Vermont Legislature SmartTranscripts:

[Emilie Kornheiser (Chair)]: Yeah. It is Thursday, March 12. It is 01:15. Is there anything in the miscellaneous tax bill that anyone wants to look at again with Kirby after digesting or eating lunch or whatever you do during the last hour?

[Carolyn Branagan (Member)]: I

[James Masland (Member)]: just was looking over my previous miscellaneous tax bills, and I was just wondering. I didn't see it anywhere. Was there something that the tax department was looking at that would make the dollar threshold for filing and paying the amount of state tax the same $5,000,000? Yeah, that's still

[Carolyn Branagan (Member)]: in there. It's still there.

[James Masland (Member)]: It is still there?

[Kirby Keaton (Legislative Counsel)]: Yep. Okay. Section Okay,

[James Masland (Member)]: no, I just I'm sorry.

[Emilie Kornheiser (Chair)]: It's okay. 16.

[Charles Kimbell (Ranking Member)]: 16. 16, yep. Hurry. I'm not saying no. It's a good honesty.

[James Masland (Member)]: Oh, okay. Okay.

[Carolyn Branagan (Member)]: Didn't understand the $2.50 exemption entirely until you explained it, because having it both ways was helpful.

[James Masland (Member)]: Great. Thank you.

[Emilie Kornheiser (Chair)]: I'd love to Any other questions? Yep. So I did one. That's great. It's credits for escorts. Oh, that's the funnest one. Perfectly, will you tell us about it again? I'm so curious. Not being sarcastic, could

[Carolyn Branagan (Member)]: you tell us about that again?

[Kirby Keaton (Legislative Counsel)]: Yeah, so that was part of the tax for that because currently, part of law, Vermont is not allowing S Corps to take the same tax credits that other past entities like LLCs or partnerships can get. And it goes back to the ninth, the court leader Rebecca Sandroff in her research, back in the 90s, the department lost a case against an S corp over a tax credit and came to the legislature and said, let's not let them take tax credits anymore. That was the testimony. And so we're at a point in time now where the thing is true, we don't know why we're doing this, but for the department it's an equity issue. S Corp, Partnership, LLC, they're pretty similar entities. Why is one being denied something that's allowed to the others? So it's an equity thing for them.

[Carolyn Branagan (Member)]: Now I remember. Isn't that a fun one? Yeah.

[Bridget Burkhardt (Clerk)]: Little tax history, petty rivalry, the whole thing.

[James Masland (Member)]: So I do have another question, and that's on the proposal that we're going to change the percentage of the purchase and use tax and change the percentage on the rooms and meals tax, switching things around. Is a five year limit on that?

[Emilie Kornheiser (Chair)]: It's forevermore.

[Charles Kimbell (Ranking Member)]: It's gonna change it next year.

[Rebecca Holcombe (Member)]: Yeah,

[Emilie Kornheiser (Chair)]: it next year. It's gonna Yeah. It's still like yes. There's no data on it.

[James Masland (Member)]: It's forevermore, except for by any. Right?

[Bridget Burkhardt (Clerk)]: Indeed.

[Emilie Kornheiser (Chair)]: So we haven't changed the other percentage for a while. So like, the percentage that's in current law, we haven't changed for a long time or whatever else. That's not something that we, like, fidget with all the time.

[Charles Kimbell (Ranking Member)]: The village tax credit, what amount is that now? Is it two, is it three, is it five, four?

[Kirby Keaton (Legislative Counsel)]: Under current law it's three, and this morning I was asked to change it, the version that you looked at this morning was going change three to five, and I was asked to change that so being a slice the hospital will change it from three to four. Okay.

[Emilie Kornheiser (Chair)]: So one more. Anyone else?

[James Masland (Member)]: The rooms and meals tax, so it's just divided up between education and general fund now. There's not another percent that goes anywhere else.

[Kirby Keaton (Legislative Counsel)]: Will double check to be sure this Do the numbers that we're looking?

[Rebecca Holcombe (Member)]: Do you have a pool of pens? The

[Kirby Keaton (Legislative Counsel)]: thing is the statute itself, Milestone Riverside statute, it's not expressly say, you have to look at those other funds and see what they add up to. But looking at the education funds and so it would be changing change to 29 in the miscellaneous tax bill which leaves bad at math but

[Emilie Kornheiser (Chair)]: can ask Chris.

[Kirby Keaton (Legislative Counsel)]: I'd have to pull up the general funds. So we have 65 general funds, 29 those rooms.

[Rebecca Holcombe (Member)]: Can

[Kirby Keaton (Legislative Counsel)]: also look at

[Carolyn Branagan (Member)]: We'll get back to you. Hold on one second.

[James Masland (Member)]: Think if you

[Charles Kimbell (Ranking Member)]: ask I asked Chris that answer, James. Yes.

[Carolyn Branagan (Member)]: Were you born with? The clean water. Oh,

[Rebecca Holcombe (Member)]: that's right.

[Charles Kimbell (Ranking Member)]: I asked Chris that answer.

[Carolyn Branagan (Member)]: Okay, thank you.

[Emilie Kornheiser (Chair)]: Anyone else?

[Carolyn Branagan (Member)]: Rebecca, do you want to vote on this right now?

[Emilie Kornheiser (Chair)]: No. I want to vote on it tomorrow once we have a fiscal note, but I want to know where we are before tomorrow because tomorrow's the last day. Good to be prepared.

[James Masland (Member)]: So you said you were going to take a straw poll in each section, basically?

[Kirby Keaton (Legislative Counsel)]: Yeah.

[Carolyn Branagan (Member)]: Do you folks want do that now? Are we bowling the next two pieces in from the miscellaneous tax bill,

[Emilie Kornheiser (Chair)]: the Regional Assessment Districts and the non homestead residential No, they're being held for the bill to come from education, so that all the accepting free work is done together. Why

[Carolyn Branagan (Member)]: is the tax classification not available then?

[Emilie Kornheiser (Chair)]: Because it's part of the Act 73. And stabilizing the For one, it's hard to change the taxes the way that it was envisioned in Act 73 if the spending isn't stable. And I don't mean to say not growing or reducing. I just mean steadily increasing instead of sort of stochastically changing. Understand. Such a random word, I'm sorry.

[Carolyn Branagan (Member)]: Yeah, I understand. I think the issue we have is this failure to address this is exacerbating both the housing situation, but also incentivizing both square footage and turnover amongst the other person right now. And it just seems like if it's good tax policy, it would be good to get in process, because it's going to take some time.

[Emilie Kornheiser (Chair)]: It would be. I guess there was agreement amongst the House, the Senate, and the administration when Act 73 passed that those things would stay together. And that's why the tax department was able to move forward with all the work on property classification that they were. And so I think if we separate them, then we won't be able to continue that work.

