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NO. 159. AN ACT RELATING TO TAX CREDIT FOR SUBSTANTIAL REHABILITATION OF HISTORIC BUILDINGS.

(H.671)

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

Sec. 1. 32 V.S.A. § 5930n(c) is amended to read:

(c) Amount of credit. Except as limited by subsection (f) of this section, the owner of a qualified building shall be entitled to claim against the taxpayer's state individual income tax *[or]*, state corporate income tax, bank franchise or insurance premiums tax liability a credit in an amount equal to five percent of the qualified rehabilitation expenditures pursuant to 26 U.S.C. § 47(c).

Sec. 2. 32 V.S.A. § 5930p(c) is amended to read:

(c) Amount of credit. Except as limited by subsection (f) of this section, the owner of a qualified building shall be entitled to claim against the taxpayer's state individual income, state corporate income, *[or state]* bank franchise or insurance premiums tax liability a credit in an amount equal to 25 percent of an amount not to exceed $100,000.00 of qualified expenditures certified by the local board. An applicant who spends more than $100,000.00 will be eligible for no tax credit under this subchapter for expenditures greater than $100,000.00.

Sec. 3. EFFECTIVE DATES, HISTORIC TAX CREDIT

Sections 1 and 2 of this act shall take effect on passage, and shall apply to any tax credits allowed by the state board under sections 5930n and 5930p of Title 32 and claimed on a return due on or after January 1, 2000.

Vermont Economic Progress Council

Sec. 4. 32 V.S.A. § 5930a(b) is amended to read:

(b) The Vermont economic progress council, within 45 days of receipt of a complete application, shall approve or deny the following economic incentives:

* * *

(4) property tax exemptions that require the approval of the Vermont economic progress council under *[subdivisions 5404a(d)(1) and (2)]* subdivision 5404a(c)(1) of this title; and

(5) applications for allocation to municipalities *[for]* of a portion of education grand list value and municipal liability from new economic development under *[section]* subsections 5404a(e) and (f) of this title.

Sec. 5. 32 V.S.A. § 5930a(c) is amended to read:

(c) The council shall first review each application under subsection (b) of this section *[by evaluating its]* and ascertain, to the best of its judgment, that but for the economic incentive to be offered, the proposed economic development would not occur or would occur in a significantly different and significantly less desirable manner. Applications that do not meet the “but for” test are not eligible for economic incentives, and shall not be considered further by the council. If the “but for” test is answered in the affirmative, then prior to approving any application for an economic incentive under subsection (b) of this section, the council shall evaluate the overall consistency of each application with the following guidelines:

*[(1) The degree to which the enterprise creates new full-time jobs that are filled by Vermont residents, not including those jobs or employees transferred from an existing business in the state or replacements for vacated or terminated positions with the applicant business, and provides opportunities that increase income, reduce unemployment, and reduce vacancy rates. New jobs include those which exceed the average annual employment level in Vermont for the applicant business in the preceding two fiscal years;]* *[(2) The degree to which the new jobs pay more than the prevailing regional wage, provide employee benefits, and offer opportunities for advancement and professional growth;]* *[(3) The creation of positive fiscal impacts on the state, the host municipality and region as projected by the cost-benefit model applied by the council under subsection (d) of this section;]* *[(4) The degree to which the enterprise uses Vermont's resources;]* *[(5) The degree to which the enterprise is welcomed by the host municipality, including conformance with appropriate duly adopted town and regional plans, and conformance with all permit and approval requirements;]* *[(6) The degree to which the enterprise strengthens the quality of life in the host municipality and fosters cooperation within the host municipality's region;]* *[(7) The degree to which the enterprise uses existing infrastructure or is a downtown redevelopment project;]* *[(8) The degree to which the enterprise protects or improves Vermont's natural, historical, and cultural resources, and enhances Vermont's historic settlement patterns.]*

(1) The enterprise should create new, full-time jobs to be filled by individuals who are Vermont residents. The new jobs shall not include jobs or employees transferred from an existing business in the state, or replacements for vacant or terminated positions in the applicant’s business. The new jobs include those that exceed the applicant’s average annual employment level in Vermont during the two preceding fiscal years. The enterprise should provide opportunities that increase income, reduce unemployment, and reduce vacancy rates. Preference should be given to projects that enhance economic activity in areas of the state with the highest levels of unemployment and the lowest levels of economic activity.

(2) The new jobs should make a net positive contribution to employment in the area, and meet or exceed the prevailing compensation level, including wages and benefits, for the particular employment sector. The new jobs should offer opportunities for advancement and professional growth consistent with the employment sector.

(3) The enterprise should create positive fiscal impacts on the state, the host municipality, and the region as projected by the cost-benefit model applied by the council under subsection (d) of this section.

(4) The enterprise should be welcomed by the host municipality, and should conform to all appropriate town and regional plans and to all permit and approval requirements.

(5) The enterprise should protect or improve Vermont’s natural, historical, and cultural resources, and enhance Vermont’s historic settlement patterns.

(6) It is desirable for the enterprise to make use of Vermont resources.

(7) It is desirable for the enterprise to strengthen the quality of life in the host municipality, and to foster cooperation within the region.

(8) It is desirable for the enterprise to use existing infrastructure or to locate in an existing downtown redevelopment project.

(9) If the enterprise proposes to expand within a limited local market, then the enterprise should not be given an unfair competitive advantage over other Vermont businesses in the same or similar line of business and in the same limited local market as a result of the economic incentive granted.

