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BILL AS INTRODUCED 2007-2008

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H.649

Introduced by   Representatives Otterman of Topsham, Branagan of Georgia and Hube of Londonderry

Referred to Committee on

Date:

Subject:  Taxation; property tax; exemptions; repeal of exemptions

Statement of purpose:  This bill proposes to repeal most property tax exemptions and phase in taxation of charitable organization property over a five-year period.

AN ACT RELATING TO REPEAL OF PROPERTY TAX EXEMPTIONS

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

Sec. 1.  32 V.S.A. § 3802 is amended to read:

§ 3802.  PROPERTY TAX

The following property shall be exempt from taxation:

(1)  Real and personal estate owned by this state, except as otherwise provided, real and personal estate owned by the United States, United States’ securities which are specially exempt from taxation by the laws of the United States at the time of making the list; except that this subsection shall not prohibit a federal agency from making payments for taxes on repossessed or voluntary voluntarily conveyed single family residences, multifamily living units or farm properties.

(2)  Real and personal property owned by a post of any veterans’ organization chartered by act of Congress of the United States or owned by a corporation the members or stockholders of which are members of said post or its auxiliary, provided said real estate is used for purposes of the post or its auxiliary or such corporation only, is used as the principal meeting place of said post or its auxiliary in the exercise of its functions and activities, and is not leased or rented for profit; and real and personal property owned by and used for the purpose of its work by a nonprofit organization chartered by act of the Congress of the United States, such as a Red Cross, boy scout, girl scout, boy or girl organization.

(3)  Personal estate owned by inhabitants of this state situated and taxed in another state.

(4)  Real and personal estate granted, sequestered or used for public, pious or charitable uses; real property owned by churches or church societies or conferences and used as parsonages and personal property therein used by ministers engaged in full time full-time work in the care of the churches of their fellowship within the state; real and personal estate set apart for library uses and used by the public and private circulating libraries, open to the public and not used for profit; lands leased by towns or town school districts for educational purposes; and lands owned or leased by colleges, academies or other public schools or leased by towns for the support of the gospel; and lands and buildings owned and used by towns for the support of the poor therein; but private buildings on such lands shall be set in the list to the owners thereof, and shall not be exempt.  The exemption of lands owned or leased by colleges, academies or other public schools, shall not apply to lands or buildings rented for general commercial purposes, nor to farming or timber lands owned or leased thereby; but this provision shall not affect the exemption of so-called school or college lands, sequestered to such use prior to January 28, 1911. 

(5)  Real and personal property held by and for the benefit of college fraternities and societies and corporations owning such property, but this exemption shall not apply to property held for investment purposes.  The exemption from taxation of real and personal property held by and for the benefit of college fraternities and societies and corporations owning such property shall not be construed as exempting lands, buildings or property other than a fraternity or society house, the land occupied thereby, the land adjacent thereto and used as a lawn, playground or garden, and the household furniture, and equipment in actual use in such fraternity or society house.

(6)  Buildings, land and personal property owned and occupied by a Young Men’s Christian Association or a Young Women’s Christian Association for the purposes of its work, the income of which is entirely used for such purposes.

(7)  Lands used for cemetery purposes and the structures thereon, trust funds and other property belonging to or held by cemetery associations and the lots of the proprietors thereof.

(8)  Household furniture and equipment of every person not regularly used as income producing property; household provisions; personal wearing apparel and ornament; private and professional libraries; shrubs and plants located in a commercial greenhouse or nursery; fowl; sheep; cattle; horses; goats; swine; bees; hay and produce sufficient to winter out the stock; tractors and other machinery of a farmer, not used for hire or contract purposes; real and personal farm property constructed and used for the storage of manure and designed to avoid water pollution; tools and implements of a mechanic or farmer; aircraft, automobiles and motor vehicles, but not including trailer coaches; and motorized highway-building equipment and road-making appliances as defined in section 4(19) and (31) of Title 23 required to be registered as motor vehicles.