[Carolyn Branagan (Member)]: Folks wanna straw poll now or wait until tomorrow? Yep. Okay. You don't have to record all the votes.

[Bridget Burkhardt (Clerk)]: I was just gonna section

[Emilie Kornheiser (Chair)]: if you really want.

[Bridget Burkhardt (Clerk)]: I I was thinking I forgot everybody's name, but I was like, I was gonna, like we did last year, just numbers, just so that's okay. Yeah, sure, yeah, yeah, No, go for it.

[Emilie Kornheiser (Chair)]: Section, we're gonna do hands. Okay. Repeal of denial of tax credit for S corporations, section one. Section two, grants department authority to investigate landlord tenant relationships. 11. PVRR conducts valuation for unrolled parcels in certain cases. Section three and four. Section five, change its calculation for payment to municipalities for the flood stuff. Section five. 11? Six, add the provision addressing cases for communication service providers for PVR. Seven clarifies CHIP treatment. Carol, you hit on that for me? Sorry. Yeah, I'm reading notes. Purposes, section eight is the PVR 100% CLA. Elevens. Nine and ten extends the health IT sunset. 11 to 14 updates NEEP to NEEP since NEEP no longer exists. I respect that. You actually can't abstain, but I respect that. Do you want to vote yes or no?

[Carolyn Branagan (Member)]: No. I mean, I understand where

[Emilie Kornheiser (Chair)]: you're coming from. It's product story.

[Carolyn Branagan (Member)]: It is not appropriate for a personnel based sector. Well, I agree with that too.

[Emilie Kornheiser (Chair)]: I'm sorry. I'm coming in. But I'm

[Carolyn Branagan (Member)]: gonna vote yes because we don't have an alternative. Okay. Thank you.

[Emilie Kornheiser (Chair)]: Carol, are you also voting yes because we don't have But I totally agree. I am very interested in updating you later. We're just not doing it right. Section 15, the PTC to be calculated using 100% property tax liability. 11. For divorced people. For divorced people or separated people. They don't have to be a, yep.

[Carolyn Branagan (Member)]: Was that everyone?

[Bridget Burkhardt (Clerk)]: Yes, I think unless someone says no.

[Carolyn Branagan (Member)]: I shall see if anyone says no.

[Bridget Burkhardt (Clerk)]: Well, I looked and everyone had their hands about that. So, yeah.

[Emilie Kornheiser (Chair)]: 16 aligns the estate tax filing threshold. Section, that was 11. Section 17 extends the down payment assistance program.

[Kirby Keaton (Legislative Counsel)]: Let's try.

[Bridget Burkhardt (Clerk)]: 10, okay.

[Emilie Kornheiser (Chair)]: Section eighteen and nineteen, before we do hands, precludes the Vermont participation of the federal tax program for contributions to scholarship granting organizations. What I wanna offer for further context on this is, for me, this is really like a delegation of authority issue. And since the feds have not finished rulemaking on this, we have absolutely no idea what the rules will be on it or what the fiscal impact, positive or negative, could possibly be. So I think that once the rules are developed, it would be important for this body to pick up that conversation again. But right now, we shouldn't be making decisions in the interim until we actually know what we're doing.

[Charles Kimbell (Ranking Member)]: Right now what, Madam Chair?

[Emilie Kornheiser (Chair)]: Have no idea what the federal rules are, and so we shouldn't be making decisions until we do know. Understood.

[Carolyn Branagan (Member)]: So to clarify, you're proposing to amend the language.

[Emilie Kornheiser (Chair)]: So I'll just leave it as is. Can you give him the bill? No, because we need to I think we need to If we take it out of the bill, then we're essentially opting in. And I'm saying we should opt out until we know what we're opting into.

[Carolyn Branagan (Member)]: This is that.

[Emilie Kornheiser (Chair)]: But it's the one about Yeah, but we can revisit it next year once we actually If the feds finish rules by next year, it's possible they won't. Okay.

[Carolyn Branagan (Member)]: A no vote says what then?

[Emilie Kornheiser (Chair)]: A no vote says you don't like that section? No. But says that you think that we should leave it to the administration to decide whether or not to opt in rather than it being a legislative decision.

[Charles Kimbell (Ranking Member)]: Do you

[Emilie Kornheiser (Chair)]: want to say anything,

[Charles Kimbell (Ranking Member)]: Mark? I'm

[James Masland (Member)]: confused as to what the straw poll is.

[Emilie Kornheiser (Chair)]: Section eighteen and nineteen.

[James Masland (Member)]: Repeat

[Carolyn Branagan (Member)]: questions.

[Emilie Kornheiser (Chair)]: Precludes remote participation in the federal tax credit program for contributions to scholarship granting organizations.

[Kirby Keaton (Legislative Counsel)]: And you have a

[Charles Kimbell (Ranking Member)]: part to create the administration a decision with consultation?

[Emilie Kornheiser (Chair)]: The legislature would have to approve the administration's decision.

[James Masland (Member)]: We know for a fact that they don't have the rules at all. Kirby said that. Yeah.

[Kirby Keaton (Legislative Counsel)]: I can always explain more to you if you need, but under the federal law, the statute that was part of HR1 that they created this, it expressly says that the Treasury Department, in other words the IRS, has to put out rules about it. They're in the process of preparing the rules right now. If I were to guess, it would be summer, probably, best guess. Then again, I guessed section eight earlier than section 16. I'm more certain that it will be done before the end of the year though because it's supposed to start 01/01/2027 and the IRS will at least meet that deadline,

[Emilie Kornheiser (Chair)]: I would

[Kirby Keaton (Legislative Counsel)]: think. So the things that they can decide through the rules are what expenses exactly can these organizations give scholarships for. Another thing that the IRS is being pressured about is to include restrictions on what states can limit. So there is a Senate bill right now, S-one 161, that would opt in for Vermont but limit what the scholarships that SGOs give out can be used for. That's the kind of thing that Vermont passes, the IRS rate could end up contradicting. Expenses, how states can limit it, some of the details around what the SGOs have to do in their operations, that's likely to be included. These kinds of details are unknowns at this point and so later this year, like I was saying, you'll know more about what the IRS Just to go a little farther on the West Council side, you don't mind, seeing how this could play out going in the years in the future. If the IRS were to look at our regs that said something like states cannot limit what SGOs do, only we can. But there's not a lot in the statute actually to build on that, then an organization could go, citizens could go and challenge that regulation and say this is not founded based on the statute, this is the IRS just making stuff up basically. In recent years the US Supreme Court has moved in the direction of away from giving agencies deference like IRS, giving them deference when it comes to rule of the game. So that's one reason to believe that maybe if the IRS does go too far, this will make it a given challenge and then there would be a whole other new landscape. My point is in the next few years of this thing, think the landscape could very well change. It could be changed by what there are since public regulations. Then it could be changed further if those regulations end up getting challenged. So that's something from the legal side we want you to be aware of. One thing I am sure about though looking at it is the statute is very clear about whether states can opt in or not though, so I wouldn't worry if our ruling was about whether you have the ability to choose to opt in. Statute's very clear there's an allay to give states that choice. It's also written clearly in a way to say that if you do nothing, the default entity, so to speak, should choose from year to year what SGOs get recognized in the state and whether the state opts in. That entity is the default under the federal law, it's the governor, unless a state law says otherwise, very plain about that too. So it's written in a way to, my reading of it, it's very clearly written to allow states to choose a different designated entity And of course, being the legislature, you can decide that through law. So I think those are the different pieces to keep in mind, I'd say.

