Vermont Legislature SmartTranscripts:

[Rep. David Durfee (Chair)]: The state, the law was changed, and then I'm gonna have to let somebody else tell you why it was changed back again. But there there's been lots of conversation about this over the years anyway. John? Just to give us some context, does this and Kirby probably will fill us in anyway, but does this speak to the that prorating that was done of properties that we had a lot of discussion about. Yeah. Yeah. They Jill can also when Jill remixed in this afternoon, he can speak to why they didn't feel comfortable moving ahead with that after looking at some and more data. And it it seemed like it might have been a good idea, then I think the data didn't support it. Anyway, Kirby, thank you for joining us. Are you able to share your screen? And if you want to just get a little context and then pull up the bill, I don't think it's very long.

[Kirby Keaton (Legislative Counsel)]: Good morning. Kirby Keaton, legislative counsel. I'm the person who handles the tax portfolio. That's why I'm here. The tax side of current use is what we're going to talk about. Yeah, the House Ways and Means Committee is considering a miscellaneous tax bill. A large portion of what's in there at the moment were administrative proposals from the Department of Taxes. So everything we're going to look at is what department is proposing for that bill. There are three sections relating to current use and might use change tax that we're gonna look at. They're not all interesting stats, but

[Unidentified committee member]: Just now.

[Kirby Keaton (Legislative Counsel)]: Okay. And with that, we can jump to section three. I mean, if you really want, we can talk about S corporations and things like that too, but we can skip over it.

[Rep. David Durfee (Chair)]: With everybody if you jump to section three and preferred.

[Kirby Keaton (Legislative Counsel)]: So land use change tax. There's a couple of changes to that section of statute. First is on I know you don't have this probably pulled up quite yet, but the first on page four, where there's a change relating to what this does happen, you were a moment ago, you were talking about the valuation for a portion of a parcel. So this comes up most often in that context where there needs to be a local assessing official come and decide the value of the parcel. If it's the full parcel that's been developed or being removed from the program, and having to have the lien removed, you have to pay the land use change tax. If it's a situation like that where it's the whole parcel, then my understanding is that they'll probably use the value that's kind of established already, but in cases where they need to have the assessing official come in to do a value, this makes some changes so that the assessing official has thirty days essentially to do that valuation. I think there's been some cases where because of a lack of staff and many other issues that the municipality is just not able to do that, which means the landowner is kind of just waiting without knowing what's going to happen, what they're going to have to pay. So the department is proposing a way to address that issue by saying that the assessing official will have thirty days and if they cannot do it in thirty days, PVR has the ability to come in and do it. And then PVR would have thirty days from that point forward to value the parcel. PVR is? Property valuation and review. Yeah, pretty much when you see me in here, I'm most likely to be talking about current use and the division within the Department of Taxes that administers current use along with the equalization study and property taxes is called property valuation and review. Jill Remick is the director of PVR. So, if it helps when you hear me say PVR, you should think Jill as the face of that.

[Rep. David Durfee (Chair)]: Yeah. Non PPR question, I saw several hands go up there. So

[Kirby Keaton (Legislative Counsel)]: that's what they're proposing. It's a way to address that issue. Previously, when Jill testified on this in ways, I mean, she did mention that this doesn't mean that the department doesn't want to work with the municipality if they're struggling to get it done in time. It's just a way forward to move the process.

[Unidentified committee member]: John, question? Just for clarity, Kirby, so previously it's as there's capacity from a listserv to get to this, there's no real deadline?

[Kirby Keaton (Legislative Counsel)]: Yeah, that's the current law. Okay. So this proposes that thirty day requirement.

[Rep. David Durfee (Chair)]: Was there some reference somewhere to a fourteen day period? Yes,

[Kirby Keaton (Legislative Counsel)]: that's a different change. But to fully address your question, in current law we have some of it here. You can see that like on line 11 that in this case, the law does require that the termination be made within thirty days. That's what the director notifies the local assessing official. There's it kind of stops there, though. So if it doesn't happen in that thirty days, there's you know, the the law doesn't currently address, like, what do you do from there? So this is doing that.

[Rep. David Durfee (Chair)]: Sorry, another question here. The local assessing official, is that the same as the Worcester?

[Kirby Keaton (Legislative Counsel)]: It is, or if the municipality instead uses an assessor. I think there's some people have feelings around whether you say lister or assessor, so we say both together.

