Vermont § 1910c - Use of tax increment; retention period

§ 1910c. Use of tax increment; retention period

• (a) Uses of tax increments. A municipality may apply tax increments retained pursuant to this subchapter to debt
  incurred within the period permitted under section 1910a of this subchapter, to related
  costs, and to the direct payment of the cost of a housing infrastructure project.
  A municipality may provide tax increment to a sponsor only upon receipt of an invoice
  for payment of the financing, and the sponsor shall confirm to the municipality once
  the tax increment has been applied to the financing. Any direct payment shall be subject
  to the same public vote provisions of section 1910a of this subchapter as apply to
  debt. (b) Education property tax increment. (1) For a housing infrastructure project that does not satisfy the affordability criterion
  of section 1910 of this subchapter, up to 75 percent of the education property tax
  increment may be retained for up to 20 years, beginning the first year in which debt
  is incurred for the housing infrastructure project. (2) For a housing infrastructure project that satisfies the affordability criterion of
  section 1910 of this subchapter, up to 85 percent of the education property tax increment
  may be retained for up to 20 years, beginning the first year in which debt is incurred
  for the housing infrastructure project. (3) Upon incurring the first debt, a municipality shall notify the Department of Taxes
  and the Vermont Economic Progress Council of the beginning of the retention period
  of the education property tax increment. (c) Municipal property tax increment. Not less than 85 percent of the municipal property tax increment may be retained,
  beginning the first year in which debt is incurred for the housing infrastructure
  project. (d) Excess tax increment. (1) Of the municipal and education property tax increments received in any tax year that
  exceed the amounts committed for the payment of the financing and related costs for
  a housing infrastructure project, equal portions of each increment may be retained
  for the following purposes: (A) to prepay principal and interest on the financing; (B) to place in a special tax increment financing account required pursuant to subsection
  1910b(e) of this subchapter and use for future financing payments; or (C) to use for defeasance of the financing. (2) Any remaining portion of the excess education property tax increment shall be distributed
  to the Education Fund. Any remaining portion of the excess municipal property tax
  increment shall be distributed to the city, town, or village budget in the proportion
  that each budget bears to the combined total of the budgets unless otherwise negotiated
  by the city, town, or village. (e) Adjustment of percentage. During the 10th year following the creation of a housing development site, the municipality
  shall submit an updated tax increment financing plan to the Vermont Economic Progress
  Council that shall include adjustments and updates of appropriate data and information
  sufficient for the Vermont Economic Progress Council to determine, based on tax increment
  financing debt actually incurred and the history of increment generated during the
  first 10 years, whether the percentages approved under this section should be continued
  or adjusted to a lower percentage to be retained for the remaining duration of the
  retention period and still provide sufficient municipal and education increment to
  service the remaining debt. (Added 2025, No. 69, § 20, eff. July 1, 2025.)