The Vermont Statutes Online

Title 32: Taxation and Finance

Chapter 135: EDUCATION PROPERTY TAX

§ 5401. Definitions

As used in this chapter:

(1) "Coefficient of dispersion" is the average absolute deviation expressed as a percentage of the median ratio, and for a municipality in any school year shall be determined by the Director of Property Valuation and Review as follows:

(A) calculate the ratio of the listed value to the fair market value of each property used in determining the equalized education property value of the municipality as required by section 5406 of this title;

(B) determine the median of the ratios calculated in subdivision (A) of this subdivision;

(C) determine the absolute deviation of each ratio from the median ratio calculated in subdivision (B) of this subdivision;

(D) calculate the average absolute deviation.

(2) "Commissioner" means the Commissioner of Taxes.

(3) "Common level of appraisal" means the ratio of the aggregate value of local education property tax grand list to the aggregate value of the equalized education property tax grand list.

(4) "Director" means the Director of Property Valuation and Review.

(5) "Education property tax grand list" means the list of property determined pursuant to section 5404 of this title. When the listed value of real property for school tax purposes is adjusted by a board of civil authority or a court, that board or court shall make a corresponding adjustment to the listed value for purposes of taxation under this chapter.

(6) "Equalized education property tax grand list" means one percent of the aggregate fair market value of all nonresidential and homestead property that is required to be listed at fair market value as certified during that year by the Director of Property Valuation and Review under section 5406 of this title, plus one percent of the aggregate value of property required to be listed at a value established under a stabilization agreement described under section 5404a of this title, plus one percent of the aggregate use value established under chapter 124 of this title of all nonresidential property that is enrolled in the use value appraisal program.

(7) "Homestead":

(A) "Homestead" means the principal dwelling and parcel of land surrounding the dwelling, owned and occupied by a resident individual as the individual's domicile, or for purposes of the renter property tax adjustment under subsection 6066(b) of this title, rented and occupied by a resident individual as the individual's domicile.

(B) The parcel of land surrounding the dwelling shall be determined without regard to any road which intersects the land. If the parcel of land surrounding the dwelling is owned by a cooperative housing corporation incorporated under 11 V.S.A. chapter 14, or owned by a nonprofit land conservation corporation or community land trust with exempt status under Section 501(c)(3), the homestead includes a pro rata part of the land upon which the dwelling is built, as determined by the cooperative corporation, nonprofit corporation, or land trust.

(C) A homestead may consist of a part of a multi-dwelling or multi-purpose building, including cooperative property occupied as a permanent residence by a member of a cooperative housing corporation incorporated under 11 V.S.A. chapter 14. A mobile home may constitute a principal dwelling for purposes of this chapter.

(D) A dwelling owned by a trust may qualify as a homestead if it meets the requirements of subsection 6062(e) of this title.

(E) A homestead also includes a dwelling on the homestead parcel owned by a farmer as defined under section 3752 of this title, and occupied as the permanent residence by a parent, sibling, child, grandchild of the farmer, or shareholder, partner, or member of the farmer-owner, provided that the shareholder, partner, or member owns more than 50 percent of the farmer-owner, including attribution of stock ownership of a parent, sibling, child, or grandchild.

(F) A homestead also includes any other improvement or structure on the homestead parcel which is not used for business purposes. A homestead does not include that portion of a principal dwelling used for business purposes if the portion used for business purposes includes more than 25 percent of the floor space of the building.

(G) For purposes of homestead declaration and application of the homestead property tax rate, "homestead" also means a residence which was the homestead of the decedent at the date of death, and from the date of death through the next April 1 is held by the estate of the decedent and not rented.

(8) "Education spending" means "education spending" as defined in 16 V.S.A. § 4001(6).

(9) "Municipality" means a city, town, unorganized town, village, grant or gore; or, in the case of property located within the territorial limits of an incorporated school district, "municipality" means an incorporated school district.

(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 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 this title); 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 24 V.S.A. chapter 53, subchapter 5 to the extent that the taxes generated on such excess valuation of property are committed under 24 V.S.A. § 1894 to finance tax increment financing district debt; provided that any increment in excess of the amounts committed shall be distributed in accordance with 24 V.S.A. § 1900.

(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 10 V.S.A. § 6615a(f), including supporting infrastructure, on sites eligible for the United States Environmental Protection Agency "Brownfield Program," for a period of ten years.

(J) Buildings and fixtures of:

(i) wind-powered electric generating facilities taxed under section 5402c of this title; and

(ii) renewable energy plants generating electricity from solar power that are taxed under section 8701 of this title.

(11) "Education property value" means the aggregate fair market value of all nonresidential and homestead real property that is required to be listed at fair market value as certified during that year by the Director of Property Valuation and Review under section 5406 of this title, plus the aggregate value of property required to be listed at a value established under a stabilization agreement described under section 5404a of this title, plus the aggregate use value established under chapter 124 of this title of all nonresidential real property that is enrolled in the use value appraisal program.

Subdivision (12) effective until July 1, 2014; see also subdivision (12) effective July 1, 2014 and subdivision (12) effective July 1, 2016 set out below.

(12) "Excess spending" means:

(A) the per-equalized-pupil amount of the district's education spending, as defined in 16 V.S.A. § 4001(6), plus any amount required to be added from a capital construction reserve fund under 24 V.S.A. § 2804(b);

(B) in excess of 125 percent of the statewide average district education spending per equalized pupil in the prior fiscal year, as determined by the Secretary of Education on or before November 15 of each year based on the passed budgets to date.

Subdivision (12) effective July 1, 2014 and shall apply to education budgets for fiscal years 2015 and 2016; see also subdivision (12) effective until July 1, 2014 set out above and subdivision (12) effective July 1, 2016 set out below.

(12) "Excess spending" means:

(A) the per-equalized-pupil amount of the district's education spending, as defined in 16 V.S.A. § 4001(6), plus any amount required to be added from a capital construction reserve fund under 24 V.S.A. § 2804(b);

(B) in excess of 123 percent of the statewide average district education spending per equalized pupil in the prior fiscal year, as determined by the Secretary of Education on or before November 15 of each year based on the passed budgets to date.

Subdivision (12) effective July 1, 2016 and shall apply to education budgets for fiscal year 2017 and after; see also subdivision (12) effective until July 1, 2014 and subdivision (12) effective July 1, 2014 set out above.

