Tape No. 98-11, 98-12, 98-13 A only

MEMBERS PRESENT: Representatives John S. Freidin, Chair; Paul A. Cillo; Martha P. Heath; Karen M. Lafayette; Senator Jeb Spaulding.

STAFF PRESENT AT VARIOUS TIMES: Bill Russell, Emily Tartter, Anne Winchester and Rachel Levin of the Legislative Council.

Representative Freidin called the meeting to order at 9:55 a.m.

Representative Heath made a motion to approve the minutes as submitted. Representative Freidin asked if committee members had any comments or suggestions. Seeing none, the motion was seconded and passed on a unanimous voice vote.

Chris D’Elia, Vermont Economic Progress Council (VEPC) Executive Director, distributed the text of the final version of "The Vermont Guide to Economic Advancement Tax Incentives and Downtown Development Incentives." Representative Freidin reiterated the committee’s appreciation for the opportunity VEPC provided for committee input.

Representative Freidin referred to documents which had been mailed to the committee prior to the meeting: a Rutland Herald article entitled, "Act 60 Boosts Forge Growth," as well as a memo from Tom Kavet on the subject of cost-benefit models. Representative Freidin said that the decisions, which must be made by VEPC, would necessarily depend on many sorts of information that address the question whether the applicant would proceed with its proposal if it did not receive an incentive from VEPC. He said that the information that the computer supplies is only part of the information VEPC will use to answer the "but for" question.

Chris D’Elia reported that VEPC had 65 inquiries about tax incentives; that at VEPC’s last meeting a decision had been made to purchase the "REMI" cost-benefit model; that it was in the hands of the contractor and that data was being input; that they were working on licensing and

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distribution issues relating to placing the model on the internet and end distributions to regions. Chris D’Elia said that the timing for the delivery for the REMI model was the beginning of October and that the goal was to have it up and running as soon as possible. He said that VEPC would be testifying before the Joint Fiscal Committee at its next meeting.

Representative Freidin said that in the mailing prior to the meeting, committee members had been provided with articles provided by Tom Kavet which illustrated the REMI model and variables. He said that Rachel Levin would be obtaining a copy of Governor Lawton Chiles’ veto message relating to proposed Florida legislation on economic incentives, which would be shared with committee members as well as VEPC.

Chris D’Elia continued, saying that VEPC had been in contact with a professor from the Tuck School for a possible higher education review of the REMI/cost-benefit model. He said that in the meantime, a staff member from Norwich University had joined the advisory committee to help with developing the REMI/cost-benefit model. Representative Heath asked if a professor from the University of Vermont had been considered. Chris D’Elia replied that he had contacted UVM, but that, perhaps, due to summer schedules he hadn’t heard back.

Representative Freidin asked if VEPC had received any applications from municipalities. Chris D’Elia said he knew of one application to be submitted and a half dozen requests for clarification on tax stabilization. He said that there would be an article in the Vermont League of Cities and Towns’ newsletter clarifying the issue because there was a lack of information, as well as information which would be distributed at the upcoming municipal officers’ conference at UVM. Representative Freidin said that anything that could be done to clarify the options municipalities had would be very important. He asked VEPC to provide the information given to VLCT to the committee.

Representative Freidin requested that Chris D’Elia provide Rachel Levin with "The Vermont Guide to Economic Advancement Tax Incentives and Downtown Development Incentives,"

so that it could be mailed to the General Assembly. He said that the committee looked forward to an update from VEPC at the next meeting. Representative Freidin thanked Chris D’Elia on behalf of all members of the committee, for taking the committee’s suggestions.

Senator Spaulding distributed his 9/10/98 article entitled, "Act 60 Position Paper by State Senator Jeb Spaulding," which had appeared as an op-ed in the Rutland Herald.

Bill Talbott, Department of Education Chief Fiscal Officer, distributed and discussed a 9/14/98 memo entitled, "Act 60 Implementation Update." He said:

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- September 1 payments went out on time

- Letter of explanation to districts for recording payments has been sent

- Joint Vermont Superintendents’ Association, Tax and Education Departments’

training session had been scheduled for September 22

- Forms for December 1 payments to education fund from towns and districts were under

development with the State Treasurer’s Office

- Model for establishing state liabilities and fund receipts for FY2000 had been completed

- 331 Annual Statistical Reports had been received detailing FY98 school

district expenditures

Bill Talbott also reviewed a map entitled, "Total Local Education Expenditures Per Equalized Pupil, FY1999," which illustrated patterns of spending per pupil by town. He concluded by commending all of his staff for working very hard and answering all requests and providing information.

Bill Reedy, Department of Education Counsel, and Pat Johnson, Department of Education School Improvement Coordinator, updated the committee on the status of the proposed School Quality Standards. Bill Reedy said that the last draft had been rewritten and distributed around the state for comments and that the State Board of Education, at its October meeting, would have final approval. He said that October 2 was the cutoff date for comments. Representative Heath congratulated Bill Reedy on the reorganization of the document.