[Rep. David Durfee (Chair)]: I just wanted to make sure that

[Unidentified committee member]: I understood clearly what that official is in my town.

[Rep. David Durfee (Chair)]: I

[Kirby Keaton (Legislative Counsel)]: think for most it will still be a lister, I think. Another change here is having to do so currently a municipality can keep up to $2,000 of the land use change tax for partially or related to doing like this work. So the department is also proposing that if it does have to step in and do it instead, that revenue would not be shared with municipality. And instead it would be deposited like it is now. Part of land exchange tax that goes to the state has three quarters going to the Ed Fund and one quarter going to the general fund. So they're proposing that if the state keeps the money that would have gone municipality, that it also gets split up. So none

[Jed Lipsky (Clerk)]: of that

[Richard Nelson (Ranking Member)]: of course, it depends on values of these changes, but I can understand three quarters going to the Ed Fund because that property being current uses retracted, you know, negative on the Ed Fund. But there's some of it that's a negative on the municipality as well because of the lower value. Why would it all revert to the general fund? Why would it go back to the municipality to offset their local taxes?

[Kirby Keaton (Legislative Counsel)]: I think that's a good question for Jill. Okay.

[Rep. David Durfee (Chair)]: Yeah. So the policy Yeah. That they were amending. But just to read the way that it's written, this only happens if the town doesn't do anything for thirty days. If the town does what it's supposed to do within thirty days, then it gets its $2,000. Yeah. Or whatever portion. Yeah.

[Unidentified committee member]: Okay. Good way of doing it to make sure it gets done.

[Rep. David Durfee (Chair)]: I think that's the idea. Yeah. I agree.

[Richard Nelson (Ranking Member)]: I agree on the 2,000.

[Kirby Keaton (Legislative Counsel)]: Yeah. But as far as the background about why the why the revenue split up the way it is is, you know, that was a decision made by the general assembly previously. Jill may have some institutional knowledge there. I'm I'm not aware of exactly why that split was made in this case.

[Rep. David Durfee (Chair)]: Does some of the land use change tax go to BHCB?

[Kirby Keaton (Legislative Counsel)]: It's just the Ed Fund and General Fund. I mean, I think, you know, BHCB gets some funding from the General Fund. So, if you want to look at it that way, but not to

[Rep. David Durfee (Chair)]: Property transfer taxes. Oh, that's the one, yeah. Right, not this one. I'm having trouble interpreting what it means on line two where it says, an owner erroneously appeals. What is that scenario covering?

[Kirby Keaton (Legislative Counsel)]: Oh, thank you. This is another thing they're proposing that's related. They're just proposing what you call a tax payer friendly change. Currently, if you don't like the value that's done in this situation as a landowner, you would need to appeal to the municipality, but because taxpayers are often dealing with the Department of Taxes as administering the current use program, they'll send their appeal to the department and then the department has to then forward that to the municipality. So they're suggesting that the law be changed so that whether the person sends their appeal to the department or the municipality, they meet their deadline requirements for a timely appeal.

[Rep. David Durfee (Chair)]: The call means do that one or send it

[Kirby Keaton (Legislative Counsel)]: to the wrong place. Yes. That's exactly

[Richard Nelson (Ranking Member)]: what you're

[Unidentified committee member]: Got it. Thank you

[Richard Nelson (Ranking Member)]: for that question. I was wondering the same thing. So

[Rep. David Durfee (Chair)]: this is a different thirty day period. This is thirty days that the homeowner or the property owner has to appeal? It's a different, talking about a different thirty days here then.

[Kirby Keaton (Legislative Counsel)]: They're all thirty day periods, thirty days for the municipality to do the valuation. If it's not done, PVR would have thirty days to do the valuation. So the landlord, even under this construct, if things go according to plan, still as much as sixty days and then the landowner would have thirty days to appeal. And under current law, it is fourteen days. That's the fourteen days that you had brought up before. And generally speaking, just across all of Vermont statutes, fourteen days is the shortest appeal period that I'm aware of. So, to expand that, I think just a general be on the safe side of due process, generally, I think is good to give. If it's administratively possible, it's better to give more time. Giving another couple of

[Rep. David Durfee (Chair)]: weeks to people to know what's

[Kirby Keaton (Legislative Counsel)]: going on, file an appeal. Especially how things have changed recently with a lot of these things go through the mail and people are becoming more and more disconnected from that. And then also, when it comes to anything legal, people have to sometimes go get professional help to understand it, and it's just fourteen days is a lot for all the things that could have been wrong.