(12) "Excess spending" means:

(A) the per-equalized-pupil amount of the district's education spending, as defined in 16 V.S.A. § 4001(6), plus any amount required to be added from a capital construction reserve fund under 24 V.S.A. § 2804(b);

(B) in excess of 121 percent of the statewide average district education spending per equalized pupil in the prior fiscal year, as determined by the Secretary of Education on or before November 15 of each year based on the passed budgets to date.

(13) "District spending adjustment" means the greater of: one or a fraction in which the numerator is the district's education spending plus excess spending, per equalized pupil, for the school year; and the denominator is the base education amount for the school year, as defined in 16 V.S.A. § 4001. For a district that pays tuition to a public school or an approved independent school or both for all of its resident students in any year and which has decided by a majority vote of its school board to opt into this provision, the district spending adjustment shall be the average of the district spending adjustment calculated under this subdivision for the previous year and for the current year. Any district opting for a two-year average under this subdivision may not opt out of such treatment, and the averaging shall continue until the district no longer qualifies for such treatment.

(14) "Domicile" means the principal dwelling of a person who has established permanent residence in the State. Intention to establish permanent residence is a factual determination to be made in the first instance by the Commissioner. No one factor is conclusive of whether a dwelling is a permanent residence; the Commissioner may consider any relevant factors, including but not limited to the following:  formal and informal statements of the declarant; the location of residences owned or leased by the declarant; where the declarant spends time; the declarant's place of employment and business connections; the location of items of significant value (either monetary or sentimental) to declarant; where the declarant's family lives; place of voter registration; place of issuance of automobile registration and driver's license; previous permanent residency of the declarant; and address listed on federal and State income tax returns filed by the declarant. (Added 1997, No. 60, § 45, eff. Jan. 1, 1998; amended 1997, No. 71 (Adj. Sess.), §§ 7, 7a, eff. Jan. 1, 1998; 1997, No. 71 (Adj. Sess.), § 58, eff. June 26, 1997; 1997, No. 156 (Adj. Sess.), § 34, eff. April 29, 1998; 1999, No. 49, §§ 7, 18, eff. June 2, 1999; 2001, No. 53, § 1, eff. June 12, 2001; 2001, No. 144 (Adj. Sess.), § 3, eff. June 21, 2002; 2003, No. 66, § 289b; 2003, No. 68, § 3; 2003, No. 68, § 28, eff. June 18, 2003; 2003, No. 76 (Adj. Sess.), §§ 13, 14, eff. Feb. 17, 2004; 2005, No. 38, §§ 16, 24; 2005, No. 94 (Adj. Sess.), § 8, eff. March 8, 2006; 2005, No. 182 (Adj. Sess.), § 10; 2007, No. 66, §§ 11, 25, eff. July 1, 2007; 2007, No. 82, § 21, eff. July 1, 2007; 2007, No. 92 (Adj. Sess.), § 24; 2009, No. 44, § 19, eff. May 21, 2009; 2011, No. 45, § 13c, eff. May 24, 2011; 2011, No. 127 (Adj. Sess.), § 3, eff. Jan. 1, 2013; 2011, No. 143 (Adj. Sess.), § 37, eff. May 15, 2012; 2013, No. 60, §§ 1, 2; 2013, No. 73, § 38, eff. June 5, 2013; 2013, No. 80, § 11.)

§ 5402. Education property tax liability

(a) A statewide education tax is imposed on all nonresidential and homestead property at the following rates:

(1) the tax rate for nonresidential property shall be $1.59 per $100.00; and

(2) the tax rate for homestead property shall be $1.10 multiplied by the district spending adjustment for the municipality, per $100.00, of equalized education property value as most recently determined under section 5405 of this title. The homestead property tax rate for each municipality which is a member of a union or unified union school district shall be calculated as required under subsection (e) of this section.

(b) Calculation of education tax

(1) The Commissioner of Taxes shall determine for each municipality the education tax rates under subsection (a) of this section, divided by the municipality's most recent common level of appraisal. The legislative body in each municipality shall then bill each property taxpayer at the homestead or nonresidential rate determined by the Commissioner under this subdivision, multiplied by the education property tax grand list value of the property, properly classified as homestead or nonresidential property and without regard to any other tax classification of the property. Tax bills shall show the tax due and the calculation of the rate determined under subsection (a) of this section, divided by the municipality's most recent common level of appraisal, multiplied by the current grand list value of the property to be taxed.

(2) Taxes assessed under this section shall be assessed and collected in the same manner as taxes assessed under chapter 133 of this title with no tax classification other than as homestead or nonresidential property.

(3) If a district has not voted a budget by June 30, an interim homestead education tax shall be imposed at the base rate determined under subdivision (a)(2) of this section, divided by the municipality's most recent common level of appraisal, but without regard to any district spending adjustment. Within 30 days after a budget is adopted and the deadline for reconsideration has passed, the Commissioner shall determine the municipality's homestead tax rate as required under subdivision (b)(1) of this subsection.

(c) The treasurer of each municipality shall by December 1 of the year in which the tax is levied and on June 1 of the following year pay to the State Treasurer for deposit in the education fund one half of the municipality's statewide nonresidential tax and one half of the municipality's homestead education tax, as determined under subdivision (b)(1) of this section. The Secretary of Education shall determine the municipality's net nonresidential education tax payment and its net homestead education tax payment to the state based on grand list information received by the Secretary no later than the March 15 prior to the June 1 net payment. Payment shall be accompanied by a return prescribed by the Secretary of Education. The municipality may retain 0.225 of one percent of the total education tax collected, only upon timely remittance of net payment to the State Treasurer. The municipality may also retain $15.00 for each late property tax adjustment claim filed after April 15 and before September 2, as notified by the Department, for the cost of issuing a new property tax bill.

(d) A municipality which has upon its grand list an operating electric generating plant subject to the tax under section 5402a of this chapter shall be subject to the nonresidential education property tax at three-quarters of the rate provided in subdivision (a)(1) of this section, as adjusted under section 5402b of this chapter; and shall be subject to the homestead education property tax at three-quarters of the base rate provided in subdivision (a)(2) of this section, as adjusted under section 5402b of this chapter, and multiplied by its district spending adjustment.

(e) The Commissioner of Taxes shall determine a homestead education tax rate for each municipality which is a member of a union or unified union school district as follows:

(1) For a municipality which is a member of a unified union school district, use the base rate determined under subdivision (a)(2) of this section and a district spending adjustment based upon the education spending per equalized pupil of the unified union.

