ADDENDUM
TO THE
SENATE CALENDAR
OF
THURSDAY
APRIL 29, 1999
Favorable with Recommendation of Proposal of Amendment
H. 548
An act relating to equal educational opportunity omnibus act.
Reported favorably with recommendation of proposal of amendment by Senator Rivers for the Committee on Finance.
The Committee recommends that the Senate propose to the House to amend the bill by striking out after the enacting clause and inserting in lieu thereof the following:
* * * TITLE * * *
Sec. 1 TITLE
This act may be known as and shall be cited as the MISCELLANEOUS TAX REDUCTION ACT OF 1999, and the title of the act shall be amended accordingly.
* * * PART I. EDUCATION FUNDING PROVISIONS * * *
Sec. 2. SPECIAL EDUCATION FUNDING; LIMITS
(a) Implementation of the caps imposed in Sec. 120 of No. 71 of the Acts of 1998, relating to limits to state aid for special education, shall be delayed one year. The provisions of Sec. 120 of No. 71 of the Acts of 1998, relating to differential funding of special education costs, are repealed. Therefore, in fiscal year 2000, the general assembly shall appropriate funds to provide state aid for special education at the 60 percent level required under 16 V.S.A. chapter 101.
(b) The state board of education shall study ways to control special education costs while continuing to provide a free appropriate education to Vermont children and shall recommend to the general assembly by January 10, 2000, legislative action to implement this intent.
Sec. 3. 16 V.S.A. § 4010(f) is added to read:
(f) For purposes of the calculation under this section, a district’s equalized pupils shall in no case be less than ninety-six and one half percent of the district’s equalized pupils in the previous year.
Sec. 4. 16 V.S.A. § 4015(a) and (b) are amended to read:
§ 4015. SMALL SCHOOL SUPPORT
(a) In this section
(1) “Eligible school district” means a school district which operates at least one school and
(A) has a two-year average combined enrollment of fewer than 100 students in all the schools operated by the district, or
(B) has an average grade size of 20 or fewer.
(2) “Enrollment” means the number of students who are enrolled in a school operated by the district on October 1. A student shall be counted as one whether the student is enrolled as a full-time or part-time student.
(3) “Two-year average enrollment” means the average enrollment of the two most recently completed school years.
(4) “Average grade size” means two-year average enrollment divided by the number of grades taught in the district on October 1. For purposes of this calculation, kindergarten and pre-kindergarten programs shall be counted together as one grade.
(5) “AGS factor” means the following factors for each average grade size:
Average grade size
More than: - but less than or equal to: Factor:
070.19
790.175
9100.16
10110.145
11120.13
12130.115
13140.10
14150.085
15160.070
16170.055
17180.040
18190.025
19200.015
(b) Small schools support grant: Annually, the commissioner shall pay a small schools support grant to any eligible school district. The amount of the grant shall be the greater of
(1) the amount determined by multiplying the two-year average enrollment in the district by $500.00 and subtracting the product from $50,000.00, except that no grant shall exceedwith a maximum grant of $2,500.00 per enrolled student; or
(2) the amount of the general state support grant for the current year, multiplied by the two-year average enrollment, multiplied by the AGS factor.
Sec. 5. 32 V.S.A. § 3411 is amended to read:
§ 3411. POWERS OF THE PROPERTY VALUATION AND REVIEW DIVISION
The property valuation and review division shall through its director:
* * *
(9) annually publish athe report concerning the property appraisal practices within the state, including information required by Title 16 for the administration of state aid to educationdescribed in section 3412 of this title;
Sec. 6. 32 V.S.A. § 4301 is amended to read:
§4301. BASIS FOR COUNTY TAXES
(a) The director shall determine the aggregate fair market value of all taxable property in each town, unorganized town and gore in accordance with the procedure for such a determination with regard to property of school districts under section 3458a of Title 16, and such aggregate value, with the addition of the total amount of taxable polls in the town, unorganized town or gore, shall constitute the equalized grand list of the town, unorganized town or gore. The equalized municipal property tax grand lists for each town, unorganized town and gore shall be the basis of taxation for county purposes.
(b) Annually, on or before January 1, the director shall provide to each county treasurer the equalized municipal property tax grand list for each town, unorganized town, and gore within the county. “Equalized municipal property tax grand list” in this section shall mean the equalized education property tax grand list as defined in chapter 135 of this title plus inventory, machinery and equipment subject to municipal tax in that municipality at its grand list value.