[Rep. David Durfee (Chair)]: Does the property owner have a right to appeal the director's ruling? Does it go to

[Richard Nelson (Ranking Member)]: Superior Court then?

[Kirby Keaton (Legislative Counsel)]: In either case, it would be an appeal to the municipality. Now, the municipality, if PVR did the valuation, they'd have to work with them from there. This proposal is not trying to change the way the current appeal process works there. It's just including PVR in some cases.

[Rep. David Durfee (Chair)]: Fourteen days, the current law is not in this bill?

[Kirby Keaton (Legislative Counsel)]: It's been a little while since I looked at the underlying stuff here.

[Rep. David Durfee (Chair)]: I just quickly scanned it. I didn't see it, and we don't need to get hung up on that. Yeah.

[Kirby Keaton (Legislative Counsel)]: It's a good question. I know I mean, since since the language is being added there to provide the thirty days in this case,

[Rep. David Durfee (Chair)]: Let's just make a note of that. Certainly not critical, but

[Kirby Keaton (Legislative Counsel)]: Yeah, no, it makes me think that maybe there's other fourteen day periods that they're relying on for other things, so that would be something to think about if you Yeah, to review those appeal periods for everything for use related.

[Rep. David Durfee (Chair)]: Other questions?

[Kirby Keaton (Legislative Counsel)]: You have one more change.

[Unidentified committee member]: Yes, you go on to the next one.

[Kirby Keaton (Legislative Counsel)]: The two big ones here is about the valuation and PVR possibly doing it and the other one being the appeals, the appeal period being a little longer and the ability for the taxpayer to just appeal to PVR and for that to count. Okay. Oh, so this is some additional language being added about the thirty days. So this might go to the chair's question. When it comes to the fair market value determination, there is language here adding the thirty days to be clear. The other change has to do with I think most of you are probably familiar with the different ways to enroll Agland in current use. If you have 25 acres or more, as the law says there, then it's relatively straightforward to enroll, but when the acreage is under 25 acres, there's this list of specific ways that you can enroll. One of them is that it's owned by a farmer and is part of an overall farm unit. Farmer in this case means that you make at least half your income from farming. The other is you know, for it to be leased to a farmer as part of a farming operation. Then the last one has to do with producing a farm crop and having an annual gross income of at least $2,000 and $75 per acre for each acre over 25. But the farm crop part of it is another limiting factor to how you can enroll in this way. Hay would count and it does count currently. So the department is pointing out that if you use it, if you let your neighbor farmer pay your fields, then you could possibly enroll in the current use under the under 25 acre method here. As long as you're meeting those late in the income requirements. But the same is not true if your neighbor instead has a herd and they pay you to graze. So the department is proposing to add that along with farm crops. So the language that's being added here is for grazing rights on a per head basis. So the same income requirements is the situation with the haying, except in this case, it's raising rights that it's allowed in. So it opens up a new way of enrolling into the program.

[Rep. David Durfee (Chair)]: So we'll hear more from the department about their rationale for this this afternoon, but as this is written, it looks pretty straightforward. It's just saying not only growing crops on the land for somebody else, but letting somebody else raise on the

[Kirby Keaton (Legislative Counsel)]: land with also cattle. Yeah, and we don't know a lot about the demand for this. We'll testify on it, previously when they testified, they mentioned that there's not a lot of people trying to do this as far as they know, as far as the applications they receive, but the unknown there as well, probably because it's not allowed and most people aren't applying. So, kind of an open question about how much more enrollment would this cause.

[Rep. David Durfee (Chair)]: So just to get to the questions I saw in a second, the person who would be newly eligible for this is not currently eligible because he hasn't met any of the other possible conditions. If we're thinking about how much tax revenue is at stake here, it's only in this situation where none of

[Kirby Keaton (Legislative Counsel)]: the other

[Rep. David Durfee (Chair)]: possibilities apply. And I don't know if I remember what all those possibilities are. Guess they're all listed here, but it's somebody who's not a farmer, first of all. They're not making their living as a farmer.

[Kirby Keaton (Legislative Counsel)]: Yes, because they could use the other approach if they did.