(2) For a municipality which is a member of a union school district:

(A) determine the municipal district homestead tax rate using the base rate determined under subdivision (a)(2) of this section and a district spending adjustment based on the education spending per total equalized pupil in the municipality who attends a school other than the union school;

(B) determine the union district homestead tax rate using the base rate determined under subdivision (a)(2) of this section and a district spending adjustment based on the education spending per equalized pupil of the union school district; and

(C) determine a combined homestead tax rate by calculating the weighted average of the rates determined under subdivisions (A) and (B) of this subdivision (2), with weighting based upon the ratio of union school equalized pupils from the member municipality to total equalized pupils of the member municipality; and the ratio of equalized pupils attending a school other than the union school to total equalized pupils of the member municipality. Total equalized pupils of the member municipality is based on the number of pupils who are legal residents of the municipality and attending school at public expense. If necessary, the Commissioner may adopt a rule to clarify and facilitate implementation of this subsection. (Added 1997, No. 60, § 45, eff. Jan. 1, 1998; amended 1997, No. 71 (Adj. Sess.), § 8, eff. Jan. 1, 1998; 1997, No. 71 (Adj. Sess.), § 53; 1997, No. 71 (Adj. Sess.), § 73, eff. January 1, 1999; 1999, No. 1, § 60e, eff. March 31, 1999; 1999, No. 49, § 30, eff. June 2, 1999; 2001, No. 63, § 276, eff. June 16, 2001; 2001, No. 144 (Adj. Sess.), § 21, eff. June 21, 2002; 2003, No. 68, § 76, eff. June 18, 2003; 2003, No. 68, § 4, eff. for fiscal years 2005 and after; 2003, No. 76 (Adj. Sess.), § 6; 2003, No. 80 (Adj. Sess.), §§ 49a, 49c, eff. March 8, 2004; 2003, No. 130 (Adj. Sess.), § 13; 2005, No. 182 (Adj. Sess.), §§ 11, 12; 2007, No. 33, § 11, eff. May 18, 2007; 2007, No. 65, § 289; 2007, No. 82, § 12; 2007, No. 190 (Adj. Sess.), §§ 10, 11; 2009, No. 1 (Sp. Sess.), § H.23, eff. June 2, 2009.)

§ 5402a. Repealed. 2011, No. 143 (Adj. Sess.), § 57.

§ 5402b. Statewide education tax rate adjustments

(a) Annually, by December 1, the Commissioner of Taxes shall recommend to the General Assembly, after consultation with the Agency of Education, the Secretary of Administration and the Joint Fiscal Office, the following adjustments in the statewide education tax rates under subdivisions 5402(a)(1) and (2) of this title:

(1) If there is a projected balance in the Education Fund Budget Stabilization Reserve in excess of the five percent level authorized under 16 V.S.A. § 4026, the Commissioner shall recommend a reduction, for the following fiscal year only, in the statewide education tax rates which will retain the projected Education Fund Budget Stabilization Reserve at the five percent maximum level authorized and raise at least 34 percent of projected education spending from the tax on nonresidential property; and

(2) If there is a projected balance in the Education Fund Budget Stabilization Reserve of less than the three and one-half percent level required under 16 V.S.A. § 4026, the Commissioner shall recommend an increase, for the following fiscal year only, in the statewide education tax rates which will retain the projected Education Fund Budget Stabilization Reserve at no less than the three and one-half percent minimum level authorized under 16 V.S.A. § 4026, and raise at least 34 percent of projected education spending from the tax rate on nonresidential property.

(3) In any year following a year in which the nonresidential rate produced an amount of revenues insufficient to support 34 percent of education fund spending in the previous fiscal year, theCommissioner shall determine and recommend an adjustment in the nonresidential rate sufficient to raise at least 34 percent of projected education spending from the tax rate on nonresidential property.

(4) If in any year in which the nonresidential rate is less than the statewide average homestead rate, the Commissioner of Taxes shall determine the factors contributing to the deviation in the proportionality of the nonresidential and homestead rates and make a recommendation for adjusting statewide education tax rates accordingly.

(b) If the Commissioner makes a recommendation to the General Assembly to adjust the education tax rates under section 5402 of this title, the Commissioner shall also recommend a proportional adjustment to the applicable percentage base for homestead income based adjustments under section 6066 of this title, but the applicable percentage base shall not be adjusted below 1.8 percent.

(c) Repealed.]  (Added 2003, No. 68, § 5, eff. June 18, 2003; amended 2005, No. 185 (Adj. Sess.), § 10; 2009, No. 160 (Adj. Sess.), §§ 50, 51, eff. June 4, 2010.)

§ 5402c. Wind-powered electric generating facilities tax

(a) A facility certified by the Commissioner of Public Service as a facility which produces electrical energy for resale, generated solely from wind power, which has an installed capacity of at least one megawatt, which was placed in service after January 1, 2007, and which holds a valid certificate of public good issued under 30 V.S.A. § 248, shall be assessed an alternative education property tax on its buildings and fixtures used directly and exclusively in the generation of electrical energy from wind power.

(b) The tax shall be imposed at a rate per kWh of electrical energy produced by the certified facility, as determined by the Public Service Department for the six months ending April 30 and the six months ending October 31 each year. The rate of the tax shall be $0.003.

(c) In no case shall the tax imposed for any six-month period be less than an amount equal to the rate per kWh imposed by this subsection multiplied by the number of kWh that would be generated if the facility operated at 15 percent of the facility's average capacity factor.

(d) The tax imposed by this section shall be paid to the Commissioner of Taxes by the person or entity then owning or operating the certified facility by December 1 for the period ending October 31 and by June 1 for the period ending April 30 for deposit into the education fund. A person or entity failing to make returns or pay the tax imposed by this section within the time required shall be subject to and governed by the provisions of sections 3202 and 3203 and subchapters 8 and 9 of chapter 151 of this title.

(e) Unless buildings and fixtures are taxed under this section, they shall remain subject to taxation under section 5402 of this title. Buildings and fixtures subject to the education property tax under this section shall not be taken into account in determining the common level of appraisal for the municipality. (Added 2007, No. 92 (Adj. Sess.), § 25; amended 2011, No. 127 (Adj. Sess.), § 5, eff. Jan. 1, 2013.)

§ 5403. Repealed. 1999, No. 1, § 60g(a), eff. Mar. 31, 1999.

