|BILL AS INTRODUCED||2007-2008|
Introduced by Senator McCormack of Windsor District
Subject: Taxation; appraisal value; property tax; exclusion of energy efficiency improvements
Statement of purpose: This bill proposes to exclude the value of energy efficiency improvements from grand list value and, as a result, exempt them from municipal and education property tax.
AN ACT RELATING TO EXCLUSION OF ENERGY EFFICIENCY IMPROVEMENTS FROM GRAND LIST TAX VALUE
It is hereby enacted by the General Assembly of the State of Vermont:
Sec. 1. 32 V.S.A. § 3481 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
(A) with respect to property enrolled in a use value appraisal program, the use value appraisal as defined in subdivision 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 in nonrental residential property 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 determinative.
(B) For residential rental property that is subject to a housing subsidy covenant or other legal restriction, imposed by a governmental,
quasi-governmental, or public purpose entity, on rents that may be charged, fair market value shall be determined by an income approach using the following elements:
rents with utility allowance adjustments for the geographic area in which the
property is located as determined by the federal office of Housing and Urban
Development or in the case of properties authorized under 42 U.S.C. § 1437, 12
U.S.C. § 1701q, 42 U.S.C. § 1485, 12 U.S.C. § 1715z-1, 42 U.S.C. § 1437f,
and 24 CFR Part 882 Subpart D and E, the higher of contract rents (meaning the
amount of federal rental assistance plus any tenant contribution) and HUD
market rents; (B)(ii) actual
expenses incurred with respect to the property which shall be provided by the
property owner in a format acceptable to the commissioner and certified by an
independent third party, such as a certified public accounting firm or public
or quasi-public funding agency; (C)(iii) a
vacancy rate that is 50 percent of the market vacancy rate as determined by the
United States Census Bureau with local review by the Vermont housing finance
agency; and (D)(iv) a
capitalization rate that is typical for the geographic area determined and
published annually prior to April 1 by the division of property valuation and
review after consultation with the Vermont housing finance agency.
(C) “Appraisal value” shall not include the value of energy efficiency components in or on a building. “Value of energy efficiency components” means the original cost of, and installation charges for, any or all of the following:
(i) Replacement of existing windows with energy‑efficient windows.
(ii) Replacement of energy‑inefficient hot water heaters with energy efficient heaters.
(iii) Replacement or addition of insulation, curtains, or shades with higher insulating characteristics.
(iv) Sealing of basements for purposes of energy efficiency.
(v) Addition of storm windows or storm doors.
(vi) Installation of solar photovoltaic systems, solar water or space heating systems, and any related equipment.
(vii) Installation of wind turbines, and related equipment.
(ix) Installation of geothermal space or water heating systems.
(x) Installation of hydropower equipment.
(xi) Installation of fuel cells that rely on renewable fuels.
(xii) Replacement of inefficient energy heating systems with efficient systems.
(2) “Listed value” shall be an amount equal to 100 percent of the appraisal value. The ratio shall be the same for both real and personal property.
Sec. 2. EFFECTIVE DATES
This act shall apply to grand lists for April 1, 2009, and after.
The Vermont General Assembly
115 State Street