When we worked on the bill from the original version and introduced it, I turned over to Patty to tell us what's been going on. We had one walkthrough last week on the original bill. Yeah. And I see in my folder there's an amendment here. I guess this would be the memorabilia to address. Yeah. And quite frankly, let me just say at the offset. I did the best thinking or the ideas that I had at the moment, but I'd really rather have this just be a strike all with all the ideas that we agree to in this committee and that we're willing to advocate for. I have no feeling of, you know, that this would be an amendment. I would hope we'd come out with a clean strike all. That's fine. We'll get there one way or another. Okay, great. Great. So, Abby Shepherd, Office of Legislative Council. This is drafted currently as an individual amendment by Senator Clarkson. It's 331. So I can switch that over to a strike all and then repeat the language. This bill, this portion really only deals with the tax sections. So it does not have any changes to the initial. So, and the piece we're going to hear from Laura, I hope we will add is the fourth piece to the bill. Correct. Because we have three areas that we address student debt with this amendment at the moment. And then I'm hoping that we will add. Just to get a base line and a framework here, I remember the first issue was loss of the $15,000, $20,000 down payment assistance if somebody had student debt that they could reduce their student debt. While they are, while this money is liberated and this drives young people with student debt into buying homes in opportunity zones. And that's the piece of it that Laura will speak to after Abby's finished with the 529 sync up, the employer tax credit benefit for the employee and the remote worker adding the payment eligibility of adding student debt to the remote worker. Oh, yeah. Because that's in another bill as well. But. I thought it was good to have it hooked into several places. Okay. So let's hear about, I know there's a bit of confusion how employers can deduct employees whether they have to declare this as income. So give us your wisdom. Great. So this draft makes a few different changes as Senator Carson just went through. To start, I'll just walk through each section and then we can address the questions that came out of my testimony from the first time we did the walkthrough. The first change has to do with section four. I don't know if you have the underlying bill there in front of you. It has its deduction for student loan payments that are made by employers. So when an employer makes a payment on their employee's loan, that employee can deduct up to $5,000 under this proposal from their income taxes. And the committee pointed out the qualified student loan was restricted to loans incurred to attend and receive a degree. So this first amendment removes the requirement to actually receive the degree. So it's for any loan to attend higher education. So it's more expansive. So that's the first very small technical change. There was discussion about that, but it seemed to be too restrictive for payments. So this could be people who transferred and didn't finish their degree in one place but have student debt as they transferred to another university. And this is for people who may have not graduated but incurred debt and have gone to work for somebody. There are all sorts of scenarios where you could not have completed a degree and have students debt. So are you going to get it into the deductibility factor and how that changes it just a lot? Well, so the proposal NS331 is to allow these payments to be deductible. So that's an existing bill as proposed. And is that only on a state level? Yes. This is only for Vermont income tax liability. And this deduction is just for the individual. So the amendment deals with the deduction for the individual just making that small change. But it's also, as Senator pointed out, does now provide credit for the employer. So it's helping the individual and the employer. But it's in two different ways. So right now the employer chose, under existing law, chose to give $5,000 to reduce the debt. It would be considered income to the employee. That's correct. It would be no deduction. And the employer wouldn't get the deduction either? The employer wouldn't get any tax benefit. So it's almost like a gift. Except it isn't because that might be excluded. This gives more favorable tax treatment both to the individual and the employer. So it deals with both sides of the interest. Do you know of any other states that have done that? Maine? Let me look at Maine. They are fairly generous. I did look at it from a state's perspective. I'm just referring to the concept of making you a deductible expense for the employer employee. Other states have done that? Yes. That's correct. We put a limit on it. Maine didn't put a limit on it, as I recall. I looked at Connecticut in particular and they do have that. We have any projection of how much glossary we need? No, we need a fiscal note on it once we've got all our bills there. Are you coming back? I can let J.F. know. Well, I would go there yet. Let's make sure the committee wants to do this. The $200,000 and $250,000 numbers here will be very popular among the monitors when they read that. Is there a number in here? Okay. So the $200,000 and $250,000 are the income limits. They're eligible up to that. As I say, that's going to be very popular. It might as well do it for everybody. You're giving a benefit to the 1% is the narrative, and that is not something that I think... This is the first time we're seeing this, so let's... Don't take our bills. Are these people going to buy in opportunities? Right. Well, no, this part... Oh, this is the original bill. Okay, this part in the original bill is not restricted to anybody in the opportunity, so... No, that's a separate... Okay. That's more important. This is for deduction. Okay. We've set it up as a page seven of the original bill. The original bill. That was not changed. So those are setting the income threshold, so an individual who earns up to $200,000 of AGI or $250,000 of joint return is eligible to take this deduction. Yes, because we were thinking of this more as an household rather than individuals. You look at the average household income in Vermont, and you said that you're going to give somebody a benefit who earns up to $250,000 as an income is going to be very, very popular as you could imagine. The public perception of that in terms of the press I think will be... I think he's being facetious. I am. No, I hear you. Let's keep the... We're nowhere near deciding this stuff. But I do want to put it in perspective, and that is that how much is this tax credit worth to somebody who's making $60,000 a year? I mean, somebody could run those numbers. I mean, the marginal tax rate is in that area is probably like 2%. So 2% of $5,000 is $100. That's what we're giving you. I don't want to get to the same situation where we're remote workers when we had a bill that put in that was going to get the tax credit of $200 for people to move here. So I'm concerned that this may be de minimis in terms of what we're trying to do here. Okay, we don't want it to be de minimis. It would be de minimis in its effect and devastating in terms of its public relations impact. So we've... It's the best of all possible worlds at the jackpot. Okay. So let's go continue through. So that's the only change. The very first instance of amendment is the only change to this deduction for the individual. There's nothing else that addresses that in the amendment. Okay. The next instance of amendment, second, so I'm on page one of the amendment language. This now creates the employer credit, so it's giving a tax benefit on the employer who's making the contribution to pay off their employee's student loans. I took the same definitions that are in the deduction language and used that for the employer credit. So an institution of higher education is only post-secondary, generally limited to graduates of secondary schools. It can include public, private, nonprofit, and for-profit institutions of higher education, qualified education loans, and you won't incur to attend an institution of higher education. I added in some language here about a qualified employee that might, depending on the policy choices, might need to be changed. Qualified employee is an individual who's employed at least, and I could have put part-time here. I took a definition from the labor title, 1,040 hours per taxable year. That's considered part-time. I don't know if the committee wants it to be only full-time workers. I believe Maine does require that. So there's some decisions there that can be made. And I also did domicile in the state for any part of the taxable year. You could also make that the entire taxable year. The entire, in the whole chapter of that. What line is that? I'm sorry, so it starts on line 19 and then it's line 20 and 21 on the first page of those. I'm talking about the qualified employee. So currently the qualified employee in this language is anyone who works at least part-time and who has domiciled at any time during the taxable year. There's no minimum requirement. And I hope our intent is that this is actually a resident of the state and is here for the, you know, who is, I mean, I think those are discussion points, but I can't imagine us doing it without a resident without working for four years. I mean for full-time. Does this mean that just, so I understand the intent of this. The intent is a person has to work part of the full year in order to qualify for this in the first place. So it's after the fact payment, after they've met that threshold. So a person