarification of statutory construction and administrative detail.

Act 80 also required the Council to identify issues that require corrective action on the part of the municipalities with Districts that were created prior to January 2006 and were audited by the State Auditor of Accounts in 2011 and 2012. From the date of adoption of this rule, municipalities with Districts in existence prior to 2006 must abide by this governing rule and any other provisions of the law in force. However, this rule also indicates which specific provisions are not applicable to those Districts in existence prior to January 2006 and specifies rule provisions applicable to only those Districts or only to individual Districts created prior to 2006. Any issues identified in the Auditor's reports that remain unresolved and continue to result in disputed underpayments to the Education Fund shall cause an accumulation of underpayments commencing only upon adoption of this rule and shall be subject to the non-compliance provisions contained in statute [4] and this rule.

Section 300 Definitions

All terms used in statute or this rule, but not defined herein, shall have the meanings ascribed to them in statute. [5]

"Active District" means a District that has been created pursuant to 24 V.S.A. § 1892(a), has not been terminated pursuant to 24 V.S.A. § 1894(a), and which has not retired all District financing or related costs.

"Appraisal value" has the same meaning as 32 V.S.A. § 3481(1) as the property's estimated fair market value.

"Appropriated" as used in 24 V.S.A. 1891 (8) means approved by the municipal legislative body and dedicated to service eligible District expenditures.

"Assessed valuation" as used in 24 V.S.A. § 1895 and § 1896 is the listed value of each property within the District, less any statutory and voted exemptions.

"Capital assets" as used in this rule means tangible property used to advance the purposes of 24 V.S.A. Chapter 53, Subchapter 5, which is not easily converted into cash, and has an initial useful life extending beyond a single financial reporting period. Capital assets can be defined in terms of a minimum useful life and a minimum initial cost.

"Coordinating agency" as used in 24 V.S.A. § 1892(c) means any public or private entity from outside the municipality's departments or offices and not employing the municipality's staff, which has been designated by a municipality to administer and coordinate a District during creation, public hearing process, approval process, or administration and operation during the life of the District, including overseeing infrastructure development, real property development and redevelopment, assisting with reporting, and ensuring compliance with statute and rule.

"Council" means the Vermont Economic Progress Council, as established by 32 V.S.A. § 5930a.

"District Debt" means financing, as defined by 24 V.S.A. 1891 (7) and this rule, which will be serviced or paid using District incremental revenue.

"District Finance Plan" or "TIF Financing Plan" means a plan filed by municipality with a District created after 2006 either concurrently with, or subsequent to, a District Plan, which is considered and approved by the Council, and which includes District improvement details including finance instruments and tools, timing for incurring debt, finance structures and terms, development and redevelopment schedules, and projections of revenue generation.

"District Fund" means the special fund created by a municipality in accordance with 24 V.S.A. § 1896(a) in which the District's revenue and expenditures shall be segregated and tracked for accounting, recordkeeping, and reporting purposes.

"District Plan" means the plan required by 24 V.S.A. § 1892(a), which was the subject of public hearings in accordance with 24 V.S.A. § 1892(a), adopted by the municipal legislative body and recorded by the municipal clerk or listers in accordance with 24 V.S.A. § 1892 (b), and which, for Districts created after 2006, was considered and approved by the Council in accordance with 32 V.S.A. § 5404a(h). Such plans set the baseline for implementing Districts and against which performance will be measured, but may be amended pursuant to 24 V.S.A. § 1901 and these rules.

"District Reconciliation" means a document filed with the Council by municipalities with Districts created prior to 2006 to provide baseline information and data.

"Education Property Tax Increment" or "Education Tax Increment" means the amount of additional revenue resulting from the application of tax rates when the education taxable value of all the properties within a District for a given year is greater than the education original taxable value of all the properties within a District.

"Financing Plan," "Financial Plan" or "Finance Plan" has the same meaning as District Finance Plan as defined in this section.

"Financing" means, in addition to the meaning provided by 24 V.S.A. § 1891(7), debt instruments, leasing, lease-purchase, other borrowing arrangements, and direct payments, undertaken for improvements in or serving a District, that will be repaid in part or in whole using District increment, only after being authorized by the legal voters of the municipality in accordance with 24 V.S.A. § 1894(h) and (i).

"Improvements" means, in addition to the meaning provided by 24 V.S.A. § 1891(4), the installation, new construction or reconstruction of municipal capital assets.

"Incur District debt" or "Incur District indebtedness" means the proper and appropriate execution, by an authorized official of a municipality, of a debt instrument to finance District improvements, or to make a direct payment for District improvements, if such instrument is intended to be financed, or payment made, in whole or in part with District incremental revenue and has been approved by the legal voters pursuant to 24 V.S.A. 24 § 1894(h).

"Inter-fund loans" as used in 24 V.S.A. § 1891(7) means a method of financing District improvements whereby loans are made from one fund to another within a municipality, with explicit terms of repayment, which, in accordance with 24 V.S.A. § 1894(i), shall not include the payment of interest.

"Listed value" has the same meaning as 32 V.S.A. § 3481(2) as 100% of the appraisal value.

"Municipal Property Tax Increment" or "Municipal Tax Increment" means the amount of additional revenue resulting from the application of all tax rates when the municipal taxable value of all the properties within a District for a given year is greater than the municipal original taxable value of all the properties within a District.

"New real property development" means the development or redevelopment of real property expected to occur through private or public investment caused by improvements financed with District increment.

"Nexus" means the causal relationship that must exist between the improvements and the expected development and redevelopment in the District or the expected District outcomes.

"Non-increment" or "Non-TIF" revenue means any revenue available to a municipality to pay for District improvements, service District debt, or pay for related costs, that are not derived from the increase in taxable value of the properties within the District. Examples include municipal property tax, Federal and State grants, use fees, and parking revenue. These revenues are often used to help pay the proportion of District improvement costs that do not serve the District, as determined by the Council.

''Original Taxable Value" or "OTV" means, in addition to the meaning provided in 24 V.S.A. § 1891(5), the value of all real property within a District as determined under V.S.A. 32, Chapter 129, calculated by aggregating the taxable value of such properties as of April 1 of the calendar year in which the District was created, or in accordance with the appropriate statute controlling the establishment of the OTV. Each District has a municipal OTV and an education OTV.

"Parcel" has the same meaning as 32 V.S.A. § 4152(a) (3); all contiguous land in the same ownership, together with all improvements thereon.

"Pledged" as used in 24 V.S.A. § 1891(8) means authorized by the legal voters of the municipality and dedicated to service eligible District expenditures.

"Proportion" as used in 24 V.S.A. § 1894(e) means the percentage, as determined by the Council at the time of approval of a District Plan, of the total improvement cost that is eligible for financing with District increment, based on the ratio by which the improvement will serve the District.

"Proportionality" as used in 24 V.S.A. § 1894(e) means the relational process used by the Council at the time of approval of a District Plan to determine the percentage of total improvement costs that are eligible for financing with District increment.

"Related Costs" means, in addition to the meaning provided in 24 V.S.A. § 1891(6), expenditures incurred and paid by a municipality, other than the actual cost of construction and financing of improvements, that are directly related to the creation, implementation, administration, and operation of a District.

"Retention Period" means the period during which the approved share of incremental municipal property tax revenue and incremental education property tax revenue may be set aside in a District fund. The retention period commences the calendar year during which the municipality executes the first of any financing or direct payments for District improvements which have been approved by the voters. The retention period for incremental education property tax revenue is limited to twenty consecutive years. The retention period for incremental municipal property tax revenue is as authorized by the municipal legislative body or until all financing and related costs are retired. The retention period does not refer to the number of years the increment so retained in the District fund may be used to service District debt and pay related costs, which may continue until all District financing and related costs are retired.

"Secretary" means the Secretary of Commerce and Community Development.

"Serve the District" refers to improvements that have nexus to the District.

"Share" means the percentage of municipal property tax increment and education property tax increment that may be retained each year an increment is generated.

"Substantial change" means an amendment to an approved District Plan or District Finance Plan which may result in a significant impact with respect to any of the criteria for approval by the Council specified in 32 V.S.A. § 5404a(h) and 24 V.S.A. Subchapter 5, or a request for an extension of the five-year period to incur indebtedness, and, in the case of Districts created prior to 2006, an amendment to the District Reconciliation filed in accordance with this rule which may result in a significant adverse impact with respect to the District Reconciliation.

"Taxable value" means the listed value of real property within a District less any statutory exemptions.

"TIF" or "TIF District" or "District" means a Tax Increment Financing District.

Section 400 Purpose of Districts

The purpose of a TIF District, as stated in statute [6] , is to provide revenues for improvements that serve the District, and related costs, which will stimulate development or redevelopment within the District, provide for employment opportunities, improve and broaden the tax base, or enhance the general economic vitality of the municipality, the region, or the State.

While this purpose assumes that the improvements will primarily be the construction of public infrastructure, the purpose does not assume that every improvement will be subject to 100% public use. Rather, the improvements should stimulate and cause public good outcomes.

Section 500 Resolution of Outstanding Issues from Audits

Applicability of the rule to Districts created prior to January 2006: This rule identifies issues that require corrective action on the part of the municipalities with Districts that were created prior to January 2006 and were the subject of performance audits conducted by the State Auditor of Accounts in 2011 and 2012. From the date of adoption of this rule, municipalities with Districts in existence prior to 2006 must abide by this governing rule and any other provisions of the law in force. However, this rule also indicates which specific provisions are not applicable to those Districts in existence prior to January 2006 and specifies rule provisions that are applicable to only those Districts or only to individual Districts created prior to 2006. Any issues identified in the Auditor's reports that remain unresolved and continue to result in disputed underpayments to the Education Fund shall cause an accumulation of underpayments commencing only upon adoption of this rule and shall be subject to all of the provisions contained in statute. [7]

Submission of payments and transfers by municipalities required by law [8] : The Council will prescribe a process for municipalities to notify Council staff that the required payments and transfers have been approved by the municipal legislative body, for submitting the payments electronically, and for certifying and providing notification of the payments and transfers. The process will require certification that the payments and transfers are from the funds prescribed by law. Council staff will monitor the timeliness of the submission of approvals, payments, and transfers and report on the status of compliance with these requirements in writing to the General Assembly.