Sec. 6. 32 V.S.A. § 5930a(d) is amended to read:

(d) In reviewing the application of a business or municipality *[which the council pursuant to subsection (c) of this section has determined to be]* under subdivision (c)(3) of this section to determine whether the applicant is eligible for the economic incentives under subsection (b) of this section, the council shall apply a cost-benefit model *[that provides]* to determine the return on investment to the state, relative to other applicants, and to assist in establishing appropriate award levels for individual applicants. The cost-benefit model shall be a uniform and comprehensive methodology for assessing and measuring the projected net fiscal benefit to the state *[and region of the state]* of proposed economic development activities. *[The council shall develop]* Any modification of the cost-benefit model shall be subject to the approval of the joint fiscal committee *[and]* . The council shall perform cost-benefit analysis in consultation with the commissioner of economic development. *[The cost-benefit model shall measure the present value of the anticipated direct and indirect fiscal benefits that will inure to the state against the anticipated direct and indirect fiscal costs associated with a proposed tax stabilization agreement under subdivision (b)(1) of this section and economic advancement incentive under subdivision (b)(2) of this section. The present value calculation]* The cost-benefit analysis may include consideration of*[: (i)]* the effect of the passage of time *[on the multi-year fiscal benefits and costs; (ii)]* and inflation on the value of multi-year fiscal benefits and costs*[; and (iii) other cost and benefit factors as determined by the council]*.

(1) In determining the projected net fiscal benefit or cost of the incentives *[approved]* considered under subdivisions (b)(1), (4), and (5) of this section, the council shall calculate the net present value of the enhanced or forgone statewide education tax revenues, reflecting both direct and indirect economic activity. If the council approves an incentive pursuant to this section, the fiscal costs, if any, to the state shall be counted as if all those costs occurred in the year in which the council first approved the incentive and that cost shall reduce the amount of the annual authorization for such approvals established by the legislature for the applicable fiscal year.

(2) In determining the projected net fiscal benefit or cost of the*[ ]*incentives *[approved]* considered under *[subdivision]* subdivisions (b)(2) and (3) of this section, the council shall calculate the net present value of the enhanced or forgone state tax revenues attributable to the *[approved]* incentives, reflecting both direct and indirect economic activity. If the council approves an incentive, the fiscal costs, if any, to the state shall be counted as if all of those costs occurred in the year in which the council first approved the incentive and that cost shall reduce the amount of the council's annual authorization for approval of economic incentives as established by the legislature for the applicable fiscal year.

Sec. 7. 32 V.S.A. § 5930a(h) is amended to read:

(h) Information and materials submitted by a business concerning its income taxes and other confidential financial information shall not be subject to public disclosure under the state's public records law in Title 1, chapter 5, but shall be available to the joint fiscal office or its agent upon authorization of the joint fiscal committee or a standing committee of the general assembly, and shall also be available to the auditor of accounts in connection with the performance of duties under section 163 of this title; provided, however, that the joint fiscal office or its agent, and the auditor of accounts, shall not disclose, directly or indirectly, to any person any proprietary business information or any information which would identify a business except in accordance with a judicial order or as otherwise specifically provided by law. Nothing in this subsection shall be construed to prohibit the publication of statistical information, rulings, determinations, reports, opinions, policies, or other information so long as the data is disclosed in a form that cannot identify or be associated with a particular business.

Sec. 8. 32 V.S.A. § 5930a(i) is amended to read:

(i) *[By January 10 of each year the]* The governor shall recommend to the general assembly, and the general assembly shall thereafter establish by law,

(1) an annual authorization for *[a gross maximum amount of value for]* the total net fiscal cost of incentives the council may approve in the authorized year under subdivisions (b)(1), (4), and (5) of this section *[and]* for projects that are net negative under the cost-benefit model;

(2) an annual authorization for the total net fiscal cost of incentives the council may approve in the authorized year under subdivisions (b)(2) and (3) of this section for projects that are net negative under the cost-benefit model.

Sec. 9. 32 V.S.A. § 5930a(j) is amended to read:

(j) By *[January 10]* February 15 of each year, the council, in consultation with the commissioner of economic development, shall report to the house committee on ways and means, the house committee on commerce, the senate committee on finance, the house and senate committees on appropriations, and the joint fiscal committee of the *[legislature]* general assembly on the gross and net value of incentives granted pursuant to subdivisions (b)(1),(4) and (5) of this section and *[the gross and net values of the incentives granted]* pursuant to subdivisions (b)(2) and (3) of this section during the preceding year *[and the cumulative impact of the credits issued. The report shall include an evaluation of past credits, and if there is a net loss, the current year's authorization shall be adjusted to account for it accordingly. The report of the council in January 1999 shall also include review of other successful state development programs dedicated to higher value jobs, opportunities to create new economic activity not addressed by tax credits, and recommendations for economic development tools for fiscal year 2000]*. The report shall include an account of each incentive granted under subsection (b) of this section, from inception of the program to the date of the report, including the date and amount of the award, the expected calendar year or years in which the award will be exercised, whether the award is currently available, the date the award will expire, and the amount and date of all incentives exercised. The council’s report shall also describe the extent to which the tax credits allowed by the department of taxes in the previous calendar year supported economic activity that complied with the performance expectations in the written notification of approval under subsection (k) of this section. The report shall also address the council’s conformance with subsection (i) of this section. The council may use measures to protect confidential financial information, such as reporting information in an aggregate form or masking the identity of the tax award recipient.