[Rep. David Durfee (Chair)]: It's smaller than 25 acres. Maybe somebody's got a couple of extra acres behind their house kind of a thing. Jed? Yeah. Thank you, chairman.

[Jed Lipsky (Clerk)]: I have land that for years let neighbors, dairy farmer, has been cropping. He's encouraged going out of business. Another neighbor who has grazed, who raises beef for a collective of friends and family, who did graze. We don't do it other than to be neighborly and have our field stewarded. But it's good to know I think it's a good policy or a good change if that acreage can be either grazed or cropped for the budding or nearby farmers.

[Unidentified committee member]: Is your landing car in use already that? No.

[Jed Lipsky (Clerk)]: I took it out on a one of those exit passes, I think, in 2016 or 2017. For other reasons, not getting home. I get kids going to.

[Unidentified committee member]: Well, I'm just wondering yeah. I like the fact that's in there. Just wondering if there's a I mean, as you have crops, Animals are a crop. Right? So that's the reason for that language. Just wondering if there's another way to word it potentially

[Unidentified committee member]: without just having crops and, like, try to

[Unidentified committee member]: find a grazing rice on a per head basis. That's the I like the fact that it's in there and I wouldn't want to see this go away, to be honest. So a conversation about changing it, I don't want that to necessarily take that away, but

[Richard Nelson (Ranking Member)]: I think there's an opportunity to to maybe do a little bit better.

[Rep. David Durfee (Chair)]: To to be more expansive? More

[Unidentified committee member]: Not necessarily expansive, but, like, you know, I'm looking at the language on REPs in the way, you know, like $2,000 worth of sales, right? Yes. Is what up farm what? What does it say? I'm trying to look at what say farm products?

[Kirby Keaton (Legislative Counsel)]: Can we say if it's farm products? It a farm product? Annual gross income from the sale of farm crops or the linguistic additives or grazing rights on a per head basis. So an annual gross income from the sale of raising rights? In the ERAP statute,

[Unidentified committee member]: that's the one who think it's farm crops.

[Kirby Keaton (Legislative Counsel)]: Do you mean like agency of agriculture rights? I'm not sure. I'm just familiar with the current use approach.

[Unidentified committee member]: Yeah. Okay. No, that's what I'm just saying or tripping over. It would be

[Unidentified committee member]: you're getting paid lease of 2,000 or the animals that raised your property might lead to $2,000 in gross?

[Kirby Keaton (Legislative Counsel)]: The landowner, who would be the applicant trying to enroll, would need to receive $2,000 because we'll just make this simple and keep it under 25 acres. Dollars 2,000 in one of two or three of five calendar years of So you have to kind of set this up and have it going and then enroll, which is the current situation. And so what you really need to show is that annual gross income of 2,000. So you would need to be getting paid 2,000, not necessarily every year, but one or two or three to five.

[Unidentified committee member]: Just wondered, sugar bushes, same thing, like 10 acres of a sugar bush.

[Kirby Keaton (Legislative Counsel)]: Considered a farm crop. Also, that would be eligible.

[Richard Nelson (Ranking Member)]: Graves in is part of agriculture. It's part of farming. So I really if if and we're talking for parcels under 25 acres that are rented out to a farmer or leased out to a farmer. Farmers aren't gonna pay $5 an acre for 10 for grazing on a

[Unidentified committee member]: ten, fifteen acre parcel because they gotta build a fence and maintain it. They're gonna do it as a courtesy to help a person keep their land clear,

[Richard Nelson (Ranking Member)]: but it's part of agriculture, whether it's sheep, beef, dairy, goat, you know, all of that. So I I don't know, you know, if this language really needs to be in there because grazing is part of farming. But if it's a way to allow people to have horses on their grazing, and it helps out the horse farmers that we tried to help last year. Just

[Rep. David Durfee (Chair)]: Okay. That's an interesting point.

[Kirby Keaton (Legislative Counsel)]: Let's let's ask well, let's double check with PVR. Would this apply to horses? I also have questions about I'm not really familiar with this per head basis approach. It seems like the department researched that and is proposing that for a reason, I'm not sure why. But when I see grazing rights, annual income, I'm not seeing anything limiting based on the animal. Not either.