Failure to submit evidence of approval of payments or failure to submit payments or make transfers: If a municipal legislative body fails to approve the payments or a municipality fails to make a payment or transfer within 60 days of the dates prescribed, the Council will notify the General Assembly, in writing, through the Joint Fiscal Office. The General Assembly will consider any amounts identified as owed to the Education Fund and may withhold such amounts from any funds otherwise payable by the state to the municipality or a school district in the municipality or a school district of which the municipality is a member. [9]

Section 600 Authorization for Utilization of Education Property Tax Increment for District Financing

Districts authorized: The following eleven Districts in Vermont have been approved, either by direct legislation or legislation authorizing the Council to give such approval, to utilize incremental education property tax revenue to finance District improvements:

District :	Municipality :	Authority :
Burlington Waterfront	City of Burlington	Section 45 of Act 60 (1997)
Newport Industrial Park	City of Newport	Section 45 of Act 60 (1997)
Milton North/South	Town of Milton	Sections 47 and 58 of Act 71 (1998)
Winooski Downtown	City of Winooski	Sections 37-38 of Act 159 (1999)
Milton Town Core	Town of Milton	Sections 2a-2i of Act 184 (2006)
Severance Comers	Town of Colchester	Sections 2a-2i of Act 184 (2006)
Burlington Downtown	City of Burlington	Sections 2a-2i of Act 184 (2006)
WRJ Downtown	Town of Hartford	Sections 2a-2i of Act 184 (2006)
St. Albans Downtown	City of St. Albans	Sections 2a-2i of Act 184 (2006)
Barre Downtown	City of Barre	Sections 2a-2i of Act 184 (2006)
So. Burlington City Center	City of So. Burlington	Sections 2a-2i of Act 184 (2006) and Section 17 of Act 80 (2013)

Limitation on authorizations: In accordance with statute, [10] the Council is not authorized to approve any additional Districts to utilize incremental education property tax revenue to finance District improvements. If any District is terminated in accordance with statute, [11] the Council does not have the authority to approve any additional Districts in place of terminated Districts. [12]

District Finance Plan: Municipalities filing applications with the Council after 2006 must file both a District Plan and a District Finance Plan. A municipality may seek approval of a District Finance Plan concurrently with consideration of a District Plan. In these cases, the Council will require a level of financial detail sufficient for the Council to make the viability and consistency determinations required by statute. [13] Alternatively, a municipality may submit a District Finance Plan after approval of the District Plan. In either case, the District Finance Plan must be submitted to and approved by the Council before the municipality seeks a public vote to pledge the credit of the municipality and the District Finance Plan must be submitted to the Council on a form prescribed by the Council.
Requirement to file revised District Finance Plans: The District Plans and District Finance Plans approved by the Council after 2006, but before 2013, were all based on the statute in place at the time, which limited the period to incur debt to five years. In 2013, the limit on the period to incur debt was extended to ten years. In order to more accurately reflect the new ten-year period allowed to incur District debt, any District that had a five-year District Finance Plan approved by the Council after 2006 must, within six months of the adoption of this rule, submit an updated ten-year District Finance Plan using the Substantial Change process. This requirement only applies if the municipality will extend its plan to a ten-year debt period and will therefore incur debt beyond the five-year period previously approved. The Milton Town Core District is exempt from this requirement. [14]

Any District which has had a District Plan approved by the Council but which has not yet submitted a District Finance Plan for approval, shall submit a ten-year District Finance Plan to the Council for consideration on a schedule that takes into account the application due dates incorporated into the Council's monthly meeting calendar.

Requirement to file a District Reconciliation: Unless a waiver is granted from this provision, any District in existence prior to 2006 must, within six months of the adoption of this rule submit to the Council a District Reconciliation, which includes the following information:

-- After an analysis of the boundary and parcels by the Department of Taxes/PVR, a listing of properties within the District upon creation and including the municipal original taxable value and the education original taxable value indicated by homestead and non-residential;

-- A detailed map of the District, including shape files;

-- Data and information regarding debt incurred and anticipated, including information on debt instruments, interest rates, terms, payments of principal and interest, payment schedule, and balances;

-- An accounting of the District fund to date;

-- Information and data regarding infrastructure improvements completed and anticipated;

-- Information and data on non-TIF revenue utilized and anticipated to pay for or finance improvements.

-- Information and data regarding development and redevelopment that has occurred and that is anticipated;

-- Information regarding the benefits accrued to the municipality, the region, and the state due to the creation of and improvements within the District.

The District Reconciliation shall be approved and certified by the municipal legislative body before being submitted to the Council and will serve as the basis for performance indicators and potential Substantial Change requests for the Districts created prior to 2006.

Performance Indicators: After 2006, when approving Districts to utilize incremental education property tax revenue to finance District improvements, the Council determined that certain criteria for approval were met by the municipality, the application, and the District Plan/District Finance Plan. Other criteria were approved based on actions or activities that were proposed and projected to be carried out during implementation of the District. The information and data provided in the District Plans and applications that address these criteria, and any statutory purposes or goals, will be utilized as performance indicators for each District.

For Districts in existence prior to 2006, any statutory purposes or goals in place when the District was created and any other goals subsequently added to statute with specific reference to the District, plus the District Reconciliation submitted in accordance with this rule, will be the basis for performance indicators.

The Council will develop a set of performance indicators for each District for which the municipalities must include data and information as part of the Annual Report by municipalities required by statute [15] and Section 1004.2 of this Rule The indicators will be subject to the monitoring and oversight activities of Council staff.

Departures from and Substantial Changes to approved District Plans/District Finance Plans or District Reconciliations: For Districts created after 2006, the information and data contained in the District Plan/District Finance Plan were presented at a public hearing and approved by the municipal legislative body and the Council and serves as the basis for implementing the District. For Districts in existence prior to 2006, the District Reconciliation will serve this role.

Municipalities must include corrections or minor changes to the approved District Plan/District Finance Plan or District Reconciliation in the Annual Report required by statute [16] and Section 1004.2 of this Rule. Departures from the approved District Plan/District Finance Plan or District Reconciliation that meet the definition of a "substantial change" must be presented at a public hearing prior to approval by the municipal legislative body and then be submitted to the Council for consideration and approval. Any substantial change request must be filed in the format required by the Council. See Section t 003 of this Rule for further detail.

Section 700 Power and Life of Districts

Creation of a District: To create a District, a municipal legislative body must have determined that such a District will serve the statutory public purposes. [17 ]The municipal body must describe the District in a District Plan and hold one or more public hearings, after providing public notice, on the proposed plan. Following the public hearing(s), the municipal legislative body must adopt the District Plan and the Plan must be recorded with the municipal clerk and the listers or assessor.

The District is considered created and active at 12:01 a.m. on April 1 of the calendar year in which the municipal legislative body voted to adopt the District Plan. Even if the vote occurs between April 2 and December 31, the life of the District starts on April 1 of that calendar year. The creation date of each of the existing Districts is as follows:

Burlington Waterfront	City of Burlington	April 1, 1996 ¹⁸
Newport Industrial Park	City of Newport	April 1, 1998
Milton North/South	Town of Milton	April 1, 1998 ¹⁹
Winooski Downtown	City of Winooski	April 1, 2000
Milton Town Core	Town of Milton	April 1, 2008
Severance Corners	Town of Colchester	April 1, 2010
Burlington Downtown	City of Burlington	April 1, 2011
WRJ Downtown	Town of Hartford	April 1, 2011
St. Albans Downtown	City of St. Albans	April 1,2012
Barre Downtown	City of Barre	April 1, 2012
So. Burlington City Center	City of South Burlington	April 1, 2012

Properties within the boundary of the District: For Districts created after 2006, the District Plan includes a listing of the properties contained within the District boundaries, with their assessed and taxable values, and describes and illustrates on a map the boundary of the District. In accordance with statute, [20] the boundary must not divide or bisect a parcel; the parcel must be included wholly within the District or be wholly outside the District. After approval of the District Plan by the Council, any proposed change to the District boundary must be considered as a substantial change request.

For Districts in existence prior to 2006, this information must be included in the District Reconciliation due no more than six months after the adoption of this rule. That document will serve as the basis for any substantial change request.

Coordinating Agency: Municipalities with Districts may designate an entity from outside the municipality's departments or offices as a District coordinating agency. Such designees may include regional planning commissions, regional development corporations, consultants, or other entities. The municipality may claim the costs of the services paid to such an entity as related costs, if such costs are approved by the voters. The coordinating agency is meant as an administrative entity working on behalf of the municipality and cannot be authorized to enter into any agreements or make any covenants on behalf of the municipality or otherwise act to commit the municipality.
Improvements: Statute [21] provides a specific definition of improvements that may be paid for or financed using incremental District revenue. Eligible improvements generally are the installation, new construction, or reconstruction of infrastructure that will serve a public purpose and fulfill the purpose of the District. Eligible improvements may include, but are not limited to the following:

-- Utilities, such as power transmission lines, telecommunications lines, telecommunications towers, and power or telecommunications equipment; wastewater, storm water, water dispersal, collection, and treatment facilities and treatment equipment including force mains, pump stations, sewers, lift stations, and related wastewater, storm water and water equipment.

-- Transportation improvements such as public roads, streets, bridges, parking lots, facilities, garages, and structures, multimodal facilities, public transit stop equipment and amenities, street and sidewalk lighting, sidewalks, streetscapes, way-finding signs and kiosks; traffic signals, medians, turn lanes, and property acquired or used for right of way.

-- Civic facilities and amenities such as hiking and biking trails, parks and green spaces, pathways to facilitate multimodal transportation, bicycle and pedestrian lanes, paths, and bridges, playgrounds, street furnishings, and civic structures such as libraries, town/city hall and offices, public safety facilities and recreation facilities.

-- Land and property acquisition, property demolition, and property improvements.

-- Site preparation for development or redevelopment including acquisition, demolition, and environmental remediation of contaminated property.

Statute [22] and this Rule ( Section 400) are clear that the improvements must serve the District. This means that the improvements do not necessarily have to be located within the District, but must serve the District. For Districts created after 2006, the amount of the total improvement costs that can be paid with District incremental revenue is limited by the proportionality set during the District application process.