that you're attracting to the state, for example, with this type of incentive, isn't going to get the incentive until a year later. No, I would hope that actually this incentive would be a benefit that they would receive on a monthly basis. And we'd have to be for a full-time employee. I mean, I don't see this being. Because that is not the way that I read this. No, no, I haven't discussed this yet. We haven't focused on that piece. So I'm actually, you know, I think of this as a benefit, like a benefit you get regularly on a monthly basis. And it would be a benefit that would be paid directly to an institution or to a business that has been created out in the marketplace that actually pays down student debt directly to institutions for employers. So the whole issue of how you define a qualified employee would have to change. Yes, that's our conversation. This is a conversation start, not the end. Although Abby and I actually didn't talk about that. Just so I can preview things where we're going, by the way, because we want to get to the housing bill fairly soon. I did this, put this in, more of who's going to talk about the other pieces going away, and I want to hear from her before she went on. Okay, so maybe we should speed up on this. Right. Because there's definitions for a qualified employer, a qualified payment having to do with whether it's made directly through the lender or a customized repayment program. So I don't know if you want me to go through the basics of the credit, is that it's being made to the employer, provided that the amount of the credit is not exceeding $5,000. Connecticut's credit is about half of this maximum, but theirs is also 50% of the payments made. So this is dollar for dollar, every payment, dollar, pain, and I don't pay that much. 50% of the payments made up to 2,600. And we're 100% up to 5,000. Correct. Okay, there's some administrative language in section 7. This is a different benefit altogether. This has to do with the 529, and so I don't know if you're ready for me to move on to that. Yeah, I'll do that. This is a different piece, and that's what I... Section 7. ...got into. Section 7 started in line 17 of page 2. That's what I got into in my last testimony. This would link Vermont, Vermont and decoupled last year from the 529 allowable distributions. When you're taking money out of your 529, Vermont decoupled from that and only allows distributions from your Vermont 529 for cost of attendance. This now follows the federal changes. So it's cost of attendance, registered apprenticeship programs, and it also allows upon death or disability of the beneficiary, you can also take funds out. So it's more of an equity. So this is where I got really confused last time. So the federal law changed, right? Right. And allowed for more uses. Correct. Because there's tax. Right. So regardless of this bill and everything else, it seems like this would be a positive thing to do just in and of itself. I mean, isn't this what VSAC is sort of suggesting too that they... We haven't... We didn't hear from Marilyn, who... Remember, we couldn't... Right. We ran out of time, but it would be great to hear from them. Okay. Well, we would have to definitely hear from the tax department also on the other stuff. Yes, we need a fiscal note. Once we agreed to what we're asking to do a fiscal note on that, it was why I didn't ask for one right. But this stands on its own. This is separate from the... I mean, this could pass. Yeah. Okay. All right. Okay. And then the final change in Section 8 is to the Remote Worker Grant Program. It adds a new subdivision that allows women's aid on student loans as a qualifying expense to request the Remote Worker Grant. Is this the same language that we had in the other bill? Just do the same thing. The other bill. They talked about that. No, no, no. Two, 56, I think that merges the two programs and allows for... Oh, no, it's not the same, because we had to fight. We had somebody who graduated from the Vermont School in there. So this is different. Right. So, yeah. We should sync it up with what we have already passed out on the committee. They haven't passed that out with Lydia. Right. But it's in the other bill. Right. And then I made the effective perspective. So it's start in January 1st of 2021. So it would be for... I come taxes filed in 2022. Okay. Good. So, anybody have any questions for Abby? It's a good start. I think these give you sort of a... At least flesh out some of the thinking, the best thinking that we've had today. And we've got lots of research on the other states, and which David has sent us, which the UVM students have done for us, and they are eager to come and present it to us. So, wait. Thanks. There's lots to support doing something about student debt. So let's hear from Moore. I think when Moore was talking about that was the bigger piece of this bill. It's one of the four options. Right. In a scheme of things, this is going to make a debt to student debt. The other one is going to be a big policy choice. But it doesn't really save that much money on student debt. Well, I think an employer benefit would be very helpful for people on a monthly... You know, just noodling away at student debt. Actually, no.  An employer side, yes. It's not just the deductibility. It's the actual cash reduce reduction of your debt every month. You're right. You're right. Hello. Hi. I'm Mark Collins, I'm the director of the Vermont Housing Finance Agency. Thank you for squeezing me in before I head out of town later. I, again, want to start the way I started last time. Just with two sentences, I really appreciate that you saw the success of our down payment assistance program, which I call our DPA program. And I want to expand it. Senator Clarkson's idea of expanding it as a way of addressing these student loan debt needs. I can see how that makes sense. And since this was an idea that was brought to VHFA and stem from VHFA, I'm back to just tell you some stats about student loan debt in our borrowers now that I've had a moment to look that up. And it can start to... So that you all could start to scale and size this what I think would be the first section of this bill. I will tell you, I looked at... Oh, I won't be very clear. My team at VHFA, I didn't look at the last four years of our lending to our borrowers. And 45% of our borrowers had student loan debt. I would have thought, actually that percentage would have been higher, knowing that our borrowers skew very young. But on the other hand, I think that that may be a testament to the types of borrowers that we work with. We work with lower and moderate income folks who are first-time home buyers. And I think that if you saw the educational outcomes of our borrowers, they may not match up with the state's overall educational outcomes. But the average outstanding loan balance was just over 37,000. And they're paying on average about $330 a month for their student loan debt. So that... And they have about 10 years left on their loans. So the way... This is for all your loans, not just down payment assistance. Correct. This is all the loans. I'm going to dive down into the OZ, the opportunity zones. And just to put this in perspective, which is interesting, your debt average student debt is higher than the Vermont average. The Vermont average is just over 31,000. Okay. So... So they have a lot of that. So I wanted to speak to some of this because I know Senator Clarkson's idea was this idea of $20,000 and forgiving it over five years. So I was trying to just check your numbers to see if I would agree. But if there's 10 years left on a loan, then doing something forgivable over five years would be meaningful, as well as knowing that they have an outstanding balance on average well above the $20,000 you're talking about in this program. 20% of our mortgages over the last four years were in opportunity zones. That didn't... 20% of all your loans. Of all our single-family mortgages. And that doesn't surprise me because I know that our market share in underserved areas is higher than what it is overall. We actually have a lower market share in Chittenden County and really high market share in the three Northeast Kingdom counties as well as Rotland and Orange County. But the characteristics of the borrowers in opportunity zones for us matched our typical borrowers. So what I told you last time was about an average income of 63 grand and borrowing... they borrowed just about $146,000 to buy a home. It was $155,000 worth. Sorry, they borrowed about $148,000. In OZs, they borrowed $146,000 and they bought a home priced around $155,000. So... and 68% of these borrowers in OZs got our existing dump payment assistance program. 68%. 