Sec. 10. 32 V.S.A. § 5930a(k) is added to read:

(k) The council shall provide written notification to the applicant of its approval of economic incentives under subsection (b) of this section. The written notification shall include both an assessment of the probability that the economic development activity would not occur or would occur in a significantly different and significantly less desirable manner but for the approval of incentives under this section, and an assessment of the application’s consistency with the guidelines set forth in subsection (c) of this section. The written notification shall also specify performance expectations on which continuing approval shall be conditioned. The council shall forward a copy of the written notification, including its assessment and the performance expectations, with the certificate of eligibility that it provides to the department of taxes.

Sec. 11. 32 V.S.A. § 5930a(l) is added to read:

(l)(1)(A) To claim an incentive under subdivisions (b)(2) and (3) of this section, an award recipient shall file a report with the department of taxes and with the council within 60 days of the close of the applicant's fiscal year in which the economic activity occurred. The report shall respond directly to the performance expectations in the written notification of approval issued under subsection (k) of this section, and shall include a description of the economic activity, including the total number of jobs created, the number of new jobs filled by Vermont residents, the wages for the new jobs, investments made according to the categories of incentives awarded, the nature and extent to which the economic activity was consistent with the guidelines in subsection (c) of this section, and any other information required by the council or the department of taxes to assess the performance of the award recipient.

(B) The department of taxes shall compare the award recipient's report with the performance expectations in the written notification of approval. Upon determining that an award recipient has met all of the performance expectations, the department of taxes shall allow the tax credit and shall provide the council with a report of the credit amount allowed and the basis for allowing the credit. If the department of taxes is unable to determine compliance with the performance expectations, the department shall request that the council conduct a more detailed review. At the conclusion of its review, the council shall submit a written report to the commissioner of taxes, recommending that the credit be approved, in full or in part, or disallowed. Upon receiving the recommendation, the commissioner of taxes shall decide whether the credit shall be approved, in full or in part, or disallowed.

(C) In assessing the performance of an award recipient, the department of taxes shall have the authority to obtain from the council all records and information necessary to determine whether the award recipient has complied with the performance expectations in the written notice of approval.

(D) In any one year, an economic incentive awarded under subdivision (b)(2) of this section shall not be applied to reduce the award recipient’s income tax liability by more than 80 percent of its income tax liability in that year.

(E) Nothing in this subsection shall preclude the department of taxes from adjusting the tax liability of any award recipient whose credit was incorrectly calculated.

(2) By December 31 of each year following the approval of an economic incentive, until the December 31 following the taxable year in which the approved incentive expires, an award recipient that has obtained the council’s approval under subdivisions (b)(1), (4), or (5) of this section shall file a report with the council, stating the amount of any incentives used during the preceding taxable year, and detailing compliance with all performance expectations upon which the award was conditioned.

Sec. 12. 32 V.S.A. § 5930a(m) is added to read:

(m) The value of any economic incentives taken by an applicant that has obtained the council’s approval under this section shall be refunded to the state, and any economic incentives remaining to be exercised shall be disallowed in the event that:

(1) the applicant fails to comply with all performance expectations upon which the award was conditioned;

(2) the applicant knowingly fails to supply any information required under this section or knowingly files false or misleading information; or

(3) the applicant fails to file the report required in subsection (l) of this section.

Sec. 13. 32 V.S.A. § 5930g is amended to read:

§ 5930g. SMALL BUSINESS INVESTMENT TAX CREDIT

A person, upon obtaining the approval of the Vermont economic progress council under section 5930a of this title, may receive a credit against its income taxes imposed by this chapter in an amount equal to five to ten percent of its total investments within the state of Vermont *[in excess of $150,000.00]* in plants or facilities and machinery and equipment in the applicable tax year, but only if those investments exceed $150,000.00, according to the following:

* * *

Sec. 14. 32 V.S.A. § 5930h(c) is amended to read:

(c) In the event a person that has obtained the approval of the Vermont economic progress council under section 5930a of this title ceases to employ in Vermont, for a period of 120 consecutive days, at least 75 percent of the number of employees it employed in Vermont as of the year in which a credit was *[received]* utilized under this subchapter, then for any such year and all succeeding years, *[carry-forward of]* any unused credit shall be disallowed. Furthermore, there shall be imposed upon each such employer a recapture penalty equal to a percentage of the total credit used, computed in accordance with the following table:

* * *

Sec. 15. 32 V.S.A. § 163 is amended to read:

§ 163. DUTIES OF THE AUDITOR OF ACCOUNTS

In addition to any other duties prescribed by law, the auditor of accounts shall:

* * *

(12) Biennially audit the economic advancement tax incentives program established under chapter 151, subchapter 11E of this title to determine compliance with that subchapter and all other applicable statutes and regulations. The auditor’s report shall be made available to the general assembly during the fourth quarter of the second year of each biennium.