The meaning of "improvements" as provided by statute [23] and this rule does not mean annual municipal operating costs, public transportation operating costs, annual maintenance or repair costs, nor the purchase of vehicles, interior furnishings, operating equipment or apparatus, nor other expenditures for non-capital assets.

Related Costs: As of 2006, statute authorized municipalities with Districts to assign certain costs, other than the actual costs of constructing and financing infrastructure improvements, to the District as related costs and pay for these costs with District incremental revenue.

Related costs may include, but are not limited to:

-- Cost of plans, studies, or reports that are specific to preparing a District Plan, a District Finance Plan, application to the Council, or subsequent filing or reporting required to maintain the District.

-- Costs of providing public notification about, and obtaining public approval for, a District Plan, a District Finance Plan, application or subsequent filing to the Council.

-- Costs such as consulting, design, architects, engineering, accounting, legal, project management, or other professional services incurred during preparation of a District Plan, District Finance Plan, District application, or Substantial Change Request.

-- Soft costs such as consulting, design, architects, engineering, accounting, legal, project management, or other professional services directly related to the implementation and construction of eligible District improvements.

-- Municipal employee and staff costs directly related to the District; however, these costs may only be paid with municipal increment generated beyond the required municipal share to service debt and related costs that are not municipal employee and staff costs (See Section 706).

-- Administration fees paid to a coordinating agency designated by the municipality.

-- Application fees charged by the Council for third party analysis of District Plans, District Financing Plans or subsequent filings.

-- The cost of audits by the State Auditor of Accounts required by statute, [24] including costs billed back to the municipality by the State Auditor of Accounts and any audit-related costs incurred by the municipality during the conduct of those audits.

-- The District-related costs of the independent annual municipal audit required by statute. [25]

Related costs do not include:

-- The direct costs of improvements such as construction costs, financing or debt costs or costs related to financing (If eligible, these costs can be paid with District incremental revenue, but are not related costs).

-- Any costs incurred by private entities undertaking development or redevelopment within a District.

-- Municipal operating costs, public transportation operating costs, annual maintenance or repair costs, the purchase of vehicles, furnishings, equipment, or apparatus.

-- Capitalized interest, underwriter's discounts, or funding of reserves.

-- Time or services provided by employees of the municipality in the normal course of their municipal duties which are unrelated to the District creation or implementation.

-- Expenditures for annual independent audits performed in accordance with statute, [26] except for the specific costs incurred due to the District-related requirements in statute. [27]

Related costs may be incurred starting with the process to establish the District and may continue to be incurred until the life of District ends or the District is terminated. Related costs may only be reimbursed to the municipality or directly paid if they have been approved by the voters. In each year, the priority of the application of incremental revenue shall be first to service debt and other improvement financing, then to pay related costs.

The municipality must retain receipts for and maintain an accounting of all related costs. , The accounting must include a description of the cost; the amount; the date(s) it was incurred; an explanation of how the cost relates directly to the creation, implementation, administration, or operation of the District; the date(s) cost was reimbursed or paid with District increment; and the date(s) the related cost was approved by the voters.

When the municipality seeks voter approval for District financing and a portion of the proceeds will be used to reimburse the municipality for related costs previously advanced or for projected related costs, the notice to voters required by statute [28] must include the amount of the related costs and types to be reimbursed, and an estimate of the amount and type of related costs to be paid in the future with the financing proceeds under consideration by the voters.

Restriction on use of education increment for certain related costs: In accordance with statute, [29] costs incurred by the municipality to create, operate, administer, or implement a District, which are normally considered internal municipal operating costs, such as departmental or personnel costs, may be accounted for and reimbursed or paid from District increment as related costs with the following restrictions:

-- The personnel time or other departmental costs meet the definition of related costs;

-- The costs may only be reimbursed using incremental municipal property tax revenue; and,

-- The municipal increment that may be used for these restricted related costs must be above and beyond the municipal increment committed to service the District's financing and unrestricted related costs.

For example, if the District was approved to utilize 75% of the annual Education Property Tax incremental revenue, the municipality must utilize at least 75% of the annual municipal incremental revenue to service debt and pay non-restricted related costs. Only municipal incremental revenue generated beyond the 75% may be retained and used to pay restricted related costs, if approved by the municipal legislative body. If the municipality votes to allow the District to retain more than the minimally required level of municipal incremental revenue, the additional municipal may be used to pay for restricted related costs.

The Burlington Waterfront and Winooski Districts are exceptions because they are authorized by statute to retain 100% of municipal increment for debt and related costs and therefore, none of the related costs are restricted.

Requirement to incur first District debt within five years after creation of District: Each District approved by the Council after 2006 must incur District debt that has been approved by the voters at least once before the fifth anniversary of the District creation date, or the municipality is required to obtain an extension of the debt period by application to the Council; otherwise the District is terminated. [30] To qualify as a first instance of debt incurred for the District, the municipality must intend to use District increment to finance all or any part of the debt or use the approval to make a direct payment for improvements. The financing or direct payment must also have been approved by the voters. However, such public vote and subsequent notification of the Council of the vote, do not satisfy the requirement to incur debt. The debt instrument or direct payment must be executed to satisfy the requirement to incur debt within five years.

Incurring expenses which are considered related costs that will be reimbursed by future voter-approved financing, or incurring pre-development costs or short-term debt (i.e. BAN) that will be subsumed in future voter-approved financing, or incurring debt that will not be financed in any part with District increment, even if the debt is for District improvements, does not constitute incurring debt under this requirement.

Procedure for Obtaining an Extension of the Five-Year Requirement to Incur First District Debt: If a District approved by the Council after 2006 does not incur District debt by the fifth anniversary of the District creation date, to avoid termination the municipality may submit a five year extension request to the Council.

An extension request is considered a substantial change. Therefore, prior to submitting the extension request to the Council, the municipality must:

-- Prepare an updated Executive Summary of the approved District Plan and update the District Finance Plan;

-- If a District Finance Plan had not been previously filed, the updated District Plan shall include a pro-forma District Finance Plan;

-- Properly notice and hold a public hearing on these updates;

-- Receive approval by the municipal legislative body for the substantial change;

-- File the updated District Plan and updated District Finance Plan with the municipal clerk; and

-- File the extension request with the Council.

The extension request must be received in accordance with the Council's monthly meeting application deadline schedule so that the request can be considered prior to the fifth anniversary of the District creation date. However, if consideration and approval by the Council cannot be completed prior to the fifth anniversary of the District creation date, the submission shall serve as a stay of termination of the District until the Council has approved or denied the extension.

The Council will review the updated District Plan executive summary and the District Finance Plan and determine if the plan has continued viability and remains consistent with the approved District Plan. If the Council makes such a determination, the new District Finance Plan is approved and the District is granted a five year extension in which to incur District debt. If the approval occurs after the fifth anniversary of the District creation date, the approval is retroactive to that date and the extension is for no more than five years from the fifth anniversary of the date the District was created.

Termination of a District due to failure to incur District debt: If a District approved by B7 the Council after 2006 does not incur District debt by the fifth anniversary of the creation date, and no extension request is filed, the District is terminated and no longer has the powers conferred by Vermont statute.

Ten-year limitation to incur all District debt: A District approved by the Council after 2006, which has incurred District debt for the first time within the five-year limitation, or which has been granted a five-year extension by the Council, must incur all District debt within ten years from the creation of the District. Any debt incurred after the ten-year limitation may not be financed, serviced, or in any way paid for using District incremental revenues.
Equal Share of incremental revenue required: [31] For the Districts created after 2006, during approval of the District Plan the Council set the maximum share of the education property tax incremental revenue that may be retained each year to service District debt and pay related costs, which also sets the minimum share of the municipal property tax incremental revenue that must be retained. The share is expressed as a percentage of the total increment and will be based on the financial data provided in the District Finance Plan. The share will ensure the retention of incremental education and municipal property tax revenue sufficient to service the proportion of District improvement costs and related costs approved by the Council. The share of education property tax incremental revenue that can be retained shall be no more than 75 percent. The share of municipal property tax incremental revenue that can be retained shall be no less than an equal percent, but may be higher. These are the shares of the education and municipal incremental revenues that are to be segregated in the District fund and committed to service District improvement financing and related costs. Until the first instance of District debt is incurred, triggering the increment retention period, any incremental revenue generated due to increases in property values within the District continues to be paid in full to the taxing authorities.

For Districts created prior to 2006, the share was established by statute. See Section 716 for detail.

In accordance with statute, [32] the incremental revenues generated by applying all municipal tax rates against the increase in value when compared to the OTV must be shared between the District and the taxing entities. This applies to all municipal tax rates, even if the rate was approved for a special purpose and even if that purpose is included in the municipal charter.

Twenty-year retention period for incremental education property tax revenue: When a municipality with a District approved by the Council after 2006 incurs the first District financing that has been approved by a public vote, a twenty-year education property tax incremental revenue retention period is triggered. The first education property tax increment to be retained will be calculated using the education taxable value as of April 1 of the calendar year in which the first District debt is incurred, regardless of when during the calendar year the first District debt is incurred. If the education taxable value of the grand list for the first year in which District debt is incurred is not greater than the education OTV and therefore does not generate an increment, the twenty-year retention period is still triggered. For that year and for twenty consecutive years, the approved share of education property tax incremental revenue must be segregated into the District fund.

