Introduced by Committee on Ways and Means
Subject: Education finance; property reappraisals
AN ACT RELATING TO APPRAISALS AND EDUCATION FINANCE
It is hereby enacted by the General Assembly of the State of Vermont:
* * * Grand List Issues Study * * *
Sec. 1. 32 V.S.A. § 3481(1) is amended to read:
§ 3481. DEFINITIONS
The following definitions shall apply in this Part and chapter 101 of this title, pertaining to the listing of property for taxation:
value” shall mean, with respect to property enrolled in a use value appraisal
program, the use value appraisal as defined in
3752(12) of this title, multiplied by the common level of appraisal, and with
respect to all other property, the estimated fair market value. The estimated
fair market value of a property is the price which the property will bring in
the market when offered for sale and purchased by another, taking into
consideration all the elements of the availability of the property, its use
both potential and prospective, any functional deficiencies, and all other
elements such as age and condition which combine to give property a market
value. Those elements shall include a consideration of a decrease in value due
to a housing subsidy covenant as defined in section 610 of Title 27, or the
effect of any state or local law or regulation affecting the use of land,
including but not limited to chapter 151 of Title 10 or any land capability
plan established in furtherance or implementation thereof, rules adopted by the
state board of health and any local or regional zoning ordinances or
development plans. In determining estimated fair market value, the sale
price of the property in question is one element to consider, but is not solely
Sec. 2. STATEMENT OF INTENT
It is the intent of the general assembly to enhance voluntary lister training provided by the state, in order to support local listers in executing their jobs and to improve the quality and uniformity of appraisal methodology and grand list maintenance. Therefore, the general assembly proposes to amend the law pertaining to lister training and to appropriate additional state funds to support this training as follows in the next two sections of this act.
Sec. 3. 32 V.S.A. § 3436 is added to read:
§ 3436. Assessment Education
(a) The director shall provide an assessment education program for municipal listers and assessors at convenient times and places during the year and is authorized to contract with one or more persons to provide part or all of the assessment instruction. On an annual basis, the director shall provide, to the extent allowed by available resources, instruction in lister duties, property inspection, data collection, valuation methods, mass appraisal techniques, and property tax administration.
(b) The director shall determine the necessary course work or evaluation of equivalent experience required for designation as Vermont lister/assessor, Vermont property evaluator, and Vermont municipal assessor. Designation for any one level shall be for a period of three years.
(c) Designation obtained under subsection (b) of this section may be renewed for three-year periods upon completion of requirements as determined by the director.
(d) The director shall also notify all towns annually of any new approaches which the division of property valuation and review is aware of for obtaining or performing mass reappraisals and for grand list maintenance.
Sec. 4. IMPLEMENTATION AND APPROPRIATION
(a) There is appropriated for fiscal year 2006 from the education fund to the education fund equalization and reappraisal account the amount of $100,000.00, to be used by the director of property valuation and review for the purpose of assuring accuracy in grand list maintenance through assessment education in fiscal year 2006, including obtaining instructors and classroom space and materials and production of videotape and computer courses. This appropriation is in addition to and shall not supplant any portion of the property valuation and review budget to be used for lister education programs offered in fiscal year 2006 that were provided by the division during fiscal year 2005; nor shall the division charge any additional fees for new lister education programs. This appropriation is within the purposes established in law for the equalization and reappraisal account and is not to be used for any other activities of the division of property valuation and review.
(b) In designing the overall program and course offerings to be offered as required under 32 V.S.A. § 3436, the director shall consult with the Vermont Assessors and Listers Association and other persons the director deems appropriate. The director shall report on January 15, 2006 and January 15, 2007 to the house committees on ways and means and appropriations and to the senate committees on finance and appropriations on the current status of the lister education program, including courses offered, level of participation in the program, and level of participants’ satisfaction with the program.
Sec. 5. 32 V.S.A. § 4001(a) is amended to read:
on April 1, at the expense of the state, the director shall furnish to the
several town clerks and boards of appraisers for unorganized towns and gores
inventory forms sufficient in number to meet the requirements of this chapter. Such
forms shall be formulated by the director, and, among other things, shall
contain suitable interrogatories requiring each taxpayer to furnish therein a
brief statement of all
his of each taxpayer’s taxable property,
real and personal, and such other information, including income and expense
information with respect to any income-producing properties, as will enable
the listers or appraisers to appraise such part thereof as is required by law
to be by them appraised, and to make up the abstract of individual lists and
grand list in the manner prescribed by law.