68%. So... so... I heard you said or saying about the strike all approach and you know they'd sent you sort of an edited version but the language... We need to get the happy right. The language... last time I testified that got a little cut short I was suggesting that the program be a VHFA program right now it's written to be ACCD in partnership with VHFA and because this would be an expansion of our existing dump payment assistance program in these limited geographic areas both for marketing and other reasons Would like it just to be VHFA We would like it to just be us because I can see the potential for there being a rub between two different entities discussing how are we going to administer a program and if we're ultimately responsible for it and designing it Can I... back up a little bit more to understand the money flow here so in essence somebody who has a student loan can have... they're not going to have anything of that student loan forgiven they're going to have the $20,000 dump payment assistance forgiven I'm not sure So the whole point of that is that it liberates that money and they would have to show that they were also reducing directly reducing their student loan debt as a piece of this they'd have to show that they were doing that because this is designed to liberate money and we felt and Nora will tell you why we couldn't mingle the two but it's designed to liberate money to okay so I think you answered this before the $5,000 existing down payment assistance is usually not even enough to do the closing costs right but the $20,000 might be able to do the closing costs and more and that just would be labeled down payment assistance so we would go towards reducing the amount of the underlying loan right? yes which is part of the objective so that all their costs are reduced so money is liberated to pay down student debt and they will have less debt burden going forward all together so you're basically a conduit to reduce people's student debt yes and the reason you're a conduit with a lot of things very conducive one could make an argument that it would be more efficient to take $20,000 and pay down student loan debt one reason I believe the senator approach to get to pay for this conversation was that if you do that how do you then get the person to root here, stay here especially in these areas of more economic distress that we see with OZ and so by tying it with a mortgage I see that benefit you know and you can build in this 20% forgiveness over five years not only are they here but they're going to stay and so those are all the reasons why this makes good sense it also promotes homeownership which is a big problem absolutely we know the tie that high student loan debt is impacting the ability to how does the original program deal with the down payment assistance to get paid back yes when the first mortgage goes away it's a second mortgage and it runs for the length of the first mortgage so if you are the rare bird who keeps a mortgage for 30 years you will pay it off the $5,000 in 30 years if you're like the rest of us who will refinance or move or die or something else then that would get paid back when that first mortgage goes away this program, the $20,000 this is forgivable it's written to be forgivable 20% a year for five years so it will not revolve or be paid back and that way it's very different good so I talked about the benefits of why tying this with a mortgage is a good thing but one could make an argument that it would be more efficient if you just paid down a student loan debt by $20,000 when I'm thinking about my programs the drawback is that would be counted as income and now borrowers may not qualify for the H.A. mortgage because you may be over our income limits which are quite low so that is why doing this conduit approach makes sense if you really want this to be a housing related program one thing Senator you said that so let me stop you there this is an important point so if we just set up a fund to give people money to pay off their student debt any money would give them would be considered income this would not be considered income the way this is structured correct this is a loan and a forgivable loan is not considered income really are you sure about that for purposes of our programs that's what I'm talking about you need Doug Fernum or someone to talk about how this gets recorded for purposes of your programs can you elaborate what you mean by that yeah so we have we sell tax exempt bonds and use that investor money to make loans and so those private activity bonds are the programs called the mortgage revenue bond program MRB and there are a lot of federal rules that go with the MRB program and in addition to all those federal rules we then use a mortgage back security model and sell those loans to a secondary market Fannie or Freddie so not only do we have to make sure that the loans abide by the MRB rules because it's being funded with tax exempt money but also we need to make sure those loans can be sellable on a secondary market and Fannie and Freddie imposes rules so for instance MRB rules may set my income limits here Fannie and Freddie are telling me that they want income limits down here so I have to go with the stricter of both sets of rules depending on what we're talking about assets, income, credit score we could talk about all that things so um yeah I like that but what I'm trying to understand is that being the case if at some point you're effectively giving someone some money as you forgive those loans the loans that they borrow you're forgiving the loan regardless of the rules regarding income limits I'm trying to understand why that would not be considered income received by the recipient when you do the forgiveness most states a lot of states dumb payment assistance programs like the one we already have we're actually forgivable loans the idea of second liens is a very common practice nationwide happens all the time in the housing finance world and again someone from the tax department could speak to how in April that would get written up on their tax statements but I can tell you that the federal government has decided that MRB rules that forgivable loans are not considered I have to say any reaction because in the business world if you get a loan forgiven it may be taxable but they still are eligible to qualify for whether or not it would be taxable to qualify for income and state income tax purposes come to the individual at the point at which the loan is forgiven and I'm smart enough to know that I would never give tax advice which is why I need the tax department to come and say what the tax implications are I can tell you that for the housing programs that I run is not considered income and they would not be eligible for our programs because of this structure I'm keeping a running list but I can tell you a concern I have about something I heard a moment ago which is that I don't see how we could promise that the let's say every year $4,000 is forgiven I don't know how to make that money go to the student debt payment directly versus the boiler that breaks the car muffler, the whatever else so I can every year ask what is your outstanding student debtedness and I can watch it go down by $4,000 a year but if it doesn't one year or it doesn't for five years I don't know right now how I could design a program that would require that unless I mean I think we do need we do need to design it that way but it needs some thought as to how at least we can put an incentive there that the highest priority is to take that savings and put it to a student debt because I want to throw out a scenario that I could see happening with the way and I don't know how to protect from the scenario I'm going to throw out I'm a borrower who qualifies for $170,000 mortgage I now hear about this $170,000 DPA program I'm going to buy a home for $190,000 my mortgage payment is going to be the same as without your program I don't have a savings to then take that 300 bucks and pay my student loan debt how do you keep someone from not buying a bigger home than they would qualify for qualifying for a home I don't if you've bought a home I know I was qualified for a home price that I I did not agree I could afford a home in a lower price but if I found a home for 10 grand more no lender was going to stop me from doing that now my borrowers are in a different situation sometimes and they do come up against these limits but I so far do not see how we would protect from someone not buying $7,000 more expensive home or $10,000 $20,000 would you if we tied it to technical assistance how much technical assistance do you provide currently for the down payment assistance program absolutely zero we require them to go to home area education for a few hours but I would not call it technical assistance because I think you're right I think a woman would have to guard against exactly that there are two things we have to focus on here is how do we protect them from buying a house they really can't afford it really shouldn't be affording well they can afford it thanks to your money yeah right and how do we also ensure the debt forgiveness is applied to their student those are the two big things and I thought actually the latter would not be quite so hard but the former I hadn't thought about so and I can keep I mean I have my home ownership director has been thinking about this we've looked at other states models I know one point you asked about Maryland is well known that their housing finance agency has created a program around this and we've looked at that driving people to opportunity zones no no no but I'm just they have a mortgage program that specifically people are qualified when they have certain that amounts of student debt and you know they they have two versions of the same program they have a program and they added a 2.0 version and the first one it's interesting you get I feel like my nose but you get 30 or 40 thousand dollars you get 15 percent of the home's purchase price as your DPA your dumb payment assistance and you have to pay off all of your student loan debt at the mortgage closing so that's how you can make sure it happens but I'll say I'm my mind around that and not understanding it because if I oh let's say $40,000 in student loan debt you want to scale this program to be $20,000 assistance I could use the states money essentially for the $20,000 but now I have to all of a sudden pay off $20,000 of student loan debt at closing I mean that's going to kill the program because my brothers don't have that and the whole point of this is to do it thoughtfully and affordably and sustainably so more of seven minutes can you wrap up you think? I can so because you're going to be kind of to send