Retention period for incremental municipal property tax revenue: When a municipality with a District approved by the Council after 2006 incurs the first District financing that has been approved by a public vote, the retention of incremental municipal property tax revenue is also triggered. The first municipal property tax increment to be retained will be calculated using the municipal taxable value as of April 1 of the calendar year in which the first District debt is incurred, regardless of when during the calendar year the first District debt is incurred. If the municipal taxable value of the grand list for the first year in which District debt is incurred is not greater than the municipal OTV and therefore does not generate an increment, the retention period is still triggered. For that year and until all debt and related costs are retired, the approved share of municipal property tax incremental revenue must be segregated into the District fund.
Use of incremental municipal and education property tax revenue: The amounts held apart in the District fund must be disbursed only for payment of District financing approved by a public vote and incurred during the ten-year period following the creation of the District and for the reimbursement or payment of related costs approved by the voters. Once in the District fund, the increment may be disbursed for these purposes until all financing and related costs are retired.
: Adjustment of equal share percentage: [33] During the tenth year anniversary of any District created after 2006, by which time all District debt will have been incurred, the municipality must submit an updated District Finance Plan to the Council. The update shall include updated data and information sufficient for the Council to determine, based on actual District debt incurred and related costs incurred and planned, the real property development that has occurred or will occur, and the history of increment generated during the first ten years, whether the approved shares of incremental revenue to be retained each year should be continued or adjusted to a lower percentage for the remainder of the retention period. The Council will not adjust to a lower percentage unless the lower percentage continues to provide sufficient municipal and education incremental revenue to service the remaining debt and related costs. In no case will the share be lowered if to do so would impair the municipality's ability to service debt, pay related costs, or impair a covenant or agreement with a lender.
Statutory retention periods, debt periods, and share for Pre-2006 Districts: The retention periods, debt periods, and shares of the incremental revenues to be retained by the Districts created prior to 2006 vary and were established by statute as follows: (Share refers to the share retained by the District)

Burlington Waterfront ³⁴
Debt Period:	1996 - 2019
Retention Period:	1999 - 2025
Share:
1996 - 2010:	Education- 100%; Municipal- 100%
2010 - 2025:	Education- 75% ³⁵; Municipal- 100%
Newport Industrial Park
Debt Period:	1997-2007
Retention Period:	Until all debt paid
Share:	Education- 100%; Municipal-100%
Milton North/South ³⁶
Debt Period:	1999 - 2019
Retention Period:	1999 - 2019
Share:
1999 - 2019:	Education- 100%; Municipal-At discretion of municipality.
2010 - 2019:	Education-No more than 75%; Municipal-equal percentage
Winooski Downtown ³⁷
Debt Period:	2000-2005
Retention Period:	2004-2024
Share:
1999-2008:	Education-95%; Municipal-100%
2009-Debt Paid	Education-98%; Municipal-100%

Proportionality: [38] Proportionality refers to the portion of the cost of an improvement that will serve the District because a determination has been made that there is nexus between the improvement and the expected real property development. Only that portion of the total improvement cost that is approved through the proportionality determination by the Council may be paid using municipal and education incremental revenue.

For the Districts created prior to 2006, no proportionality requirements were included in statute because only improvements located wholly or partly within the District could be financed with District increment. No improvements made by the Districts created prior to 2006 are subject to the proportionality rule.

In 2008, statute was amended [39] effective retroactively to Districts approved after 2006, to allow financing of an improvement made outside a District as long as the improvement serves the District and limited to the proportion of the improvement cost that will serve the development within the District. This proportion is determined by the Council for each planned improvement at the time of approval of the District Plan and/or District Finance Plan, or Substantial Change request.

The designated proportionality may be met either by applying the proportion to each individual cost factor within the total cost of the improvement or related cost, or by grouping individual cost factors together to meet the approved proportion of the total cost. Increment may not be used to pay for more than the proportion of the total cost that was approved. If the total cost of an improvement increases, the proportionality remains the same. The actual cost and application of the approved proportionality will be monitored through annual reporting.

Public Vote Required for All District Financing : [40] For all existing Districts, notwithstanding any provisions of any municipal charters, the municipal legislative body must obtain authorization from the voters to pledge the credit of the municipality, borrow, make a direct payment for, or to reimburse the municipality for or pay future related costs. Prior to a public vote on District financing, the municipality must provide a detailed informational notice to the voters. [41] The vote must also be preceded by an appropriately warned public hearing at which the detailed information is presented to the voters by the municipality, followed by a vote or resolution of the municipal legislative body to approve the ballot item. The public vote must be by a majority of all voters present and voting on the question at a special or annual municipal meeting properly and duly warned for the purpose.

The ballot question must include the amount of financing and related costs to be approved by the current vote and, after the first instance of District financing is approved, any subsequent vote must include in the ballot question the amount of District financing and related costs to be approved by the current vote and a cumulative amount of outstanding District debt and related costs approved by the voters to date.

Life of a District: A District is considered created and active at 12:01 a.m. on April 1 of the calendar year in which the municipal legislative body voted to create a district. The District life continues and the District is active until the date and hour that all District debt and related costs are retired, or (only for Districts created after 2006) five years following the District creation date if no District debt is incurred by the fifth anniversary of the District creation date and no extension of the period to incur debt is requested or granted.

Section 800 Indebtedness

Incurring District Debt. For Districts created after 2006, following the creation of the B7 District and approval of a District Plan and a District Finance Plan by the Council, a municipality may incur indebtedness against revenues of the District for up to ten years from the creation date of the District, if the first such debt is incurred before the fifth anniversary of the District creation, or an extension has been approved by the Council.

The municipality must seek the approval of the legal voters to incur any form of District debt included in the definition of "financing" [42] and as further defined in Section 300 of this Rule.

Regardless of when the District was created or the type of financing to be utilized, including a direct payment for infrastructure improvements, the incurrence of debt or direct payment must be preceded by a public vote. The public vote provides the municipality with the authority to pledge the credit of the municipality, borrow, make direct payment for improvements, or otherwise secure the debt for the specific purposes that implement the District Plan, as warned to the voters.

The public vote does not incur District debt for the purposes of satisfying the five-year deadline to incur first debt, nor does it trigger the twenty-year increment retention period. Debt is incurred for these purposes when a municipality executes the actual financing or payment mechanism.

The financing vote may include sufficient funds, in addition to those needed for improvement costs, to reimburse the municipality for related costs that have already been incurred and related costs that will be incurred after the financing is approved and executed. The financing may also assume pre-development costs and short-term debt incurred after the creation of the District, but these costs must be included in the information provided to the voters at the time of the public vote to incur debt.

If the form of District debt proposed by the municipality to be approved by the voters is a direct payment for an improvement rather than the execution of a debt instrument, the municipality must diligently and completely document the transactions. For Districts created after 2006, use of a direct payment from the increment accumulated in a District fund as the first occurrence of incurring District debt is not possible as no increment will accumulate until after the first debt is incurred. Making a direct payment from the TIF increment in subsequent years is possible, but the municipality must document that the incremental revenues to be used for the payment are sufficient and available in the District fund and are not committed to service other District debt previously incurred.

If the form of District debt proposed by the municipality to be approved by the voters is an inter-fund loan, the notice to the voters must include documentation of the terms and conditions of such loan. Statute prohibits charging interest on inter-fund loans for District improvements. [43]

If the municipality intends to utilize interim or short-term financing (such as bond anticipation notes), or borrow against proceeds anticipated from the debt instrument that is the subject of the public vote, that information should be included in the information provided to the voters.

Refinancing of existing District debt to take advantage of improved rates or terms does not constitute incurring new debt and therefore does 'not require a public vote or prior notification of the Council. Such refinancing should be reported to the Council in the Annual Report required by Section 1004.2 of this Rule.

Triggering Ten-Year Debt Period and Twenty-Year Retention Period: A District is created as of April 1 of the calendar year during which the municipal legislative body voted to create the District.

For Districts created after 2006, the creation of the District triggers the five-year period during which the first TIF debt must be incurred or a request for a five-year extension must be filed. If first debt is incurred before the five-year anniversary of the District creation date or an extension is approved, only District debt incurred prior to the tenth-year anniversary of the District creation date may be financed or paid with District incremental revenues. The debt incurred during this ten-year debt period may be serviced until paid from the incremental revenues held apart in the District fund.

The date on which the first District debt is actually executed, after being authorized by a public vote, is the date the first District debt is incurred. The first-year education and municipal property tax increments to be retained will be calculated using the taxable value filed as of April 1 of the calendar year in which the first District debt is incurred; regardless of when during the calendar year the first District debt is incurred. For that year and for twenty consecutive years, the approved share of education property tax incremental revenues must be retained and segregated in a District fund. For that year and for the period approved by the municipal legislative body, the approved share of municipal property tax incremental revenues must be retained and segregated in a District fund.

Ineligible financing: For all Districts, any debt incurred prior to the creation of the District (including any debt incurred prior to the creation of the District that is then refinanced during the life of the District), or any debt incurred after the ten-year anniversary of the District creation date, or after the statutorily limited debt period, even if for improvements related to the District, is not eligible to be serviced with any District incremental revenues.

Additionally, any financing (for District improvements) which has not been approved by the voters, is ineligible to be serviced using District increment, the exception being short-term or interim financing incurred after the creation of the TIF District which is then subsumed into a debt instrument approved by the voters.

Duration of District indebtedness: The duration and terms of District financing may be authorized by the municipal legislative body, except that interest on inter-fund loans is prohibited. [44]

For the Winooski District, the duration of bonds issued to finance District improvements is limited to twenty years. [45]

For the Burlington Waterfront District, education property tax increments may be used for no more than 20 years from the date the debt was incurred for financing of any certificates of participation or HUD Section 108 debt issued between April 1, 1996 and March 31, 2006. [46]

Section 900 Original Taxable Value and Tax Increment

Original Taxable Value (OTV): Immediately following the creation of a District, the listers or assessor for the municipality must certify to the municipal legislative body the original taxable value of the District, which is the aggregated taxable value of all properties within the boundaries of the District as of April 1 of the calendar year in which the District was created. This is the base value which determines the amount of property taxes that will continue to be paid to the municipal general fund, other municipal funds, and the Education Fund each year, based on the tax rates for each year. The value used to determine the amount of tax collected when the appropriate tax rate is applied stays the same regardless of the status of the parcel in a future year (see exceptions in Section 905). It is also the base value of the District from which any future increment will be determined by comparing any annual changes in value to the OTV.

The OTV shall be accounted for as follows:

(a) A municipal OTV consisting of the aggregated taxable values for municipal purposes;

(b) An Education Fund OTV for homestead properties consisting of the aggregated taxable values for all properties in the District classified as homestead properties for Education Fund tax purposes; and

(c) An Education Fund OTV for non-residential properties consisting of the aggregated taxable values for all properties in the District classified as non-residential properties for Education Fund tax purposes.