* * * Late-Filed Homestead Declaration * * *
Sec. 6. 32 V.S.A. § 5410(h) and (i) are amended to read:
filing of a new or corrected declaration or rescission of an erroneous
December 1 July 15 of the property tax year
that is not reflected in the first education fund payment under 16 V.S.A. §
4028 for that fiscal year or in a municipality’s first payment to the education
fund under subsection 5402(c) of this title for that fiscal year shall be
reflected in the final net payment to or from the education fund for that
fiscal year. The municipality may retain one-eighth of one percent of the tax
collected. Any reduction in tax paid to a municipality due to a new, revised,
or rescinded declaration shall be paid by the municipality to the taxpayer no
later than May 15 of the fiscal year. No later than June 1, each
municipality shall provide to the state treasurer a list of taxpayers who filed
late or corrected declarations or rescinded declarations, the amount of the
change in education tax, and the amount of any interest and penalty billed the
owner filing a new or corrected declaration, or rescinding an erroneous
December 1 July 15 or after shall not be entitled
to a refund resulting from the correct property classification; and any
additional property tax and interest which would result from the correct
classification shall not be assessed as tax and interest, but shall instead
constitute an additional penalty, to be assessed and collected in the same manner
as penalties under subsection (g) of this section.
Sec. 7. 32 V.S.A. § 6061(13) is added to read:
(13) “Homestead” means a homestead as defined under subdivision 5401(7) of this title and declared in accordance with section 5410 of this title.
* * * Per‑Parcel Payments to Towns * * *
Sec. 8. 32 V.S.A. § 4041a(a) is amended to read:
municipality shall be paid
$6.00 $8.50 per grand list parcel per
year from the equalization and reappraisal account within the education fund,
to be used only for reappraisal and costs related to reappraisal of its grand
list properties and for maintenance of the grand list.
* * * Homestead Parcel and Replacement-Value Appraisals * * *
Sec. 9. STUDY OF PARCEL DEFINITION AND REPLACEMENT-VALUE
(a) The Joint Fiscal Office and Legislative Council, in consultation with the Vermont League of Cities and Towns, Vermont Assessors and Listers Association and the Division of Property Valuation and Review, shall study:
(1) options for redefining the homestead “parcel” to take into account all land which is either underlying or contiguous to commercial improvements; and
(2) the advisability and impact upon the education fund of adopting a replacement-value basis for property taxation as proposed in H. 302 of 2005 for the purpose of increasing taxpayer equity in grand list valuation.
(b) The study group shall report its findings and recommendations, including proposed legislation, by December 15, 2005, to the chairs of the House Committee on Ways and Means and the Senate Committee on Finance.
* * * Education Operations Consultant * * *
Sec. 10. 16 V.S.A. § 4028(c) is added to read:
(c) Any district which has adopted a school budget that includes excess spending, as defined in 32 V.S.A. § 5401(12), shall, upon timely notice, be authorized to use a portion of its excess spending penalty in obtaining an education operations consultant, as follows: The district may employ a consultant for recommendations on how to reduce its future education spending, and the department of education shall pay the consulting costs from the property tax revenue to be generated by the excess spending increase to the district’s spending adjustment as estimated by the commissioner, up to a maximum of $5,000.00. “Timely notice” for this purpose means written notice from the district to the commissioner within 60 days after the budget is adopted. The consultant may not be an employee of the district or of the department of education. A copy of the consultant’s final recommendations shall be submitted to the commissioner, and each affected town shall include in its next town report an executive summary of the consultant’s final recommendations and notice of where a complete copy is available. No district is authorized to obtain consulting funds under this section more often than once every five years.
* * * Income Sensitivity Technical Amendments * * *
Sec. 11. 32 V.S.A. § 5932(3) is amended to read:
spouse” means any individual who is not a debtor, but has filed a joint income
tax return , property tax rebate claim or sales tax rebate or
claim under chapter 154 of Title 32 with a debtor.
Sec. 12. 32 V.S.A. § 6061(3) is amended to read:
(3) “Household” means, for any
individual and for any taxable year, the individual and such other persons as
resided with the individual in the
homestead principal dwelling
at any time during the taxable year. A person who is not related to any member
of the household and who is residing in the household under a written homesharing
agreement pursuant to a nonprofit homesharing program or a person residing in a
household who is hired as a bona fide employee to provide personal care to a
member of the household and who is not related to the person for whom the care
is provided shall not be considered to be a member of the household.
