ACT NO. 38
Appraisals and education finance
This act makes various amendments to education finance and property tax appraisal laws.
Sec. 1. Clarifies that in determining fair market value for appraisals, a sale price is only one factor to be taken into account, but is not solely determinative.
Secs. 2, 3,and 4. Create a voluntary lister and assessor education program, to be administered by the property Valuation and Review Division, leading to designation of competence at three levels. The education program is intended to aid in attaining grand list accuracy.
Sec. 4a. Towns receive 30 cents per parcel to use for enrolling town employees in the training program created by Secs. 2, 3, and 4 of the act. The money is paid from the equalization and reappraisal account in the education fund to each town's own lister training subaccount. Moneys left in a subaccount at the end of the year revert to the education fund.
Sec. 5. Clarifies that questionnaires (called "inventories") used by listers to obtain information necessary for determining market value of a property may include questions on the income and expenses of an income-producing property.
Secs. 6, 7. Beginning in 2006, changes the late-filing deadline for homestead declarations from December 1 to July 15, and makes explicit that for purposes of a prebate or rebate claim, the homestead must be declared.
Sec. 8. Increases the payment towns receive to defray the cost of reappraisals and grand list maintenance. The current payment of $6.00 per parcel was based upon the state paying one-half of the town's cost of reappraisal, assuming that reappraisals were done approximately every five years, and using a 1997 reappraisal cost-per-parcel of $60.00.
Of the $8.80 per parcel, towns will receive $8.50 per parcel to aid in appraisals and grand list maintenance.
This new amount is based on the midpoint between the low-end reappraisal cost of $50.00 per parcel and the high-end of $120.00 per parcel. The State's half on a five-year reappraisal basis would be the $8.50.
Note that towns also receive an additional $1.00 per parcel each year for aiding PVR in the equalization study.
The additional thirty cents per parcel will be credited to each town's lister training subaccount (see Sec. 4a).
Sec. 9. Creates a legislative staff study of four issues:
(1) how to define the homestead parcel, to exclude land which underlies or is contiguous to the business portion of the parcel;
(2) the impact of adopting a replacement-value basis for property tax appraisals;
(3) whether a residence owned by a family-owned entity should be taxed at the homestead rate;
(4) whether a residence owned by a farmer, located on a farm parcel, occupied by a family member, should be taxed at the homestead rate.
Sec. 10. Allows a town with "excess spending" to use a portion of the penalty revenues to hire an education operations consultant, to advise the district on how better to control spending.
Sec. 11. Current law protects a nondebtor spouse from loss of a refund from a joint income tax return or joint rebate claim. This section updates the rebate reference to include prebates as well.
Sec. 12. For calculating household income for income sensitivity, current law refers to income of all persons living in the homestead.
Since the homestead may now include other houses on the homestead parcel, the rule is changed to include only other persons in the "principal dwelling."
Sec. 13. Creates a House legislative study committee on Income-Based Education Property Tax for Vermonters. The report is due December 15, 2005.
Sec. 14. Allows listers to correct the grand list for late-filed homestead declarations without having to go through the errors and omissions process, which is cumbersome.
Sec. 15. Provides that co-owners of a duplex may each claim an entire half for prebate and rebate purposes.
Secs. 16, 17, and 18. Provide that if the owner of a homestead dies before declaring the homestead, and the homestead is owned by the estate on April 1 and not rented, then the property will be taxed at the homestead education property tax rate for that year.
Retains the current rule for the prebate and rebate: the estate may not claim either of those benefits.
Sec. 19. Provides that in calculating fair market value of land owned by the Agency of Natural Resources, for purposes of determining a town's payment in lieu of taxes for that land, the value of the land will not be diminished because of conservation restrictions under federal law or under a state agreement.
Sec. 20. Removes the limitation on special education expenditures.
Sec. 21. Requires the value of all exempt property to be included in the annual report to the legislature from Property Valuation and Review, beginning in 2007.
Sec. 22. Effective dates
Secs. 23, 24. Allows municipalities to set up a reserve fund in which to hold funds for future school construction.
Money raised for the construction reserve fund is not counted in calculating whether the district is subject to the Excess Spending Penalty. If, however, any portion of the fund is spent on anything other than approved school construction, the amounts so spent must be added into the Excess Spending Penalty calculation in that year at 150% of the amount so spent.
Sec. 25. For prebate and rebate claims based on 2006 property taxes, raises household income maximum to $85,000 and housesite maximum to $200,000.
Sec. 26. For prebate and rebate claims based on 2007 property taxes and after, raises household income maximum to $90,000 and leaves housesite maximum at $200,000.
Sec. 27. Effective dates for Secs. 25 and 26.
Sec. 28. Allows a permanently disabled veteran to apply only once for ongoing homestead appraisal reduction on grand list. The appraisal reduction would end if the property is transferred. (Law would still require annual application for reduction in veteran's homestead value if based on other than permanent disability.)
Effective Date: June 2, 2005
The Vermont General Assembly
115 State Street