[Emilie Kornheiser (Chair)]: And I just want to offer that if I'm chair of ways and means again, then I will make a full commitment to, if someone introduces a bill once the rules are finished at the federal level, to give it a non Friday morning real hearing.

[James Masland (Member)]: Follow-up on one thing that I thought I heard you say. The Senate is proposing some rules around it right now to support it going forward.

[Kirby Keaton (Legislative Counsel)]: There's FCC-one in the Senate, is, it was passed out of Senate education, was proposed by Senator Bongartz and it's in Senate Finance now and they're considering it. I was in there a few days ago. And what in a nutshell what that bill does is allow Vermont participation, allows the governor to recognize SGOs, but the governor can only recognize SGOs that provide scholarships exclusively for certain purposes and in that bill it limits the scholarships to public school students or students attending an independent school that is approved to be the public school for a district. So it tries it, tries something out. There's also some language there about scholarships being provided to students from households that are underprivileged, not by word choice. It's to limit down the scope of what scholarships can cover beyond what the federal does.

[James Masland (Member)]: Well I guess my last question is what's the conflict and if we pass this you're going have people to be at conference and work out the difference?

[Kirby Keaton (Legislative Counsel)]: Yes.

[Emilie Kornheiser (Chair)]: I mean, if we pass this, the Senate will get it and do what they will with. If the Senate passes that, we'll Thanks,

[James Masland (Member)]: thank you.

[Emilie Kornheiser (Chair)]: Anyone else want to say anything on 1819? Okay. Strawpull on 1819. Jim, where are you on 1819? Yes, no?

[James Masland (Member)]: Yeah, sorry.

[Emilie Kornheiser (Chair)]: Okay.

[Carolyn Branagan (Member)]: So is that 7 To 4?

[James Masland (Member)]: Sorry, no.

[Emilie Kornheiser (Chair)]: H4? Or H3? If you took 3. Okay. Section 20 amends the definition of parcel for the scanned list, for mapping. Oh, it's from PBR. Is that 11? That's section 20.

[Carolyn Branagan (Member)]: Sorry, was looking

[Bridget Burkhardt (Clerk)]: for We're on section 20.

[Emilie Kornheiser (Chair)]: I'm so sorry. Section 20, yeah? Okay. Okay. Section 21 to 23 as amended. That's sufficient wildlife. I like

[Carolyn Branagan (Member)]: that change.

[Bridget Burkhardt (Clerk)]: That's a limit.

[Emilie Kornheiser (Chair)]: There's the Branagan sections. It's the Branagan sections. '24 to 28, grand list submission date, moved to January 1.

[James Masland (Member)]: No protest.

[Emilie Kornheiser (Chair)]: That's the colorful commentary people are adding to this.

[Charles Kimbell (Ranking Member)]: Gotta do something to

[Emilie Kornheiser (Chair)]: say here. Section 49, remove statutory language about the delinquent taxes. Wait, 49? 49. 49. Oh, 49.

[Charles Kimbell (Ranking Member)]: 24 to 48 was all in one section.

[Bridget Burkhardt (Clerk)]: Oh, sorry, I thought

[Emilie Kornheiser (Chair)]: it was like 24 to 20. Section 49.

[Bridget Burkhardt (Clerk)]: 49? That's 10.

[Charles Kimbell (Ranking Member)]: Yeah, yeah, I'm sorry.

[Bridget Burkhardt (Clerk)]: 10, okay.

[James Masland (Member)]: Oh, I'm

[Charles Kimbell (Ranking Member)]: cutting down.

[Carolyn Branagan (Member)]: You're right, okay.

[James Masland (Member)]: I know.

[Charles Kimbell (Ranking Member)]: Know. It was a lot.

[Emilie Kornheiser (Chair)]: Just for fun. I'm gonna vote for the build out. Don't worry.

[Carolyn Branagan (Member)]: It's not a question.

[Emilie Kornheiser (Chair)]: The PVR expenses coming out of the pilot special fund.

[Carolyn Branagan (Member)]: For people that think that we hold you, that, you know, that have a concern.

[Emilie Kornheiser (Chair)]: We're on sections 50 to 53 of PBR expenses out of the pilot special fund.

[Charles Kimbell (Ranking Member)]: Under

[Emilie Kornheiser (Chair)]: protest. Okay. So that's fine. Did you? And your tax study, section 54? That's not tax. I'm excited about that one. You're like, if you're doing this, I

[Bridget Burkhardt (Clerk)]: don't know what that means. Is that a

[James Masland (Member)]: It means like, yes, so we'll see what appropriate And

[Bridget Burkhardt (Clerk)]: Jim, were you a yes or a yes? Yeah, yeah, okay.

[Carolyn Branagan (Member)]: People sit on that.

[Emilie Kornheiser (Chair)]: It's not a commission. It's just a study the JFO does. Yeah,

[Charles Kimbell (Ranking Member)]: it's not a tax structure commission.

[Emilie Kornheiser (Chair)]: It's not a But maybe the tax study will lead to recommendations on what a commission should do. But we haven't had a commission I in a

[Carolyn Branagan (Member)]: would say what we need is on that next commission, we really

[Bridget Burkhardt (Clerk)]: have to have

[Carolyn Branagan (Member)]: service providers, you know what I'm saying, like lawyers and CPAs and so forth, because that was services that we were, think maybe we'll expand. Oh, okay.

[Kirby Keaton (Legislative Counsel)]: You might wanna talk to an accountant.

[Carolyn Branagan (Member)]: Remember that, I'm

[Emilie Kornheiser (Chair)]: in section 55 now. You like me to stop?

[Carolyn Branagan (Member)]: No. Okay. No. No.

[Kirby Keaton (Legislative Counsel)]: Wonderful.