Sec. 16. 32 V.S.A. § 3102(e) is amended to read:

(e) The commissioner may, in his or her discretion and subject to such conditions and requirements as he or she may provide, including any confidentiality requirements of the Internal Revenue Service, disclose a return or return information:

* * *

(10) to any person, provided that the disclosure is reasonably necessary to investigate the truthfulness of a statement made pursuant to section 3113 of this title that a contractor, licensee, or person authorized by the state to conduct a trade or business is in good standing with respect to or in full compliance with a plan to pay any and all taxes due as of the date such statement is made, or to discipline or prosecute any person making a false statement;

(11) to the joint fiscal office or its agent, provided that the disclosure relates to a successful business applicant under section 5930a of this title and the tax incentive it has claimed and is reasonably necessary for the joint fiscal office or its agent to perform the duties authorized by the joint fiscal committee or a standing committee of the general assembly under subsection 5930a(h); to the auditor of accounts for the performance of duties under section 163 of this title; and to the Vermont economic progress council, provided that the disclosure relates to a successful business applicant under section 5930a of this title and the tax incentive it has claimed and is reasonably necessary for the council to perform its duties under section 5930a.

Sec. 17. STUDIES AND REPORTS

(a) On or before December 15, 2000, the Vermont economic progress council shall study and report to the house committee on ways and means and the house committee on commerce its recommendations concerning the removal of impediments to small businesses receiving more of the total annual authorized tax credits under 32 V.S.A. § 5930a(b)(2) than they currently receive.

(b) On or before December 15, 2000, the agency of commerce and community development shall study and report to the house committee on ways and means and the house committee on commerce its recommendations concerning the promotion of economic development in rural areas, in areas where the prevailing wage is lower than the state average, and in areas where the unemployment rate is above the state average.

(c) On or before January 15, 2001, the secretary of administration shall study and report to the house committee on ways and means and the house committee on commerce recommendations concerning the projected long-term effect of tax increment financing and tax stabilization agreements on the education fund.

Sec. 18. AUTHORIZATIONS

(a) The sum of the net fiscal costs of economic incentives that the Vermont economic progress council may approve under subdivisions (b)(1), (4), and (5) of section 5930a of Title 32 for all projects that are net negative under the cost-benefit model in 32 V.S.A. § 5930a(d) shall not exceed $300,000.00 in fiscal year 2001, $300,000.00 in fiscal year 2002, and $300,000.00 in fiscal year 2003.

(b) The sum of the net fiscal costs of economic incentives that the Vermont economic progress council may approve under subdivisions (b)(2) and (3) of 32 V.S.A. § 5930a for all projects that are net negative under the cost-benefit model in 32 V.S.A. § 5930a(d) shall not exceed $2,000,000.00 in fiscal year 2001, $2,000,000.00 in fiscal year 2002, and $2,000,000.00 in fiscal year 2003.

(c) The annual authorizations in subsections (a) and (b) of this section are for the year specified only. Any unused balance of authorizations shall not be carried forward into future years.

Sec. 18a. EFFECTIVE DATES

Secs. 4 (amending § 5930a(b)) and 13 (amending § 5930g) of this act shall take effect from passage and apply retroactively to January 1, 1998.

Credit for Changes in Federal law

Sec. 19. 32 V.S.A. § 5824 is amended to read:

§ 5824. CREDIT FOR CHANGES IN FEDERAL LAW

If, for any taxable year, the tax liability of an individual, estate or trust under this chapter exceeds, by any amount, what that liability would have been had the "laws of the United States" been defined, under this chapter, as "the statutes of the United States relating to federal income taxes in effect on December 31, *[1998]* 1999," the taxpayer shall be entitled to a credit equal to that excess amount plus six percent of such amount, against the taxpayer's tax liability under this chapter for the next succeeding taxable year. In the event the tax liability of the taxpayer under this chapter for the next succeeding taxable year is less than the amount of such credit, the difference between such liability and such credit shall be refunded to the taxpayer by the commissioner. Any taxpayer claiming a credit under this section shall establish and verify that claim in such manner, and by use of such forms or schedules, as the commissioner shall by regulation prescribe.

Sec. 20. EFFECTIVE DATE, CREDIT FOR CHANGES IN FEDERAL LAW

Sec. 19 of this act (credit for changes in federal law) shall apply to tax years beginning January 1, 1999 and after.

Mobile Homes

Sec. 21. 11 V.S.A. § 1610 is added to read:

§ 1610. SEPARATE TAXATION; MOBILE HOME COOPERATIVES

Each unit in a mobile home limited equity cooperative under proprietary lease, together with any improvements thereon and together with the proprietary lessee’s cooperative interest in the common areas and facilities owned by the cooperative, shall be considered to be a parcel, and shall be subject to separate assessment and taxation as real property by each assessing unit and special district for all types of taxes authorized by law, including special ad valorem levies and special assessments. Each unit held by the cooperative not under proprietary lease, together with any improvements thereon, and together with the remaining and unissued cooperative interest in the common areas and facilities owned by the cooperative, may be combined and treated as one parcel for purposes of assessment and taxation at the discretion of the listers, and shall be subject to assessment and taxation as real property by each assessing unit and special district for all types of taxes authorized by law. Except for the units described in this section, no cooperative property, including common areas and facilities owned by the cooperative, shall be deemed to be a parcel subject to separate assessment and taxation.

Sec. 22. 32 V.S.A. § 5079 is amended to read:

§ 5079. SALE OR TRANSFER OF MOBILE HOMES; COLLECTION OF TAXES

(a) *[An]* Within 10 days of acquiring ownership by sale, trade, transfer, or other means, an owner of a mobile home as defined in 9 V.S.A. § 2601 or 10 V.S.A. § 6201*[, except those held solely for sale by a manufacturer, distributor or dealer,]* shall file with the clerk of the municipality in which *[it]* the mobile home is located *[the]* a mobile home uniform bill of sale, containing the make, model, serial number, size, year manufactured, and location of the mobile home. It shall give the name and address of the owner of the property, and whether the property is subject to a security interest, and shall be substantially in the form prescribed in 9 V.S.A. § 2602(c). This subsection shall not apply to mobile homes held solely for sale by a manufacturer, distributor, or dealer that are stored or displayed on a sales lot and are not connected to utilities.