Sec. 7. REPEALS
(a) 32 V.S.A. § 4302 (grand list for state taxes) is repealed.
(b) 32 V.S.A. § 4303 (grand list for county taxes) is repealed.
Sec. 8. 32 V.S.A. § 5401(7) is amended to read:
(7) "Homestead" means the principal dwelling owned and occupied by a resident individual, as defined in section 5811 of this title, in which the individual claims residence for purposes of income tax liability and rights and privileges of residency. A homestead also includes a dwelling owned by a farmer as defined under section 3752 of this title, and occupied as the permanent residence by a parent, sibling, child, grandchild or shareholder of the farmer-owner, provided that the shareholder owns more than 50 percent of a corporate farmer-owner, including attribution of stock ownership of a parent, sibling, child or grandchild. A homestead includes as much of the land surrounding the dwelling as is reasonably necessary for use of the dwelling as a home, but in no event more than two acres per dwelling unit, up to a maximum of 10 acres per parcel. 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, and a part of the land upon which it is built. A mobile home may constitute a principal dwelling for purposes of this chapter. A homestead does not include buildings or improvements detached from the home except for a building used as a garage for personal passenger vehicles and any sheds used for noncommercial purposes. A homestead does not include that portion of a principal dwelling used for business purposes if the portion used for business purposes includes either two or more rooms or more than 25 percent of the floor space of the building.
Sec. 9. 1999 DECLARATION OF HOMESTEAD
Notwithstanding section 5410(d) of Title 32, a declaration of homestead in 1999 shall not be due on the date for filing the income tax return, but shall be filed by October 15, 1999.
Sec. 10. 32 V.S.A. § 6061(4) is amended to read:
(4) “Household income” means modified adjusted gross income received in a calendar year by
(A) all persons of a household while members of that household; and
(B) the spouse of the claimant who is not a member of that household and who is not legally separated from the claimant , unless the spouse is at least 62 years of age and has moved to a nursing home or other care facility with no reasonable prospect of returning to the homestead.
Sec. 11. 32 V.S.A. § 6067 is amended to read:
§ 6067. CREDIT LIMITATIONS
(a) Only one individual per household per taxable year shall be entitled to a benefit under this chapter.
(b) No benefits shall be available to a taxpayer under this chapter whose household income is $75,000.00 or more.
Sec. 12. 32 V.S.A. § 6066(a) and (b) are amended to read:
(a) The property tax of an eligible claimant who owned the homestead on the last day of the taxable year shall be adjusted as follows:
(1) the claimant's statewide property tax liability shall be:
(A) For claimants with household income of $75,000.00 or more, the lesser of 2.0 percent of household income for the taxable year plus the statewide property tax on the value of the homestead in excess of $175,000.00; or the amount of statewide property tax assessed on the homestead; and
(B) For claimants with household income less than $75,000.00, the lesser of 2.0 percent of household income for the taxable year, or the amount of statewide education property tax the municipality would have assessed on the homestead if its equalized value had been reduced by $15,000.00;
(2) the claimant's local share property tax liability shall be the local share percentage rate established under section 4027 of Title 16 for the municipality in which the homestead is located, multiplied by the statewide property tax liability determined under subdivision (1) of this subsection; and
(3) a claimant whose household income does not exceed $47,000.00 shall also be entitled to a credit against the claimant's tax liability under chapter 151 of this title equal to the amount by which the property taxes upon the claimant's homestead, adjusted under subdivisions (1) and (2) of this subsection, exceeds a percentage of the claimant's household income for the taxable year as follows:
If household income (rounded to then the tax payer is entitled to
the nearest dollar) is: credit for property tax paid in excess
of this percent of that income:
$0 - 4,999.003.5
$5,000.00 - 9,999.004.0
$10,000.00 - 24,999.004.5
$25,000.00 47,000.005.0
(4) A claimant age 62 or older as of the last day of the taxable year, with household income of $15,000.00 or less, who is otherwise qualified for a credit under this section, shall be entitled to an additional credit as follows:
If household income (rounded to the nearest dollar) is: the additional
credit is:
$0 - 2,999.00$175.00
$3,000.00 - 5,999.00$150.00
$6,000.00 - 8,999.00$125.00
$9,000.00 - 11,999.00$100.00
$12,000.00 - 15,000.00$ 75.00
In no event shall the total credit under this subsection exceed the amount of the adjusted property tax.