[Emilie Kornheiser (Chair)]: This section 55 has decouples for bonus depreciation for qualified production property. 56 to 57, as clarifying language to make sure Vermont apportionment uses the same modifiers for taxpayers that owe taxes in multiple states and when a taxpayer only owes tax to Vermont. 58 increases Vermont research and development tax credit from 27% to of federal credit to 75% of the federal credit. Section 59 increases the Downtown Village Center tax credit that can be awarded annually by $1,000,000 Just by 2,000,000 I know it does. Why I corrected my mouth. 60 to 61 links of Vermont's income tax code to the federal tax code for 2025. This is

[Carolyn Branagan (Member)]: where we get our AGI.

[Emilie Kornheiser (Chair)]: Yes, sure. Is that what that does?

[Kirby Keaton (Legislative Counsel)]: Yes. Many

[Emilie Kornheiser (Chair)]: things. It supports the thing.

[Carolyn Branagan (Member)]: Okay. Are we on hands? Talked a lot together. Look, and there's something Mark, are you a no? Or you just Mark.

[Emilie Kornheiser (Chair)]: I'm sorry? Are you a no,

[Bridget Burkhardt (Clerk)]: or yes, I'm 60 to 61? It's just something for us. Great.

[Emilie Kornheiser (Chair)]: 60 to 63, changes to the statutory definition. This is the moving money to the transportation fund. Effective dates.

[Charles Kimbell (Ranking Member)]: I'm not living on the

[Emilie Kornheiser (Chair)]: effective dates. Thank you very much, everyone.

[James Masland (Member)]: It was

[Emilie Kornheiser (Chair)]: a nice way to was great. That was lovely. Okay. Let us shift gears I wonder how many times I say that in a week and talk about regional assessment districts. I don't think we've made any changes to the regional assessment district language since last we looked at it.

[Kirby Keaton (Legislative Counsel)]: We have.

[Emilie Kornheiser (Chair)]: Have? Ben, would you like to come sit in the lovely chair?

[James Masland (Member)]: Because

[Charles Kimbell (Ranking Member)]: this is where the July thing happened. Oh, thank you.

[Kirby Keaton (Legislative Counsel)]: Hello again, everyone. Here. Kirby Keaton, legislative council. Still sick? I don't think so. I don't think so.

[James Masland (Member)]: You know, Carolyn was mother of here.

[Emilie Kornheiser (Chair)]: Charlie? Mom was mother of the year. Yes.

[Kirby Keaton (Legislative Counsel)]: Did you know that? Many are you giving her

[Charles Kimbell (Ranking Member)]: a How well each her is Can I get my kids to nominate them for mother of the year?

[Emilie Kornheiser (Chair)]: That's a club I'll never be joining. It's a more functional.

[James Masland (Member)]: We should

[Carolyn Branagan (Member)]: have therapists. I believe that class. It's these things.

[Emilie Kornheiser (Chair)]: Let's talk about regional assessments real quick.

[Kirby Keaton (Legislative Counsel)]: Would the committee like to refresh on everything in here or look at the changes only?

[Emilie Kornheiser (Chair)]: Just look at changes for

[Kirby Keaton (Legislative Counsel)]: now. Okay. So there's just a few. One of which was, last time I was here, there's a provision within the statute that once RADs become effective, there will be a new chapter or sub chapter controlling RADS, and there is a section in there for standard guidelines, procedures, rulemaking, and there was a provision that a lot of this language was changed if you remember, because there's been back and forth with the tax department throughout the session. And so this is some language that the tax department wanted included that says that PVR shall establish a schedule for each regional assessment district to full year reappraisal for six years. The director at the director's discretion may alter the reappraisal schedule for a regional assessment district for one or more of a regional assessment district's member municipalities. We talked about how part of the rationale for that would be during the initial setup, where you have a group of municipalities that might have previously been on different schedules and PBR might want to waive municipality's participation in the first year because it had recently had a reappraisal anyway, like that kind of situation. Then it says, if a municipality or a regional assessment district fails to reappraise on the schedule established by the director under the subsection, the state may withhold funds. This was changed before it spelled out what kinds of funds and there was some discussion about that. And, I was given the direction to just by the committee, to just change it to just funds. We will just leave it at that.

[Emilie Kornheiser (Chair)]: Thank you.

[Kirby Keaton (Legislative Counsel)]: So statement withhold funds.

[Emilie Kornheiser (Chair)]: There's a section for that first round of assessments about that two towns can join together in that first round. Is that here or further down? You know what

[Carolyn Branagan (Member)]: I'm talking about?

[Rebecca Holcombe (Member)]: Sorry. About joint appraisal? Yeah. Two or more communities can do joint Joint

[Kirby Keaton (Legislative Counsel)]: put it joint together. Yeah.

[Charles Kimbell (Ranking Member)]: It was, like, the first round exemption. It was like, I was one they can do.

[Kirby Keaton (Legislative Counsel)]: That's up here. So for the first full reappraisal conducted simultaneously by member municipalities as part of the reasonable assessment district, each municipality may at its discretion, conduct a reappraisal jointly with one or more others. So the first round is optional. So maybe my example from a moment ago, wasn't all that apt.

[Emilie Kornheiser (Chair)]: I wasn't trying to correct you. I received a email from a listing expert pointing out, I thought, a really good point that just two districts working jointly might not be at a scale that would be useful for statistical analysis. And we might wanna frame it slightly differently to, like, one sixth of the district or two or more as long as they are reaching a certain parcel count or something like that.

[Kirby Keaton (Legislative Counsel)]: I think the distinction here is go it alone or join with any number of others.

[Emilie Kornheiser (Chair)]: Oh, because it's before we actually get to the

[Kirby Keaton (Legislative Counsel)]: It's before they are required to start following the PVR schedule.

[Emilie Kornheiser (Chair)]: Okay. Great. There you go, thank you.

[Bridget Burkhardt (Clerk)]: I mean, seems like

[Carolyn Branagan (Member)]: we have such disparate current status on appraisal. Some are so woefully far behind that you wouldn't want to prevent someone from doing it just because they have no idea.

[Kirby Keaton (Legislative Counsel)]: We are now in the sections on appeals and hearings conducted by the racial assessment district appeals boards, Originally, we looked at language that prevented for these three person panels, it was, or at first it was none of them can be representatives of the town in which the underlying property is located, and then it was changed to, well, one of them could be, and then I think the more the committees thought about it, the more there could be situations in which most of the parcels in this RAD are from the same municipality, and so maybe for purposes of people participating in the appeals boards, it just makes sense to allow even more than one. So I was last asked to change it to no more than two board members shall be panelists for a hearing involving a property located in municipality first, the members of representatives. So up to two out of the three can be from the underlying properties municipality. Maybe at least one more change. Almost there. Okay. So I think there's two more changes. This is a change relating to abatement for specific issues.