(b) An owner of a mobile home, except those held for sale by a manufacturer, distributor or dealer that are stored or displayed on a sales lot and are not connected to utilities, may not sell, trade, *[or]* transfer, or move the home without a mobile home uniform bill of sale endorsed by the clerk of the municipality in which it is located *[indicating that]*. In the case of removal of a mobile home from the municipality, or of a sale, trade, or transfer that will result in the removal of the mobile home from the municipality, the clerk shall not endorse the mobile home uniform bill of sale unless all property taxes assessed with regard to the mobile home, but not the mobile home site, have been paid. The owner of the mobile home shall file a copy of the endorsed mobile home bill of sale with the clerk of the new municipality within 10 days of the date on which the mobile home is moved into the new municipality. Where ownership of an abandoned mobile home is transferred pursuant to a court order issued pursuant to 10 V.S.A. § 6249, the order shall constitute a release of the mobile home from any lien for penalties, interest and taxes due the town to the date of the bill of sale, prorated as of that date. Where ownership of an abandoned mobile home is transferred pursuant to 10 V.S.A. § 6249 to an owner who certifies to the court that the mobile home will be disposed of, the order shall constitute a release of the mobile home from any lien for taxes due the town and an authorization to remove the mobile home from the town for the purpose of disposal.

(c) Any person, including the owner of a mobile home or *[his]* agent, who *[sells, transfers or]* removes a mobile home from the town in which it was listed without having in his or her possession a mobile home uniform bill of sale endorsed by the clerk of the municipality where the mobile home was located as required by subsection (b) of this section shall be fined not more than $300.00.

(d) *[Mobile homes sold, transferred or]* A mobile home removed from a town without a mobile home uniform bill of sale endorsed by the clerk of the municipality where the mobile home was located as required by subsection (b) of this section may be taken into possession by any sheriff, deputy sheriff, constable or police officer, or by the treasurer or tax collector of the town in which the mobile home was last listed if known, or by the commissioner of taxes if that town is unknown. A mobile home taken into possession under this section by an officer other than the collector of taxes shall be delivered promptly to the collector of taxes of the town in which the mobile home was last listed. In taking possession, the authorized officer may proceed without judicial process only in the event that the taking of possession can be done without breach of the peace. Proceedings for collection of the taxes assessed against and due with respect to the mobile home shall then be conducted in accordance with subchapter 9 of chapter 133 of this title.

(e) Taxes assessed against a mobile *[homes]* home shall be considered due for purposes of this section as of the date of *[sale, transfer or]* removal of the mobile home from the town in which the mobile home was last listed, and the owner shall be liable for fees provided for in section 1674 of this title from the date of removal.

(f) The treasurer or tax collector of any town *[in which a mobile home is sold, transferred, or]* from which a mobile home is removed, without an endorsed mobile home uniform bill of sale required by subsection (b) of this section, may notify the director of the division of property valuation and review of the removal giving a description of the mobile home by serial or other number if known. If the director is notified of the seizure of a mobile home as provided in subsection (d) of this section, he or she shall immediately notify the treasurer or tax collector of the town, if known, in which the mobile home was last listed on the grand list.

(g) *[Any filing of a mobile home uniform bill of sale required by this section shall be done within 10 days of the date on which a mobile home is located in a municipality.]* Taxes lawfully assessed upon a mobile home shall attach as a lien on the mobile home as provided in section 5061 of this title.*[ ]*

Sec. 23. 9 V.S.A. § 2602 is amended to read:

§ 2602. SALE*[,]* ; PRICE DISCLOSURE; UNIFORM MOBILE HOME BILL OF SALE

* * *

(c) No mobile home shall be moved over the highways of this state unless the operator of the vehicle hauling such mobile home has in his or her possession a copy of the mobile home uniform bill of sale endorsed pursuant to 32 V.S.A. § 5079 by the town clerk of the town in which the mobile home was *[situated on the day of the move, identifying the mobile home or, if no sale is involved, a release signed by that clerk stating that all real and personal property taxes have been paid]* last listed and by the clerk of the town in which the mobile home was last located. The mobile home uniform bill of sale shall contain the make, model, serial, size, year manufactured and location of each mobile home. It shall give the name and address of the owner of the property and whether the property is subject to a security interest and shall be substantially in the following form:

* * *

Sec. 24. 24 V.S.A. § 1535 is amended to read:

§ 1535. ABATEMENT

(a) The board may abate in whole or part taxes, interest, and collection fees accruing to the town in the following cases:

* * *

(9) taxes upon a mobile home moved from the town during the tax year as a result of a change in use of the mobile home park land or parts thereof, or closure of the mobile home park in which the mobile home was sited, pursuant to 10 V.S.A. § 6237.

* * *

Sec. 25. EFFECTIVE DATES; MOBILE HOMES

Sections 21 through 24 of this act and this section relating to mobile home taxation shall take effect upon passage and shall apply to tax assessments for 2001 and after, and shall apply to sales, transfers, trades, and removal on or after July 1, 2000.

