An act relating to education finance simplification.
The Senate proposes to the House to amend the bill as follows:
First: By striking out Sec. 9 ($6000.00 cap on property tax adjustments) in its entirety and inserting in lieu thereof a new Sec. 9 to read as follows:
Sec. 9. TAX DEPARTMENT ANALYSIS OF LARGE PROPERTY TAX
The commissioner of taxes shall review each property tax adjustment claim filed in 2006 which results in a total adjustment in excess of $6000.00, and shall report to the general assembly by January 15, 2007, the number of those claims which the department determines did not comply with the statutory provisions and the corrective actions initiated by the department to ensure compliance; and of those which did comply, which claims raise questions as to manipulation of household income for purposes of claiming the adjustment, which claims raise questions of additional sources of income not required to be included in household income, and which claims raise other questions as to whether the claimant is entitled to the adjustment under the law. To the extent possible, within the confines of the department’s confidentiality law, the commissioner shall in his report describe the basis for questions raised by the various adjustment claims and shall make recommendations for appropriate changes to the law to address claims which he believes to be questionable. The commissioner shall in his report also recommend an asset test for payment of property tax adjustment claims in excess of a capped amount, and shall include a proposed list of assets to be included and excluded in making that determination.
Second: In Sec. 13, 32
V.S.A. § 6061(5)(C), by striking out the following: “or payments made by the
state or an agency designated in section 8907 of Title 18 for foster
or to a family of a juvenile, or for flexible family funding or
difficulty of care payments” and inserting in lieu thereof the following: or
payments made by the state pursuant to chapters 49 and 55 of Title 33
for foster care, or to a family or the first $6,500.00 of
payments made by the state or an agency designated in section 8907 of Title 18
for flexible family funding or difficulty of care payments”
Third: By adding a new section to be numbered Sec. 13a to read as follows::
Sec. 13a. 18 V.S.A. § 8729 is amended to read:
§ 8729. FAMILY SUPPORT PAYMENTS: TAX EXEMPTION
Any payment to an eligible family for the support of a person with a developmental disability constitutes a state benefit, and shall not be deemed to be income for the purposes of state taxation or of determining eligibility for any income-related state benefits , but may be included in household income for purposes of chapter 154 of Title 32 as provided in section 6061 of that chapter.
Fourth: By striking out Secs. 14, and inserting in lieu thereof a new section to be numbered Sec. 14 to read as follows:
Sec. 14. AMENDMENT OF MODIFIED ADJUSTED GROSS INCOME TRANSITION AND EFFECTIVE DATE
(a) For claims filed in 2005, 2006 and 2007, modified adjusted gross income as defined under 32 V.S.A. § 6061(5)(C) shall be calculated by excluding all foster care payments made pursuant to chapters 49 and 55 of Title 33, and also excluding all payments made by the state or an agency designated in section 8907 of Title 18 for flexible family funding and difficulty of care payments for the support of an eligible person with a developmental disability as defined in subdivision 8722(2) of Title 18.
(b) Any tax assessments related to prebate or rebate claims filed in 2005 or 2006 and which are contrary to the amendment in subsection (a) of this section shall be abated.
(c) Any person may file, on or before September 1, 2006, a late or amended property tax adjustment claim related to household income in 2004 or 2005 solely to reflect the amendment in subsection (a) of this section.
(d) Sec. 13 of this act ($6500 exclusion from household income for flexible family funding and difficulty of care payments) shall apply to claims filed in 2008 and after; and Sec. 13a of this act (reference in Title 18 to 32 V.S.A. § 6061 rules) shall take effect upon passage.
Fifth: In Sec. 15 after the first sentence, by adding the following: The commissioner shall also analyze the types of payments made under various adult “homeshare” agreements with the state or other state agreements which may be referred to as “adult foster care”, and shall define these types of agreements and report the amount of payments made under such agreements and to whom these payments may be made, and shall recommend whether these payments should be included or excluded, in whole or in part, from household income for purposes of property tax adjustments in Title 32.
Sixth: By adding a new section to be numbered Sec. 2a to read as follows:
Sec. 2a. 32 V.S.A. § 6066(h) is added to read:
(h) State property tax reduction incentive. A homestead owner shall be entitled to an additional property tax adjustment amount equal to one percent of the amount of income tax refund which the claimant elects to allocate to payment of homestead property tax under section 6068 of this title.