[Rep. David Durfee (Chair)]: Okay. And it would and it only it only works if it's to Richard's point, if the farmer is paying the landowner for the privilege of having their animals raised there. John? And in the squirrelly category, apiary on there too, be more livestock that you could have a 10 acre field that you're letting the farmer put their bees on.

[Richard Nelson (Ranking Member)]: If they're gonna do that,

[Jed Lipsky (Clerk)]: they got ear tags, so it's Yeah.

[Jamie Fidel (Vice President for Vermont, Audubon Vermont)]: I mean,

[Rep. David Durfee (Chair)]: let's why don't we save the discussion because we're we're already over, and we got a really tight schedule here. We will pick this up again this afternoon. And if there's not enough time this afternoon, we are not we're not nobody's forcing us to make any quick decisions here.

[Kirby Keaton (Legislative Counsel)]: The only thing I would add to that discussion, though, is that mean, you the the slang was just like you do a combo. So it could be grazing rights plus farm income from some something else to get you to that 2,000.

[Rep. David Durfee (Chair)]: Interesting to hear from the tax department where this proposal originated. Mhmm. Kirby, thank you. Yeah, thank you. Just something I'd like for later too is, you remember where we left off in Ann Vineyard Laundry. He solved that problem. Can somebody just give us an update on that? Because that relates to what Jonathan gave yesterday on that, essentially, 1A, because it was a change of ownership, I think it was less than 25 acres, right? But it was seamless, agricultural. Yes, yeah. We can ask Joe to check if knows. Okay. All right, interesting discussion. Now switching gears to a different interesting topic. Jamie Fidel. Jamie, just make sure you're muted. So some of you may recognize Jamie from his previous role with the Natural Resources Council. Welcome back, Jamie. Know you're no longer with that organization, but you were part of the stakeholder group that worked on the wood products manufacturing report. And we've taken some testimony on that, and we're, I think, planning to introduce a committee bill shortly based on the recommendations that came out of that group. But we're trying to hear from as many people as possible who were part of it or have had thoughts about it. So thank you for showing up today, and I'm happy to hear what you've got.

[Jamie Fidel (Vice President for Vermont, Audubon Vermont)]: Yeah. Thank you. So good morning, Jamie Fidel. As chair Durfee mentioned, been working in the legislature for about twenty three years, previously with Vermont Natural Resources Council, now vice president for Vermont with Audubon, Vermont. So essentially acting as director for Audubon, Vermont and tied into national leadership of the organization. I'm really excited for the opportunity. Thanks for the invitation to come in today. I don't know how much you've sort of heard from Audubon in the past. I could run through quickly just some background slides if that would help just to orient you on our work and the connection to this and then pivot to the report or just cover the report, whatever you'd like. Not

[Rep. David Durfee (Chair)]: because we didn't want to give you more time, but just I think the schedule we've got this way, we've only got a half hour. Whoever you'd like to use that half hour.

[Jamie Fidel (Vice President for Vermont, Audubon Vermont)]: I can be pretty efficient with the slides. I think it'll just orient you. Think a little bit to the to the maybe the connection to our interest and my continuing interest in the report and the organizations, and then I'll I'll discuss the report.

[Unidentified committee member]: Just quickly, David Mears was responding to position, John will remember too. How many years has there been sort

[Rep. David Durfee (Chair)]: of no Audubon rep here?

[Jamie Fidel (Vice President for Vermont, Audubon Vermont)]: Yeah, so there's been a couple of years. Conservation, and she was acting as interim while they were in a period of there were a number of of vice president positions across the whole Atlantic kinda Eastern Flyway where they were filling. And so it took it took a couple of years. But we do plan to have a presence here as much as we can. We'll be hiring a policy manager fairly soon, so be boosting capacity to do more policy work and help you with any issues where we could be of assistance. Patricia, should I I don't see oh, there's a share. I just sent you a request for that. Yeah. You Okay. Sort of fortunately freezing. Me back out of that and then bring but it was kind of a Yeah, because you're there already. So you can go to the shift button.

[Kirby Keaton (Legislative Counsel)]: Right. But this seems to be Yeah. Some reason

[Jamie Fidel (Vice President for Vermont, Audubon Vermont)]: I think it shouldn't even come back. Let me try that. Let me just Okay. I'll be watching here. Okay. Yeah. That did work. Let me try this one more time.

[Kirby Keaton (Legislative Counsel)]: Yeah. When, you know, my computer

[Rep. David Durfee (Chair)]: wants