Vermont Film Corporation

Sec. 26. REENACTMENT OF VERMONT FILM CORPORATION

(a) Section 7 (enacting 10 V.S.A. chapter 26 which establishes the Vermont Film Corporation) and Section 9 of No. 190 of the Acts of the 1995 Adjourned Session are reenacted, and shall expire June 30, 2004.

(b) This section shall take effect from passage, but shall apply retroactively so as to negate the effect of the original sunset on the Vermont Film Corporation.

Sec. 27. REPEAL

Sec. 54 of No. 156 of the Acts of 1998 (sunset of provision regarding taxation of income from commercial film production) is repealed.

Motor Vehicle Purchase and Use

Sec. 28. 32 V.S.A. § 8903 is amended to read:

§ 8903. TAX IMPOSED

(a) There is hereby imposed upon the purchase in Vermont of a motor vehicle by a resident a tax at the time of such purchase, payable as hereinafter provided. The amount of the tax shall be six percent of the taxable cost of *[any]* a:

pleasure car as defined in 23 V.S.A. § 4; *[or]*

motorcycle as defined in 23 V.S.A. § 4;

motor home*[, except for school buses, and including]* as defined in subdivision 8902(11) of this title; or

*[vehicles]* vehicle weighing up to 10,099 pounds, registered *[at the same fee as pleasure cars]* pursuant to 23 V.S.A. § 367 *[except for farm trucks]*, other than a farm truck.

For any other motor vehicle *[including school buses]* it shall be six percent of the taxable cost of the motor vehicle or *[$750.00]* $1,100.00 for each motor vehicle, whichever is smaller, except that pleasure cars which are purchased, leased or otherwise acquired for use in short-term rentals shall be subject to taxation under subsection (d) of this section.

(b) There is hereby imposed upon the use within this state a tax of six percent of the taxable cost of *[any]* a:

pleasure car as defined in 23 V.S.A. § 4; *[or]*

motorcycle as defined in 23 V.S.A. § 4;

motor home*[, except for school buses, and including]* as defined in subdivision 8902(11) of this title; or

*[vehicles]* vehicle weighing up to 10,099 pounds, registered *[at the same fee as pleasure cars]* pursuant to 23 V.S.A. § 367 *[except for farm trucks]*, other than a farm truck.

For any other motor vehicle *[including school buses]* it shall be six percent of the taxable cost of a motor vehicle, or *[$750.00]* $1,100.00 for each motor vehicle, whichever is smaller, by a person at the time of first registering or transferring a registration to such motor vehicle payable as hereinafter provided, except no use tax shall be payable hereunder if the tax imposed by subsection (a) of this section has been paid, or the vehicle is a pleasure car which was purchased, leased or otherwise acquired for use in short-term rentals, in which case the vehicle shall be subject to taxation under subsection (d) of this section.

* * *

(g) There is hereby imposed upon the titling in this state a tax at the rate provided for in subsection (a) or (b) of this section of the taxable cost of *[any]* a:

pleasure car as defined in 23 V.S.A. § 4; *[or]*

motorcycle as defined in 23 V.S.A. § 4;

motor home*[, except for school buses, and including]* as defined in subdivision 8902(11) of this title; or

*[vehicles]* vehicle weighing up to 10,099 pounds, registered *[at the same fee as pleasure cars]* pursuant to 23 V.S.A. § 367 *[except for farm trucks]*, other than a farm truck.

For any other motor vehicle *[including school buses]*, it shall be at the rate provided for in subsection (a) or (b) of this section and paid by a person at the time of obtaining a certificate of title to the vehicle, except no tax shall be payable hereunder if the tax imposed by subsection (a) or (b) of this section has been paid, or the vehicle is a pleasure car which was purchased, leased or otherwise acquired for use in short-term rentals, in which case the vehicle shall be subject to taxation under subsection (d) of this section.

Sec. 29. 32 V.S.A. § 8911 is amended to read:

§ 8911. EXCEPTIONS

The tax imposed by this chapter shall not apply to:

* * *

(12) one motor vehicle owned or leased and operated by a permanently physically handicapped person for whom the vehicle's controls have been altered to enable the person to drive, or owned or leased by a permanently handicapped person or by a parent or guardian of a permanently handicapped person for whom a mechanical lifting device has been installed to allow for entry and exit of the vehicle, provided that the handicapped person has been certified exempt from the tax by the commissioner of motor vehicles under the provisions of section 8901 of this title;

* * *

Sec. 30. 32 V.S.A. § 8911(20) is added to read:

(20) titles issued to the manufacturer of a vehicle which has been returned to that manufacturer pursuant to any proceeding brought under chapter 115 of Title 9.

Sec. 31. EFFECTIVE DATE; MOTOR VEHICLE PURCHASE AND USE Sections 28, 29 and 30 of this act (motor vehicle purchase and use) shall take effect July 1, 2000.

Tax Department Report on Pension and Annuity Payments

Sec. 32. PENSION AND ANNUITY PAYMENTS IN HOUSEHOLD INCOME

The Department of Taxes shall, by January 15, 2001, report to the Senate Committee on Finance and the House Committee on Ways and Means, its recommendations regarding inclusion of “the gross amount of any pension or annuity” payments in household income under section 6061(5) of Title 32.