For the Burlington Waterfront District, the OTV is as established upon creation in 1996 and expanded in 1997, except that the grand list as of April 1, 2010 for the area encompassing the Burlington Waterfront TIF District, but excluding two parcels at 25 Cherry Street and 41 Cherry Street, shall serve as the original taxable value to calculate the increment to be shared between the state Education Fund (25%) and the District (75%). The excluded parcels shall be subject to a share of 100% to the District. [47 ]

For the Winooski District, the OTV is established on the April 1 immediately preceding the date of issuance of bonds (2004) and the properties and values to be included in the OTV shall be determined through an agreement between the municipality, the Council, and the Tax Department/PVR. A meeting shall occur no later than three (3) months after the promulgation of this rule to begin the process to determine the OTV and the OTV shall become effective as of the April 1 immediately following the agreement and will be applicable for the calculation of the tax increment for subsequent years.

For the Milton North/South TIF District, due to the repeal of the ''adjustment to the OTV due to reappraisal," [48] as of the April 1 immediately following the promulgation of this rule, the OTV will revert back to the original taxable value established at the time of the District creation and shall be applicable for the calculation of the tax increment for subsequent years.

Documentation of OTV: For Districts created after 2006, municipalities included estimated OTV listings in the TIF District Plan and application, but such listings may not have detailed the OTV into the three required categories. For Districts created prior to 2006, no documentation of the OTV was ever required. Therefore, for all TIF Districts, the Council will prescribe administrative steps to obtain the municipal and education OTV listings from each District in accordance with Section 901 of this Rule and have the OTV, including a parcel listing, values, and acreage, certified by the municipality, the Council, and PVR within three months of adoption of this rule.

Municipalities may file a substantial change request to amend the OTV only if the event or error causing the change occurred within the same grand list year in which the District was created and results in a change to the grand list on which the OTV is based (i.e., the successful appeal of a property value by the property owner in the year in which the TIF District was created). Parcel survey adjustments are considered administrative and do not require a substantial change, but must be reported in the Annual Report required by Section 1004.2 of this Rule.

Increase/Decrease in Assessed Valuation: Each year following the year of creation, the listers or assessor shall certify to the municipal legislative body the amount by which the total assessed valuation of taxable properties within the TIF District has increased or decreased compared to the municipal and education OTV. Prior to providing the certification to the municipal legislative body, the listers or assessor shall have the calculation of the increase or decrease, including an examination of the disposition and tax status of each parcel within the District, verified by a second party. Selection of the second party is up to the municipality and may be an individual within or outside of the municipal government. However, the individual should be familiar with parcel listings and valuation, property tax status, and the concepts of OTV and District increment. A copy of the certification of the value and the increase or decrease must be included in the Annual Report required by Section 1004.2 of this Rule along with a certification that a second party reviewed the information. The Council will provide a form on which to provide this certification.
Tax Increment: In each year after the district is created, the municipal officials shall do the following:

(a) Determine the total assessed value of all property in the District according to the provisions of statute; [49 ]and,

(b) For the calculation of the municipal incremental revenue:

i. Collect the municipal taxes for the current tax year, determined by applying against the value calculated in (a) all of the tax rates in effect in the municipality for tax year including (1) the municipal tax rate and (2) all other municipal tax rates in effect in the district, including tax rates to generate revenue for specific municipal purposes even if included in a municipal charter provision. [50]

ii. Compute the total amount of the municipal taxes that would have been due, including all municipal taxes and taxes assessed to generate revenue for specific purposes, if the grand list used to compute such taxes had included only the OTV.

iii. Subtract the amount of the taxes computed in "ii" from the amount of the taxes computed in "i" to calculate the municipal incremental revenue.

(c) The Education Tax incremental revenue is calculated by determining the incremental revenue attributable to homestead property and the incremental revenue attributable to non-residential property separately, then aggregating the two amounts to determine the Education Tax incremental revenue. Education Tax incremental revenue shall be determined by:

i. Using the homestead or nonresidential rate determined by the Commissioner of Taxes, multiplied by the education property tax grand list value of the property in the District, classifying the property as homestead or nonresidential property and without regard to any other tax classification of such property, the municipality shall collect the education property taxes for all properties in the District.

ii. Using the homestead or nonresidential rate determined by the Commissioner of Taxes, multiplied by the education property tax grand list value of the property in the District, classifying the property as homestead or nonresidential property and without regard to any other tax classification of the property, compute the total amount of the education property taxes that would have been due if the education property tax grand list used to compute such taxes had included only the OTV.

iii. With respect to the properties classified as homestead in the District, subtract the amount of taxes computed in "ii" using the applicable homestead tax rate from the amount of the taxes computed in "i" using the homestead tax rate to determine the education homestead tax incremental revenue.

iv. With respect to the properties classified as non-residential in the District, subtract the amount of taxes computed in "ii" using the applicable non-residential tax rate from the amount of the taxes computed in "i" using the non-residential tax rate to determine the education non-residential tax incremental revenue.

v. Aggregate the education homestead tax rate incremental revenue and education nonresidential tax incremental revenue to determine the amount of the education tax incremental revenue.

(d) If the District has not triggered the retention period, any increment is paid over to the taxing authorities. If the District has triggered the retention period, retain in the District Fund that portion of each of the municipal tax incremental revenue and the education tax incremental revenue determined by applying the share that the municipality is allowed to retain against each of the municipal tax incremental revenue and the education tax incremental revenue; and pay the balance over to the taxing authorities to whom the remaining amounts are due.

Special Situations Applicable to All Districts:

905.1. Taxable to non-taxable: When a taxable parcel of land located within the boundaries of a District is transferred to an entity that is exempt from municipal taxes or education fund taxes or both, there is no change to the OTV as a result of the transfer. For as long as the exemption continues to be effective the listed value of the exempt property shall be included in the grand list at zero.

905.2. Non-taxable to taxable: When a non-taxable parcel of land located within the boundaries of a District is transferred to an entity that is not exempt from municipal taxes or education fund taxes or both, there is no change to the OTV as a result of the transfer. For the purposes of calculating the increment, the listed value of the property shall be included in the grand list at its fair market value.

905.3. Separation of a Parcel into Two or More Parcels: When a parcel of land located entirely within the boundaries of a District is separated into two or more parcels, the OTV assigned to the parcel of land on the grand list immediately preceding the separation shall be assigned to the resulting parcel which retains the SPAN to which the OTV was assigned. Each resulting parcel shall be classified as homestead or non-residential property according to applicable law.

905.4. Combination of Parcels: When two or more parcels of land located entirely within the boundaries of a District are combined into a single parcel, the municipal assessing officials shall identify one SPAN to continue as the active parcel in the grand list and the municipal assessing officials shall assign a new appraisal value for the combined parcel. The OTV will continue to apply to each of the parcels to which it was originally assigned. Any additional SPANs identifying the remaining properties combined should be marked as inactive in the grand list and should remain active in the calculations related to OTV and increment.

905.5. Separation of a Parcel or Combination of two Parcels not located wholly within the District. The separation of a parcel into two or more parcels or the combination of two parcels into a single parcel that would result in a change in the boundary of the District is considered a Substantial Change. The municipality must file a Substantial Change Request in accordance with Section 1003.3.3 of this Rule and the Council s action will determine the effect of the separation or combination on the District.

905.6. Property changes use from Homestead to Non-residential: When a parcel of land located within the boundaries of a District is re-classified from homestead to non-residential or non-residential to homestead, the OTV assigned to the parcel shall remain with the parcel.

905.7. Boundary Adjustments: A boundary adjustment affecting one or more parcels wholly within a District, which also affects the boundaries of a District is considered a Substantial Change. The municipality must file a Substantial Change Request in accordance with Section 1003.3.3 of this Rule. Any adjustment to OTV resulting from the change in the size of the District shall be resolved during the processing of the application for the substantial change. A boundary adjustment involving parcels wholly within the boundaries of a District which does not affect the boundaries of a district is not a substantial change. The OTV assigned to the parcels in their original configuration shall remain the OTV for such parcels.

Taxation status of a parcel: Whether or not a parcel is subject to the education property tax for purposes of the OTV listing or annual calculation of the increment depends on the Vermont property taxation statute in force at the time of creation of the District for the establishment of the original taxable value and each year thereafter for the valuation of the property in order to calculate the increment. Properties built by the municipality, financed with District increment, or owned by a non-profit may be subject to taxation due to the use of the property or other reasons. Listers/assessors must thoroughly examine Vermont statute and should confer with the Council and Vermont Department of Taxes/PVR regarding any questions regarding the taxation status of a property.

Reporting Increment: Each year, municipalities shall report assessed values, changes in assessed valuation, and education property tax increment for all properties in the District to the Property Valuation and Review Division of the Department of Taxes using the reporting process specified by the Director of the Property Valuation and Review. Currently, this reporting occurs through the software provided to municipalities by a State of Vermont contract with the New England Municipal Resource Center (NEMRC).
District Fund: The municipal and education property tax incremental revenue retained by the municipality, limited by the required share and the amounts committed to debt and related costs, shall be accounted for by the municipality in a designated District Fund until all District debt and related costs are fully paid. The municipality shall maintain records and file such reports as required by statute [51] and Section 1 000 of these rules.

Limitations on use of education property tax increment: The incremental education property tax revenue generated by an approved District, and retained in accordance with relevant statutory provisions and these rules, shall remain available to the municipality until the District debt and related costs are retired. The availability of the incremental revenue shall be restricted only to the extent that the real property development generating the incremental revenue fails to occur. [52] However, the availability of the incremental revenue may also be limited by the enforcement provisions of statute. [53 ]Further, statute [54] limits the use of any incremental revenue held in the designated District Fund to pay District debt financing and related costs and prohibits loaning or utilization of the incremental revenues for any other purpose by the municipality.

Interest: Any interest earned by a municipality due to incremental municipal or education property tax revenue retained in municipal accounts for the District Fund shall be kept in the District Fund and not used for any other purposes. When any excess increment is distributed in accordance with statute [55] and Section 912 of this rule, the accumulated interest shall be distributed in the same manner.