(b) Only one claimant per household per year shall be entitled to relief under this chapter. A claimant age 62 or older as of the last day of the taxable year, with household income of $15,000.00 or less, who is otherwise qualified for a credit under this section, shall be entitled to an additional credit as follows:
If household income (rounded to the nearest dollar) is the additional credit is:
$0 - 2,999.00$175.00
$3,000.00 - 5,999.00$150.00
$6,000.00 - 8,999.00$125.00
$9,000.00 - 11,999.00$100.00
$12,000.00 - 15,000.00$ 75.00
In no event shall the total credit under this subsection exceed the amount of the rent constituting property tax.
Sec. 13. 32 V.S.A. § 6062 is amended to read:
§ 6062. NUMBER AND IDENTITY OF CLAIMANTS; APPORTIONMENT
(a) In the case of a renter credit claim based solely on rent constituting property taxes, the claimant shall have rented property during the entire taxable year; provided, however, that a claimant who owned a homestead which was sold in the taxable year and who does not own another homestead on December 31 of the taxable year may file a renter credit claim. If two or more individuals of a household are able to meet the qualifications for a claimant hereunder, they may determine among them who the claimant shall be. Any disagreement under this subsection shall be referred to the commissioner and his or her decision shall be final.
(b) Only one claimant per household per year shall be entitled to relief under this chapter.
(c) When a homestead is owned by two or more persons as joint tenants, tenants by the entirety, or tenants in common and one or more of these persons are not members of the claimant's household, the property tax is the same proportion of the property tax levied on that homestead as the proportion of ownership of the homestead by the claimant and members of the claimant's household; provided, however, that
(1) the property tax of a claimant who is 62 years of age or older is the same proportion of the property tax levied on that homestead as the proportion of ownership of the homestead by the claimant, members of the claimant's household, and the claimant's descendants; and the claimant's siblings or spouse who have moved on an indefinite basis from the homestead to a residential care or nursing home and who claim no rebate or credit for such year under this chapter; and.
(2) the property tax of a claimant who is a joint tenant or tenant by the entirety with, and legally separated from, a spouse who is not a member of the household, is the actual tax paid by the claimant spouse on the homestead for which the claimant is responsible pursuant to a courtapproved settlement agreement.
(3) the property tax of a claimant who is a joint tenant with a former spouse and who has possession of the homestead pursuant to the joint owners’ final divorce decree is the property tax for which the claimant is responsible under the joint owners’ final divorce decree or any modifying orders.
(4) The property tax of a claimant who is a joint tenant with one or more parents or stepparents is the property tax on the homestead of the claimant, provided that the homestead was purchased prior to April 1, 1999 and the parent or stepparent is on the promissory note and the deed for the sole purpose of qualifying the claimant for a loan of funds with which to purchase the claimant’s homestead. The commissioner may require any documentation which in the commissioner’s judgement is necessary to establish the purpose of the parent or stepparent’s inclusion on the deed.
(d) When a claimant owns the homestead for part of the preceding calendar year and rents it or a different homestead for a part of that year, property tax means the property tax on the homestead owned by the claimant, multiplied by the percentage of the taxable year that the property was owned and occupied by the claimant as his or her homestead; plus the rent constituting property taxes paid by the claimant for the remaining percentage of the taxable year.
(e)(d) Whenever a homestead is an integral part of a larger unit such as a farm, or a multipurpose or multidwelling building, property taxes paid shall be that percentage of the total property tax as the value of the homestead is to the total value. Upon a claimant's request, the listers shall certify to the claimant the value of his or her homestead.
(e) A dwelling owned by a trust is not the homestead of the beneficiary unless the claimant is the sole beneficiary of the trust and:
(1) the claimant was the grantor of the trust and the trust is revocable; or
(2) the claimant is the parent, grandparent, child, grandchild or sibling of the grantor, the claimant is mentally disabled or severely physically disabled, and the grantor’s modified adjusted gross income is included in the household income calculation.
