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Introduced by Representatives Sweaney of Windsor, Acinapura of Brandon, Ainsworth of Royalton, Allard of St. Albans Town, Ancel of Calais, Andrews of Rutland City, Aswad of Burlington, Atkins of Winooski, Audette of S. Burlington, Baker of West Rutland, Barnard of Richmond, Bissonnette of Winooski, Bostic of St. Johnsbury, Botzow of Pownal, Bray of New Haven, Brennan of Colchester, Brooks of Montpelier, Canfield of Fair Haven, Chen of Mendon, Clark of St. Johnsbury, Clark of Vergennes, Clerkin of Hartford, Condon of Colchester, Consejo of Sheldon, Copeland‑Hanzas of Bradford, Corcoran of Bennington, Courcelle of Rutland City, Davis of Washington, Deen of Westminster, Devereux of Mount Holly, Donahue of Northfield, Donovan of Burlington, Dostis of Waterbury, Edwards of Brattleboro, Emmons of Springfield, Evans of Essex, Fisher of Lincoln, Fitzgerald of St. Albans City, Flory of Pittsford, Frank of Underhill, French of Randolph, Gervais of Enosburg, Gilbert of Fairfax, Godin of Milton, Grad of Moretown, Haas of Rochester, Head of S. Burlington, Helm of Castleton, Hosford of Waitsfield, Howard of Rutland City, Howrigan of Fairfield, Hudson of Lyndon, Hunt of Essex, Hutchinson of Randolph, Jerman of Essex, Jewett of Ripton, Johnson of South Hero, Keenan of St. Albans City, Keogh of Burlington, Kilmartin of Newport City, Kitzmiller of Montpelier, Klein of East Montpelier, Krawczyk of Bennington, Kupersmith of S. Burlington, Larocque of Barnet, Larson of Burlington, LaVoie of Swanton, Lawrence of Lyndon, Lenes of Shelburne, Livingston of Manchester, Lorber of Burlington, Maier of Middlebury, Manwaring of Wilmington, Marcotte of Coventry, Marek of Newfane, Martin of Wolcott, Masland of Thetford, McCormack of Rutland City, McFaun of Barre Town, Milkey of Brattleboro, Minter of Waterbury, Monti of Barre City, Mook of Bennington, Moran of Wardsboro, Morrissey of Bennington, Mrowicki of Putney, Myers of Essex, Nease of Johnson, O’Donnell of Vernon, Ojibway of Hartford, Otterman of Topsham, Oxholm of Vergennes, Pearson of Burlington, Pellett of Chester, Peltz of Woodbury, Peterson of Williston, Pillsbury of Brattleboro, Potter of Clarendon, Pugh of S. Burlington, Rodgers of Glover, Scheuermann of Stowe, Shand of Weathersfield, Shaw of Derby, Smith of Morristown, Spengler of Colchester, Sunderland of Rutland Town, Trombley of Grand Isle, Turner of Milton, Valliere of Barre City, Weston of Burlington, Wheeler of Derby, Winters of Williamstown, Wright of Burlington and Zuckerman of Burlington

Referred to Committee on


Subject:  Taxation; property tax; PILOT; full funding

Statement of purpose:  This bill proposes to repeal the PILOT special fund limitation and require full funding of the state’s obligation under PILOT.


It is hereby enacted by the General Assembly of the State of Vermont:


Sec. 89 of No. 60 of the Acts of 1997 (PILOT special fund and proration of PILOT payments in case of underfunding) is repealed, effective July 1, 2006.

Sec. 2.  32 V.S.A. § 3706 is amended to read:

§ 3706.  Payment to municipalities

Grants under this subchapter Annually, the state shall pay to each town the amount required under this subchapter.  Payments shall be made annually by the secretary of administration to each eligible municipality on or before December 1, 1997, and on or before October 31 in years thereafter each year from the PILOT special fund.  Nothing in this subchapter shall be construed or permitted to affect the tax exempt status of the University of Vermont and State Agricultural College, as provided by statute and guaranteed by that institution’s charter.

Sec. 3.  32 V.S.A. § 3709 is amended to read:


(a)  There is hereby established a PILOT special fund consisting of appropriations to the fund by the general assembly and local option tax revenues paid to the treasurer pursuant to 24 V.S.A. § 138.  This fund shall be managed by the commissioner of taxes pursuant to subchapter 5 of chapter 7 of this title.  Notwithstanding subdivision 588(3) of this title, all interest earned on the fund shall be retained in the fund for use in meeting future obligations.  The fund shall be exclusively for payments required under subchapter 4 of chapter 123 of this title, state payment in lieu of property taxes.  The commissioner of finance and management may draw warrants for disbursements from this fund in anticipation of receipts.

(b)  If the PILOT special fund is insufficient to pay the full amount of all payments in lieu of taxes under subchapter 4 of this chapter, payments, after application of the cap in subsection 3703(c) of this title, shall be reduced proportionately.  Annually, the general assembly shall appropriate to the PILOT special fund the amount necessary to meet the state’s full obligation under this subchapter for the following fiscal year, after taking into account the revenue from local option taxes for that fiscal year as estimated by the joint fiscal office.  Annually, by January 15, the director of property valuation and review shall report to the general assembly the state’s full PILOT obligation to each town for the current fiscal year and the estimated obligation to each town for the following fiscal year.


This act shall take effect February 1, 2007, and the report required by 32 V.S.A. § 3709(b) for 2007 from the director of property valuation and review to the general assembly shall be due March 1, 2007.

Published by:

The Vermont General Assembly
115 State Street
Montpelier, Vermont