us these notes and send this draft to one of my questions is who's our primary drafter now that we have four parts is it going to be David that has the overall putting it together or is it going to be Abby? she does the tech stuff and I do the rest okay so we'll merge them with you you'll have the final sort of overall okay great the tech stuff I didn't mention in that answer if you'd be kind of to send your draft book Abby David just one question is it conceivable to structure some sort of a program in which the student loan debt becomes a second mortgage on the house with a mortgage guarantee whether it be by the state or some sort of a moral some form of that so it's structured and attached to the home presumably in the law or interest rate that is possible it's not a model that I recommend because I think I said less than 30% of student loan debt goes into forbearance or default at some point in the life that is a really high percentage to a mortgage lender like me I like to keep those numbers under 5% so I'm very nervous about as I have said when you don't pay your student loan debt you have a collections person calling you and that's really annoying when you don't pay us we foreclose and that's on your credit record so I don't like merging student debt the problem you're trying to solve for you're solving for X and that is trying to have less of a monthly debt burden and I don't know that that resolves the problem because I don't hear that interest rates are really the problem especially in the last eight years even student loan debt has low interest rates the problem is is the outstanding deadness it's then the payment so if some of these issues could be overcome I will say I know you need fiscal notes and I am not a fiscal note person but I did look at VHFase borrowers over the last several years in opportunity zones who were first time home buyers and I get down to 145 households and they had these first time home buyers they know Z's this population you're looking at over the last four years and they had $40,500 an average outstanding student loan debt and they owed about $350 a month on it and they still had 10 years left on their loan so the program is designed you really hit it great you scaled it I would say unbeknownst to me because I wasn't a part of this really in the sweet spot so that was serendipitous David Hall so on average we we originated about 36 loans a year in OZ's and if you wanted I could tell if you buy OZ if you're that nerdy and so I would suggest I would assume that maybe with some marketing this could be scaled up to 50 loans a year and if each of those got 20 grand in and you want to market this and administer it I'm thinking it's going to cost you a million dollars a year to support 50 home buyers each year and that would be a reasonable scale you only have 145 for a much smaller about four years 36 a year and that would cost 20,000 dollars and that comes to 725,000 and then market and administer it and I haven't scaled that down could it be 275,000? I was just going by you saying you assumed you wanted to do 50 a year and if we're in the main program if we're only doing 36 a year I'm just questioning why we would start so aggressively at 50 because in the bill that was handed to me it talked a lot about marketing the program and ramping it up and once we we ended up with 36 OZ buyers without ever telling anyone what an OZ was now we would well I mean that's our sweet spot that's where we do mortgages in depressed areas of the state and so the not that all OZ's are depressed the if you want us to market it and if you put up 20,000 dollars instead of 5,000 dollars you will get more demand and if I we start training lenders and saying hey you have a market in Randolph just so we're clear I mean I think what you're saying is that's how much the program would cost if you service the demand but this is not an entitlement we could set it at whatever level we want we could do a pilot for 10 houses in the first year while you can I would also say that the cost honestly mortgage lenders there are so many programs and so much to learn that if they think that something is going to be around for a year they will not even learn about it that's our other challenge how do we make sure this is around for a while yes and so at some point a pilot is exciting and at some point it's so boutique I can't sell it and it's not worth us getting our computer systems and our servicers and all this off for 10 loans a year no yeah you can't sell a boutique pilot anything else before you head off to Albany I didn't get to meet with the governor you got to go out of the way we begin with the best here please thank you very much so we're going to switch over to 237 I want to say I find this idea very creative and it's a good start I mean I think we're running into time pressures obviously but there are ways to even if you know I was thinking that this potentially can go on its own it could be part of the housing bill if you want to do it part of the housing bill you probably will vote the housing bill out without this and continue to work on it and see if we can add it on before it makes its way to the floor eventually so it's also a possibility to add it to other vehicles too it could also be part of our economic development bill that also I want to get out of this so so let's move on okay this goes with okay I've got we need both of them we're going to organize here today is the 24th thank you chair I've got notes on here I also want to hear more about the I'll be let's get some parts thank you David thank you Abby thank you hello 331 we're putting away we're going to 237 I okay so 237 where we are is we're going to focus in the next we have an hour I guess we'll go by starting on the environmental portions of 237 which includes the municipal plan as well so I think it was section 1 through 11 in the original bill and if at all possible I'd like to get a sort of clear direction where we're going on so we're not going to vote on anything but I want to get our best thinking over to Senator Bray because he's very anxious to get something on this on these sections tomorrow we'll talk about the other sections of the bill and we'll see what we go from there so Ellen has been hard at work incorporating a lot of comments from people changes that changes that the administration has had hearing from the NRC and the Council and I think could work and that we should discuss I think the biggest thing in here in terms of what she's going to go through just to set a framework is that what this version does is it combines what the bill has introduced as you recall had a lot of mandatory provisions on density and inclusionary zoning and the administration has since put that initial position wanted to a voluntary position what this proposal does I hope at least for discussion is to make it voluntary for a three year period and then at the end of three years we'll convert to a mandatory provision with the hopes of having the media take the voluntary thing and the money we're offering to change their bylaws for greater density to do it in a three year period and also I would note that what the administration originally considered mandatory it's not really mandatory at all because it has an off ramp to say there's too many substantial municipal constraints that we're not in a position to change our bylaws so is that clear what I just said yes I'll say it again because it's important the administration originally wanted it to be mandatory and then they came back and said let's make it voluntary so they took out all the provisions on density and inclusionary housing and all that stuff small lots and flood plains all that stuff and they made it voluntary so what this version will do and we'll go through it would say okay it's voluntary and we put money behind like $350,000 to help the towns on a voluntary basis update their zoning regs to make for greater density then at the end of three years the mandatory thing would kick in if they hadn't done it by then however the big footnote is that the administration's mandatory in my mind was never really mandatory to begin with because you had an off ramp from municipalities that didn't think they could change for various reasons so they just have to file a piece of paper saying we have municipal constraints and we're not doing that they would report back to us that mandatory thing really didn't work very well so it's voluntary with money mandatory with an off ramp and then we would look at it again for however many towns have not changed their bylaws so it's pretty soft or towns that are like under 500 people where it's inappropriate I mean there may be towns that are just too small for it to be because Chris Bray is going to get his hands on all of this and probably have some suggestions is that it? did I explain it? pretty much what's in here? yes and what we actually discussed it last week is the big notion after three or five years after three or five years okay so I think we obviously have various degrees of enthusiasm about anything that becomes mandatory for the now after three or five years from now yeah and I would hope that for those people who don't have enthusiasm for that that they would look at the off ramp provision to keep towns protected so I think we want to do something I read your email back to Chris maybe you don't want to do anything but I want to do something to promote housing and I think across this country people are looking at density as a way to promote housing this is sort of you read my email we read her okay probably won't have you as the reporter I guess probably won't have you as the reporter I guess I don't want to be a forward to that well I found that okay let's