(9)  Grounds and property owned and occupied by agricultural societies so long as the same are used annually for agricultural fairs.

(10)  Real property owned by an honorably discharged person who served in the army or navy of the United States in the Civil and Spanish-American Wars, or in the army, navy or marine corps of the United States between April 21, 1898, and July 4, 1902, or by his widow, if she is entitled to a pension under the federal laws, whether such property is owned by or deeded to such soldier or sailor, such soldier or sailor and wife, or such widow, to the extent of a dwelling house used as a home, shall be exempt from taxation, provided that written application therefor shall be filed with the listers before the abstract of individual lists is completed.  Such exemption shall be noted on the grand list book opposite the name of such person.

(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.

(B)  The terms used in this subdivision shall have the same definitions as in Title 38, U.S. Code § 101, except that:

(i)  the definitions shall apply as if federal law recognized a civil union in the same manner as Vermont law;

(ii)  such definitions shall not be construed to deny eligibility for exemption in the case where such exemption is based on retirement for disability and retirement pay is received from a federal agency other than the veterans administration; and

(iii)  the age and marital status limits in section 101(4)(A) shall not apply.

An unremarried widow or widower of a previously qualified veteran shall be entitled to the exemption provided in this subdivision whether or not he or she is receiving government compensation or pension.  By majority vote of those present and voting at an annual or special meeting warned for the purpose, a town may increase the veterans’ exemption under this subsection to up to $40,000.00 of appraisal value.  Any increase in exemption shall take effect for the taxable year for which it was voted, and shall remain in effect for future taxable years until amended or repealed by a similar vote.

(12)  Real and personal property exclusively installed and operated for the abatement of pollution of the waters of the state of Vermont or waters within the purview of the New England Interstate Water Pollution Control Compact in accordance with engineering principles approved by the Vermont water resources board.  This type of property shall be exempt as long as its operation meets with the approval of the secretary of the agency of natural resources.

(13)  Fallout shelters built at any time in compliance with then existing standards of the department of defense, office of civil defense, as long as the same are kept or used only for protection from radioactive fallout.

(14)  [REPEALED.]

(15)  Real and personal property owned by a charitable, nonprofit organization devoted to the welfare, protection and humane treatment of animals, including any premises of a custodian or caretaker which is attached to or is located on the grounds of such an animal shelter.

(16)  Real and personal property owned by a federally-qualified health center or a free standing, federally-designated rural health clinic, provided such center or clinic is governed by a community board of directors; offers care on a sliding scale based on ability to pay; is owned and operated on a nonprofit basis; is unconditionally dedicated to public use which directly benefits an indefinite class of the public and confers a benefit on society.  Notwithstanding any provision of law to the contrary, this exemption shall apply without the need for a vote of the town or municipality in which such property is located. 

Sec. 2.  32 V.S.A. § 3831 is amended to read:

§ 3831.  COLLEGE, UNIVERSITY OR FRATERNITY PROPERTY

(a)  Any real property acquired after April 1, 1941, by any college, university or fraternity such as would be exempt from taxation under the provisions of section 3802 of this title, shall be set to such institution in the grand list of the town or city in which such real property is located at the value fixed in the appraisal next preceding the date of acquisition of such property, and taxed on such valuation.  However, the voters of any town or city may at any legal meeting thereof vote to exempt such property from taxation, either in whole or in part. Except as provided under subsection (c) of this section, the value fixed on such property at such appraisal shall not be increased so long as the property is owned and used by such institution for other than commercial and investment purposes, whether or not improvements are made thereon.

(b)  The provisions of subsection (a) shall not exempt from county, town or school taxes, lands owned by a college, and leased “as long as wood grows and water runs,” securing to the lessees the right of preemption, unless such lands were chartered as sequestered for the benefit of the college, or became the property of the college prior to the organization of the town in which they lie.