Use of Income Generated by District Infrastructure: If the District Plan or District Finance Plan approved by the Council included the utilization of income generated by infrastructure financed with District increment to ensure the viability of the District (such as parking garage leases or fees), that income must be utilized in accordance with the District authorization document issued by the Council.
Distribution: In any one year following the ten-year period during which debt may be incurred, the balance of the District Fund may not exceed the total amount committed [56] by the municipality for the payment or financing of District improvements and related costs for that year and any future years. The municipality may utilize excess municipal and education property tax increment in the Fund for the following permitted uses:

-- Prepayment of principal and interest on District financing;

-- Future payments of District financing and related costs; or

-- Defeasance of TIF District financing.

If the municipality chooses not to retain any balance for these permitted uses or there is a balance remaining after the funds are committed for permitted uses, any balance remaining shall be distributed to the municipal general fund and the Education Fund in proportion to the rates that generated the increment.

Final Debt Payment: The municipality shall report the final payment of District debt and related costs to the listers or assessor and the Council. Such notification terminates the District and for all years thereafter, all tax rates are applied against the entire assessed valuation of the properties in the District and the resulting tax revenues shall be remitted in full to the taxing entities.

Section 1000 Recordkeeping, Notifications, and Reporting

District Plan Approval: After 2006, authorizing a municipality to utilize incremental education property tax revenue to finance District improvements became one of the Council's central responsibilities. [57] The Council is also charged with oversight and monitoring of all Districts, regardless of the date of creation and, together with the Department of Taxes (Property Valuation and Review), is responsible for providing an annual report to the General Assembly regarding all existing Districts. To enable the Council to determine progress on performance indicators, meeting the goals of District Plans, and meeting the purpose of Districts as stated in statute, municipalities are required to report certain information to the Council and the Department of Taxes on a form prescribed by the Council.

The Secretary of Commerce, based on recommendations from the Council, has the authority to issue decisions in regard to compliance with statute and these rules. [58] To ensure a foundation of information regarding each District upon which progress can be measured and compliance decisions can be made, this rule requires that each existing District submit an updated or original District Finance Plan or a District Reconciliation.

For the Burlington Waterfront, Winooski, Newport, and Milton North/South Districts, the level of recordkeeping and accounting expected for the years prior to this rule is dependent on statutory requirements for that period and extenuating circumstances impacting the ability of the municipality to comply with these new requirements.

For the Town of Milton, for purposes of accounting and reporting, the two Districts known as the Husky (or North) District and the Catamount (or South) District will be treated as a single district. [59 ]

Recordkeeping. Municipalities with Districts must maintain a separate fund for the District and segregated records to account for the District's incremental revenue and expenditures. This includes segregating the accounting and records of the District from other municipal designations, areas, or districts, even those that may overlap such as Designated Downtowns, Designated Growth Centers, New Town Centers, Designated Village Centers, New Neighborhoods, Historic Districts, Urban Centers, or Downtown Development Districts.

The District Fund recordkeeping must include, at a minimum, the following:

-- An accounting of the real property within the District boundaries; the assessed and taxable value of each property, the original taxable value of the properties for municipal and education purposes, and the total municipal and education OTV of the District, any changes in ownership or value for those properties and the taxable value of each property for each year through the life of the District. Any lists of parcels or parcel values within the District must indicate whether a parcel is homestead or non-residential and any aggregation of the parcels must include subtotals by homestead and non-residential categories.

-- An accounting of all municipal and education tax revenue generated when all tax rates are extended against the assessed valuation, the resulting increment, and all the rates that were applied.

-- An accounting of the municipal and education property tax increment generated each year following the District creation date, the amounts credited to the fund each year due to the appropriate share retained, debits to the fund for servicing District debt or making direct payments or paying related costs, and the balance of the fund.

-- An accounting of any interest earned due to increment held in the District Fund, the utilization of the interest and distribution of interest in accordance to the established share.

-- An accounting of any income generated by infrastructure financed with District increment if the District Plan or District Finance Plan approved by the Council included the utilization of such income to ensure the viability of the District (such as parking garage leases or fees), and an accounting of the utilization of that income.

-- An accounting of all District improvements, including total cost, and a breakdown of the cost factors (design, engineering studies, project management costs, actual construction costs, etc.), how the approved proportionality was applied to the improvement cost, and the amount of infrastructure work (including non-construction costs) that was performed by Vermont firms.

-- An accounting of all related costs incurred, including receipts, for the life of the District. The accounting must include a description of the cost, an amount, when it was incurred, an explanation to substantiate how the cost relates to the creation, implementation, operation, or administration of the District, whether and when the cost was reimbursed or paid with TI F increment, and when the reimbursement or payment was included in a public vote.

-- An accounting of all District debt incurred and any direct payments made for District improvements, including the debt terms and duration.

-- An accounting of any other sources of revenue utilized for District improvements, such as grants, fees, municipal general fund revenue, or revenues gained from District improvements (i.e. parking garage revenues), regardless of whether or not these revenues were applied to the TIF or non-TIF proportion of the improvement cost.

-- An accounting and description of the real property developments and redevelopments that occur because of the District improvements, and a description of other benefits and outcomes that accrue to the municipality, region or the state because of the improvements and development, including less measurable outcomes such as ''walkability" and "connectedness."

-- An accounting of the public good outcomes that were factors in the determination that a District Plan met the Project Criteria approval requirements, [60] which are included in the performance indicators specific to each District, such as: new housing development and data to determine the affordability of such housing; the remediation and redevelopment of contaminated property; the addition of new businesses or business operations or expansion of an existing business(es), the new jobs created by these businesses, and the average wages for such jobs; and enhancements to transportation due to improved traffic patterns and flows and/or improvements to public transportation systems.

-- An accounting of any other performance indicators developed by the municipality and the general performance requirements mandated by statute, [61] including the number of jobs created in the District each year following creation and the sectors experiencing job growth within the District.

1002.1 Records Retention. All records pertaining to the creation, implementation, administration, and operation of a District should be maintained by the municipality in accordance with the standards and best practices established by the Vermont Secretary of State. However, the destruction of such documents and records from the period up to or between audits by the State Auditor of Accounts shall not occur until after the audit has taken place in accordance with the audit schedule required by statute. [62]

Notifications

1003.1. Public Hearings. Whether for the creation of a District and approval of a District Plan, making substantial changes to an approved District Plan or District Finance Plan, or obtaining voter approval for District financing, municipalities must take appropriate steps to inform the voters by providing adequate notice and adequate opportunity for public comment. For the creation of a District and approval of a TIF Plan by the municipal legislative body, statute [63] requires that the legislative body hold one or more public hearings, after public notice, on the proposed plan.

The same level of notice and public hearing is required for substantial change requests, and to obtain approval by the voters to incur District financing. Unless a municipal charter requires greater notice, the municipal legislative body shall hold a public informational hearing on the question by posting warnings at least 15 days in advance of the hearing in at least two public places within the municipality and in the town clerk's office. The warning must clearly indicate the purpose of the hearing and the question to be considered by the voters. The public hearing may be held in conjunction with, or after, a warned meeting at which the question is to be considered by the municipal legislative body, but must occur before the issue is submitted to VEPC or the public vote to incur District financing is held. Refer to statute [64] and Section 1003.2.2 of this rule for details on the information required in the notice to the voters prior to a public vote to incur District financing.

1003.2. Notifications to Voters

1003.2.1. Substantial change requests: Prior to submitting a substantial change request to the Council for consideration, notify the voters of the change through a properly warned public hearing before obtaining approval by the municipal legislative body.

1003.2.2. Vote on District financing: Prior to a public vote on District financing, the question must be approved by a vote or resolution of the municipal legislative body in accordance with the municipal charter, and the municipality must provide an informational notice to the voters. [65] Such public notice must be provided as part of at least one public hearing on the matter. The public notice must include a minimum of the following information, as known:

-- Total amount of debt to be voted upon and total cumulative District debt incurred (Statute [66] also requires that this information be included in the actual ballot question.)

-- Estimated amount and types of financing that will be serviced or paid using District increment, including principal, and estimated interest, and fees, and terms of the debt.

-- Estimated amount of related costs that will be financed, paid or reimbursed with increment.

-- Identification of the loaning fund and documentation of the terms and conditions for interfund loans, if utilized.

-- If utilized, estimates of interim financing, such as a Bond Anticipation Notes, developer-assisted financing, or other short-term financing instruments to be issued and refinanced with the proceeds of the debt that is the subject of the vote.

-- Improvements to be financed and the proportion of the total improvement cost that was approved for financing with District increment.

-- Estimated development and/or redevelopment and District outcomes expected to occur because of the improvement.

-- Notice to the voters that if the tax increment received by the municipality from any property tax source (education or municipal) is insufficient to pay the principal and interest on the debt, or other forms of District financing, in any year, for whatever reason, including a decrease in property value or repeal of the education property tax source, unless determined otherwise at the time of such repeal, the municipality shall remain liable for the full payment of the principal and interest for the term of indebtedness.

The format of such notification is the responsibility of the municipality and subject to the charter of the municipality but the content is required by statute [67] .

1003.3. Notifications to Council and Tax Department: Unless specifically required by statute or this rule, for the notifications and reports required throughout Section I 000, the Council will serve as the single point of contact and will be responsible for establishing submittal forms and for sharing information reported by the municipalities to the Department of Taxes.

1003.3.1. Public Vote on District financing: Within 60 days prior to a public vote to obligate the municipality for District financing, notify the Council of the pending vote and when available (but prior to the vote), provide the following electronically to the Council:

-- A copy of the notice to the voters required by 24 V.S.A. § 1894(i), including information on where and when the notice was published and posted;

-- A copy of the notice of public hearing, including copies of the notice as it appeared in publications;

-- A copy of agendas and minutes of the municipal legislative body indicating votes or resolutions involving the District financing.

Within 30 days after the public vote to obligate the municipality for District financing, electronically provide to the Council a copy of the ballot with a certification of the vote tally.

1003.3.2. Incurring debt: Within 30 days after it is executed, electronically provide the Council a copy of the document(s) executed by the municipality to incur District financing. The document(s) must include the date of execution of the financing.