move on let's see if we can get this on Chris today of the Office of Legislative Council. I have draft 1.2 of the Straygall Amendment to S237, and it does sort of encompass what was originally sections one through 11, but it's a little bit longer now. The way we did that, just to jump in on this, so people know is that there are some changes in here, substantive and technical, in section one through 11, but the way we made it three years out is just by changing the effective day of these sections to be three years out, so. Yep, so starting on page one, this language is the same from S237 as introduced. So we're in the plan for the municipality, municipal zoning, so we're adding water supply lines and facilities and service areas, as well as waste disposal lines, facility and service areas to the map with the municipal plan. Anybody have any questions on that? In case there's any information, more information can be each part of the plan. Page two, still in section one, sub-division 10. This is also the same as introduced. But when you do that, we can always, not too much to hear it again as to what it does. So I want you to just say what it does, as it was just saying, there's no change from the original page. So I'm sorry, but I thought that in this version we were getting rid of, this was still considered okay by the administration in section 10, lines four through nine, because it was confined with, you need to know where, we still don't want to know where your sewer and water lines because I just want to point that out if the one shall that the administration is supporting. Yes. Just, right, thank you. To have those things mapped on the municipal maps, yep. Right, so then on page two, still in the plan for the municipal plan, it has to have a housing element with a recommended program for addressing low and moderate income housing. And the program shall comply with the requirements of section 4412 to provide affordable housing. And that's the section we're about to get into. Okay, and I guess the one, in terms of all the substantive changes we're doing on greater density, one of the big areas was excessive dwelling units. And that was never part of the, the switch to voluntary that the administration put in. They had all continued to say, we want to do something from day one on ADUs. So we're going to get into the ADU section and you should just understand that this is not the zoning changes that are going to be voluntarily promoted during the first few years, according to effective media. The D, section D. Starting on page, starting on page two, right? Bottom of page two. But I have a question in online, 15. So I assume that the shall apply, which I would, is only dealt with as an effective date three years out. Is that right? I mean, because this was, this is our moving to voluntary initially. So we haven't gotten there yet? But shall apply in every municipality is a big. Yep, so that's existing law. Oh, okay. This is just right. So 4412 lays out the prohibited and required bylaws. So we're still in existing law. We haven't gotten to the voluntary. God, thank you. That's helpful. Every time we see a shall, we should jump up and down. Yep, and we haven't even gotten to the ADUs yet. He's a little ahead of me. So we're almost there. I apologize, so I took the bottom of the page three. Yep, so the next change, so the next change is on page three. This is starting on line one, within any regulatory district that allows multi-family residential dwellings, no bylaw shall have the effect of prohibiting multi-unit residential dwellings of four or fewer as an allowed permitted use or a conditioning approval based on the character of the area. So we're not into the voluntary stuff yet. This is still about required bylaws. So this is saying if you have a multi-unit district, you can't prohibit, you can't say that you have to allow four units. Or fewer. No, you can't prohibit fewer. You can prohibit five or more, but you have to allow up to four. Right. So how does, and I'm probably going to get it today, Chris sprays area, but how does an allowed permitted or conditioning, so they can still make it subject to conditional use, but they can use character of the area as a criteria? Yes. That's the covenants that we were talking about. This is kind of blending the covenants as far as I can. It is a bit. A little bit, but I think that you heard testimony that sometimes the argument is that a multi-family unit with four units doesn't meet the character of the neighborhood, like if there are other single families. So that is to get that, not necessarily the covenants. Right. How does something like parking work in this situation, that? Work can get. Could you, the only, they can still do conditional uses based upon parking. You just can't do conditional use based upon character of the area. So if they have four units, they might be able to say, we need four times as many parking spots. And this section is one that the administration agrees with and they don't necessarily want to go to voluntary. They want to put this into place now, right? I think so. It's hard to remember exactly. Okay. Cakes looking surprised, so maybe it's not. Who? Inquisitive. Inquisitive. Where is the administration? Oh, okay. The administration does not support this. Does not. Does not support this. So when you said you're voluntary stuff, you wanted this struck out as well? Yeah. I think about that. Well, thank you. But we could just make this a fact for three days, three years out as well. Okay. Yeah. And they're probably not even going to support that. That's okay. I, we just didn't know when you went to, but you went from mandated to voluntary. What was the scope of the stuff that was going? And I thought that ADUs came in after your first draft. It was something that I was pushing. You came up with that. So I thought that was not necessarily part of the voluntary changes. Can you answer that question? Yeah, no, my understanding is that we, there were ADU provisions in the administration. And you said that we've since the course. That you've pulled back. Yeah, pulled back on this. Which is too bad because it's an easy reason or way to increase it. Well, I think there's something we have to agree. I know. I think we heard enough about ADUs that we can go forward with that section. So this isn't the ADU section. Well, I know, but we want to get to it. Okay. Yeah. It's an aspect. Well, it's the counterpoint to ADUs. It's multi, multi, yeah. Yeah. Okay. Okay. Our time is tight. Well noted. Okay. So subdivision E, starting on line five, is the ABU section. So, except for flood hazard and fluvial erosion area bylaws adopted pursuant to section 44 and 24 of this title, no bylaw shall have the effect of excluding as a permitted use one accessory dwelling unit that is located within or pertinent to a single family dwelling on an owner occupied lot. A bylaw may require a single family dwelling with an accessory dwelling unit to be subject to the same review, dimensional and other controls as required for a single family dwelling without an accessory dwelling unit. An accessory dwelling unit means a distinct unit that is clearly supported into a single family dwelling and has facilities and provisions for independent living, including sleeping, food preparation and sanitation, provided there's compliance with all the following. The property has sufficient waste water capacity. The unit does not exceed 30% of the total habitable floor area of the single family dwelling or 900 square feet. So, this changes to this are based on multiple pieces of testimony you've heard and the chair and I sort of combined multiple pieces of testimony. Oh, that's good. So, essentially what we're changing here is that it still has to be owner occupied, but it was unclear before whether the owner would have to live in a small unit or a big unit, but now it's clear that they can live in either one. It doesn't have to be limited to an efficiency or one bedroom, you know. If you have a square footage and you want to make it two bedrooms, you can do it. Right. And it gives it up to 900 square feet. And again, the town can do more if they want and it can be more if they want, right? Yeah, this is just the bottom. Right. You know, it actually does not exceed. It means it's the ceiling. There's no amount that is the smallest. Well, so this is, they can't prohibit. Right. Yeah. And when you go, when you continue on how it wants 20 to 21, what are we doing here? How are we affecting the existing law and as we continue with all of the stuff that happens? Let's get rid of the parking. I'm sorry, where are you? The bottom on page three. Mm-hmm. Oh. 20. Great. And continuing on page four to line ten. What are we doing with each change? Well, forget about lines nine and ten for the moment, but how are we changing the law here in? So at the bottom of page three, that's removing one of the criteria that the town can add. So it's not, the town can't require applicable setbacks coverage and parking requirements. So it's removing that extra. Well, so I guess I have a question on that. So if you're putting an accessory unit, that's detached. Is that saying that the town can't control that they put it right up to the block line to the next door neighbor? I don't think we want to do that. What was the question, Senator? It's the setbacks. It seems like we're removing setback requirements for building accessories rowing units. So some of these units can, they don't have to be attached to the house. They could be a separate tiny house or something like that. I would think we'd want to allow the town to say, you can't put it right up on the boundary line to the neighbor. Well, in tight spaces, there are lots of times