(c)  In the event of a general reappraisal of all property in the municipality completed after 1982, the appraisal value of property subject to subsection (a) of this section shall first be changed to an amount which yields a tax liability (computed with reference to the tax rate applicable to the first tax year based on the reappraisal) equal to the tax liability for such property for the tax year immediately preceding the reappraisal; provided, that in the event the tax liability imposed on the majority of all taxable properties in the municipality increases in the first tax year based on the reappraisal, then any appraisal value of property subject to subsection (a) shall be further changed to an amount that yields the tax liability computed above adjusted by the average percentage increase or decrease in the tax liability of all taxable properties in the municipality.

(d)  For the purposes of this section, the term “fraternity” shall also mean “sorority.”

Sec. 3.  32 V.S.A. § 3832 is amended to read:

§ 3832.  PUBLIC, PIOUS AND CHARITABLE USES

The exemption from taxation of real and personal estate granted, sequestered or used for public, pious or charitable uses shall not be construed as exempting:

(1)  Real and personal property held in trust for a municipal corporation by virtue of a trust which takes effect after passage of this act when the property is located outside the town where the said municipal corporation has its principal place of business, unless the town or municipality in which the property is located so votes at any regular or special meeting duly warned therefor.

(2)  Real estate owned or kept by a religious society other than a church edifice, a parsonage, the outbuildings of the church edifice or parsonage, a building used as a convent, school, orphanage, home or hospital, land adjacent to any of the buildings named in this subsection, kept and used as a parking lot not used to produce income, lawn, playground, or garden, and the so-called glebe lands.

(3)  Property of railroad corporations.

(4)  A municipal electric light plant when located outside the town wherein the municipality owning it is situated.

(5)  Real and personal property held by the state and located in any town other than that in which the institution of which it forms a part is located.

(6)  Real and personal property owned or kept by an orphanage, home or hospital including diagnostic and treatment center not used for the purpose of such institution but leased to others for income or profit, whether or not the institution is conducted by or connected with a religious society unless the town or municipality in which the property is located so votes at any regular or special meeting duly warned therefor.

(7)  Real and personal property of an organization when the property is used primarily for health or recreational purposes, unless the town or municipality in which the property is located so votes at any regular or special meeting duly warned therefor.

Sec. 4.  32 V.S.A. § 3834 is amended to read:

§ 3834.  FACTORIES; QUARRIES; MINES

If the amount invested exceeds $1,000.00, manufacturing establishments, quarries, mines, and such machinery, tramways, appliances and buildings as are necessary for use in the business, machinery placed in an unoccupied building to be used in such business, and capital and personal property used in such business, may be exempted from taxation for a period not exceeding ten years from the commencement of business, if the town so votes.

Sec. 5.  32 V.S.A. § 3836 is amended to read:

§ 3836.  HOMES AND DWELLINGS

Annually at town meeting, a town may vote to exempt from taxes the first $75,000.00 or a smaller amount of the appraised value of buildings used and occupied exclusively as homes, dwelling houses or farm buildings whether for sale or rent, provided such buildings have been constructed or put in the process of construction during the 12 months immediately preceding the meeting or are to be constructed or put in the process of construction during the 12 months immediately following the meeting.  The duration of such exemption shall not exceed three years, to be determined by the vote.  The exemption shall first be applicable against the grand list of the year in which the vote is taken.

Sec. 6.  32 V.S.A. § 3840 is amended to read:

§ 3840.  CHARITABLE AND FRATERNAL ORGANIZATIONS

When a society or body of persons associated for a charitable purpose, in whole or in part, including fraternal organizations, volunteer fire, and ambulance, or rescue companies, company owns real estate used exclusively for the purposes of such society, body or organization, such real estate may be exempted from taxation, either in whole or in part, for a period not exceeding ten years, if the town so votes.  Upon the expiration of such exemption, a town may vote additional periods of exemption not exceeding five years each.