§ 5404. Determination of education property tax grand list

(a) Municipalities shall determine the education property tax grand list by calculating one percent of the listed value of nonresidential and homestead real property as provided in this section. The listed value of all nonresidential and homestead real property in a municipality shall be its fair market value, its value established under a stabilization agreement described in section 5404a of this title, or the use value of property enrolled in a use value program under chapter 124 of this title. If a homestead is located on a parcel of greater than two acres, the entire parcel shall be appraised at fair market value; the housesite shall then be appraised as if it were situated on a separate parcel and the value of the housesite shall be subtracted from the value of the total parcel to determine the value of the remainder of the parcel.

(b) Annually, on or before August 15, the clerk of a municipality, or the supervisor of an unorganized town or gore, shall transmit to the Director in an electronic or other format as prescribed by the Director: education and municipal grand list data, including exemption information and grand list abstracts; tax rates; and the total amount of taxes assessed in the town or unorganized town or gore. The data transmitted shall identify each parcel by a parcel identification number assigned under a numbering system prescribed by the director. Municipalities may continue to use existing numbering systems in addition to, but not in substitution for, the parcel identification system prescribed by the Director. If changes or additions to the grand list are made by the listers or other officials authorized to do so after such abstract has been so transmitted, such clerks shall forthwith certify the same to the director.

(c) If a town clerk or the legislative body fails without good cause, as determined by the Commissioner, to transmit the grand list data or the tax data in a timely manner and in the format required by the Director, the Commissioner shall notify the Secretary of Transportation and the Secretary of Education, who shall withhold all general and other aid payments owing to the municipality until the grand list information is filed as required by the Director under subsection (b) of this section. Federal funds are exempt from withholding if either the Secretary or Commissioner has an opinion of counsel that withholding would be a violation of federal law.

(d) Municipalities shall include, on all property tax bills, the parcel identification number prescribed in subsection (b) of this section. (Added 1997, No. 60, § 45, eff. Jan. 1, 1998; amended 2003, No. 68, § 29, eff. June 18, 2003; 2009, No. 160 (Adj. Sess.), § 5, eff. June 4, 2010.)

§ 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 this title 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 this title 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 10 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 10 years, subject to the provisions of subsection 5930b(f) of this title. 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 24 V.S.A. § 2741.

(3) A tax stabilization agreement relating to commercial or industrial property entered into after July 1, 1997 by a municipality under 24 V.S.A. § 2741, 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 24 V.S.A. § 2741, 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 10 V.S.A. § 6306, a transfer of the development rights to real property under 10 V.S.A. chapter 155 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) Repealed.]

(f) A municipality that establishes a tax increment financing district under 24 V.S.A. chapter 53, subchapter 5 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 financing of the improvements and related costs for up to 20 years pursuant to 24 V.S.A. § 1894, if approved by the Vermont Economic Progress Council pursuant to this section.

(g) Any use of education property tax increment approved under subsection (f) of this section shall be in addition to any other payments to the municipality under 16 V.S.A. chapter 133 and shall remain available to the municipality for the full period authorized under 24 V.S.A. § 1894 and shall be 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 or by the enforcement provided by subsection (j) of this section.

(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:

(1) Review each application to determine that the new real property development would not have occurred or would have occurred in a significantly different and less desirable manner but for the proposed utilization of the incremental tax revenues. The review shall take into account:

(A) The amount of additional time, if any, needed to complete the proposed development within the tax increment district and the amount of additional cost that might be incurred if the project were to proceed without education property tax increment financing.

(B) How the proposed development components and size would differ, if at all, without education property tax increment financing.

(C) The amount of additional revenue expected to be generated as a result of the proposed development; the percentage of that revenue that shall be paid to the education fund; the percentage that shall be paid to the municipality; and the percentage of the revenue paid to the municipality that shall be used to pay financing incurred for development of the tax increment financing district.

(2) Process requirements. Determine that each application meets all of the following four requirements:

(A) The municipality held public hearings and established a tax increment financing district in accordance with 24 V.S.A. §§ 1891-1900.

(B) The municipality has developed a tax increment financing district plan, including: a project description; a development financing plan; a pro forma projection of expected costs; a projection of revenues; a statement and demonstration that the project would not proceed without the allocation of a tax increment; evidence that the municipality is actively seeking or has obtained other sources of funding and investment; and a development schedule that includes a list, a cost estimate, and a schedule for public improvements and projected private development to occur as a result of the improvements.

(C) The municipality has approved or pledged the utilization of incremental municipal tax revenues for purposes of the district in the same proportion as the utilization of education property tax revenues approved by the Vermont Economic Progress Council for the tax increment financing district.

(D) The proposed infrastructure improvements and the projected development or redevelopment are compatible with approved municipal and regional development plans, and the project has clear local and regional significance for employment, housing, and transportation improvements.

(3) Location criteria. Determine that each application meets one of the following criteria:

(A) The development or redevelopment is compact, high density, and located in or near existing industrial areas.

(B) The proposed district is within an approved growth center, designated downtown, designated village center, or new town center.

(C) The development will occur in an area that is economically distressed, which for the purposes of this subdivision means that the area has experienced patterns of increasing unemployment, a drop in average wages, or a decline in real property values.

(D) Repealed.]

(4) Project criteria. Determine that the proposed development within a tax increment financing district will accomplish at least three of the following five criteria:

(A) The development within the tax increment financing district clearly requires substantial public investment over and above the normal municipal operating or bonded debt expenditures.

(B) The development includes new housing that is affordable to the majority of the residents living within the municipality and is developed at a higher density than at the time of application. "Affordable" has the same meaning as in 10 V.S.A. § 6001(29).

(C) The project will affect the remediation and redevelopment of a brownfield located within the district. For the purposes of this section, "brownfield" means an area in which a hazardous substance, pollutant, or contaminant is or may be present, and that situation is likely to complicate the expansion, development, redevelopment, or reuse of the property.

(D) The development will include at least one entirely new business or business operation or expansion of an existing business within the district, and this business will provide new, quality, full-time jobs that meet or exceed the prevailing wage for the region as reported by the department of labor.

(E) The development will enhance transportation by creating improved traffic patterns and flow or creating or improving public transportation systems.