* * * Legislative Study * * *
Sec. 13. JOINT LEGISLATIVE STUDY OF INCOME-BASED
EDUCATION TAX SYSTEM
(a) There is created a legislative committee, to be known as the Joint Legislative Study Committee on Income-Based Education Property Tax for Vermonters. The committee shall analyze the current prebate and rebate system, including the renter rebate program, by which most Vermonters pay education property tax based on income, and propose a more understandable and efficient income-based system, taking into account taxpayer confidentiality. In analyzing and designing its proposals, the committee shall consider:
(1) whether prebates and rebates are the best method to achieve a transparent and Vermonter taxpayer-friendly income-based system;
(2) all administrative and taxpayer burdens and costs of the current methods of prebates and rebates, as contrasted with any proposed new system;
(3) expanding or decreasing the requirements for eligibility for an income-based program, including but not limited to:
(A) definition of “household income”;
(B) housesite value limitation;
(C) qualifying income thresholds and possible inflation index.
(4) concerns with the amount of benefit available in the circumstance of a taxpayer with very high property tax and very low income, and methods to assure that a taxpayer in such circumstance does not receive an inappropriate benefit (as defined by the Study Committee) without creating a hardship for those in true need; ways to limit manipulation of “household income” eligibility, including income averaging; and balancing of the needs of individual taxpayers against the cost to other taxpayers.
(5) which of the following options is the best method to have Vermonters pay for education based on income rather than on property tax:
(A) bill sent by town that identifies the education tax due based on income.
(B) bill sent by the state that identifies the education tax due based on income.
(C) eliminate the prebate system and in its place enact an education income tax.
(D) eliminate the prebate system and modify the rebate system.
(E) other legislative ideas presented in previous sessions.
(F) other ideas.
(G) keeping in place the current system.
(b) The joint committee members shall be four members of the House, not all from the same political party, appointed by the Speaker, two from the House Committee on Ways and Means, one from the House Committee on Appropriations, and one additional representative; four members of the Senate, not all from the same political party, appointed by the Senate Committee on Committees, two from the Senate Committee on Finance, one from the Senate Committee on Appropriations, and one additional Senator; one representative of the Department of Taxes; one representative of the Vermont League of Cities and Towns; and one representative of the Vermont Municipal Clerks and Treasurers Association.
(c) The joint committee shall meet no more than eight times and hold at least one public hearing. It shall report its findings and recommendations, including proposed legislation, by December 15, 2005, to the chairs of the House Committee on Ways and Means and the Senate Committee on Finance.
* * * Simplified Lister Procedure for Late-Filed
Homestead Declarations * * *
Sec. 14. 32 V.S.A. § 4261 is amended to read:
§ 4261. Correcting omission from grand list
When real or personal estate is
omitted from the grand list by mistake, or an obvious error is found, the
listers, with the approval of the
selectmen selectboard, before
December 31, may supply such omissions or correct such errors and make a
certificate thereon of the fact; provided, however, the listers may make a
correction resulting from the filing or rescission of a homestead declaration
without approval of the selectboard.
* * * Income Sensitivity Claim for a Duplex * * *
Sec. 15. 32 V.S.A. § 6062(c)(4) is added to read:
(c) When a homestead is owned by two or more persons as joint tenants, tenants by the entirety, or tenants in common and one or more of these persons are not members of the claimant’s household, the property tax is the same proportion of the property tax levied on that homestead as the proportion of ownership of the homestead by the claimant and members of the claimant’s household; provided, however, that
* * *
(4) if the homestead is a portion of a duplex, and all owners of the duplex occupy some portion of the building as their principal residence, the property tax of the claimant shall be that percentage of the total property tax equal to the ratio of the claimant’s principal residence value to the total duplex building value.
* * * Homestead Property Tax Rate Retained for
Homestead of Decedent * * *
Sec. 16. 32 V.S.A. § 5401(7)(G) is added to read:
(G) For purposes of homestead declaration and application of the homestead property tax rate, “homestead” also means a residence which was the homestead of the decedent at the date of death, and from the date of death through the next April 1 is held by the estate of the decedent and not rented.
Sec. 17. 32 V.S.A. § 5410 is amended to read:
§ 5410. DECLARATION OF HOMESTEAD
homestead owner shall declare ownership of a homestead for purposes of
education property tax.