Sec. 7.  REPEAL

The following section of Title 32 are repealed:

(1)  § 3837 (town may vote to exempt property used for or in connection with airport purposes);

(2)  § 3838 (town may vote to exempt property used for hotel purposes; voting majority must own at least one-half the grand list of those voting and majority equals at least one-third of legal town voters);

(3)  § 3843 (town may enter into an agreement with owner of federally-subsidized low income housing project, for payment in lieu of taxes, if federal assistance would not be available in the absence of the agreement);

(4)  § 3844 (a section 3843 agreement may be disapproved by the town voters);

(5)  § 3845 (town may vote to exempt private alternate energy property used to generate energy for private use and not for sale or exchange to the public);

(6)  § 3846 (town may enter into tax stabilization contracts with owners of farmland or forest land);

(7)  § 3847 (town may vote to exempt improvements on a principal dwelling unit funded by a program of a nonprofit, neighborhood, or municipal housing low income improvement program, including community loan funds, community land trusts, neighborhood planning associations, and municipal housing improvement programs).

Sec. 8.  32 V.S.A. § 5401(10) is amended to read:

(10)  “Nonresidential property” means all property except:

(A)  Property which is exempt from the municipal property tax by law and not by vote of the municipality.

(B)  Property which is subject to the tax on railroads imposed by subchapter 2 of chapter 211 of this title, the tax on steamboat, car, and transportation companies imposed by subchapter 3 of chapter 211 of this title, the tax on telephone companies imposed by subchapter 6 of chapter 211 of this title, or the tax on electric generating plants imposed by chapter 213 of this title.

(C)  Homesteads declared in accordance with section 5410 of this title.

(D)  Personal property, machinery, inventory and equipment, ski lifts, and snow-making equipment for a ski area; provided, however, this subdivision shall not exclude from the definition of “nonresidential property” the following real or personal property:

(i)  utility cables and lines, poles and fixtures (except those taxed under subchapter 6 of chapter 211 of Title 32); provided that utility cables, lines, poles, and fixtures located on homestead property and owned by the person claiming the homestead shall be taxed as homestead property;

(ii)  gas distribution lines (except aboveground meters, regulators, and gauges, and leased water heaters are excluded personal property).

(E)  The excess valuation of property subject to tax increment financing in a tax increment financing district established under subchapter 5 of chapter 53 of Title 24 to the extent that the taxes generated on the excess property valuation are pledged and appropriated for interest and principal repayment on bonded debt or prefunding future tax increment financing district debt and to the extent approved for this purpose by the Vermont economic progress council upon application by the district under procedures established for approval of tax stabilization agreements under section 5404a of this title, and that any such action shall be included in the annual authorization limits provided in section subdivision 5930a(d)(1) of this title.

(F)  Property owned by a municipality which is located within that municipality and which is used for municipal purposes including the provision of utility services.

(G)  Machinery and equipment used directly in the processing of whey, whether or not such machinery or equipment is attached or affixed to real property.

(H)  Real property, excluding land, consisting of unoccupied new facilities, or unoccupied facilities under renovation or expansion, owned by a business that has obtained the approval of the Vermont economic progress council under section 5930a of this title that is less than 75 percent complete, not in use as of April 1 of the applicable tax year, and for a period not to exceed two years.

(I)  Real property consisting of the value of remediation expenditures incurred by a business that has obtained the approval of the Vermont economic progress council under section 5930a of this title for the construction of new, expanded or renovated facilities on contaminated property eligible under the redevelopment of contaminated properties program pursuant to section 6615a(f) of Title 10, including supporting infrastructure, on sites eligible for the United States Environmental Protection Agency “Brownfield Program,” for a period of ten years.