Sec. 14. 32 V.S.A. § 6061(5) is amended to read:
(5) “Modified adjusted gross income” means the sum of “adjusted gross income” as defined in section 5811 of this title
(A) (but before the deduction of any trade or business loss, loss from a partnership, loss from a small business or “subchapter S” corporation, loss from a rental property, or capital loss), except that in the case of a business which sells a business property with respect to which it is required, under the Internal Revenue Code, to report a capital gain, a business loss incurred in the same tax year with respect to the same business may be netted against such capital gain;
(B) with the addition of alimony, support money, cash public assistance and relief (not including relief granted under this subchapter), cost of living allowances paid to federal employees, allowances received by dependents of servicemen and women, the gross amount of any pension or annuity (including railroad retirement benefits, all payments received under the federal Social Security Act, and all benefits under Veterans’ Acts), nontaxable interest received from the state or federal government or any of its instrumentalities, workers' compensation, the gross amount of “loss of time” insurance, and the amount of capital gains excluded from adjusted gross income, less the net employment and self-employment taxes withheld from or paid by the individual (exclusive of any amounts deducted to arrive at adjusted gross income or deducted on account of excess payment of employment taxes) on account of income included under this section, less any amounts paid as child support money if substantiated by receipts or other evidence that the commissioner may require. It does not include; and
(C) without the inclusion of gifts from nongovernmental sources, surplus food or other relief in kind supplied by a governmental agency, or the first $4,000.00 of income earned by a full-time student who qualifies as a dependent of the claimant under the federal Internal Revenue Code, or the first $4,000.00 of income received by a parent who qualifies as a dependent of the claimant under the Internal Revenue Code, or payments made by the state for foster care or to a family for the support of an eligible person with a developmental disability as defined in subdivision 8722(2) of Title 18. If the commissioner determines, upon application by the claimant, that a person resides with a claimant who is disabled or was at least 62 years of age as of the end of the year preceding the claim, for the primary purpose of providing attendant care services (as defined in section 6321 of Title 33) or homemaker or companionship services, with or without compensation, which allow the claimant to remain in his or her home or avoid institutionalization, the commissioner shall exclude that person's modified adjusted gross income from the claimant's household income. The commissioner may require that a certificate in a form satisfactory to the commissioner be submitted which supports the claim.
Sec. 15. 32 V.S.A. § 4467 is amended to read:
§ 4467. DETERMINATION OF APPEAL
Upon the appeal to the director or the court, the appraiser or court shall proceed de novo and determine the correct valuation of the property as promptly as practicable and to determine a homestead value if a homestead has been declared with respect to the property for the year in which the appeal is taken. The appraiser or court shall take into account the requirements of law as to valuation, and the provisions of Chapter I, Article 9 of the Constitution of Vermont and the 14th Amendment to the Constitution of the United States. If the appraiser or court finds that the listed value of the property subject to appeal does not correspond to the listed value of comparable properties within the town, the appraiser or court shall set said property in the list at a corresponding value. The findings and determinations of the appraiser shall be made in writing and shall be available to the appellant. If the appeal is taken to the director, the appraiser shall inspect the property prior to making a determination.
Sec. 16. 32 V.S.A. § 4961(a) is amended to read:
(a) A state tax determined pursuant to this section is hereby annually assessed upon the grand list of the gore in Chittenden county. A state tax of fifty cents$0.50 is hereby annually assessed on the grand list of the town of Glastenbury in the county of Bennington and of the unorganized town of Somerset in the county of Windham for the purposes hereinafter provided shall be the only tax assessed or levied thereon, except the county tax. Any unorganized town or gore with fewer than five students shall receive the general state support grant under 16 V.S.A. §4011 for each student based on weighted ADM count which shall not be equalized. If the local education spending in an unorganized town or gore is in excess of the general state support grant, the provisions of sections 428 and 511 of title 16 shall not apply to that unorganized town or gore, and it shall impose a tax on its education property tax grand list as defined in section 5401(5) of title 32, at the rate necessary to raise that excess amount. For purposes of a claim for property tax adjustment under chapter 154 of title 32 by a taxpayer in a municipality affected under this section, ‘local share property Tax” shall mean the tax assessed in the fiscal year under this section; and the “local share property tax liability” under subdivision 6066(a0(2) of title 32 shall be the claimant’s statewide property tax liability multiplied by a fraction, the numerator of which is the tax rate imposed under this section and the denominator of which is the equalized statewide property tax rate. These provisions relating to unorganized towns and gores shall terminate on July 1, 2001.