[Emilie Kornheiser (Chair)]: Let me frame this a little. Sure. So, under current law, all the responsibility for assessment and listing sits with the municipality. Right? Except for various circumstances. And if there's a mistake, the sort of fiscal responsibility to change it and recoup the taxes sits with the municipality. And sometimes if there's a mistake, municipalities sort of agree to pay that back to someone. And sometimes they opt to include the education tax in that, and sometimes they don't. And so this is trying to get clear on that and say, like, in the future when the responsibility of this for is gonna shift, the reimbursement for that should have should be decision decided at the state level. It should be the state's dollar. Can I explain it with better words than that?

[Kirby Keaton (Legislative Counsel)]: Maybe put it a little differently. Number one thing to know is municipalities under our system are responsible to make their education payments no matter what. Even if someone doesn't pay, like if a taxpayer doesn't pay them, it doesn't matter, the town still pays the state. Second, abatement is a process that all municipalities have at their disposal, where they can forgive property taxes for certain reasons that are listed in statute. The Board of Abatement for the municipality decides that. It's completely discretionary, it's not like an appeal. So in this case, it says that for one type of abatement that is done, which is the type that is due to clear or obvious error or a mistake of the lister, if abatement is granted for that reason, then the municipality or the Board of Abatement could choose to not only abate municipal taxes in which the municipality would be responsible for, but could also abate the same proportion of education taxes, and that the state will reimburse the municipality for that abatement. And it's in situations in which basically a clear mistake was made, such as the lister mistakenly thought that a different building was on that parcel, and the property was valued much higher than it should have been, or, you know, some other mistake relating to the property valuation, or some detail about the property. So the policy choice here is for the state to be responsible for those situations, because if not, with under our current system, there's not really a lot of incentive for a municipality to make that person whole, even though, you know, there's an unfairness there that they were required to pay more taxes than they should have, but the municipality doesn't want to abate because the municipality would then have to pay it even though it's state education tax money.

[Charles Kimbell (Ranking Member)]: There's nothing in here that says the municipality has to provide, I guess it's assuming through the definition that the municipality has already given money back to the property tax there?

[Kirby Keaton (Legislative Counsel)]: Yes, because it's reimbursement, the education tax would have had been abated already and then they're reimbursed by the state. And there's an approval process in this language, where, the Commissioner of Taxes would decide, whether the requirements are met, and then, it's the Agency of Education that does the forgiving, because they're the holders of the state education fund money.

[Emilie Kornheiser (Chair)]: Does this feel okay for folks?

[Bridget Burkhardt (Clerk)]: Yeah, so even right now, the Secretary of Education is directly responsible for the

[Emilie Kornheiser (Chair)]: Ed Fund, or the flow of money from it? Perfect.

[Kirby Keaton (Legislative Counsel)]: Education tax money goes to the Agency of Education, and the Agency of Education way the statutes are constructed, it flows through there.

[Emilie Kornheiser (Chair)]: The approval of this would be the Commissioner of Taxes.

[Kirby Keaton (Legislative Counsel)]: With the rationale being the Commissioner of Taxes has staff that has expertise about property valuation and that sort of thing, and that's what would be looked into presumably, not the money flow. So AOE doesn't have as much expertise to approve these.

[Carolyn Branagan (Member)]: The abatement is granted by the local board Local Board of Abatement? Yes. Is that right? So the locals make the decision, but then the payment is contingent on the opinion of the commissioner? The

[Kirby Keaton (Legislative Counsel)]: locals make the decision. The taxpayer has their tax abated, so the municipality either issues a refund or if tax haven't been paid yet, then the taxpayers have to pay them. But nonetheless, the municipality is still responsible for education tax and still sends in the education tax payment like it is supposed to, as if the person had paid. And then this gets corrected kind of on the back end, where the municipality makes a request to the tax commissioner and says, look, we abated this education tax, can you reimburse us the $5,000 or whatever? And the tax commissioner has the ability to look into the details and say, what was this abatement about? What happened? Do we agree that this was an actual mistake? And if let's just look at a worst case scenario, so to speak. Commissioner disagrees, says that wasn't a mistake, that was some other problem that does not fall under fifteen thirty five sub four, they could deny it and say we're not going to have AOE reimburse us that, or the commissioner could accept it and say, okay, looks like a mistake of the Lister was made, we will tell AOE to issue the reimbursement for you. Does that make sense?

[Carolyn Branagan (Member)]: Yes, but I don't like it.

[Emilie Kornheiser (Chair)]: I yeah.

[Carolyn Branagan (Member)]: I totally like that. I don't like it because now the commissioner can subvert a decision made by the local board

[Emilie Kornheiser (Chair)]: of abatement. So the local board either has the responsibility or they don't have the responsibility. I think the problem I was trying to solve here is that boards of abatement are very hesitant to abate the education side of the tax because it's the municipality, because they're often willing to abate municipal tax and not willing to abate the education tax. And so this gives a path, an opportunity for them to evade the education tax and get their money back. Or get their money, it's not back, but get the money for it.

[Carolyn Branagan (Member)]: That may be. In fact, I I believe you've been a chair because I've never known you to not tell me the truth. But I was on the board of abatement for years, and I never knew that to happen in my local board.

[Emilie Kornheiser (Chair)]: It happens on my local board, and this happened to a constituent of mine. And I see Teddy has been nodding about it. I think it happens on Mark's Board

[Rebecca Holcombe (Member)]: of Abateness as well. We also

[Charles Kimbell (Ranking Member)]: did, intentionally related, but in the flood bill last year, we did a similar thing where we refunded the education for taxes that were abated due to flooding events.

[James Masland (Member)]: Part of

[Charles Kimbell (Ranking Member)]: the flood bill refunded, made the municipalities hold for

[Rebecca Holcombe (Member)]: that abated education fund policy. So it's the same principle.

[Kirby Keaton (Legislative Counsel)]: I took a lot of the language from Act 82 that you represent for this. It's the same As far as the process between the tax commissioner and the AOE, it's the same process that was used for Act 82. Except that was based on the different types of abatement. This is for the clear or obvious error or mistake of a lister.

[Carolyn Branagan (Member)]: Is there a way we can do this without pulling the rug out from underneath the local wall?

[Kirby Keaton (Legislative Counsel)]: I would say that under our current system, municipalities do not have a way in our laws to abate education tax without basically paying it themselves instead. This gives a pretty narrow situation, it's one of very many scenarios that could come up that's problematic that a board might want to abate under, so it's only one of those reasons that are allowed in statute for abatement is allowed. So I would say this slightly opens up options for courts of abatement and for municipalities to have a choice to abate education tax and not have to pay for it themselves.

[Carolyn Branagan (Member)]: President Burkhardt? My question

[Bridget Burkhardt (Clerk)]: is about the language around the secretary. It says that the secretary has the authority to make reimbursements, but do they then have the authority not to make a reimbursement? I'm just trying to understand if the language really does compel them to make a reimbursement if it's approved by the Commissioner.