Sec. 9.  32 V.S.A. § 5404a is amended to read:

§ 5404a.  TAX STABILIZATION AGREEMENTS; TAX INCREMENT

                FINANCING DISTRICTS

(a)  Tax agreements and exemptions affecting the education property tax grand list.  A tax agreement or exemption shall affect the education property tax grand list of the municipality in which the property subject to the agreement is located if the agreement or exemption is:

(1)  a prior agreement, meaning that it was:

(A)  a tax stabilization agreement for any purpose authorized under 24 V.S.A. § 2741 or comparable municipal charter provisions entered into or proposed and voted by the municipality before July 1, 1997, or a property tax exemption adopted by vote pursuant to chapter 125 of Title 32 or comparable municipal charter provisions before July 1, 1997; or

(B)  an agreement relating to property sold or transferred by the New England Power Company of its Connecticut River system and its facilities along the Deerfield River which was warned before September 1, 1997; or

(2)  a tax stabilization agreement relating to industrial or commercial property entered into under 24 V.S.A. § 2741, or comparable municipal charter provisions or an exemption for the purposes of economic development adopted by vote under sections 3834 (factories; quarries; mines), 3836 (private homes and dwellings), 3837 (airports), or 3838 (hotels) of Title 32 or comparable municipal charter provisions after June 30, 1997 if subsequently approved by the Vermont economic progress council pursuant to this subsection and section 5930a of this title. An agreement or exemption may be approved by the Vermont economic progress council only if it has first been approved by the municipality in which the property is located with respect to the municipal tax liability of the property in that municipality. Any agreement or exemption approved by the Vermont economic progress council may not affect the education tax liability of the property in a greater proportion than the agreement or exemption affects the municipal tax liability of the property.  A municipality’s approval of an agreement or exemption under this subsection may be made conditional upon approval of the agreement or exemption by the Vermont economic progress council.  The legislative body of the municipality in which the property subject to the agreement or exemption is located or the business that is subject to the agreement or exemption may request the Vermont economic progress council to approve an agreement or exemption pursuant to section 5930a of this title.  The council shall also report to the general assembly on the terms of the agreement or exemption, and the effect of the agreement or exemption on the education property tax grand list of the municipality and of the state.  If so approved by the council, an agreement or exemption shall be effective to reduce the property tax liability of the municipality under this chapter beginning April 1 of the year following approval.

(3)  an agreement relating to affordable housing, which may be submitted to the council for its approval under subdivision (2) of this subsection, or alternatively may be approved under this subdivision by the commissioner of taxes upon recommendation of the commissioner of housing and community affairs provided the agreement provides either for new construction housing projects or rehabilitated preexisting housing projects and secures federal financial participation which may include projects financed with federal low income housing tax credits.

(4)  an exemption of property owned by a nonprofit volunteer fire, rescue, or ambulance organization and used for the purposes of the organization, adopted, extended, or renewed by vote of a municipality under chapter 125 of this title or comparable municipal charter provision after July 1, 1997.

(5)  an exemption of property owned by a municipality situated in another municipality, which has been exempted from municipal property taxes by vote of the municipality in which the property is situated, and which is used for municipal forest lands, municipal water supply, or for other noncommercial municipal purposes.  To be exempted under this subsection, the property must have been voted an exemption by the municipality before January 1, 1998, and such exemption may be extended or renewed thereafter by a similar vote of the municipality.

(6)  an exemption of a portion of the value of a qualified rental unit parcel.  An owner of a qualified rental unit parcel shall be entitled to an exemption on the education property tax grand list of 10 percent of the grand list value of the parcel, multiplied by the ratio of square footage of improvements used for or related to residential rental purposes to total square footage of all improvements, multiplied by the ratio of qualified rental units to total residential rental units on the parcel.  “Qualified rental units” means residential rental units which are subject to rent restriction under provisions of state or federal law, but excluding units subject to rent restrictions under only one of the following programs:  Section 8 moderate rehabilitation, Section 8 housing choice vouchers, or Section 236 or Section 515 rural development rental housing.  A municipality shall allow the percentage exemption under this subsection upon presentation by the taxpayer to the municipality, by April 1, of a certificate of education grand list value exemption, obtained from the Vermont Housing Finance Agency (VHFA). VHFA shall issue a certificate of exemption upon presentation by the taxpayer of information which VHFA and the commissioner shall require. An exemption granted by a municipality under this subsection shall expire upon transfer of the building, upon expiration of the rent restriction, or after ten years, whichever first occurs.

