Bill Summary – FastDemocracy

BILL AS INTRODUCED                                                        H.541
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                                     H.541
 Introduced by Representatives Kornheiser of Brattleboro, Anthony of Barre
                City, Buss of Woodstock, Andrews of Westford, Arsenault of
                Williston, Brown of Richmond, Brownell of Pownal, Carpenter
                of Hyde Park, Casey of Montpelier, Chase of Chester, Christie
                of Hartford, Cole of Hartford, Dolan of Waitsfield, Farlice-
                Rubio of Barnet, Goldman of Rockingham, Graning of Jericho,
                Holcombe of Norwich, James of Manchester, Long of Newfane,
                McCann of Montpelier, Mihaly of Calais, Mrowicki of Putney,
                Noyes of Wolcott, Ode of Burlington, Patt of Worcester, Rice
                of Dorset, Roberts of Halifax, Satcowitz of Randolph, Stebbins
                of Burlington, Stone of Burlington, Waters Evans of Charlotte,
                White of Bethel, and Williams of Barre City
 Referred to Committee on
 Date:
 Subject: Taxation; statewide education property tax; abatements
 Statement of purpose of bill as introduced: This bill proposes to reimburse a
 municipality for certain State education property tax payments if the
 municipality granted State education property tax abatements to property
 owners for damage caused by flooding. This bill also proposes to exclude VT LEG #372078 v.1
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 federal disaster relief payments from household income when calculating the
 homestead property tax credit.
    An act relating to State education property taxes and flood-related damage
 It is hereby enacted by the General Assembly of the State of Vermont:
 Sec. 1. REIMBURSEMENT TO MUNICIPALITIES OF STATE
         EDUCATION PROPERTY TAXES THAT WERE ABATED DUE
         TO FLOODING
    (a)(1) The Commissioner of Taxes may approve an application by a
 municipality for reimbursement of State education property tax payments owed
 under 32 V.S.A. § 5402(c) and 16 V.S.A. § 426. To be eligible for
 reimbursement under this section, prior to April 15, 2024, a municipality must
 have abated, in proportion to the abated municipal tax, under 24 V.S.A. § 1535
 the State education property taxes that were assessed on eligible property, after
 application of any property tax credit allowed under 32 V.S.A. chapter 154.
       (2) As used in this subsection, “eligible property” means property lost or
 destroyed due directly or indirectly to severe storms and flooding in an area
 that was declared a federal disaster between July 1, 2023 and October 15,
 2023, provided the loss or destruction resulted in one or more of the following:
          (A) a 50 percent or greater loss in value to the primary structure on
 the property;
                                                                       VT LEG #372078 v.1
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          (B) loss of use by the property owner of the primary structure on the
 property for 60 days or more;
          (C) loss of access by the property owner to utilities for the primary
 structure on the property for 60 days or more; or
          (D) condemnation of the primary structure on the property under
 federal, State, or municipal law, as applicable.
    (b) If a municipality demonstrates that, due to disruption to tax collections
 resulting from flooding in an area that was declared a federal disaster between
 July 1, 2023 and October 15, 2023, the municipality incurred unanticipated
 interest expenses on funds borrowed to make State education property tax
 payments owed under 32 V.S.A. § 5402(c) and 16 V.S.A. § 426, the
 municipality may be reimbursed by an amount equal to its reasonable interest
 expenses under this subsection, provided the amount of reimbursed interest
 expenses shall not exceed eight percent.
    (c) The Commissioner shall adopt application and approval procedures for
 reimbursements made to municipalities under this section.
    (d) Notwithstanding any provision of law to the contrary, the Agency of
 Education has the authority to make the reimbursements approved by the
 Commissioner under this section by:
       (1) reducing the amount of State education property tax payments that a
 municipality owes under 32 V.S.A. § 5402(c) and 16 V.S.A. § 426; or VT LEG #372078 v.1
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       (2) reconciling the reimbursements with any State education property
 tax payments that a municipality has already made under 32 V.S.A. § 5402(c)
 and 16 V.S.A. § 426.
    (e) A board of abatement may reconsider any decision it has made between
 April 1, 2023 and the date of passage of this act. The General Assembly
 recognizes the public service provided by boards of abatement and encourages
 boards to create procedures to treat all claims for property tax abatements due
 to the severe storms and flooding uniformly.
 Sec. 2. HOMESTEAD PROPERTY TAX CREDIT; HOUSEHOLD INCOME
         DEFINITION; EXCLUSION OF DISASTER RELIEF PAYMENTS;
         TAXABLE YEARS 2023 AND 2024
    Notwithstanding 32 V.S.A. § 6061(4)(A) and (5), the definition of
 household income for purposes of the homestead property tax credit shall
 exclude all disaster relief payments, as determined under 26 U.S.C. § 139,
 received by a taxpayer in taxable years 2023 and 2024.
 Sec. 3. EFFECTIVE DATE
    This act shall take effect on passage.
                                                                      VT LEG #372078 v.1