In Sec. 3, 32 V.S.A. § 6066a(a), by striking out the following: “under
subdivisions 6066(a)(1) and
(2)(3)” and by striking out the
following: “under subdivisions 6066(a)(1), (2) and (3)” and inserting in both
places in lieu thereof the following: under section 6066 related to a
homestead owned by the claimant
Eighth: In Sec. 3, 32 V.S.A. §6066a(e) after the following: “of this title”, by inserting the following: any additional adjustment amounts due the homestead owner under section 6066 of this title
Ninth: In Sec. 3, 32 V.S.A. § 6066a(f)(3), in the last sentence, by striking out the following: “No tax-reduction incentive for early payment of taxes shall apply” and inserting in lieu thereof the following: No municipal tax-reduction incentive for early payment of taxes shall apply
Tenth: By striking out Sec. 7 in its entirety and inserting in lieu thereof a new Sec. 7 to read as follows:
Sec. 7. 32 V.S.A. § 6061(13) is amended and (14) and (15) are added to read:
(13) “Homestead” means a homestead as defined under subdivision
5401(7) , but not under subdivision 5401(7)(G), of this title and
declared on or before
July 15 September 1 in accordance with
section 5410 of this title.
(14) “Unadjusted property tax” means the amount of education and municipal property taxes on the homestead parcel before any reduction for a property tax payment under section 6066a of this chapter.
(15) “Adjusted property tax” means the amount of education and municipal property taxes on the homestead parcel after reduction for any property tax payment under section 6066a of this chapter.
Eleventh: By adding a new section to be numbered Sec. 22 to read as follows:
Sec. 22. ADVISORY WORKING GROUP
There is established an Education Finance Advisory Working Group, to advise the Department of Taxes and town officials on issues related to implementation of this act. The Working Group shall include an appointee from each of the following: the Commissioner of Taxes, Vermont League of Cities and Towns, Vermont Clerks and Treasurers Association, Vermont Association of Realtors, Vermont Tax Preparers Association, Vermont Society of CPAs; and an individual familiar with the NEMRC system, appointed by the commissioner of taxes; and one member of the House Committee on Ways and Means appointed by the Speaker of the House, and one member of the Senate Committee on Finance appointed by the committee on committees. The Working Group shall be chaired by the Commissioner of Taxes and shall convene at his request, and shall provide assistance in implementation of this act, including planning for public education. Public education shall include sufficient notice of the following:
(1) Beginning in 2007, property tax adjustment amounts will no longer be paid in cash, but will instead be issued as credits against upcoming property taxes;
(2) Income tax amounts due on an income tax return must be paid by the taxpayer, and will not be taken out of the property tax adjustment amount;
(3) Taxpayers who are eligible for a 2006 prebate, and who are planning to wait until January 2007 to claim the amount as part of their 2007 rebate, should be encouraged to file for their 2006 prebate this year, which will still be paid in cash and can be used against 2006 property tax installments;
(4) In the sale of a homestead, the method for pro-rating unadjusted property taxes and otherwise accounting for property tax adjustments between the buyer and seller; and
(5) Such other information as the Working Group identifies as necessary for public education to simplify transition to the new system. The Working Group shall report to the general assembly by January 15, 2007, any recommended technical changes or other amendments to the education property tax adjustment laws. Members shall serve from the date of appointment through January 15, 2007, and members who are members of the legislature shall be entitled to compensation for services and reimbursement for expenses as provided in section 406 of Title 2.
Twelfth: By striking out Sec. 21 (one-time school construction aid) in its entirety.
Thirteenth: In Sec. 5, 32 V.S.A. § 6068, by striking out subsection (c) in its entirety and inserting in lieu thereof a new subsection (c) to read as follows:
(c) No request for allocation of an income tax refund may be made after September 1.
Fourteenth: By adding a new section to be numbered Sec. 23 to read as follows:
Sec. 23. 32 V.S.A. § 6064 is amended to read:
The amount of any
otherwise payable or refund property tax adjustment amount resulting
under this chapter may be applied by the commissioner, beginning July 1 of
the calendar year in which the claim is filed, against any state tax
liability outstanding against the claimant.
Fifteenth: By adding a new section to be numbered Sec. 24 to read as follows:
Sec. 24. ANALYSIS OF EDUCATION TAX BURDENS UNDER ACT 68
(a) The joint fiscal office, with the assistance of legislative council, shall analyze the relative education tax burdens borne by nonresidential, homestead and income-sensitized taxpayers under Act 68. The report of the joint fiscal office shall examine the impact of the following factors on any education tax shifting between classes of taxpayers:
(1) growth in the education grand lists;
(2) growth in household income;
(3) growth in education spending;
(4) growth in non-education tax revenue sources;
(5) 32 V.S.A. § 5402b (Statewide education tax rate adjustments); and
(6) any other changes to Act 68 enacted in the 2006 legislative session.
(b) For the purposes of this analysis, the tax department shall provide any information or assistance requested by the joint fiscal office. The joint fiscal office shall present its analysis to the general assembly by January 15, 2007.
The Vermont General Assembly
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