(b)  An agreement affecting the education property tax grand list defined under subsection (a) of this section shall reduce the municipality’s education property tax liability under this chapter for the duration of the agreement or exemption without extension or renewal, and for a maximum of ten years.  A municipality’s property tax liability under this chapter shall be reduced by any difference between the amount of the education property taxes collected on the subject property and the amount of education property taxes that would have been collected on such property if its fair market value were taxed at the equalized nonresidential rate for the tax year.

(c)  Tax agreements not affecting the education property tax grand list.  A tax agreement shall not affect the education property tax grand list if it is:

(1)  A tax exemption adopted by vote of a municipality after July 1, 1997 under chapter 125 of this title, or voted under a comparable municipal charter provision or other provision of law for property owned by nonprofit organizations used for public, pious or charitable purposes, other than economic development exemptions voted under sections 3834, 3836, 3837, or 3838 of this title and approved by the Vermont economic progress council, or exemptions of property of a nonprofit volunteer fire, rescue, or ambulance organization adopted by vote of a municipality.

(2)  A tax stabilization agreement relating to agricultural property, forest land, open space land, or alternate energy generating plants entered into after July 1, 1997 by a municipality under section 2741 of Title 24.

(3)  A tax stabilization agreement relating to commercial or industrial property entered into after July 1, 1997 by a municipality under section 2741 of Title 24, or a property tax exemption for purposes of economic development adopted by vote after July 1, 1997, which has not been approved by the Vermont economic progress council to affect the education grand list under subsection (a)(2) of this section and section 5930a of this title. In granting tax stabilization agreements for commercial or industrial property under section 2741 of Title 24, a municipality shall consider any applicable guidelines established for the approval of such stabilization agreements by the Vermont economic progress council established in section 5930a(c) of this title.

(4)  Notwithstanding section 6306 of Title 10, a transfer of the development rights to real property under chapter 155 of Title 10 which is less than a permanent transfer of those rights, or is a lease of those rights for a fixed period, entered into on or after January 1, 1998, and a transfer or lease of such rights executed prior to January 1, 1998 upon the expiration of the period of the transfer or lease not to exceed five years.

(d)  Tax agreements not affecting the education property tax grand list as defined in subsection (c) of this section shall not reduce the total education property tax liability of the municipality to the state under this chapter. However, such agreements shall reduce the education property tax liability of the owner of the property subject to the agreement to the extent provided in the agreement.  A municipality shall assess a tax on its municipal grand list at a rate sufficient to raise an amount equal to the difference between the municipality’s total education property tax liability to the state under this chapter and the amount collected from education property taxes in the municipality after reductions for all tax agreements in effect in the municipality as defined in subsection (c) of this section.  Any such tax assessed under this section shall be identified on the tax bill of the municipality as a separate tax for municipally voted tax agreements.

(e)  Allocations. A municipality on behalf of a person may apply to the Vermont economic progress council for an allocation of the education grand list value for up to ten years, of a portion of the increase in the value and liability assessed under section 5402 of this title on new economic development that is subsequently approved by the Vermont economic progress council pursuant to this section and subsections 5930a(c) and (d) of this title. Allocation to a municipality pursuant to this subsection shall be in addition to any other payments to the municipality under chapter 133 of Title 16. If allocated, the allocated portion of the education fund liability shall be used by the municipality for infrastructure that includes wastewater treatment, water supply, transportation, and telecommunications and utility connections.