Bill Reedy asked the committee for suggestions on the licensing of school nurses. Representative Heath said that it was important to leave as much flexibility as possible. Representative Freidin asked if any other members had issues. Senator Spaulding clarified that the proposed rule would go before the Administrative Rules Committee after approval by the State Board. Representative Freidin said that he had spoken with Senator Chard. Senator Chard said that she would contact Representative Heath with any suggestions. The committee agreed they had completed their consideration of the proposed rule on School Quality Standards. Bill Reedy said that if committee members come across any other issues, the Department would still be able to make changes.

Representative Cillo said that he had gotten good feedback on the local action planning groups, which had been meeting. He asked if the Department had gotten any feedback. Pat Johnson said that there had been positive feedback and that many meetings had taken place with administrators, teachers, parents, community members, and school board members, as well as others. Representative Cillo requested that the Department provide to the committee the process on action planning and institutes. Representative Lafayette asked if there were any meetings planned for the charter communities to discuss their questions. Bill Reedy responded that was a good idea. Representative Freidin said that it would be valuable to have a meeting and get conclusions prior to the convening of the General Assembly.

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Representative Freidin invited the following people to testify: Barbara Andrejczak, Town of Manchester Municipal Assessor; Steve Jeffrey, Vermont League of Cities and Towns (VLCT) executive director; Representative Patty Smith and Sudbury Town Clerk (by speaker phone); and Emily Tartter of the Legislative Council. Barbara Andrejczak presented the committee with a "Lister’s Timeline" she had compiled to demonstrate her concerns regarding the pre-existing statutory dates affecting grand lists.

After discussion the committee agreed that Representative Freidin request that Bill Johnson, Director of Property Valuation and Review, examine the issues raised and propose solutions, at the committee’s next meeting. The committee also suggested that Bill Johnson speak with Emily Tartter, Barbara Andrejczak and Steve Jeffrey, as well as Deputy Commissioner Sean Campbell.

Representative Freidin thanked Barbara Andrejczak for bringing her issues forward and discussing them with the committee.

The committee recessed and reconvened after lunch.

Representative Freidin commented on two documents which had been mailed to the committee prior to the meeting: information on a September 27 seminar sponsored by the Stowe Act 60 Action Committee and a grid summarizing the proposed rules the committee had discussed. Representative Freidin said that if committee members had any questions or suggestions on the grid on proposed rules to talk to Rachel Levin or him. Representative Freidin distributed a one page statement Chris D’Elia had provided to VLCT to explain local authority to enter into tax stabilization agreements which is authorized by Act 71, and VEPC authority to approve tax stabilization agreements, also authorized by Act 71, which would be mailed by the Vermont League of Cities and Towns to its members.

Bill Snow, Current Use Programs Chief for Property Valuation and Review (PVR) distributed and discussed two documents entitled, "Use Value Appraisal Program: Potential Applications Received for 1999 Tax Year Participation by County," and "Use Value Appraisal Program: High 1999 Use Value Appraisal Applications Towns." He said that the potential applications for the 1999 tax year were 826 parcels, encompassing 108,119.6 total acreage. Bill Snow noted that this was the first year for applications for nonprofit lands for conservation.

Representative Freidin asked Bill Snow what his observations were on trends in enrollment and whether there was any data he could provide the committee. Bill Snow said that he would have to see if the data was available to carry out statistical analysis, which would be of any use.

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Representative Freidin said that in January, the standing committees would be interested in more of an analysis, examining patterns, the correlation between acres coming in and out of the program and the relationship to changes in tax rates.

Charles Merriman, an Attorney for Property Valuation and Review, presented a 9/14/98 memo addressing, "Authority for Designating a Portion of a Barn as a Garage." He said he was addressing a question relating to the committee’s discussion on the proposed rule on homesteads. After committee discussion, Representative Freidin said it was important to determine what was required by Acts 60 and 71 and determine if a new definition of homestead was needed. He suggested that the issue should be brought to the legislature in January.

Gloria Hobson, Director of Taxpayer Services for the Department of Taxes, provided the committee with a 9/14/98 memo on the processing of prebate applications. She said that as of September 11, 1998, 99,871 prebates, totaling $51,140,103.55 had been mailed, at an average of $512.06 per prebate. In addition, 3,647 applications were being held pending the receipt of missing information from the applicants; and another approximately 5,000 applications had been received and were being processed.

The committee discussed a letter sent by Axel Mondigo of Manchester. Representative Freidin invited Jim Kannon, a Manchester lister, to explain what he thought were Axel Mondigo’s concerns relating to financial responsibility for an elderly parent and the definition of household income. Representative Freidin said he would draft a letter of response.

The committee scheduled the following meetings to begin at 9:30 a.m. and take place in Room 10 at the State House: Thursday, October 8 and Thursday, November 5.

The Committee adjourned at 2:35 p.m.

Respectfully submitted,

Rachel Levin