(i) The Vermont Economic Progress Council and the Department of Taxes shall make an annual report to the Senate Committees on Economic Development, Housing and General Affairs and on Finance and the House Committees on Commerce and Economic Development and on Ways and Means of the General Assembly on or before April 1. The report shall include, in regard to each existing tax increment financing district, the date of creation, a profile of the district, a map of the district, the original taxable value, the scope and value of projected and actual improvements and developments, projected and actual incremental revenue amounts and division of the increment revenue between district debt, the Education Fund, the special account required by 24 V.S.A. § 1896 and the municipal general fund, projected and actual financing, and a set of performance indicators developed by the Vermont Economic Progress Council, which shall include the number of jobs created in the district, what sectors experienced job growth, and the amount of infrastructure work performed by Vermont firms.

(j) Tax increment financing district rulemaking, oversight, and enforcement.

(1) Authority to adopt rules. The Vermont Economic Progress Council is hereby granted authority to adopt rules in accordance with 3 V.S.A. chapter 25 for the purpose of providing clarification and detail for administering the provisions of 24 V.S.A. chapter 53, subchapter 5 and the tax increment financing district provisions of this section. A single rule shall be adopted for all tax increment financing districts that will provide further clarification for statutory construction and include a process whereby a municipality may distribute excess increment to the Education Fund as allowed under 24 V.S.A. § 1900. From the date the rules are adopted, the municipalities with districts in existence prior to 2006 are required to abide by the governing rule and any other provisions of the law in force; provided, however, that the rule shall indicate which specific provisions are not applicable to those districts in existence prior to January 2006.

(2) Authority to issue decisions.

(A) The Secretary of Commerce and Community Development, after reasonable notice to a municipality and an opportunity for a hearing, is authorized to issue decisions to a municipality regarding questions and inquiries about the administration of tax increment financing districts, statutes, rules, noncompliance with 24 V.S.A. chapter 53, subchapter 5, and any instances of noncompliance identified in audit reports conducted pursuant to subsection ( l ) of this section.

(B) The Vermont Economic Progress Council shall prepare recommendations for the Secretary prior to the issuance of a decision. As appropriate, the Council may prepare such recommendations in consultation with the Commissioner of Taxes, the Attorney General, and the State Treasurer. In preparing recommendations, the Council shall provide a municipality with a reasonable opportunity to submit written information in support of its position. The Secretary shall review the recommendations of the Council and issue a final decision on each matter within 60 days of the recommendation. However, pursuant to subdivision (5) of this subsection (j), the Secretary may permit an appeal to be taken by any party to a Superior Court for determination of questions of law in the same manner as the Supreme Court may by rule provide for appeals before final judgment from a Superior Court before issuing a final decision.

(3) Remedy for noncompliance. If the Secretary issues a decision under subdivision (2) of this subsection that includes a finding of noncompliance and that noncompliance has resulted in the improper reduction in the amount due the Education Fund, the Secretary, unless and until he or she is satisfied that there is no longer any such failure to comply, shall request that the State Treasurer bill the municipality for the total identified underpayment. The amount of the underpayment shall be due from the municipality upon receipt of the bill. If the municipality does not pay the underpayment amount within 60 days, the amount may be withheld from any funds otherwise payable by the State to the municipality or a school district in the municipality or of which the municipality is a member.

(4) Referral; Attorney General. In lieu of or in addition to any action authorized in subdivision (3) of this subsection, the Secretary of Commerce and Community Development or the State Treasurer may refer the matter to the Office of the Attorney General with a recommendation that an appropriate civil action be initiated.

(5) Appeal; hearing officer. A hearing that is held pursuant to this subsection shall be subject to the provisions of 3 V.S.A. chapter 25 relating to contested cases. The hearing shall be conducted by the Secretary or by a hearing officer appointed by the Secretary. If a hearing is conducted by a hearing officer, the hearing officer shall have all authority to conduct the hearing that is provided for in the applicable contested case provisions of 3 V.S.A. chapter 25, including issuing findings of fact, hearing evidence, and compelling, by subpoena, the attendance and testimony of witnesses.

(k) The Vermont Economic Progress Council may require a third-party financial and technical analysis as part of the application of a municipality applying for approval of a tax increment financing district pursuant to this section. The applicant municipality shall pay a fee to cover the actual cost of the analysis to be deposited in a special fund which shall be managed pursuant to subchapter 5 of chapter 7 of this title and be available to the Council to pay the actual cost of the analysis.

( l ) The State Auditor of Accounts shall conduct performance audits of all tax increment financing districts according to a schedule, which will be arrived at in consultation with the Vermont Economic Progress Council. The cost of conducting each audit shall be considered a "related cost" as defined in 24 V.S.A. § 1891(6) and shall be billed back to the municipality. Audits conducted pursuant to this subsection shall include a review of a municipality's adherence to relevant statutes and rules adopted by the Vermont Economic Progress Council pursuant to subsection (j) of this section, an assessment of record keeping related to revenues and expenditures, and a validation of the portion of the tax increment retained by the municipality and used for debt repayment and the portion directed to the Education Fund.

(1) For municipalities with a district created prior to January 1, 2006 and a debt repayment schedule that anticipates retention of education increment beyond fiscal year 2016, an audit shall be conducted when approximately three-quarters of the period for retention of education increment has elapsed, and at the end of that same period, an audit shall be conducted for the final one-quarter period for retention of education increment.

(2) For municipalities with a district created after January 1, 2006 and approved by the Vermont Economic Progress Council, an audit shall be conducted at the end of the 10-year period in which debt can be incurred and again approximately halfway through the 20-year period for retention of education increment; provided, however, that an audit shall occur no more than one time in a five-year period. A final audit will be conducted at the end of the period for retention of education increment. (Added 1997, No. 60, § 45, eff. Jan. 1, 1998; amended 1997, No. 71 (Adj. Sess.), § 47, eff. March 11, 1998; 2003, No. 76 (Adj. Sess.), § 7, eff. Jan. 1, 2004; 2003, No. 163 (Adj. Sess.), § 33, eff. Jan. 1, 2004; 2005, No. 184 (Adj. Sess.), § 2h; 2007, No. 81, §§ 12, 13, eff. June 11, 2007; 2007, No. 190 (Adj. Sess.), §§ 61, 63, 64; 2009, No. 47, § 6, eff. May 28, 2009; 2011, No. 45, § 15a, eff. May 24, 2011; 2013, No. 80, §§ 12-16, eff. June 7, 2013.)