1003.3.3. Corrections and Substantial Changes to District Plans: Once approved, the District Reconciliation and, for the post-2006 Districts, the District Plan, District Finance Plan, and approved applications, serve as the foundational documents for each District's implementation, providing the intentions of the municipality regarding debt and financing, improvements, and development/redevelopment. For Districts approved after 2006, these plans were presented at a public hearing, voted on by the municipal legislative body, and approved by the Council.

Municipalities must include in the Annual Report required by statute [68] and detailed in Section I 004.2 of this rule, information regarding any deviation from the approved District Plan, District Finance Plan, or District reconciliation. Minor corrections to a District Plan or reconciliation, which do not meet the definition of a Substantial Change, may be submitted electronically to Council staff at any time, but must be included in the Annual Report.

Municipalities must, pursuant to statute [69] and this rule, after holding a properly warned public hearing, obtain approval from the municipal legislative body for any substantial change request prior to submitting it to the Council for review. The request must be filed electronically, in the format required by the Council, by an application deadline for a monthly Council meeting. If the request is not received by the application deadline, the request may be added to the agenda for the following meeting, or a special meeting may be scheduled, at the discretion of the Council Executive Director and Chair.

A substantial change request must include:

-- A letter requesting consideration by the Council of a substantial change. The letter must be signed by the chair of the municipal legislative body and the top non-elected official (i.e. city or town manager) and must indicate that the municipal legislative body has considered and approved the substantial change.

-- A copy of the municipal legislative body meeting agenda and minutes indicating that a hearing was held and that the municipal legislative body considered and approved the substantial change.

-- A narrative explanation of the substantial change that fully explains the reason for such a change and includes the following:

o Impact of the change on the overall District Plan, Finance Plan, or District Reconciliation.

o Whether the change impacts the District Plan approval determinations made by the Council.

o Whether the change is consistent with the approved local plan and a communication from the regional planning commission commenting on whether the District remains consistent with the regional plan with the change.

o Information and data showing the impact of the change on infrastructure costs, revenue generation and overall viability of the District.

o A proposal and substantiation of proportionality, if the change involves a new infrastructure improvement project.

When making a determination to allow or deny the substantial change, the Council will consider whether and the degree to which the substantial change:

-- Would cause the District Plan to violate any of the approval criteria including Location Criteria, Project Criteria, Purpose, Viability, Nexus or Proportionality.

-- Would change the cost of infrastructure (increase the liability) or the generation of revenue (reduce revenue) to a degree that adversely impacts fiscal viability.

-- Would require that additional education property tax revenue be utilized without offsetting development that would generate additional Education property tax revenue.

-- Would cause the education property tax revenue to increase.

-- Would have an impact on the financial viability of the District.

-- Would put at risk the long term economic benefit and the achievement of other District objectives.

The Council will provide a determination as soon as possible following consideration. The Council's intention is to provide a determination within 60 days after consideration at a regularly scheduled or special meeting of the Council.

Annual Reporting

1004.1. District Fund in Municipal Audit Cycle: Municipalities with an active District must ensure that the entity undertaking the annual municipal audit required by statute [70] on behalf of the municipality is aware of the requirement to include the District fund in the audit. [71] The audit procedures must include, at a minimum, verification of:

-- The original taxable value and annual and total municipal and education tax increments generated;

-- Expenditures for District debt and related costs; and

-- The current balance of the District fund.

Because these requirements are not necessarily included in a normal municipal audit, the Council will develop and publish, in cooperation with representative municipal officials and accountants familiar with municipal audits, "agreed-upon procedures" for these audit engagements.

1004.2. District Annual Reporting: Pursuant to statute, [72] a municipality with an active District must, on or before January 15 of each year, submit electronically on a form prescribed by the Council, an annual report to the Council covering the activity of previous year. Through the 2013 reporting cycle, the annual reports were for the preceding calendar year. Starting with the reports due January 15, 2015, the report will be for the previous municipal fiscal year. Therefore, the report due January 15, 2015 will cover a short year, January 1, 2014 - June 30, 2014. Subsequent annual reports will cover the entire previous fiscal year.

The annual report must include:

-- A copy of the annual value and increment certification and a certification that it was reviewed by a second party before submittal to the municipal legislative body (See Section 903).

-- A summary of any public votes and debt incurred and documentation of any public vote and debt incurred that was not previously submitted during the year.

-- Information regarding any deviation from the approved District Plan, District Financing Plan, or approved application, including correction and parcel survey adjustments.

-- Information regarding the refinancing of approved District debt.

-- A copy of the municipal audit required by statute. [73 ]

-- All information required by statute, [74] including information and data regarding annual performance requirements, which must be reported by the Council and Department of Taxes to he Vermont General Assembly, which will be requested in the form prescribed and provided by the Council.

1100 Oversight, Monitoring, Non-compliance Enforcement, and Audits

Oversight and Monitoring. The Council will conduct oversight and monitoring of all active Districts to include on-going communication with municipal officials and semi-annual staff tours of the Districts and visits with municipal officials. Such visits will include inspection of recordkeeping, evaluation of municipal documentation of the District implementation, compliance with approved District Applications, Plans, and Reconciliations, verification of information included in notifications and annual reports, and documentation of progress made to implement the Districts. Prior to initiating oversight and monitoring, every effort will be made by Council staff to work with municipal officials to ensure an understanding by the municipalities of the statute, the rules, and compliance requirements and assist the municipality to set up recordkeeping and information systems that function efficiently and effectively for all parties.

Council staff will also provide an efficient system for municipal communications regarding District statute, rules and compliance questions. The system will require the designation of a single point of contact in each municipality with an active District. Only the District single point of contact may communicate with Council staff regarding District issues and Council staff will communicate with only the single point of contact. All communication must be conducted in writing (including email).

Issue Resolution and Non-Compliance Enforcement. Inquiries and questions must be posed in writing by the municipal Single Point of Contact to Council staff, who may confer with Agency of Commerce and/or Department of Tax counsel, the Council Chair, and others as appropriate, prior to issuing a written response to the municipal Single Point of Contact.

However, if District oversight, monitoring, or annual reporting identifies non-compliance with District statute or rule, or inconsistencies with an approved District plan or District Reconciliation, or if after receiving a written response from Council staff a municipality files a formal inquiry with the Council because the municipality chooses to dispute the staff response, staff will initiate the formal process to issue decisions pursuant to statute. [75]

Examples of non-compliance, include, but are not limited to:

-- Municipality fails to provide required notifications to the voters or the Council.

-- Municipality incurs District debt without a public vote.

-- Municipality uses increment to fund improvements not included in approved District Plan or a TIF Reconciliation without appropriate approvals.

-- The District, as implemented, does not carry out the approved TIF Plan or TIF Reconciliation.

-- Absent a substantial change request and approval, the District, due to actions taken by the municipality, does not meet the required approval criteria outcomes as set in the Council's approval of the District.

-- The municipality retains more than the approved percentage of education or municipal property tax increment.

-- The municipality exceeds the approved proportionality to an improvement cost.

-- The municipality uses incremental revenue improperly or for purposes not allowed by statute or this rule.

-- The municipality fails to maintain the recordkeeping required by this rule.

-- The municipality fails to create and maintain the District fund required by statute.

Process for issue resolution and non-compliance enforcement:

(1) Council staff will review the issue with the municipality and the municipality will have a reasonable opportunity to submit documentation in support of its position. The documentation must be provided in the format requested by Council staff and must be provided by the date requested, which will allow for staff review and summary for the Council at the next regularly scheduled meeting, or a special meeting called by the Chair, if required. The due date for such information will be no later than the first Friday of the month in order to be included on the Council agenda on the regularly scheduled monthly meeting of the Council (usually the fourth Thursday of the month).

(2) Council staff will consult with Agency of Commerce and Community Development staff and counsel, and may consult the Commissioner of Taxes, Attorney General, and State Treasurer, as appropriate.

(3) Council staff will prepare a summary of the issue, including an opinion regarding the presence and degree of possible malfeasance. on the part of the municipality and the level of impact on the Education Fund, if any, and prepare a recommendation for the Council to consider along with any evidence provide by the municipality.

(4) The Council will deliberate at a regularly scheduled meeting, or a special meeting, if required and called by the Chair, and may include oral testimony by the municipality. After which, the Council will vote on a recommendation to the Secretary of Commerce on the question, issue, or non-compliance.

(5) On behalf of the Council, Council staff will transmit the recommendation from the Council to the Secretary of Commerce, in writing, which will include a summary of the evidence and a full copy of the information provided by the municipality.

(6) The Secretary of Commerce, after reasonable notice to the municipality and the opportunity for a hearing, will issue a final written decision on the question, issue, or noncompliance within 60 days of receiving the recommendation from the Council. A decision by the Secretary that clarifies a question or resolves an issue shall serve as a declarative statement on the issue or question.

(7) If a hearing is held, the hearing is subject to the provisions of 3 V.S.A., Chapter 25 related to contested cases and must be conducted by the Secretary or a hearing officer appointed by the Secretary. If the hearing is conducted by a hearing officer, the hearing officer has the authority to conduct the hearing as provided for in the contested case provisions, including issuing findings of fact, hearing evidence, and compelling, by subpoena, the attendance and testimony of witnesses.

(8) If the decision issued by the Secretary includes a finding of non-compliance which has resulted in the improper reduction in the amount due the Education Fund from the municipality, the Secretary must request that the State Treasurer bill the municipality for the total identified underpayment, unless the Secretary is satisfied that the non-compliance is resolved, including a reversal of the improper reduction in the amount due the Education Fund.

(9) The State Treasurer will issue a bill for the underpayment to the Education Fund and the bill is due upon receipt. If the bill is not paid within 60 days of receipt, the amount may be withheld from any funds otherwise payable by the State to the municipality or a school district in the municipality or of which the municipality is a member, unless the decision is appealed.

(10) The Secretary or the Treasurer may, in lieu of or in addition to billing the municipality for underpayments to the Education Fund, refer the matter to the Office of the Attorney General with a recommendation that an appropriate civil action be initiated.

(11) At any time after the issuance of a decision by the Secretary, any party in the decision may appeal the decision to a Superior Court for determination of questions of law. An appeal will stay the 60 days to pay any underpayment to the Education Fund. If the decision is upheld, the municipality will have 60 days from the Superior Court decision to pay the bill from the Treasurer to avoid withholding of funds to the municipality or school district.