Individual Participation in Downtown Development Investment

Sec. 33. 24 V.S.A. § 2795(7) is amended to read and (8) are added to read:

(7) the immediacy of the benefits provided and the desirability of prompt action to secure those benefits for a downtown district;

(8) the amount of investment from individual Vermont taxpayers that has been committed to projects in the downtown district. In considering this factor, the board shall recognize the value of individuals participating in downtown projects by giving preference to applications for incentives from individual Vermont taxpayers, and projects coordinated by developers who have encouraged the participation of such investors.

VEPC Sales Tax Exemptions Under Prior Application

Sec. 34. SALES AND USE TAX EXEMPTIONS

For any food distribution business that had an application pending for approval of sales and use tax exemptions under 32 V.S.A. § 5930a(b)(3) between February 1, 1999 and May 30, 1999, and which has received approval for tax incentives under 32 V.S.A. § 5930a(b)(2), the Vermont economic progress council may also approve sales and use tax exemptions, provided that the business submits a written request to the council on or before July 1, 2000, for the following:

(1) Sales of electricity, oil, gas, and other fuels used on site directly and primarily in the production or provision of products or services by the business.

(2) Sales of building materials within any three consecutive years in excess of $250,000.00 in purchase value, provided that the municipality where the business is located is not receiving from the commissioner of taxes an allocation pursuant to 32 V.S.A. § 9819, that are used for the production or provision of products or services by the business.

(3) Machinery and equipment, including system-based software, used directly in the production or provision of products or services by the business.

Income Sensitivity for Certain Revocable Trusts

Sec. 35. 32 V.S.A. § 6062(e)(1) is amended to read:

(1) the claimant or the claimant’s spouse was the grantor of the trust, and the trust is revocable or became irrevocable solely by reason of the grantor’s death; or

Sec. 36. EFFECTIVE DATE

Sec. 35 of this act (income sensitivity for certain revocable trusts) shall apply to claims in 2001 and after.

Tax Increment Financing District – City of Winooski

Sec. 37. FINDINGS

The General Assembly hereby finds and determines that the commercial, residential, and governmental redevelopment and rehabilitation of the portion of the City of Winooski known generally as the Champlain Mill area, when more particularly defined and created as a tax increment financing district pursuant to section 1892 of Title 24, will provide the following public benefits:

(1) Revitalization and improvement of a significant downtown area;

(2) Enhanced employment opportunities within the City of Winooski and the surrounding region;

(3) Business stability and growth incentives;

(4) Preservation and enhancement of the tax base of the City of Winooski;

(5) Development of high-density housing in the commercial center;

(6) Reduction of pressure for commercial and residential development upon open lands in the region;

(7) Reduction of traffic congestion and protection of existing interstate interchanges;

(8) Integration into and compatibility with regional development and capital plans.

Sec. 38. FINANCING

In order to furnish the City of Winooski with appropriate and effective means of financing various improvements incident to the redevelopment of a portion of the City of Winooski:

(1) Bonds issued under section 1897 of Title 24 and secured by a tax increment pledge shall have a maximum maturity of 20 years, but may be refunded from time to time, provided that the maximum term thereof does not exceed 20 years from the date of original issue, and further provided that the total principal amount of the bonds shall not exceed $30,000,000.00, and that all such bonds shall be issued within five years of the effective date of this act.

(2) In addition to any other use permitted under section 1898 of Title 24, tax increment revenue shall be used to fund such reserves and accounts deemed necessary or convenient to secure the payment of bonds issued under section 1897 of Title 24, to provide for the scheduled payment of debt service due on such bonds, and to redeem, discharge, pay or defease such bonds at or prior to maturity.

(3) The excess valuation of property within a tax increment financing district organized and created pursuant to Sec. 37 of this act, to the extent that taxes generated on the excess property valuation are pledged and appropriated for debt service on bonds issued under section 1897 of Title 24 or the funding of reserves under subdivision (2) of this section, shall not be included within the education property tax grand list provided for in section 5404 of Title 32 as taxable property, nor shall the excess valuation of the property be subject to the education property tax imposed under section 5402 of Title 32 until bonds issued under section 1897 of Title 24 are released, discharged, paid, defeased, or fully reserved; provided, however, that 5 percent of the education taxes imposed annually on the excess valuation of the residential property within the district shall be paid to the education fund. The tax rate assessed on the excess value of property within the district shall be the same rate assessed on property outside the district. Until the bonds are paid in full or have been fully redeemed or defeased through fully funded reserves and accounts, 100 percent of the municipal taxes assessed against the excess valuation of property within the district shall be pledged and appropriated solely for debt service on the bonds. For purposes of this act, “excess valuation” means the difference between the current grand list value and the grand list value at commencement of the development.

(4) At such time as all bonds issued under section 1897 of Title 24 with respect to a comprehensive redevelopment initiative have been paid in full, or at such time as said bonds have been fully redeemed or defeased through fully funded reserves and accounts attributable to such bonds, all property within the tax increment financing district, not otherwise tax exempt, shall be included within the education property tax grand list as taxable property as provided in section 5404 of Title 32, and shall be subject to the education property tax imposed under section 5402 of Title 32. This section shall be operative on April 1 next following the date upon which all bonds have been fully paid, redeemed, or defeased.

(5) The provisions of sections 5401(10)(E) and 5404a of Title 32 shall not apply to the exercise of any power or authority conferred hereby, it being the intent of the general assembly to substitute the provisions of this enactment for any other form of tax stabilization as an inducement for economic development within the tax increment financing district identified in Sec. 37 of this act.