[Kirby Keaton (Legislative Counsel)]: The language is there because under current law, it's very strict about what the Secretary can do with education money. So this is to provide that authority because, you know, if we left that out, you could have a very careful Secretary of Education say, well, it says this, but nowhere does it say that I can, that I am allowed to. And so, to be very clear that that bureaucrats don't have to worry that that it's allowed.

[Bridget Burkhardt (Clerk)]: Okay. I was yeah. I guess my question was just if the secretary decided that they didn't want to, that they had the authority just not to, even if it's been approved by

[Kirby Keaton (Legislative Counsel)]: the I don't read this as the to deny. If the commissioner has the ability to deny, that's pretty clear in this language. If told by the commissioner, then

[Emilie Kornheiser (Chair)]: They have to. It's pretty profound. Anyone else? Okay. Thanks, Greg.

[Kirby Keaton (Legislative Counsel)]: I believe this is the last one, yes. The last edition that is new is a new section that amends the section of law relating to the duties of PVR, and it adds a duty that says to issue guidance to ensure consistent and accurate appraisal of the fair market value of properties in manufactured home parks in a limited equity cooperative, taking into consideration the limitations under 11 BSA section fifteen ninety eight, which are the limitations for limited equity cooperatives. This comes out of an issue that's being discussed in a different bill that's being handled by a couple of my colleagues. So I don't know the full background, but I do know that there's an interest to clear up how property valuations should be done from town to town when it comes to manufactured home parks in limited equity properties.

[Emilie Kornheiser (Chair)]: So seven fifty seven had a really big report for PBR, and we have I think we talked about that yesterday.

[Rebecca Holcombe (Member)]: Yeah, can't mention that. So

[Kirby Keaton (Legislative Counsel)]: in lieu of that report, it's just a provision added to statute instructing PBR to issue this guidance.

[Emilie Kornheiser (Chair)]: PBR is seamless. My vision appreciates the change. Okay.

[Kirby Keaton (Legislative Counsel)]: And as a reminder, most of the RAD stuff is still set to be effective 01/01/2031.

[Emilie Kornheiser (Chair)]: The guidance issuing is sooner than that though, The little part we just looked at?

[Kirby Keaton (Legislative Counsel)]: Yes, use of X's for all of the numbers, it's starting to become problematic as this grows. It's this one, it's effective on passage. It won't be in the books yet, but PBR will know.

[Emilie Kornheiser (Chair)]: Let's switch gears to property tax specification.

[Carolyn Branagan (Member)]: I don't know, switching gears. What are those bicycles that people use? New gears? Fixed gear? So the fixed gear by fixie.

[Charles Kimbell (Ranking Member)]: Those are tough to

[James Masland (Member)]: shift gears up.

[Emilie Kornheiser (Chair)]: But your gears are fixed.

[Charles Kimbell (Ranking Member)]: Yeah. Unless you pedal backwards.

[Carolyn Branagan (Member)]: I

[Emilie Kornheiser (Chair)]: have too many fellows in Rattleboro for such a thing.

[Kirby Keaton (Legislative Counsel)]: So for property classifications, the only thing that's changed since we discussed this last time, it's been a couple of weeks, is for mixed use parcels, topic came up with, we are dividing up floor space to determine what percentage of the parcel is considered one classification, what percentage is considered a different classification. This really will come up when it comes to non homestead, non residential and non homestead residential being the two uses on a parcel. So the word finished has been included in some places to specify that when dividing up this floor space comparison, we're only looking at finished floor space, we're not looking at unfinished barns and unfinished basements. Those things would be left out of that calculation.

[Carolyn Branagan (Member)]: So the differences under previous language, let's say there were two buildings, one was commercial use, the second was a home and was used as a home and had an unfinished basement. The entire home plus unfinished basement would have counted as

[Rebecca Holcombe (Member)]: resident. I would

[Kirby Keaton (Legislative Counsel)]: say under the previous language, was ambiguous, and the department would have had

[Charles Kimbell (Ranking Member)]: to make the call.

[Emilie Kornheiser (Chair)]: Okay, the department asked us to make the call, so we

[Carolyn Branagan (Member)]: can I'm just trying to understand.

[Kirby Keaton (Legislative Counsel)]: Mean, for your information, we are putting finished here, but that's not 100% clear either what that means. So there is still some ambiguity, and then there will be some, you know, the department will still have to make some calls and educate taxpayers about this. A

[Charles Kimbell (Ranking Member)]: conversation about whether or not rental of a property for ninety consecutive days might classify it as

[Kirby Keaton (Legislative Counsel)]: non own stead, non residential, but not a second home. Just wondering if we have that in the language.

[Rebecca Holcombe (Member)]: I can't remember where we ended up on that.

[Emilie Kornheiser (Chair)]: I wasn't sure where to end up on that, and so I would love if folks went away and I'm like, can you go to the section about how long some things can be rentable? The term rent. The one thing we did talk about last time is that if someone who owns a property isn't sure how their property will be used, they can classify it as long term rental and then shift it in before October. When they if they find out that they actually haven't been able to rent it long term during that time. So that's one piece that's sort of in the existing language, but was implicit.

[Charles Kimbell (Ranking Member)]: The second piece of that was there were cases, I think we're talking about traveling nurses as an example, who might occupy a property for ninety consecutive days and there clearly wasn't a second home.

[Emilie Kornheiser (Chair)]: So I wonder if it could be ninety consecutive days or six months which aren't consecutive?

[Charles Kimbell (Ranking Member)]: Yeah, they're so stressful. What do people think about that?

[Carolyn Branagan (Member)]: You caught me. So we're trying to make sure that traveling nurses are considered long term rentals.

[Charles Kimbell (Ranking Member)]: Yes, some of them might occupy something for as many as three consecutive months.

[James Masland (Member)]: I actually heard that on my campaign or my trail for town meetings, an individual basically said they could do that for proud nurses for three months.

[Emilie Kornheiser (Chair)]: If someone's doing something for three months twice, that is six non consecutive months. Yes.

[Kirby Keaton (Legislative Counsel)]: So it would I don't want to sound like a policy suggestion or anything, but just so you are aware of the decision you are making. As Chittenden said, if you have a traveling nurse for ninety days, but then you have either a long term rental for the rest of the year or another ninety day period, then this language works for that. The scenario that could change would be if there is a ninety day period and then the rest of the year is short term rentals. So, you know, and You are going to to fill out an attestation, right? When they do their taxes or something. In either case and and, yeah, attest to how long it was rented. They've been renting to for how long? For the periods of time. I'm not sure if our if the attestation would require, like, personal knowledge of the renter or anything like that. Oh, yeah. No. I'm sorry. I'm not,

[Charles Kimbell (Ranking Member)]: like Yeah.