§ 5404b. Hydro-electric property; conservation easements; transfers

Notwithstanding any other provision of law, including the provisions of subdivisions 3481(1) and 3802(1) of this title:

(1) any real property subject to conservation easements granted pursuant to the terms of any agreement executed on or after January 1, 1997 between companies owning real property used for hydro-electric generation in this state and the state of Vermont shall continue to be assessed and property taxes collected as if such property were not subject to such easements;

(2) any real property purchased by the state pursuant to the terms of any agreement executed on or after January 1, 1997 between companies owning real property used for hydro-electric generation in this state and the state of Vermont, which property continues to be owned by the state, or by some successor owner which would otherwise be exempt from property taxes, shall continue to be assessed and property taxes collected as if such property were not so purchased by the state; and

(3) any real property and fixtures used for hydro-electric generation and purchased by the town of Rockingham on or after January 1, 2002, which property and fixtures continue to be owned by the town of Rockingham and used for purposes of hydro-electric generation, shall continue to be listed on the education property tax grand list and assessed as if such property were not so purchased by the town of Rockingham. The town shall, in lieu of property taxes, pay to any governmental body authorized to levy property taxes the amount which would be assessable as property taxes on the real and tangible personal property if that property were the property of a utility. These payments shall be due, and bear interest if unpaid, as in the case of taxes on the property of a utility. For purposes of these payments in lieu of taxes, the assessors of the taxing authority shall make a valuation and assessment of the property, and determine the tax that would be assessable if the property were owned by a utility. Payments in lieu of taxes made under this chapter shall be treated in the same manner as taxes for the purposes of all procedural and substantive provisions of law, including appeals, now and hereinafter in effect applicable to assessment and taxation of real and personal property, collection and abatement of these taxes, and the raising of public revenues. (Added 1997, No. 60, § 45, eff. Jan. 1, 1998; amended 2003, No. 121 (Adj. Sess.), § 100, eff. June 8, 2004.)

§ 5405. Determination of equalized education property tax grand list and coefficient of dispersion

(a) Annually, on or before April 1, the Commissioner shall determine the equalized education property tax grand list and coefficient of dispersion for each municipality in the State; provided, however, that for purposes of equalizing grand lists pursuant to this section, the equalized education property tax grand list of a municipality that establishes a tax increment financing district shall include the fair market value of the property in the district and not the original taxable value of the property and further provided that the unified towns and gores of Essex County may be treated as one municipality for the purpose of determining an equalized education property grand list and a coefficient of dispersion if the Director determines that all such entities have a uniform appraisal schedule and uniform appraisal practices.

(b) The sum of all municipal equalized education property tax grand lists shall be the equalized education property tax grand list for the State.

(c) In determining the fair market value of property which is required to be listed at fair market value, the Commissioner shall take into consideration those factors required by section 3481 of this title. The Commissioner shall value property as of April 1 preceding the determination, and shall take account of all homestead declaration information available before October 1 each year.

(d) Any determination of fair market value made by the Commissioner under this section shall be based upon such methods, as in the judgment of the Commissioner, and in view of the resources available for that purpose, shall be appropriate to support that determination. If the common level of appraisal is calculated using the weighted mean of ratios, any outlier shall be carefully reviewed and deleted if it will significantly affect the weighted mean, particularly if the outlier is a high-value property.

(e) Individual appraisals performed by the Division of Property Valuation and Review may be used to supplement actual sales when necessary to obtain a representative sample.

(f) Within the limits of the resources available for that purpose, the Commissioner may employ such individuals, whether on a permanent, temporary, or contractual basis, as shall be necessary, in the judgment of the Commissioner, to aid in the performance of duties under this section. The Commissioner shall pay each municipality the sum of $1.00 per grand list parcel in the municipality, for services provided to the Commissioner in connection with his or her duties under this section. Such payment shall be made from the equalization and reappraisal account within the Education Fund.

(g) Repealed.]  (Added 1997, No. 60, § 45, eff. Jan. 1, 1998; amended 1999, No. 49, §§ 19, 49, eff. June 2, 1999; 2003, No. 68, §§ 41, 85, eff. June 18, 2003; 2003 No. 68, § 85, eff. for fiscal year 2005; 2003, No. 76 (Adj. Sess.), § 1, eff. Feb. 17, 2004; 2003, No. 76 (Adj. Sess.), § 28, eff. Jan. 1, 2004; 2009, No. 160 (Adj. Sess.), § 14, eff. June 4, 2010; 2013, No. 73, § 39, eff. June 5, 2013.)

§ 5406. Notice of fair market value and coefficient of dispersion

(a) Not later than January 1 of each year, the director of the division of property valuation and review shall notify the town clerk and chair of the board of listers of each municipality of the equalized education property value and the coefficient of dispersion of that town for the prior year, and of the manner by which the equalized education property value and coefficient of dispersion were determined by the director.

(b) Not later than April 1 of each year, the director shall certify to the commissioner of education the equalized education property value and coefficient of dispersion for the prior year of every municipality of the state.

(c) If the director of property valuation and review certifies that a municipality has completed a townwide reappraisal, the common level of appraisal for that municipality shall be equal to its new grand list value divided by its most recent equalized grand list value, for purposes of determining education property tax rates. (Added 1997, No. 60, § 45, eff. Jan. 1, 1998; amended 1997, No. 71 (Adj. Sess.), § 10, eff. Jan. 1, 1998; 2003, No. 76 (Adj. Sess.), § 9, eff. Feb. 17, 2004; 2005, No. 75, § 12.)

§ 5407. Valuation appeal board

(a) There is established a valuation appeal board to consist of five members. The members shall be appointed by the governor with the advice and consent of the senate, for three-year terms beginning February 1 of the year in which the appointment is made, except that one of the initial appointments shall be for a term of one year and two of the initial appointments shall be for a term of two years. A vacancy in the board shall be filled in the same manner as the original appointment for the unexpired portion of the term vacated.

(b) Persons serving on the appeal board shall be knowledgeable and experienced in at least one of the following fields: agriculture, business management, law, taxation, appraisal and valuation techniques, municipal affairs, or related areas. No member of the valuation appeal board shall be otherwise employed by the state or be a lister. In making appointments, attention shall be given to the desirability of providing geographical balance to the degree reasonably practical.

(c) A chair shall be designated biennially by the governor from among the members of the board and any vacancy in the office of the chair shall be filled by designation of the governor.

(d) Members of the valuation appeal board shall receive a sum not to exceed $80.00 per diem for each day of official duties of the board together with reimbursement of reasonable expenses incurred in the performance of their duties, as determined by the director of property valuation and review.

(e) The board shall be attached for administrative purposes to the division of property valuation and review of the department of taxes of the agency of administration. (Added 1997, No. 60, § 45, eff. Jan. 1, 1998; amended 1999, No. 49, § 50.)