ENDNOTES

[1] 32 V.S.A. Chapter § 5404a(j).

[2] 24 V.S.A. Chapter 53, Subchapter 5 ( §§ 1891-1901) and 32 V.S.A. Chapter 135.

[3] 3 V.S.A. Chapter 25

[4] 32 V.S.A. § 5404a(j).

[5] 24 V.S.A. Chapter 53, Subchapter 5 and 32 V.S.A. Chapter 135.

[6] 24 V.S.A. § 1893

[7] 32 V.S.A. § 5404a(j).

[8] § 1 of Act 80 (2013)

[9] V.S.A. 32 § 5404a(j)(3)

[10] 24 V.S.A. § 1892(d)

[11] 24 V.S.A. § 1894(a)

[12] See V.S.A. § 1892(d).

[13] 24 V.S.A. § 1894(d)

[14] Section 82 of Act 54 (2009), as amended by § 10 of Act 3 (2009 Special Session) gave the Milton Town Core District a ten-year period to incur debt. Provision was retroactive to July 1, 2008.

[15] 24 V.S.A. § 1901.

[16] 24 V.S.A. § 1901(3) (B).

[17] See 24 V.S.A. § 1893

[18] The City voted to expand the original District on June 23, 1997 as authorized by Act 60 (1997).

[19] Also known as Milton Husky and Milton Catamount TIF Districts. Districts were approved by the Council as one District in 1999 and authorized April 1, 1999 as the effective start date of the retention period. Further, Section 15b of Act 45 (2001) retroactively allowed the Milton Husky and Catamount Districts to be treated as a single district for accounting purposes. Section 2j of Act 184 (2006), amended by Section 68 of Act 190 (2008) authorized the extension of the District for an additional ten-year period.

[20] 24 V.S.A. § 1891(5).

[21] 24 V.S.A. § 1891(4)

[22] 24 V.S.A. § 1893

[23] 24 V.S.A. § 1891(4)

[24] 32 V.S.A. § 5404a(l).

[25] 24 V.S.A. § 1901(3) (A).

[26] 24 V.S.A. § 1681

[27] 24 V.S.A. § 1901(3) (A).

[28] 24 V.S.A. 1894(i)

[29] 24 V.S.A. § 1891(6).

[30] 24 V.S.A. § 1894(a).

[31] 24 V.S.A. § 1894(f).

[32] 24 V.S.A. § 1896(c).

[33] 24 V.S.A. § 1894(g).

[34] Original debt period was ten years, ending in 2006. § 83 of Act 54 (2009) extended borrowing period for five years beginning 2010 to 2015 and § 18 of Act 80 (2013) extended the debt period five years to December 31, 2019. The retention period was originally set at 20 years by § 72 of Act 190 (2008) and was extended to 2025 by § 16 of Act 45 (2011). The District retained 100% of both municipal and education incremental revenue until amended to 75/25% split of education incremental revenue § 16 of Act 45 (2011).

[35 ] In accordance with Section 16 of Act 45 (2011), beginning in the year in which new TIF debt is incurred (which occurred in 2011), the grand list of April 1, 2010 shall be the baseline and any increment is to be divided 75% to the District and 25% to the Education Fund. This provision included an exception of two parcels (25 and 41 Cherry Street) for which 100% of the increment shall go to the District.

[36 ] The original debt period and retention period was ten years, ending in 2009. § 2j of Act 184 (2006) as amended by § 68 of Act 190 (2008) extended both another ten years to 2019. The original share was left to the discretion of the municipality, but was amended to no more than a 75/25% split of the education incremental revenue and an equal share of the municipal incremental revenue by Section 2j of Act 184, as amended by Section 68 of Act 190 (2008). Further, the new 75/25% split also applies to any debt obligations incurred prior to April 1, 2009, without regard to the proportionality rule.

[37] The debt period is 5 years from the effective date of Act 159 (1999), therefore 2000 to 2005. The retention period is 20 years from the incurrence of debt as set by § 38 of Act 159 (1999), as amended by § 40 of Act 68 (2003) and is therefore 2004-2024. The share was originally set at 100% municipal and 95% education incremental revenue by § 38 of Act 159 (1999) but was amended to 98% of the education increment by § 71 of Act 190 (2008).

[38] 24 V.S.A. 1894(e).

[39] See Sections 55 and 58 of Act 190 (2008). In the same Act ( Section 68), the Milton North South District was exempted from the proportionality rule for any debt incurred prior to April 1, 2009.

[40] 24 V.S.A. § 1894(h).

[41] 24 V.S.A. § 1894(i).

[42] 24 V.S.A. § 1891(7).

[43] 24 V.S.A. § 1894(i).

[44] 24 V.S.A. § 1891(7).

[45] § 38(1) of Act 159 (1999).

[46] § 72 of Act 190 (2008).

[47] § 16 of Act 45 (2011).

[48] § 6 of Act 80 (2013).

[49] 32 V.S.A. Chap. 129.

[50] 24 V.S.A. § 1896(c). Note that the requirement to apply all municipal tax rates against the aggregated value went into effect on July 1, 2013. Therefore, any special rates in place prior to July 1, 2013 and any created after July 1, 2013, are subject to this change. The incremental revenues generated by the grand list filed April 1, 2014 and for all subsequent years during the life of the District must be split when these special municipal rates are applied. This requirement applies to any and all special municipal rates, even if they are approved by the municipal charter for a special purpose.

[51] 24 V.S.A. § 1901.

[52] 32 V.S.A. 5404a (g).

[53] 32 V.S.A. § 5404a(j).

[54] 24 V.S.A. § 1896(d).

[55] 24 V.S.A. § 1900

[56] Defined by 24 V.S.A. § 1891(8) as "pledged and appropriated for the purpose of the current and future payment of tax increment financing..."

[57] 32 V.S.A. § 5930a(h).

[58] 32 V.S.A. § 5404a(j).

[59] Section 15b of Act 45.

[60] 32 V.S.A. 5404a (h) (4).

[61] 32 V.S.A. § 5404a(i).

[62] 32 V.S.A. § 5404a(l) )

[63] 24 V.S.A. § 1892(a).

[64] 24 V.S.A. § 1894(i).

[65] 24 V.S.A. § 1894(i).

[66] 24 V.S.A. § 1894(h)

[67] 24 V.S.A. § 1894(i)

[68] 24 V.S.A. § 1901(3)(B)

[69] 24 V.S.A. § 1901(2)(B)

[70] 24 V.S.A. § 1681 and 24 V.S.A. § 1690.

[71] 24 V.S.A. § 1901(3) (A).

[72] 24 V.S.A. § 1901(3) (B).

[73] 24 V.S.A. § 1681 and 24 V.S.A. § 1690.

[74] 32 V.S.A. § 5404a(i).

[75] 32 V.S.A. § 5404a(j) (2).

History

STATUTORY AUTHORITY: 32 V.S.A. § 5404a(j) (1)
EFFECTIVE DATE: May 6, 2015 Secretary of State Rule Log #15-013

Vermont Code of Rules, Agency 11 — Agency of Commerce and Community Development

Subagency 020 DEPARTMENT OF ECONOMIC, HOUSING AND COMMUNITY DEVELOPMENT

Chapter 001 HOUSING DIVISION RULES PART I: MOBILE HOME PARKS

11-001 Code Vt. R. 11-020-001-X HOUSING DIVISION RULES PART I: MOBILE HOME PARKS

Chapter 002 HOUSING DIVISION RULES PART III: MOBILE HOME PARK WARRANTY OF HABITABILITY

11-002 Code Vt. R. 11-020-002-X HOUSING DIVISION RULES PART III: MOBILE HOME PARK WARRANTY OF HABITABILITY

Chapter 003 HOUSING DIVISION RULES PART II: MEDIATION AND LEGAL SERVICES PAYMENTS AND CONSUMER PRICE INDEX FOR LOT RENT DISPUTES

11-003 Code Vt. R. 11-020-003-X HOUSING DIVISION RULES PART II: MEDIATION AND LEGAL SERVICES PAYMENTS AND CONSUMER PRICE INDEX FOR LOT RENT DISPUTES

Chapter 004 HOUSING DIVISION RULES PART IV: ADMINISTRATION OF THE HOUSING INVESTMENT TAX CREDIT PROGRAM

11-004 Code Vt. R. 11-020-004-X HOUSING DIVISION RULES PART IV: ADMINISTRATION OF THE HOUSING INVESTMENT TAX CREDIT PROGRAM

Chapter 005 RULES FOR THE ALLOCATION AND DISTRIBUTION OF MUNICIPAL PLANNING FUNDS

11-005 Code Vt. R. 11-020-005-X RULES FOR THE ALLOCATION AND DISTRIBUTION OF MUNICIPAL PLANNING FUNDS

Chapter 006 RULES FOR THE ALLOCATION AND DISBRIBUTION OF REGIONAL PLANNING FUNDS

11-006 Code Vt. R. 11-020-006-X RULES FOR THE ALLOCATION AND DISBRIBUTION OF REGIONAL PLANNING FUNDS

Chapter 007 FEDERAL TAX CREDITS FOR LOW INCOME HOUSING; STATE ALLOCATION SYSTEM; JOINT COMMITTEE ON TAX CREDITS

11-007 Code Vt. R. 11-020-007-X FEDERAL TAX CREDITS FOR LOW INCOME HOUSING; STATE ALLOCATION SYSTEM; JOINT COMMITTEE ON TAX CREDITS

42A, dated July 16, 1987, establish a system for allocation of federal tax

Chapter 008 RULES OF THE COUNCIL OF REGIONAL COMMISSIONS

11-008 Code Vt. R. 11-020-008-X RULES OF THE COUNCIL OF REGIONAL COMMISSIONS

Chapter 009 ADMINISTRATIVE RULES JOB DEVELOPMENT ZONE PROGRAM

11-009 Code Vt. R. 11-020-009-X ADMINISTRATIVE RULES JOB DEVELOPMENT ZONE PROGRAM

Chapter 010 TAX INCREMENT FINANCING DISTRICTS

11-010 Code Vt. R. 11-020-010-X TAX INCREMENT FINANCING DISTRICTS

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