when houses, when built structures are right up to the boundary line. It may be appropriate if it's at the back of the lot as opposed to the front. Let's see what you've got. Well, this language, I don't know who originally wrote it, but it was with the endorsement of the administration. So I'd ask the administration what they were intending this to do, if you don't mind. Yeah, and actually the language that we sent over was quite different than this, but what I read is that the additional lines above account for this setback coverage and parking requirements, because it says an owner of a bottle may require a single family to be subject to the same dimension and other controls. So those municipal regulatory divisions can be preserved in that one. Thank you. I figured those. Easy in, easy out. Okay, so let me go on. So this was redundant. That's a little section three. Thank you for that. Okay, so on line four, this gets rid of additional use review. Right, basically we have the same answer which is not as covered by that other line which on page three. On line four. I think so. But this was never a problem before on the review panel, so this hasn't changed since the line of the trade. Let's talk about lines nine and ten. Great, so this is, it's the same as the original, but it says that a bylaw can, sorry, nothing in this subjection can prohibit a bylaw that regulates short-term rental units distinctly from residential units. Did we talk about something like Senator Clarkson's gas language as I appear later on? So based on our discussion yesterday, I thought you wanted to go in the other amendment that you're going to do related to the other short-term rentals. Okay, so it wouldn't be inconsistent with this. No, it's not inconsistent with this one. So the other, what I thought we wanted to achieve is your language plus gathering data on where all of these things are and having rulemaking to allow the gatherings in a way that balances the need to get a handle on this issue with privacy of the owners and leave that for the agency to collect data. It's not taxing. Oh, I don't know, it's taxing. Well, we have taxed. This is very short. I think we have this. I do have this. I have four copies. So we're not going to do that today. I was sort of hoping it would have been better, but there we are. This is only half of the bill. The second half of the bill deals with mobile homes, accessories, not accessories, mobile homes, homelessness, short-term rentals and another part that David, if he was going to do this, but I'm here this afternoon. Okay, so let's move on to model the page four. All right, so this is existing small lots. So this is starting on line 18, a municipality may not prohibit development of a lot, not served or able to connect to municipal or water service. If the lot is less than one eighth of an acre or the lot has a width or depth of less than 40 feet. So this is the same as in your bill, but it's a small lot. Does this fall into the three-year thing or not? I guess, so as I drafted it, it wouldn't, but I suspect that it would now. I think we would probably want to change that one to the other one, but not the new ones. I think the new ones we should be doing now. I mean, that's an immediate opportunity. All right, so on page five, this is the inclusionary growth section, which we've sort of been referring to as the mandatory versus voluntary set of bylaws to encourage inclusionary growth. So this language hasn't changed, but in the effective dates, this sub-division B is what I have going into effect in three years. So do you want me to read? Actually, I'd prefer if you could sort of, because we're going to run out of time, if you could swing in these sections as opposed to reading the backwards. I mean, if there's drafting errors or something like that, we can change them and after we get them over to Chris, but I just want to get the concepts of what we're asking the powers to voluntarily do with money behind it to help them do it. Yep. So this relates a lot to density. So bylaws can't prohibit lots of 10,809 square feet or one quarter acre if it's able to connect to water system or 5,400 square feet or one eighth of an acre if it's able to connect to both water and sewer. There's also trying to remember everything that's in this section. I know that the parking calculation is in this section and I'm having a hard time remembering what B and C are for. But is B where are you? Are you missing something? Every municipality shall... Oh, condition subdivision approval on obtaining a wastewater permit. Right, but is it... Why aren't we trying to lift the requirement that they get a state permit? And so I thought that's what we were trying to do. So now it's sort of you're saying they still have to condition it on-day when it's working? I don't know. I don't remember. Question mark. We can find out what that subsection is. How about C? So this is saying a bylaw cannot prohibit or condition or require conditional use for a two-unit dwelling that's served by water and sewer to a greater extent than one unit dwelling would be regulated. And then... And a lot of this language was the original language that the administration put in where they wanted it to be mandatory now to be voluntary. To the extent there were changes, this language came from Chris to make any modifications. And the shells are qualified in the effective date section by there being three years out. Right, and then I'm about... And then the municipal... The municipalities can file a municipal constraint report saying that they're unable to comply with these. Right, so that's what our chair refers to as the offer. Right, yeah. Depends on how fast you're going. Depends on how fast you're going. Okay, D? It's about the parking. So this allows spaces to be... Parking spaces to be counted as two if they will be rent... If they will be leased separately from the unit. Right. This provides for more flexible parking options. Line 15, subject to two is the opt-out. Right. Yep, so municipality can file the substantial constraint report with the Department of Housing and Community Development. And if they do that, they don't have to adopt the bylaws in the above section. I remember we got some comment from somebody that this was not strong enough because it didn't require any action by the department. So the town could file almost anything as long as they filed it. There was no review of it in terms of saying this is good enough, this is legitimate yet. Which is not great, I think. I don't know if Chris might want to change that, but my understanding is there are some financial incentives, carrots rather than sticks, to say you get priority if you do change your bylaws. So there's some incentive to not take this opt-out. But I think we do need to address who reviews and says the constraints are actually viable. Well, that's very much a policy decision. Yeah, well, I think there does need to be some lens through which the request to opt-out is reviewed. Otherwise. Well, I think what I'd like to do with this late date is flag it for natural resources. And we were not taking a vote on this for several days. Now we can think about it some more. But we really haven't heard from the administration that we made that change. Because their opt-out did not have a review by anybody. They said they would just collect the data on how many towns opted out and say, well, we need to come back and change the law because this is not working. So I don't know that I want to make that heavy a change right now. I don't think this needs to be heavy. I just think it needs to be someone in the Department of Housing and Community Development says those are constraints that are challenging and that we agree with the town that those are constraints that are hard to overcome. And if they don't. And if they don't. And if they don't, then I think in the discretion of the Department, they can work out an extension of the time or tiffs. Or, you know, we can throw them out, but I think the... Senate to Environmental Court can decide. No, I didn't say that. It's a question that's legit in terms of it's not ready for prime time. We don't have a penalty in there if they don't. We don't have what the standards are as to how they review it. You know, it's not... I don't think it's sufficient to just say ACCV will review it and make a decision whether they're right or wrong. Yeah. So it does say online, on page 7, line 5 of the Department will provide a template and guidance on what should be in the report. And then also later, there's a section where the Department reports back on the types of municipal constraints that have been reported and whether there needs to be any recommendations to change that. So that is one of the guardrails on that. Okay. If these reports come back in a year, these reports come back. No, the report, which is on page 10, is going to come back in three years. Okay. So the... Template guidance coming in. Guidance of the municipalities going to submit. I think we can go ahead to pass the municipal approach and go to incentives and fundings. Sure, yeah. So on page 8, so honor before July 1, 2021, a municipality that requests technical assistance to update their bylaws to address inclusionary growth shall receive priority technical assistance through funding made available through the Regional Planning Commission. And at the end of this bill, there is an appropriation section that has money for both the Regional Planning Commission and the Municipal Planning Commission to assist in this process. And that is the governor's proposed budget for this as incentive for housing. So that's covered. There's 150,000 for each of those entities and there's another 50,000, which I can't remember