(6) A special assessment imposed under chapter 87 of Title 24 against property in an urban renewal area as defined in subdivision 3201(17) of Title 24, or in a tax increment financing district designated under subsection 1892(a) of Title 24, shall not be deemed to be a property tax for determining the applicability or eligibility of any general or special property tax exemption.

(7) The provisions of this act are in addition to any power, authority, or prerogative conferred by general law or municipal charter.

(8) At least ten percent of the housing in the tax increment financing district authorized by Sec. 37 and this section shall at the time of initial occupancy be affordable housing. For the purposes of this section, “affordable housing” means either of the following:

(A) Housing that is owned by its inhabitants, whose household gross annual income does not exceed 80% of the state median income, as defined by the United States Department of Housing and Urban Development, and that has a total annual cost of principal, interest, taxes, condominium fees and insurance for the housing that is not more than 30% of the household’s gross annual income.

(B) Housing that is rented by its inhabitants, whose household gross income does not exceed 65% of the state median income, as defined by the United States Department of Housing and Urban Development, and that has a total annual cost of rent and utilities for the housing that is not more than 30% of the household’s gross annual income.

(9) Within 60 days of issuing the bonds under subdivision (1) of this section, the City of Winooski shall provide to the joint fiscal committee of the general assembly comprehensive cost-benefit and financing data for the project for use in analyzing similar redevelopment projects in other municipalities.

Sec. 39. TAX INCREMENT FINANCING STATE IMPLICATIONS

STUDY

On or before January 10, 2001, the secretary of administration, with assistance from the commissioner of taxes and the commissioner of housing and community affairs, shall prepare and provide to the senate committee on finance and the house committee on ways and means recommendations for the following:

(a) A legislative proposal by which foregone revenues to the education fund resulting from the Winooski redevelopment project authorized by this act and similar redevelopment projects that may occur in other municipalities would be replaced by general fund revenues.

(b) A legislative proposal with formal criteria and a process by which municipalities would be eligible to submit tax increment financing proposals. This process shall require submission of comprehensive cost-benefit analyses, the financial and nonfinancial project implications, and the revenue implications for the impacted communities and the state.

Sec. 40. 32 V.S.A. chapter 151, subchapter 11I is added to read:

Subchapter 11I. Affordable Housing Tax Credit

§ 5930u. TAX CREDIT FOR AFFORDABLE HOUSING

(a) As used in this section,

(1) “Affordable housing project” or “‘project” means a project identified in 26 U.S.C. § 42(g).

(2) “Affordable housing tax credits” means the tax credit provided by this subchapter.

(3) “Allocating agency” means the Vermont housing finance agency.

(4) “Committee” means the joint committee on tax credits consisting of five members; a representative from the department of housing and community affairs, the Vermont housing and conservation board, the Vermont housing finance agency, the Vermont state housing authority, and the office of the governor.

(5) “Eligible applicant" means any municipality, private sector developer, department of state government as defined in 10 V.S.A. § 6302(a), nonprofit organization qualifying under Section 501(c)(3) of the Internal Revenue Code, or cooperative housing organization, the purpose of which is the creation and retention of affordable housing for lower income Vermonters, and the bylaws that require that housing to be maintained as affordable housing for lower income Vermonters on a perpetual basis.

(6) “Eligible basis” means the eligible basis of an affordable housing project as defined in 26 U.S.C. § 42(c)(1).

(7) “Section 42 credits” means tax credit provided by 26 U.S.C. §§ 38 and 42.

(b) Affordable housing credit allocation.

(1) Prior to the placement of an affordable housing project in service, the owner, or a person having the right to acquire ownership of a building, may apply to the committee for an allocation of affordable housing tax credits under this section. The committee shall advise the allocating agency on an affordable housing tax credit application based upon published priorities and criteria. The allocating agency shall issue a letter of approval if it finds that the applicant meets the priorities, criteria, and other provisions of subdivision (2) of this subsection. The burden of proof shall be on the applicant.

(2) Upon receipt of a completed application, an allocation of affordable housing tax credits with respect to a project under this section shall be granted to an applicant, provided the applicant demonstrates to the satisfaction of the committee all of the following:

(A) The owner of the project has received from the allocating agency a binding commitment for, a reservation or allocation of, an out-of-cap determination letter for, Section 42 credits;

(B) The project has received community support.

(c) Amount of credit. Except as limited by subsection (f) of this section, the owner of a project to which affordable housing tax credits have been allocated shall be entitled to claim against the taxpayer’s individual income, corporate or franchise tax a credit in an amount equal to 25 percent of the qualified basis of the project.

(d) Availability of credit. Affordable housing tax credits allocated with respect to a project shall be available to the owner in each of five consecutive tax years, beginning with the tax year in which the affordable housing project is placed in service.

(e) Claim for credit. A taxpayer claiming affordable housing tax credits shall submit with each return on which such credit is claimed a copy of the allocating agency’s credit allocation and a copy of the federal income tax return claiming the Section 42 credit. Any unused affordable housing tax credit may be carried forward to reduce the taxpayer’s tax liability for no more than 14 succeeding tax years, following the first year the affordable housing tax credit is allowed.

(f) Limitations. No affordable housing tax credits shall be allowed for any expenditure with respect to which the taxpayer does not use the straight-line method of depreciation under 26 U.S.C. § 168 over a recovery period of at least 27.5 years.

(g) In any calendar year the state board shall not award a total amount of tax credits to all applicants under this subchapter in excess of $100,000.00.

Approved: May 29, 2000