(f)  A municipality that establishes a tax increment financing district under subchapter 5 of chapter 53 of Title 24 shall collect all property taxes on properties contained within the district and apply up to 75 percent of the tax increment as defined in 24 V.S.A. § 1896 to repayment of debt issued to finance the improvements and related costs for up to 20 years, if approved by the Vermont economic progress council pursuant to this section.

(g)  Any allocation approved pursuant to subsection (e) of this section or utilization of tax increment approved under subsection (f) of this section shall be in addition to any other payments to the municipality under chapter 133 of Title 16.  Allocations and tax Tax increment utilizations approved pursuant to subsections (e) and  subsection (f) of this section shall affect the education property tax grand list and the municipal grand list of the municipality under this chapter beginning April 1 of the year following approval and shall remain available to the municipality for the full period authorized and restricted only to the extent that the real property development giving rise to the increased value to the grand list fails to occur within the authorized period.

(h)  Criteria for approval.  To approve utilization of incremental revenues pursuant to subsection (f) of this section, the Vermont economic progress council shall do all the following:

* * *

Sec. 10.  10 V.S.A. § 6306 is amended to read:

§ 6306.  EXEMPTION FROM TAXATION

(a)  The rights and interests in real property acquired by a municipality or state agency under the authority of this chapter shall be considered as municipal or state-owned land, as the case may be, with respect to taxation and state reimbursement in lieu of taxes.

(b)(1)  The commissioner of the department of taxes may certify that real property acquired by a qualified organization under this chapter is being held and maintained for the purposes expressed in section 6301 of this title.  As a condition of that certification, the commissioner may require that the qualified organization provide adequate assurances that the property is being so held and maintained, including but not limited to written agreements with the department of taxes, deeds, covenants or other conveyances.  Property which is so certified:

(A)  if in the nature of an interest in fee simple, shall be assessed on the basis of its actual use, or may be enrolled by the qualifying organization in a current use program under chapter 124 of Title 32; or

(B)  shall be exempt from assessment and taxation, if in the nature of an interest other than fee simple.

(2)  For purposes of this section, where a qualified organization holds a lease in the property for a term greater than ten years, including renewal terms, or holds such other interests as the commissioner shall determine to be substantially equivalent to an interest in fee simple, the organization shall be deemed to hold an interest in fee simple.

(c)  After acquisition by a municipality, state agency or qualified organization of a right or interest in real property under the authority of this chapter, the owner of any remaining right or interest therein not so acquired shall be taxed, under the applicable provisions of chapter 123 of Title 32, only upon the value of those remaining rights or interests to which he retains title.  The state agency or qualified organization, and the department of taxes, shall cooperate with that owner, and with the town assessing such tax, in the determination of the fair market value of any such remaining right or interest.

(d)  Property held by a qualified organization and taxed or exempted under enrolled in the current use program under chapter 124 of Title 32 as allowed by subsection (b) of this section shall be subject to a conversion tax if the commissioner determines that it is no longer being held and maintained for the purposes expressed in section 6301 of this title.  The amount of the conversion tax shall be five times the amount of the taxes avoided by reason of the exemption use value appraisal in the most recent year.  The conversion tax shall be paid to the municipality in which the property is located.

Sec. 11.  EFFECTIVE DATE AND TRANSITION RULE

This act shall apply to grand lists for April 1, 2009, and after; except that any parcel which was exempt or partially exempt on the April 1, 2008 grand list and which, as a result of this act, becomes taxable, shall be subject to property taxes assessed in years 2009 and after as follows:  based on 20 percent of its 2009 grand list value, 40 percent of its 2010 grand list value, 60 percent of its 2011 grand list value, 80 percent of its 2012 grand list value, 100 percent of its 2013 grand list value in 2013, and 100 percent of its grand list value in years after 2013.



Published by:

The Vermont General Assembly
115 State Street
Montpelier, Vermont


www.leg.state.vt.us