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S.162

Introduced by Senator Lyons of Chittenden County, Senator Gossens of Addison County and Senator Kittell of Franklin County

Referred to Committee on

Date:

Subject: Taxation; use value appraisal; stabilization contracts

Statement of purpose: This bill proposes to allow locally-adopted use value appraisal agreements to create an exemption from education property tax.

AN ACT RELATING TO LOCAL USE VALUE APPRAISAL EXEMPTION FROM EDUCATION PROPERTY TAXES

It is hereby enacted by the General Assembly of the State of Vermont:

Sec. 1. 32 V.S.A. 5404a(a) and (c) are amended to read:

5404a. TAX STABILIZATION AGREEMENTS

(a) Tax agreements affecting the education property tax grand list. A tax agreement shall affect the education property tax grand list of the municipality in which the property subject to the agreement is located if the agreement is:

(1) *[a]* A prior agreement, meaning that it was:

(A) a tax stabilization agreement for any purpose authorized under 24 V.S.A. 2741 or comparable municipal charter provisions entered into or proposed and voted by the municipality before July 1, 1997, or a property tax exemption adopted by vote pursuant to chapter 125 of Title 32 or comparable municipal charter provisions before July 1, 1997; or

(B) an agreement relating to property sold or transferred by the New England Power Company of its Connecticut River system and its facilities along the Deerfield River which was warned before September 1, 1997; or

(2) *[a]* A tax stabilization agreement relating to industrial or commercial property entered into under 24 V.S.A. 2741, or comparable municipal charter provisions or an exemption for the purposes of economic development adopted by vote under sections 3834 (factories; quarries; mines), 3836 (private homes and dwellings), 3837 (airports), or 3838 (hotels) of Title 32 or comparable municipal charter provisions after June 30, 1997 if subsequently approved by the Vermont economic progress council pursuant to this subsection and section 5930a of this title. An agreement or exemption may be approved by the Vermont economic progress council only if it has first been approved by the municipality in which the property is located with respect to the municipal tax liability of the property in that municipality. Any agreement or exemption approved by the Vermont economic progress council may not affect the education tax liability of the property in a greater proportion than the agreement or exemption affects the municipal tax liability of the property.

A municipality's approval of an agreement or exemption under this subsection may be made conditional upon approval of the agreement or exemption by the Vermont economic progress council. The legislative body of the municipality in which the property subject to the agreement or exemption is located or the business that is subject to the agreement or exemption may request the Vermont economic progress council to approve an agreement or exemption pursuant to section 5930a of this title. The council shall also report to the general assembly on the terms of the agreement or exemption, and the effect of the agreement or exemption on the education property tax grand list of the municipality and of the state. If so approved by the council, an agreement or exemption shall be effective to reduce the property tax liability of the municipality under this chapter beginning April 1 of the year following approval.

(3) *[an]* An agreement relating to affordable housing, which may be submitted to the council for its approval under subdivision (2) of this subsection, or alternatively may be approved under this subdivision by the commissioner of taxes upon recommendation of the commissioner of housing and community affairs provided the agreement provides either for new construction housing projects or rehabilitated preexisting housing projects and secures federal financial participation which may include projects financed with federal low income housing tax credits.

(4) *[an]* An exemption of property owned by a nonprofit volunteer fire, rescue or ambulance organization and used for the purposes of the organization, adopted, extended or renewed by vote of a municipality under chapter 125 of this title or comparable municipal charter provision after July 1, 1997.

(5) *[an]* An exemption of property owned by a municipality situated in another municipality, which has been exempted from municipal property taxes by vote of the municipality in which the property is situated, and which is used for municipal forest lands, municipal water supply, or for other noncommercial municipal purposes. To be exempted under this subsection, the property must have been voted an exemption by the municipality before January 1, 1998, and such exemption may be extended or renewed thereafter by a similar vote of the municipality.

(6) A tax stabilization agreement relating to agricultural property, forest land or open space land, entered into after July 1, 2001, by a municipality under section 2741 of Title 24.

(c) Tax agreements not affecting the education property tax grand list. A tax agreement shall not affect the education property tax grand list if it is:

(1) A tax exemption adopted by vote of a municipality after July 1, 1997 under chapter 125 of this title, or voted under a comparable municipal charter provision or other provision of law for property owned by nonprofit organizations used for public, pious or charitable purposes, other than economic development exemptions voted under sections 3834, 3836, 3837, or 3838 of this title and approved by the Vermont economic progress council, or exemptions of property of a nonprofit volunteer fire, rescue or ambulance organization adopted by vote of a municipality.

(2) A tax stabilization agreement relating to *[agricultural property, forest land, open space land or]* alternate energy generating plants entered into after July 1, 1997 by a municipality under section 2741 of Title 24.

(3) A tax stabilization agreement relating to commercial or industrial property entered into after July 1, 1997 by a municipality under section 2741 of Title 24, or a property tax exemption for purposes of economic development adopted by vote after July 1, 1997, which has not been approved by the Vermont economic progress council to affect the education grand list under subsection (a)(2) of this section and section 5930a of this title. In granting tax stabilization agreements for commercial or industrial property under section 2741 of Title 24, a municipality shall consider any applicable guidelines established for the approval of such stabilization agreements by the Vermont economic progress council established in section 5930a(c) of this title.

(4) Notwithstanding section 6306 of Title 10, a transfer of the development rights to real property under chapter 155 of Title 10 which is less than a permanent transfer of those rights, or is a lease of those rights for a fixed period, entered into on or after January 1, 1998, and a transfer or lease of such rights executed prior to January 1, 1998 upon the expiration of the period of the transfer or lease not to exceed five years.

Sec. 2. EFFECTIVE DATE

This act shall apply to education property taxes for fiscal years 2002 and after.