§ 5408. Petition for redetermination

(a) Not later than 30 days after the receipt by its clerk of a notice under section 5406 of this title, a municipality may petition the director of the division of property valuation and review for a redetermination of the municipality's equalized education property value and coefficient of dispersion. Such petition shall be in writing and shall be signed by the chair of the legislative body of the municipality or its designee.

(b) Upon receipt of a petition for redetermination under subsection (a) of this section, the director shall, after written notice, grant a hearing upon the petition to the aggrieved town. The director shall thereafter notify the town and the commissioner of education of his or her redetermination of the equalized education property value and coefficient of dispersion of the town or district, in the manner provided for notices of original determinations under section 5406 of this title.

(c) A municipality, within 30 days of the director's redetermination, may appeal the redetermination to the valuation appeal board. The board shall notify the appellee of the filing of the appeal. The appeal shall be heard de novo in the manner provided by chapter 25 of Title 3 for the hearing of contested cases.

(d) A municipality or the division of property valuation and review may appeal from a decision of the valuation appeal board to the superior court of the county in which the municipality is located. The superior court shall hear the matter de novo in the manner provided by Rule 74 of the Vermont Rules of Civil Procedure. An appeal from the decision of the superior court shall be to the supreme court under the Vermont Rules of Appellate Procedure. (Added 1997, No. 60, § 45, eff. Jan. 1, 1998; amended 1999, No. 49, § 52, eff. June 2, 1999.)

§ 5409. Duties of municipalities and administration

The following shall apply with regard to the statewide education tax imposed under this chapter:

(1) Late payments of the tax by a municipality to the state shall be assessed interest at a per diem rate of eight percent per annum of the amount due. If a payment is more than 90 days overdue, any state funds due the municipality shall be withheld.

(2) If by August 1 a municipality has failed to issue notices of assessment of the statewide education tax; or if the municipality fails for more than 90 days after the due date for any installment payment to enforce the tax in the municipality; then the commissioner of taxes shall either issue notices of assessment or collect the tax or both, or bring appropriate court action to require the municipal officials to issue notices and collect the tax, as the commissioner deems necessary.

(3) In any case of administration under subdivision (2) of this section by the commissioner of taxes of education property tax:

(A) Sections 5868, 5869, 5873, 5875, 5881-5887, and 5891-5895 of this title, as amended, shall apply in the same manner as to income tax.

(B) Persons aggrieved by decisions of the listers may appeal in the manner provided for property tax appeals in chapter 131 of this title; and the commissioner of taxes shall have all the powers described in chapter 133 of this title.

(C) The commissioner may abate in whole or in part the statewide education taxes of a taxpayer who has been granted an abatement of municipal taxes under section 1535 of Title 24.

(4) [Deleted.]

(5) In case of insufficient property tax payment by a taxpayer to a municipality, payments shall be allocated first to municipal property tax, and next to statewide education tax. In case of insufficient payment by a taxpayer to the department of taxes, payments shall be allocated first to liabilities other than education taxes, and next to education tax.

(6) In case of overpayment by a taxpayer who has an income tax liability under chapter 151 of this title and a homestead property tax liability, a refund of the overpayment, after accounting for any benefit amount allowed under chapter 154 of this title, shall be deemed to be a refund of income tax for purposes of debt setoff under subchapter 12 of chapter 151 of this title.

(7) Notwithstanding section 435 of this title, the commissioner shall deposit the revenue from taxes imposed under this chapter in the education fund.

(8) A municipality's liability to the state for education taxes shall not be reduced by any early payment property tax discount or similar discount offered by the municipality. (Added 1997, No. 60, § 45, eff. Jan. 1, 1998; amended 1997, No. 71 (Adj. Sess.), § 11, eff. Jan. 1, 1998; 1997, No. 71 (Adj. Sess.), § 75, eff. January 1, 1999; 1997, No. 156 (Adj. Sess.), § 50, eff. April 29, 1998; 2003, No. 68, § 21, eff. June 18, 2003.)

§ 5410. Declaration of homestead

(a) A homestead owner shall declare ownership of a homestead for purposes of education property tax.

(b) Annually on or before the due date for filing the Vermont income tax return, without extension, each homestead owner shall, on a form prescribed by the Commissioner, which shall be verified under the pains and penalties of perjury, declare his or her homestead, if any, as of, or expected to be as of, April 1 of the year in which the declaration is made.

Subsection (c) shall apply to declarations filed in 2010 and after.

(c) In the event that an unsigned but otherwise completed homestead declaration is filed with the declarant's signed State income tax return, the Commissioner may treat such declaration as signed by the declarant.

(d) The Commissioner shall provide a list of homesteads in each town to the town listers by May 15. The listers shall notify the Commissioner by June 1 of any residences on the Commissioner's list which do not qualify as homesteads. The listers shall separately identify homesteads in the grand list.

(e) The Commissioner shall adopt rules governing the eligibility requirements for declaring a homestead.

(f) [Repealed.]

(g) If the property identified in a declaration under subsection (b) of this section is not the taxpayer's homestead, or if the owner of a homestead fails to declare a homestead as required under this section, the Commissioner shall notify the municipality, and the municipality shall issue a corrected tax bill that may include a penalty. If the property incorrectly declared as a homestead is located in a municipality that has a lower homestead tax rate than the nonresidential tax rate, the penalty shall be an amount equal to eight percent of the education tax on the property, but if the homestead tax rate is higher than the nonresidential tax rate, the penalty shall be in an amount equal to three percent of the education tax on the property. If an undeclared homestead is located in a municipality that has a lower nonresidential tax rate than the homestead tax rate, the penalty shall be eight percent of the education tax liability on the property, but if the nonresidential tax rate is higher than the homestead tax rate, then the penalty shall be in an amount equal to three percent of the education tax on the property. If the Commissioner determines that the declaration or failure to declare was with fraudulent intent, then the municipality shall assess the taxpayer a penalty in an amount equal to 100 percent of the education tax on the property; plus any interest and late-payment fee or commission which may be due. Any penalty imposed under this section and any additional property tax interest and late-payment fee or commission shall be assessed and collected by the municipality in the same manner as a property tax under chapter 133 of this title.