[Kirby Keaton (Legislative Counsel)]: Yes. Seasonal employees who are other?

[Carolyn Branagan (Member)]: Yes, I 100% support tax policy that tax can enforce and make sense of. I just have to say, having come out of appropriations, that I would not want to be doing tax policy to support the practice of relying nurses because it was bleeding the stick dry.

[Charles Kimbell (Ranking Member)]: Tell me about a residential situation, not necessarily where they're working. Somebody has to work.

[Emilie Kornheiser (Chair)]: I mean, someone could move I totally agree. I'm not No. I hear you. Someone could be moving here for a permanent job And trying

[Carolyn Branagan (Member)]: to figure out where to go. I percent agree on that. I just hope that's not the document that we're doing. No.

[Charles Kimbell (Ranking Member)]: Always working. It's quite

[Carolyn Branagan (Member)]: slow. Representative Higley. This is another

[James Masland (Member)]: are we moving on to another issue?

[Emilie Kornheiser (Chair)]: No. I actually would love to did the issue get resolved while I was getting water?

[Charles Kimbell (Ranking Member)]: Oh, yeah. We're all in.

[Emilie Kornheiser (Chair)]: Where are we all in on? What are you all in on, Representative Branagan?

[Carolyn Branagan (Member)]: Not immediately, so you bakes two new purses for one

[Emilie Kornheiser (Chair)]: thing. Yeah. Sticking to six months or adding the ninety days? Ninety days.

[Carolyn Branagan (Member)]: Isn't that what's important right now?

[Emilie Kornheiser (Chair)]: No, we have six months. Okay, six months. Turn

[Carolyn Branagan (Member)]: around even.

[Kirby Keaton (Legislative Counsel)]: And

[Carolyn Branagan (Member)]: what line is it on? It's on page what? In line four. On

[Kirby Keaton (Legislative Counsel)]: page three, starting on line 10, is the long term rental definition.

[Emilie Kornheiser (Chair)]: I mean, I want to just be sort of I do not have a strong opinion or I would state it. I want to be clear that this is, in some ways, eroding the definition of long term rental by essentially adding something that you could call a medium term rental, which is not something we usually talk about, but it's a thing that sort of happens. I

[Carolyn Branagan (Member)]: like the ninety days, because it's so hard to get people to move here, they come and they have a ninety day rental just to see what they might like to go to, because it's so hard to make it hard. Not that this necessarily works. No, mean they're not, okay. And I would just say on the other side, as someone whose communities are close to a hospital, what we've seen is short term rentals around short term employees just eroding our housing base. So what did you want, six months? I mean I also have a feeling that we're going to probably visit this in a year anyway so I can't perseverate too much. So I have long term rental on page three, line 10. Long term rental means a dwelling for which rent is paid for the right of occupancy for a period of at least thirty days. For periods of at least thirty days. Yeah, you're gonna just

[Emilie Kornheiser (Chair)]: do dates. Under six months is the next piece. Then there's B.

[Carolyn Branagan (Member)]: On rent also means unwelling. Use budgeting to house your employer's employee for at least six calendar months. That's a different thing.

[Bridget Burkhardt (Clerk)]: But saying that they have to be at least thirty days, so you couldn't It has to be at least six months. And it has to be chunks at least thirty days. So you can't say it's rented for a period of six months, but

[Carolyn Branagan (Member)]: it's little like two week chunks. The thirty days is an employer and employee relationship.

[Emilie Kornheiser (Chair)]: Going to have Kirby jump in.

[Charles Kimbell (Ranking Member)]: Sure. So,

[Kirby Keaton (Legislative Counsel)]: let's say you own a property and you're deciding, do I put this down as having a long term rental, which means I could put it down as non homestead, non residential, or do I have to put this down as like a second home, like non homestead residential? And then you look at your usage. The first part says it has to be rented out for the right of occupancy. So like a legit rental situation in thirty day chunks, at least thirty days, and, and a combined rental period in the current calendar year that totals at least six months. So that would be at least six thirty day chunks, or it could be, you know, one renter for an entire six months. And there's a bona fide relationship and that's just saying you can't just let your kids stay there and call it a rental. So, that's the first part, but let's say you're like, oh, well, I'm actually letting my employees stay there and I'm not charging them fair market rent. Does that still count? So that's where the next part comes in, so there's another way to qualify, and that's where it says long term rental also means a dwelling used by an employer to house the employers' employees for at least six calendar months, which need not be consecutive in the current calendar year. As used in this section, employee means an individual who's reported for UI purposes or a farm employee, and then if it's a farm employee, the UI requirement does not apply. So those are the two ways under language you have right now to qualify. So a scenario where you have a traveling person stay there for ninety days, that doesn't get you to the six months, it gets you halfway there. So, if you have a long term renter for three more months of any other kind, you would still qualify under this definition, but if for the rest of the year, it's either vacant or short term rentals, something like that, then the property would end up having to be attested as being non homestead residential and pay a higher rate.

[Emilie Kornheiser (Chair)]: And so someone could have a three month rental and then three separate thirty one day rentals and also qualify? Right.

[Kirby Keaton (Legislative Counsel)]: I'll take the six months.

[Charles Kimbell (Ranking Member)]: We're already in the world of non homestead. Yeah.

[Carolyn Branagan (Member)]: It's the same time.

[Emilie Kornheiser (Chair)]: Okay, I'm sensing a general sticking to the language vibe. Okay, thanks everyone. Are there other things? Yes, Rebecca Holcombe. My mythosaurus and

[Rebecca Holcombe (Member)]: I have failed to come up with alternatives for non homosexual.

[Emilie Kornheiser (Chair)]: I'm really glad to hear that, thank you.

[Kirby Keaton (Legislative Counsel)]: I'm not, well, maybe

[Emilie Kornheiser (Chair)]: you can discuss it further with Jake over the summer. Grab a creamy. Then you should bring Bill. Okay,

[Bridget Burkhardt (Clerk)]: Are there other, what else is in here?

[James Masland (Member)]: It's it was just about

[Kirby Keaton (Legislative Counsel)]: the finished floor space. Anyone

[Emilie Kornheiser (Chair)]: else have anything else with this bill?

[James Masland (Member)]: Any consideration from an idea? With regards to page four, line 19, underlying land shall be classified proportionally based on the same percentage as the finished floor space and this would only apply to non homestead properties, not homestead properties because homestead properties regardless of whether you had a Airbnb or whatever would all be homestead, but for ease of assessing and not, just don't understand why we're making it so complicated that we have to proportionally separate out the same percentage for the length. I mean, much additional money are we looking to gain out of that compared to the amount of grief and malcontent and aggravation that everybody's gonna get?

