An act relating to manufactured homes and limited equity cooperatives

The sales and use tax exemption for mobile homes (40% of receipts for mobile homes/modular housing sold as tangible personal property, plus full exemption for mobile homes defined in 10 V.S.A. 6201) was removed entirely.

All property transfer tax provisions were removed, including the mechanism to subject mobile homes previously taxed under sales tax to the 1.25% property transfer tax, related definitions, payment procedures, and return filing requirements.

The property tax exemption for real property owned by a mobile home limited equity cooperative was removed.

The stormwater permit exemption for limited equity cooperatives (exempting them from needing a permit for stormwater discharge from impervious surface of three or more acres) was removed.

The trigger for issuing a deed was broadened: the old version required a deed upon 'financing or refinancing a mobile home as residential real estate or selling a mobile home that has been financed as residential real estate.' The new version adds 'or will be so financed by the grantee,' meaning a deed is also required when the buyer plans to finance the mobile home as real estate.

The effective date provision (July 1, 2026) was removed from the bill.

The subleasing rules were restructured. The old version split rules by incorporation date (before vs on/after July 1, 2026). The new version sets a general cap (sublease payments cannot exceed 110% of proprietary lease monthly payments) and creates separate rules for mobile home parks organized as LECo: subleasing is prohibited unless the member demonstrates hardship OR the unit is subleased to a low or moderate income individual, and the owner cannot charge more than necessary to cover unit costs including mortgage and utilities.

The nonprofit treatment provision was narrowed. The old version stated LECo 'shall be treated as if it has incorporated as a nonprofit corporation under the laws of this State, including for registration purposes with the Secretary of State.' The new version limits this to mobile home parks organized as LECo and only 'for the purposes of State funding and grants,' treating them 'as if it were incorporated as a State nonprofit corporation for a public purpose and public benefit.'

The quitclaim deed form now includes the phrase 'subject to encumbrances of record' when describing the effect of the deed, and the warranty deed covenant now reads 'against the lawful claims and demands of all persons except as stated' rather than 'all persons' without qualification.

Section 2605 (Mobile Home Bill of Sale Conversion Process) was removed entirely. This section had allowed owners of mobile homes initially financed as personal property to convert them to residential real estate by purging the security interest with the municipal clerk.

The nonprofit treatment provision was narrowed substantially. The House version treated all limited equity cooperatives as nonprofits for all purposes including Secretary of State registration. The enacted version limits this treatment to mobile home parks organized as LE Cs and only for purposes of State funding and grants, not for general corporate registration.

Based on the page count reduction from 49 pages to 12 pages, the municipal zoning equal treatment provision (requiring manufactured housing be allowed in all residential districts), the stormwater permit exemption for LE Cs, and likely the sales tax and property transfer tax sections appear to have been removed or significantly reduced, though the diff is truncated and full confirmation is limited.

Section 2604(e) was removed, which had stated that nothing in the deed section prevented a mobile home owner from conveying by bill of sale or financing as personal property even if previously conveyed or financed as residential real estate.

The subleasing rules were restructured. The House version used a date-based split: LE Cs organized before July 1, 2026 got a 110 percent cap on sublease payments, while those organized after that date faced a full prohibition unless hardship was demonstrated. The enacted version applies the 110 percent cap universally to all LE Cs and adds a separate prohibition specifically for mobile home parks organized as LE Cs, requiring both a hardship finding and that the sublessee be low or moderate income.

The deed forms changed the spouse release language from '(wife) (husband)' to '(wife) (husband spouse)' to be more inclusive. The 'permanently sited' qualifier was removed from Section 2604(b), broadening when owners must issue deeds.

New Sections 7-11 (32 V.S.A. 9601-9607) impose a 1.25 percent property transfer tax on mobile homes sold as tangible personal property, with specific filing and reporting requirements through town clerks.

New Section 12 (32 V.S.A. 3802(23)) exempts real property owned by a mobile home limited equity cooperative from property taxation.

Sales tax exemption expanded: the official version adds subdivision (B) providing a full sales tax exemption for mobile homes as defined in 10 V.S.A. 6201 sold as tangible personal property, while keeping the 40 percent labor-only exemption in subdivision (A) for the narrower definition.

New Section 4 (10 V.S.A. 1264(d)(3)) exempts limited equity cooperatives from stormwater permits for impervious surface of three or more acres.

Sublease rules restructured: co-ops organized before July 1, 2026 keep the 110 percent payment cap; co-ops organized on or after July 1, 2026 face a full prohibition on subleasing unless a member demonstrates hardship, with rent capped at HUD fair market rent.

Deed provisions for permanently sited mobile homes changed from mandatory ('shall') to permissive ('may'), and the deed forms are now presented as optional templates rather than required statutory forms.

Nonprofit corporation treatment broadened from applying only to mobile home parks organized as limited equity cooperatives to ALL cooperative housing corporations organized as limited equity cooperatives, including for Secretary of State registration purposes.

Low and moderate income treatment for State funding and grants expanded from applying only to mobile home parks organized as limited equity cooperatives to all limited equity cooperatives.

Effective date consolidated to a single date of July 1, 2026 for the entire act. The unofficial version had split effective dates with sales and use tax provisions taking effect January 1, 2027.

The separate Secretary of State business registration section (unofficial Sec. 7) is removed, as its function is subsumed by the broader nonprofit treatment provision in Section 2(b).

Removed the entire property transfer tax framework (Sections 7-11) that would have subjected mobile homes sold as tangible personal property to the 1.25% property transfer tax, including definitions, payment requirements, return filing, and acknowledgment provisions.

Removed the property tax exemption for real property owned by a mobile home limited equity cooperative (former Section 12 amending 32 V.S.A. section 3802).

Increased the sales tax exemption for mobile homes and modular housing sold as tangible personal property from 40% of receipts to 90% of receipts, and consolidated two separate exemptions (one for a subset of mobile homes) into a single provision covering all mobile homes defined in 9 V.S.A. section 2601.

Added a new full sales tax exemption (subdivision 57) for new mobile homes that bear an ENERGY STAR label or are certified as a Zero Energy Ready Home by the U.S. Department of Energy.

Removed the stormwater permit exemption that would have exempted LEA-controlled stormwater discharges from impervious surface of three or more acres from requiring an individual or general permit (former Section 4 amending 10 V.S.A. section 1264).

Removed the mobile home bill of sale conversion process (Section 2605) that allowed owners to purge a security interest and convert a mobile home from personal property to residential real estate by filing with the municipal clerk.

Added a new section allowing the Secretary of State to update a limited equity cooperative's business registration upon request to properly reflect its corporate structure in state systems.

Restructured subleasing rules: the introduced version split LEAs into pre-2026 (110% cap) and post-2026 (full prohibition with hardship exception). The House version applies a universal 110% cap to all LEAs, then adds a separate stricter rule for mobile home park LEAs that prohibits subleasing unless both a hardship is demonstrated AND the sublessee is low or moderate income, and limits the sublease amount to cost recovery only.

Narrowed the nonprofit treatment provision: the introduced version treated all LEAs as nonprofits for all purposes including Secretary of State registration. The House version limits this to mobile home park LEAs being treated as nonprofits specifically for State funding and grant purposes, and explicitly states this does not alter tax treatment.

Split the effective date: most sections now take effect July 1, 2026, while the sales and use tax exemption sections (5 and 6) are delayed to January 1, 2027.