(h) The filing of a new or corrected declaration or rescission of an erroneous declaration, on or before September 1 of the property tax year, that is not reflected in the first education fund payment under 16 V.S.A. § 4028 for that fiscal year or in a municipality's first payment to the education fund under subsection 5402(c) of this title for that fiscal year, shall be reflected in the final net payment to or from the education fund for that fiscal year. The municipality may retain 0.225 of one percent of the tax collected. Any reduction in tax paid to a municipality due to a new, revised, or rescinded declaration shall be paid by the municipality to the taxpayer no later than May 15 of the fiscal year. No later than June 1, each municipality shall provide to the State Treasurer a list of taxpayers who filed late or corrected declarations or rescinded declarations, the amount of the change in education tax, and the amount of any interest and penalty billed the taxpayer.

(i) An owner filing a new or corrected declaration, or rescinding an erroneous declaration, after September 1 shall not be entitled to a refund resulting from the correct property classification; and any additional property tax and interest which would result from the correct classification shall not be assessed as tax and interest, but shall instead constitute an additional penalty, to be assessed and collected in the same manner as penalties under subsection (g) of this section. Any change in property classification under this subsection shall not be entered on the grand list.

(j) A taxpayer may appeal a determination of domicile for purposes of a homestead declaration or an assessment of fraud penalty under this section to the Commissioner, in the same manner as an appeal under chapter 151 of this title. A taxpayer may appeal an assessment of any other penalty under this section to the listers within 14 days after the date of mailing of notice of the penalty, and from the listers to the board of civil authority and thereafter to the courts, in the same manner as an appraisal appeal under chapter 131 of this title. The legislative body of a municipality shall have authority in cases of hardship to abate all or any portion of a penalty appealable to the listers under this section and any tax, penalty, and interest arising out of a corrected property classification under this section; and shall state in detail in writing the reasons for its grant or denial of the requested abatement. The legislative body may delegate this abatement authority to the board of civil authority or the board of abatement for the municipality. Requests for abatement shall be made to the municipal treasurer or other person designated to collect current taxes, and that person shall forward all requests, with his or her recommendation, to the body authorized to grant or deny abatement.

(k) A municipality may retain any penalties and interest assessed and collected in accord with this section.

(l) "Hardship" under this section means an owner's inability to pay as certified by the Commissioner of taxes in his or her discretion; or means an owner's filing an incorrect, or failing to file a correct, homestead declaration due to one or more of the following:

(1) Full-time active military duty of the declarant outside the state.

(2) Serious illness or disability of the declarant.

(3) Serious illness, disability, or death of an immediate family member of the declarant.

(4) Fire, flood, or other disaster. (Added 1997, No. 60, § 45, eff. Jan. 1, 1999; amended 1997, No. 71 (Adj. Sess.), §§ 12, 13, 14, eff. Jan. 1, 1998; 1997, No. 71 (Adj. Sess.), § 76, eff. January 1, 1999; 1999, No. 1, § 60g(b); 1999, No. 49, §§ 31, 53, eff. June 2, 1999; 2003, No. 68, § 6, eff. July 1, 2004; 2003, No. 76 (Adj. Sess.), §§ 2, 20, eff. Feb. 17, 2004; 2003, No. 107 (Adj. Sess.), § 18a; 2005, No. 38, § 6, eff. Jan. 1, 2006; 2005, No. 38, § 17; 2005, No. 185 (Adj. Sess.), § 6, eff. Jan. 1, 2006; 2007, No. 190 (Adj. Sess.), § 12; 2009, No. 1 (Sp. Sess.), § H.24, eff. June 2, 2009; 2009, No. 160 (Adj. Sess.), § 47, eff. June 4, 2010; 2011, No. 45, § 11, eff. May 24, 2011; 2011, No. 143 (Adj. Sess.), § 25, eff. Jan. 1, 2013.)

§ 5411. Rules

The commissioner of taxes and the director of property valuation and review may each adopt formal or informal rules in order to carry out the provisions of this chapter. (Added 1997, No. 60, § 45, eff. Jan. 1, 1998.)

§ 5412. Reduction of listed value and recalculation of education tax liability

(a)(1) If a listed value is reduced as the result of an appeal or court action, and if the municipality files a written request with the commissioner within 30 days after the date of the determination, entry of the final order, or settlement agreement if the commissioner determines that the settlement value is the fair market value of the parcel, the commissioner shall recalculate the municipality's education property tax liability for the year at issue, in accord with the reduced valuation, provided that:

(A) the reduction in valuation is the result of an appeal under chapter 131 of this title to the director of property valuation and review or to a court, with no further appeal available with regard to that valuation, or any judicial decision with no further right of appeal, or a settlement of either an appeal or court action if the commissioner determines that the settlement value is the fair market value of the parcel;

(B) the municipality notified the commissioner of the appeal or court action, in writing, within ten days after notice of the appeal was filed under section 4461 of this title or after the complaint was served; and

(C) as a result of the valuation reduction of the parcel, the value of the municipality's grand list is reduced at least one percent.

(2) The municipality's request shall include a copy of the agreement, determination or final order, and any other documentation necessary to show the existence of these conditions.

(b) To the extent that the municipality has paid that liability, the commissioner shall allow a credit for any reduction in education tax liability against the next ensuing year's education tax liability or, at the request of the municipality, may refund to the municipality an amount equal to the reduction in education tax liability.

(c) If a listed value is increased as the result of an appeal under chapter 131 of this title or court action, whether adjudicated or settled and the commissioner determines that the settlement value is the fair market value of the parcel, with no further appeal available with regard to that valuation, the commissioner shall recalculate the municipality's education property tax for each year at issue, in accord with the increased valuation, and shall assess the municipality for the additional tax at the same time the commissioner assesses the municipality's education tax liability for the next ensuing year, unless the resulting assessment would be less than $300.00. Payment under this section shall be due with the municipality's education tax liability for the next ensuing year.

(d) Recalculation of education property tax under this section shall have no effect other than to reimburse or assess a municipality for education property tax changes which result from property revaluation. (Added 2001, No. 63, § 279, eff. June 16, 2001; amended 2007, No. 65, § 393, eff. June 4, 2007; 2007, No. 190 (Adj. Sess.), § 13, eff. June 6, 2008.)


Previous Chap. 133         Next Chap. 151
Up

All stored versions of this chapter

Title Chapter Description Begin End
32 135 EDUCATION PROPERTY TAX 2012-01-01 2013-06-30
32 135 EDUCATION PROPERTY TAX 2013-07-01 2099-12-31

Access Date: 2014-01-09
Version: 2013-07-01 - 2099-12-31