what it was for, but we wanted to add some help with... Yes. Okay. Right, so then in subdivision B, the following state program shall prioritize funding to municipalities that have updated their bylaws. So state funding for municipal water and sewer systems, municipal planning grants under 4306, Vermont Community Development Program under chapter 29 of Title X. And the Neighborhood Development Area Historic Tax Credits. Okay. So those are the prior... those are those... municipalities that adopt the bylaws will receive priority under those programs. That's the... And when you don't, at another point I'd like to be reminded how many towns that actually haven't done this yet that the 150,000 is supposed to help service. Because I'm just a little concerned that it may not be enough, but anyway, there we are. And then subdivision 4 on page 9. So this is about the restrictive covenants. So a municipality that adopts the bylaws for inclusionary growth can essentially override restrictive covenants that conflict with the inclusionary growth bylaws. And that's the next section, section 3. Say you can just say that one more time. So if a municipality adopts the inclusionary growth bylaws... Okay, so they can go ahead and pass bylaws that override... Restrictive covenants that conflict with those bylaws are overridden. Even existing? No, moving forward from the effective date. Okay. To avoid the contract clause issue. Okay. Yes. So if they adopt this inclusionary growth bylaws, the covenants with some exceptions, which we have additional language from Genon, I hope, in here... Of the last sentence, it says the subsection will not affect the enforceability of any existing de-restrictions. Great. Okay. I still don't quite understand the wording of this. When you may adopt bylaws that allow that something that's been restricted, which is past tense to me, is that in conflict with the last sentence? I tend to agree that it could be better written. I think we all know what we want to say here. I'm not sure that this says it. It basically says that the ministry may buylaws that affect development that has been restricted by covenants, conditions, and so on. That's past tense. So it's already been restricted, but then the last sentence says it shall not affect the enforceability of something. To me, that is inherently in conflict. Right. Good catch. So let that... I agree. Okay. That builds better. Line 11. So this adds a new section of covenants, conditions, and restrictions of substantial public interest. De-restrictions, covenants, and similar binding agreements running with the land added after July 1, 2020 that prohibit or have the effect of prohibiting land development allowed under the municipal bylaws in a municipality that has adopted bylaws in accordance with 24 BSA 44 and 12 B3, which is the inclusionary gross section, shall not be valid. This section shall not affect the enforceability of any property interest held in whole or in part by qualified organization or state agency as defined in 10 BSA, 6301A, including any restricted easements such as conservation easements and historic preservation rights and interests defined in 10 BSA 822. This section shall not affect the enforceability of any property interest that is restricted by a housing subsidy covenant as defined by section 610 of this title and held in whole or in part by an eligible applicant as defined in 10 BSA 3034 or the Vermont Housing Finance Agency. And so the second half of that section essentially is the language that came from VHCP. I'm not sure that this can double a little bit as well and maybe even combine it with the money we had profits above it seems. In some ways the first sentence seems to be repetitive of subsection 4 above once we correct that. So basically what you try to say is that it's perspective only but the bylaw can't, even in the future, can restrict covenants that deal with affordability and substantial public interest in programs like that, correct? Okay. This is to avoid, it's to support people who may try to privately contract through restrictive covenants the municipal bylaws. In cases of substantial public interest. Which is the inclusionary growth. Okay. But what we're trying to do here, I think I understand is that you can't, a town can't, I mean a private contract can't override people who have adopted new bylaws. Except to the extent that already existed. That's point A. Right. And point B, the town's bylaws can't interfere with, or a contract can't interfere with a, even if it's consistent with a bylaw to the extent it is a bylaw that governs perpetual affordability or a substantial public interest that exists in the public. That's why I think more, and BHCB wanted to have this additional language because they felt that their bylaws may, when their contracts, prospectively may be inconsistent with the town's bylaw. You can't work that. Right. Okay. We'll get it, if it may be right and we'll clean it up, I just want to make sure we have any intent. Does this, I'm not seeing, is this the only section we deal with the covenants that we know of in the bill? So does this adequately protect for green space that has covenants on them? My concern that I raised before, have you, is this your language? It is, yes. So does this adequately protect for covenants of green space and things that have been made in dense downtowns that have helped make it attractive and worth living in? Any past covenants are protected. That's the blank. Okay. Future presidents, I don't know if you want to answer that question. I'm not even a general with the Vermont Housing and Conservation Board, not able to answer it broadly of all town greens. This language is designed to the specific conservation easements that we and our partners in housing sub-city covenants, but I don't know what. I can't speak to all mechanisms that may be protecting. Okay. I mean, that just is a big concern because there are places that are right for possible development but that are actually key to keeping that town special green. I don't know if it's helpful, not helpful to add, but I would say that the folks that I've talked to, notwithstanding the intent of the department to be helpful here wouldn't. This isn't a big problem that we encounter a lot. It's a very problematic section. There's an option of not including it. Okay. Let's move on. I think we understand section four. So we're on to downtown exemption. Yes. Back to 50. Yes. So section five, first, this adds a new definition of mixed income housing. Would you receive testimony on? So it changes the definition of mixed income housing to mean a housing project in which the following apply. Owner-occupied housing at the time of initial sale. What's the purpose behind changing the definition? This was the suggestion from Vermont Housing and Finance. All right. Okay. So because what's going to happen in this is that downtown and neighborhood development areas are exempt, which previously priority housing projects were defined in those areas. And also Vermont Housing and Finance, they changed their, how they calculate, affordable housing to some extent. So the definition needs to reflect the mechanism they're using so that it can then be used in the Act 250 process. So how does my understanding of this section go here is correct if I'm wrong, is that there used to be an incentive for priority housing to be built in downtowns. They didn't have to go through Act 250. By virtue of taking the whole designated downtown and saying no development in that town as to go through Act 250, they lost some of their prioritization over there. And I guess I'm wondering what do they get back here by this change in terms of some sort of, some added incentive that they would get to develop in downtowns. So I think this is actually mostly to clarify that the way that it's calculated now has changed because down on line 18, where the definition of priority housing project is amended so that it is within new town centers or growth centers. But all development within, is this your, who brought us the concern about priority housing? He did. Earhart did. Earhart did. So this is the language that you agree with. Can you tell us what it's trying to do? So Earhart Mach of Vermont Affordable Housing Coalition. Right now, Alan's focusing just on the VHFA, technical correction, I believe she'll get to the other piece in a separate section further down. Which is bottom of page 11, priority housing project. So they're sort of intertwined but previously mixed income housing had a definition using purchase price at first time of sale related to affordability and the Vermont Housing Finance Agency no longer does not have a calculation and so it needed to be updated to reflect that. So I understand this is technical. And that, so right, so then the priority housing project changes down to online age. And so it removes the reference to downtown and neighborhood development area. And so a priority housing project is one that is in a new town center or growth center. Is this discussion you would want to further on? Further on, yeah. When we get to the downtown, the designated downtown section and the neighborhood development area section. Okay, I'm going to, I just want to hear from Kate, if we can, because I know she has other compending issues. So she's going to be leaving her job temporarily and I want to get VNRC had an amendment that I want to hear with any other concerns they have with this version of the bill at this point. In the next 10 minutes I guess we're about to get it fully done. Thank you. Thank you very much, Mr. Chair. I'm impending, all right. So I appreciate the space to speak. I've just skimmed over, Kate McCarthy, Sustainable Communities Program Director