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H.504

AN ACT RELATING TO APPRAISALS AND EDUCATION FINANCE

The Senate proposes to the House to amend the bill:

First:  In Sec. 6, in 32 V.S.A. § 5410(i), by inserting at the end of the subsection a new sentence to read as follows: Any change in property classification under this subsection shall not be entered on the grand list.

Second:  In Sec. 7, in 32 V.S.A. § 6061(13), after the words “and declared”, by inserting the words before July 15

Third:  In Sec. 8, by striking out “$8.80” and “$8.50” and inserting in lieu thereof “$8.50” and “$8.20”, respectively.

Fourth:  By striking out Sec. 13 in its entirety and inserting a new Sec. 13 to read:

Sec. 13.  HOUSE COMMITTEE ON WAYS AND MEANS STUDY OF

               INCOME-BASED EDUCATION TAX SYSTEM

(a)  The House Committee on Ways and Means shall study 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 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 committee shall meet no more than six times and hold at least one public hearing.  It shall provide a copy of its findings and recommendations, and any legislation it may propose, by January 15, 2006, to the Senate Committee on Finance.

Fifth:  In Sec. 23, [EFFECTIVE DATE] by striking out subdivision (14) in its entirety and inserting in lieu thereof a new subdivision (14) to read as follows:

(14)  Sec. 20 (repeal of special education limitation) shall take effect for fiscal years 2006 and after.

and by striking out subdivision (15) in its entirety and by renumbering the remaining subdivisions of this section to be numerically correct

Sixth:  By adding two new sections to be numbered Secs. 24 and 25 to read:

Sec. 24.  24 V.S.A. § 2804 is amended to read:

§ 2804.  RESERVE FUNDS; USE

(a)  At an annual or special meeting duly warned, a municipality may establish a reserve fund to be under the control and direction of the legislative branch of the municipality.  The reserve fund shall be kept in a separate account and invested as are other public funds and may be expended for such purposes for which established, or when authorized by a majority of the voters present and voting at an annual or special meeting duly warned, for other purposes.

(b)  If a reserve fund is established under subsection (a) of this section to pay a school district’s future school capital construction costs approved under chapter 123 of Title 16, any funds raised by the district as part of its education spending to pay for those future costs shall be considered “approved school capital construction spending” in calculating excess spending under 32 V.S.A. § 5401(12).  Districts shall submit to the Department of Education annually a report of deposits into and expenditures from a school capital construction reserve fund.  If the Department of Education determines that any amount in the reserve fund has not been used for approved school capital construction within five years after deposit into the fund, then 150% of that amount shall be added to the district’s education spending in the then-current year for purposes of calculating the excess spending penalty.  The definitions in Chapter 133 of Title 16 shall apply to this subsection.

Sec. 25.  32 V.S.A. § 5401(12) is amended to read:

(12)  “Excess spending” means:

(A)  the per-equalized pupil amount of

(i)  the district’s education spending, plus any amount required to be added from a capital construction reserve fund under 24 V.S.A. § 2804(b); minus

(ii)  the portion of education spending which is approved school capital construction spending or deposited into a reserve fund under 24 V.S.A. § 2804 to pay future approved school capital construction costs;

(B)  in excess of 125 percent of the statewide average district education spending per equalized pupil in the prior fiscal year, as determined by the commissioner of education.

Seventh:  By adding three new sections to be numbered Secs. 26, 27 and 28 to read:

Sec. 26.  REPEAL

32 V.S.A. § 5402b(b) (annual adjustment of the applicable percentage base for homestead property tax adjustments) is repealed for claims related to 2006 property taxes and after.

Sec. 27.  32 V.S.A. § 6066(a)(1)(A), (B) and (D) are amended to read:

(1)(A)  For a claimant with household income of $75,000.00 $90,000.00 or more:

(i)  the statewide education tax rate as adjusted under subdivision 5402(a)(2) of this title, multiplied by the equalized value of the housesite;

(ii)  minus (if less) the sum of:

(I)  the applicable percentage of household income for the taxable year, plus

(II)  the statewide education tax rate as adjusted under subdivision 5402(a)(2) of this title, multiplied by the equalized value of the housesite in the taxable year in excess of $160,000.00 $200,000.00.

(B)  For a claimant with household income of less than $75,000.00 $90,000.00 but more than $47,000.00, the statewide education tax rate as adjusted under subdivision 5402(a)(2) this title, multiplied by the equalized value of the housesite, minus the applicable percentage of household income for the taxable year.

(D)  A claimant whose household income does not exceed $75,000.00 $90,000.00 shall also be entitled to an additional adjustment amount under this section of $10.00 per acre, up to a maximum of five acres, for each additional acre of homestead property in excess of the two-acre housesite.  The adjustment amount under this section shall be shown separately on the notice of property tax adjustment to the claimant.

Sec. 28.  EFFECTIVE DATES

Sec. 26 (repeal of applicable percentage adjustment) and Sec. 27 (household income threshold and housesite maximum) shall apply to claims filed for 2006 property taxes and after.

Eighth:  By adding a new section to be numbered Sec. 29 to read as follows:

Sec. 29.  32 V.S.A. § 3802(11)(A) is amended to read:

(11)(A)  Real and personal property to the extent of $10,000.00 of appraisal value, except any part used for business or rental, occupied as the established residence of and owned in fee simple by a veteran of any war or a veteran who has received an American Expeditionary Medal, his or her spouse, widow, widower or child, or jointly by any combination of them, if one or more of them are receiving disability compensation for at least 50 percent disability, death compensation, dependence and indemnity compensation, or pension for disability paid through any military department or the veterans administration if, before May 1 of each year, there is filed with the listers:

(i)  a written application therefor; and

(ii)  a written statement from the military department or the veterans administration showing that the compensation or pension is being paid.  Only one exemption may be allowed on a property.  Application for an exemption under this section based upon permanent disability is only required to be filed with the listers before May 1 of the first year for which the exemption is sought, and the exemption shall remain on the grand list until title to the property is transferred.

Ninth:  By striking out Secs 21 and 22 in their entirety and by renumbering the remaining sections of the bill to be numerically correct

 



Published by:

The Vermont General Assembly
115 State Street
Montpelier, Vermont


www.leg.state.vt.us