Introduced by Representative Livingston of Manchester
Subject: Education property tax; common level of appraisal
Statement of purpose: This bill proposes to increase equity in education property tax by improving grand list accuracy, by eliminating common levels of appraisal, and by reducing the education property tax rate to reflect grand list growth, as follows:
(1) Lister and assessor training – transition and after. During an initial transition period, Property Valuation and Review (“PVR”) would begin a mandatory annual training program in uniform appraisal techniques for listers, and for assessors who appraise for towns. PVR would provide the training, either directly or by contracting out. After the transition period, annual training would continue, and listers would receive an incentive payment for completion of annual training.
(2) Property Valuation and Review appraisals.
(A) PVR would become independent of the tax commissioner, as a separate division reporting directly to the secretary of administration. This would make the appraisal function separate from the tax revenue function.
(B) During transition to the new system, PVR would begin hiring and training appraisers for eventual state appraisal and for optional appraisal service for towns.
(C) During the transition period, PVR would appraise utility property and large or unique commercial and industrial properties, as identified by PVR. Some state savings would occur, as the $7.00 per parcel payments to towns for reappraisal costs would no longer be made for the parcels appraised by PVR.
(D) Appeals of appraisals done by PVR would be similar to current appeals of appraisals, except that the first step would be an appeal to PVR, not to the listers.
(3) Town appraisals – transition. During the transition period, while PVR builds a trained appraisal staff, towns could contract with PVR appraisers for assistance in appraisals.
(4) Town appraisals – after transition.
(A) After the transition period, towns would appraise residential property and vacant land and would maintain their grand lists; but appraisals of all other property would be by PVR. (Residential property constitutes approximately two-thirds of all parcels in the state.)
(B) Towns would be required to reappraise residential property every five years, using rolling reappraisals, with one-fifth of the new value phased in in each of the five years. Eventually, towns would be required to move to a three-year rolling reappraisal schedule.
(C) Alternatively, towns could contract with PVR for appraisal of their residential property and vacant land.
(5) PVR appraisals – after transition. After the transition period, PVR would have trained appraisers available and would conduct state appraisals of the nonresidential property on a rolling, three-year basis, with one-third of the value phased in in each of the three years. PVR would also appraise residential property and vacant land at the request of any town on a contract basis.
(6) Elimination of the aggregate fair market value study (equalization) and common levels of appraisal. After the transition period, all parcels would be appraised directly, either by the town (residential and vacant land) or by PVR, on a rolling, three-year basis. There would be no need for indirect equalization and determination of common levels of appraisal. Instead, parcels would be directly equalized through the appraisals. Town appraisal results would be reviewed by PVR for accuracy through sampling, and the towns would be notified of the results by PVR.
(7) Listing of values for exempt properties. In order to produce a better idea of the value of exempt property in the state, the bill would require listers to show on the grand list the insurance value, expressed as replacement cost minus depreciation, of exempt properties. The bill would require an owner who wishes to be treated as exempt to submit the insurance value of the property to the listers.
(8) Funding. The bill would appropriate funds sufficient for PVR to begin hiring and training state appraisers; and would add to PVR’s annual budget a line item for training of local listers, costs of state-level appraisers, and costs of certification of local reappraisals, all with funding from the education fund.
Under current law, the cost of grants to towns of $6.00 plus $1.00 per parcel (315,000 parcels) is about $2.3 million. The grants are for maintenance of the grand list, appraisal costs, and aid with the equalization study. This $2.3 million could be used instead to help fund this new appraisal system.
AN ACT RELATING TO COMMON LEVELS OF APPRAISAL AND IMPROVED EQUITY IN EDUCATION PROPERTY TAX
It is hereby enacted by the General Assembly of the State of Vermont:
(TEXT OMITTED IN SHORT-FORM BILLS)
The Vermont General Assembly
115 State Street