Annually on or before the due date for filing the Vermont income tax return,
without extension, each
resident individual homestead owner
shall, on a form prescribed by the commissioner, which shall be verified under
the pains and penalties of perjury, declare his or her homestead, if any, as
of, or expected to be as of, April 1 of the year in which the declaration is
* * *
Sec. 18. 32 V.S.A. § 6061(11) is amended to read:
(11) “Housesite” means that portion of a homestead, as defined under subdivision 5401(7) of this title but not under subdivision 5401(7)(G), which includes as much of the land owned by the claimant surrounding the dwelling as is reasonably necessary for use of the dwelling as a home, but in no event more than two acres per dwelling unit; and in the case of multiple dwelling units, no more than two acres per dwelling unit up to a maximum of 10 acres per parcel.
* * * Valuation of ANR Land for PILOT Payments * * *
Sec. 19. 32 V.S.A. § 3708(d) is amended to read:
(d) “Fair market value” in this section shall be based upon the value of the land at its highest and best use determined without regard to federal conservation restrictions on the parcel or any conservation restrictions under a state agreement made with respect to the parcel.
(e) The selectboard of a town aggrieved by the appraisal of property by the division of property valuation and review under this section may, within 21 days after the receipt by the town listers of notice of the appraisal of its property by the division of property valuation and review, appeal from that appraisal to the superior court of the district in which the property is situated.
* * * Special Education * * *
Sec. 20. REPEAL
Sec. 10 of No. 117 of the Acts of the 1999 Adj. Sess. (2000), as amended by Sec. 283 of No. 66 of the Acts of 2003, Sec. 42 of No. 68 of the Acts of 2003, and Secs. 272 and 278 of No. 122 of the Acts of the 2003 Adj. Sess. (2004) (special education spending limitation), is repealed.
Sec. 21. APPROPRIATION
There is appropriated from the education fund in fiscal year 2006, in addition to any other appropriation for special education, the sum of $4,069,337.00 to the commissioner of education for additional special education expenditures under Sec. 20 of this act.
* * * Appropriation for the $8.50 Per‑Parcel Payment * * *
Sec. 22. APPROPRIATION
There is appropriated from the education fund in fiscal year 2006, in addition to any other appropriation for this purpose, the sum of $834,000.00 to the director of Property Valuation and Review for the additional $2.50 per‑parcel payments to towns under Sec. 8 of this act.
* * * Effective Dates * * *
Sec. 23. EFFECTIVE DATES
This section shall take effect upon passage, and the remaining sections of this act shall take effect as follows:
(1) Sec. 1 (clarification of “fair market value” for appraisal) shall take effect upon passage and shall apply to grand lists for April 1, 2006, and after.
(2) Secs. 2, 3, and 4 (lister and assessor voluntary education program) shall take effect upon passage.
(3) Sec. 5 (clarification of information for lister inventories) shall take effect upon passage.
(4) Secs. 6 (July 15 late-filed homestead declaration date) and 7 (making explicit the rule that income sensitivity claims require homestead declaration) shall take effect January 1, 2006.
(5) Sec. 8 (increasing the per‑parcel reappraisal assistance payment to towns) shall take effect July 1, 2005.
(6) Sec. 9 (study of “parcel” definition and of replacement-value appraisals) shall take effect upon passage.
(7) Sec. 10 (education operations consultant) shall take effect upon passage.
(8) Secs. 11 and 12 (technical amendments to income sensitivity laws) shall take effect upon passage.
(9) Sec. 13 (legislative study of income-based education tax system) shall take effect upon passage.
(10) Sec. 14 (simplified lister procedure for late-filed declarations) shall take effect upon passage.
(11) Sec. 15 (income sensitivity claim for a duplex) shall apply to claims filed for 2006 property taxes and after.
(12) Secs. 16, 17, and 18 (homestead tax rate for decedent’s residence) shall apply to homestead declarations related to April 1, 2005, and after.
(13) Sec. 19 (valuation of ANR land for PILOT) shall take effect upon passage.
(14) Sec. 20 (repeal of special education limitation) shall take effect for fiscal years 2006 and after, and Sec. 21 (appropriation for removal of special education limitation) shall take effect upon passage.
(15) Sec. 22 (appropriation for per-parcel payments) shall take effect upon passage.
The Vermont General Assembly
115 State Street