at the Vermont Natural Resources Council. And when I was last here, I spoke on many things I supported and a couple of things I had concern about. Based on what I've heard you discuss this morning, I support the changes to the Accessory Dwelling Unit Language that you are working on. And I appreciate that you have retained the provisions encouraging communities to create more density in smart growth areas, even though that is now a phase in. Very positive. The item I said I would work more on and try to understand better had to do with allowing river corridors in neighborhood development areas. So I was concerned the last time I was here and I had some conversations and I learned more. So I'm here saying I've changed my mind a little bit and I'm going to tell you how I feel, how the NRC believes that river corridors can be appropriately included in these areas where we want to have more housing in neighborhoods. So I sent around to the committee assistant this morning a handout that I see have. And as I've sat here, a cross-reference to that handout with the changes in draft 1.2 that you have been reviewing with Allen this morning. So what I would like to do is point out where the changes have been made and where they have not and why we think that's why it's important. So I will start by going, discussing item one on my list of proposed changes, which was a desire to clarify the meaning of undeveloped. In draft 1.2 of the bill, that can be found on page 19 of draft 1.3, starting on line 13. So this is the part of the proposal that makes the big change that goes from totally excluding identified flood hazard, fluvial erosion areas to excluding only those that are undeveloped. So it's only a subset of the recorder that will be excluded. So then I thought, well, what constitutes undeveloped? What do we need by that? If it's a parking lot, is it undeveloped? Or does it have to be a garden or completely raw land never touched by union? So in none of that, not much of that. Not much of that. So I have proposed to clarify the meaning of undeveloped. In item one of my proposal that was not incorporated into this draft, what I would like to see is that it include only areas containing pre-existing development and areas suitable for infill development as defined in the flood hazard area and river corridor rule. So the flood hazard area and river corridor rule has a definition of what developed is and a definition of what infill is. The reason that this is important is that you might want to infill on land that's close to your compact area but not previously developed. So there's that narrow range of circumstances where relatively raw land is going to be suitable for infill because it makes a place more compact. This proposal attempts to get at that. So is your proposal promote housing development or restrict housing development more? Pre-existing development. I think it promotes it by all river corridor areas to be included in neighborhood development areas under specific conditions. It's basically what was proposed before by the administration but it clarifies what constitutes a undeveloped land. Thank you. Just a technical question. For Ellen, is it appropriate to include a rule within a statute? I would like to know the answer to that. I think it is for my experience. Rules are subject to change almost every change. They are subject to change. So are statutes. Whereas I've seen a double four. I had just a question to be looking at. Sure. If you run the risk that the rule will be changed and so I could take the language from the rule as it exists now and add it. It's going to be more precise. It could be. You could save me time looking it up. All across referencing. Thank you. I'm going to double check with other people in your office. Senator Brock's question. Yeah. I mean, I've seen it before. It's cross-referenced for rules. And we certainly delegate rulemaking authority, you know, and say that. So just, if you don't mind doing that, that'd be great. But I agree with you. Okay. So let's keep going. Yep. So item two on the handout that I've given you is to provide additional specificity and ensure that to elaborate upon what it means for local bylaw provisions to be adequate to protect any development from harm. So the proposal, one of the reasons that the administration believed that this was appropriate to include is that they're saying you can include these river corridor areas in the neighborhood development area so long as certain types of bylaws are in place. The things that I am proposing that are in red are, is language to say more specifically what those bylaws should really include. So, again, cross-references another publication that flood hazard area rules, which says how you can safely develop within a settled area in a river corridor. Cross-reference is something specific to be looked at instead of just saying deem consistent with our policy basically. So I think that's important. That was included, that cross-reference is included in the proposed bill draft 1.2, page 20, line nine. There are two things additionally that I would suggest that have not been incorporated into the bill. The first is the last sentence in red. If a neighborhood development area includes flood hazard areas or river corridors, local bylaws also contain provisions to protect river corridors outside the neighborhood development area consistent with A&R model river corridor bylaws. What that does is it says don't just develop bylaws that help protect your settled area, develop river corridor bylaws that address unsettled areas, and that helps keep the river healthy and reduces the risk of flooding downstream. So we think do it comprehensively. Do it right. The other suggestion I would make, you will see in draft 1.2 that it references in line 10 development within an existing settlement. Page 20 of draft 1.2, line 10. I would advise against using the term existing settlement. That is a term that is defined in title 10 in Act 250. I believe we're in title 24 here. So it doesn't technically have the same definition. But we're talking about neighborhood development areas. So I would suggest simply saying neighborhood development areas so as to avoid confusion. Within an NDA. Within an ADA NDA. Yeah. So sorry for such that technical line item A that we're doing here. But I just want to highlight for you what's in here that is not in our proposal that you may wish to consider. So that is all I have to say about our second suggestion. So then on page 2 of my handout item, the third and last item for you to consider, this affects a part of draft 1.2 that's at the top of page 20. That's draft 1.2. draft 1.2 says that when you're making a neighborhood development area you avoid or minimize to the extent feasible the exclusion of important natural resources as defined in da da da da. What I would suggest since you're talking in this section about avoiding or minimizing the inclusion of certain natural resources. Add reference to the things that we've been talking about here. Blood hazard areas and river corridors. Those two items are not currently included in the definition of important natural resources. And they are. Is that it? The other thing that I need to say that you will not be surprised to hear is to reiterate the NRC's position that if the exemptions for development in downtowns and neighborhood development areas carries forth without the commensurate protections for outlying areas that will require our support of this bill. We'd really like to see that as part of the bigger package and conversation because it is about a balance of promoting the downtowns while protecting the outlying areas. Does that translate into reducing the district commission power to? No, that has to do with the process. What is the piece that you say is you need to see to have your support? It's in the Act 250 bill. It has to do with using the cumulative driveways and roads as a trigger. Is that a danger coming out of this one? As far as you know? Is it a danger coming out of the Act 250 bill? As far as I know is the operative word phrase. It is not there now but because it's not in S237 because the exemptions for downtowns and neighborhood development areas are standalone that is a problem. In what section of the Act 250 bill? Off the top of my head I don't know the section. But you want us to put that in this to sort of the tit for tat protection? I don't want to undermine the... I think that it could come out of this bill and be taken care of with the other bill is the more the direction that I am thinking of. So have it in here and natural resources could do that work as part of their work. It's not in our bill right now, right? The outlying area protections are not in your bill. I think that's her concern. And so I would encourage you given that we have to sadly go to this training. No, no, no. Not sadly. We're delighted to go to this training. And I'm delighted that you're here today. I just am sad it has been rescheduled. How about that? Is that okay? I'm thrilled with the training. So we do have to go. Thank you. Thank you very much. I think we got the message. We'll take this up again tomorrow. I'll talk to Chris. He won't be happy, but we'll get through this tomorrow. And I think in this area, I don't know if anybody can feel the way. Here we're trying to promote housing. But this is the floodways and flood plains are as bad as connected to natural resources any part of this bill. So I think I'm going to hand over our version and this memo and let them decide how they want to go on flood plains. And every one of our proposed increased density areas has rivers flowing through them. Most of them. Come on. I'm just saying this is important for us to deal with.