[Emilie Kornheiser (Chair)]: I'm not able to measure the grief and malcontent, and I don't think we can get a fiscal note on that. But it's the scenarios that we talked through that got us there struck me as compelling, but it sounds like they didn't strike you as compelling. And that's, I think, the only I don't I don't know if I have a better answer. Does anyone else?

[Charles Kimbell (Ranking Member)]: I I was just thinking the next if you just go up to the next item, number three, or notwithstanding any provision subsection, the entire parcel of land surrounding the homestead shall be classified as homestead.

[Kirby Keaton (Legislative Counsel)]: Right. That'd said to that. I want to clarify it. It doesn't. That's problematic.

[James Masland (Member)]: Right. I'm just talking about the example of the non homestead property, the bakery, you know, with the Airbnb at the pub.

[Emilie Kornheiser (Chair)]: I think we were talking about the horse farm. I think that's where we got I think we spent a lot of time talking about horse farms that day.

[James Masland (Member)]: Apologies about A horse pretty simple solution to aggravating proposal to separate out our non homestead properties only, not homestead, because you're correct. Homestead, that's next number three, clarifies that it's all going to be under homestead, the land. But any non homestead property, you're going to have to proportional out anything that's

[Emilie Kornheiser (Chair)]: Is the lister going to do that or is the person going do it while they're declaring on the declaration form? I was assuming that it would because it's not about the property value. It's about the property tax and the property use. And so I was imagining that was gonna be on the duo. No. Jake, how did you imagine that was going to happen? Jake,

[Rebecca Holcombe (Member)]: guess the first thing everybody knows is there's nothing about acreage here or moving acres into one thing or another, another, so that's not what we're talking about. It's about the land value. And so the question is, suppose you have 50% bakery, percent Airbnb, whatever, above it, what do do about the land And so that would say it goes fifty fifty, and that would be something that the lister would move, just like when they get homestead decoration, they could move the building into non homestead, this would be similar. You would move the building value like we call, so 50% on land value. So again, the lister decides based on things reported by the property owner. Yeah, I think you're thinking of like a scenario where it will be all or nothing, it almost sets that can pose some weird situations.

[James Masland (Member)]: You need to explain that. I just don't see it. If you like that bakery, I think we're using 25% for the Airbnb, 75% for the living. What would be the problem with just saying that all the land, like you say, not acreage, but the value of the land, going to be in a non homestead, instead of part of it non homestead residential and part of it.

[Rebecca Holcombe (Member)]: Okay, well, if you have a 10,000,000 waterfront Sherlock property, 10,000 square foot house, a lot of them could set up a little bakery outfield, it's set up, then all the land value could go to non homestead, non residential to I guess

[Carolyn Branagan (Member)]: my Or like a

[Emilie Kornheiser (Chair)]: cute farm stand on the very edge of the property.

[James Masland (Member)]: My total option, I guess, is that's why

[Rebecca Holcombe (Member)]: I don't like this one.

[Kirby Keaton (Legislative Counsel)]: So a couple of things. What we have currently for language for the grant list is that the assessing officials would have to list only the number of dwellings. That's the only requirement we actually have. So, part of what Jason is saying is projection based off of discussions between the department and assessing officials. So if we want to be very clear about what you are talking about, we might want to address that, because I think that's not guaranteed, to be clear. The only responsibility added to assessing officials here is to list that number of dwellings. Had another important thing. I have to I have to capture it with my virus rattled mind.

[Emilie Kornheiser (Chair)]: We're gonna switch gears on just a few Okay. To find that thing today. Jake just had to step out, and I wonder if you want to follow-up with him a little bit more, Mark Higley.

[Kirby Keaton (Legislative Counsel)]: The other thing is if you don't want to deal with mixed use parcels using the proportionality, we had talked before about if there is a default, you should choose which one. Would keep that in mind, if it's a default to the higher or the lower rate, basically.

[Emilie Kornheiser (Chair)]: And Jake historically has recommended we default to the higher rate, and I think we were slightly uncomfortable with that. And that's why we were doing proportional, if I'm remembering the conversation from a few weeks ago. You.

[Carolyn Branagan (Member)]: Did you have something?

[Charles Kimbell (Ranking Member)]: Oh, just a comment on the proportionality. If we divide it up before space, and I don't have a problem with doing the land the same way. It's a known metric. Been established. We've got through that. Might complicate things further, just go with what we've got. That's my 10¢.

[James Masland (Member)]: It's a performance metric as in how, because again if there's business use in property now that's performed by the individual property taxpayer. They let us know, we don't do it as an illustration.

[Kirby Keaton (Legislative Counsel)]: I would I would say the language that we're looking at doesn't necessarily change that, like, even when it comes to the new stuff.

[Emilie Kornheiser (Chair)]: Okay. Thank you. So what I heard from all that we just went through is that Mark has a change he wants. I didn't hear any other change that anyone wants. So I'm gonna okay. So, Mark, why don't you talk to Jake Moore and see if you can find a way that you can be comfortable? Okay. Thank you. Thanks, Kirby. What happens now? Now we talk about seven seventy five, an act relating to creating tools for housing production. We don't have any changes since last time we looked at that, but people had time to do their thinking. Right? Okay. You look like you have some more issues.

[Charles Kimbell (Ranking Member)]: I didn't know if you were ready for a motion or

[Bridget Burkhardt (Clerk)]: Make them ready for a motion?

[Emilie Kornheiser (Chair)]: Your plan. I think that's my plan. I feel like a good plan, folks.

[Carolyn Branagan (Member)]: Seven seventy five and switch one.

[Bridget Burkhardt (Clerk)]: That's one with the treasure.

[Emilie Kornheiser (Chair)]: I did. And Adam and the deputy commissioner of Department of Agency the Agency of Commerce and Community Development, all there's much conversation. All talk to each other. Yes. I think they're all feeling I don't want to speak for the agency.

[Charles Kimbell (Ranking Member)]: So they're talking now. At the same time, we're moving this.

[Emilie Kornheiser (Chair)]: If Adam wants to take this up on appropriations, Adam can. But this bill already made it out of another committee unanimously with the support of the administration. So Adam just caught up with it. Adam can take it up in appropriations if he wants to. I'm sure Adam does, too.

[Charles Kimbell (Ranking Member)]: Chair, in the absence of other discussion,

[James Masland (Member)]: I would move that if we

[Emilie Kornheiser (Chair)]: I

[Carolyn Branagan (Member)]: think Teddy wanted to do that.

[Charles Kimbell (Ranking Member)]: I don't know what he was doing, but I would be glad if if representative Waszazak wanted to do that.

[Charles Kimbell (Ranking Member)]: Thank you, Randy, for making him a Laurel. Madam Chair, that we signed seven seventy five paper.

[Emilie Kornheiser (Chair)]: Thank you. I think we amended it.

[Kirby Keaton (Legislative Counsel)]: We did.

[Bridget Burkhardt (Clerk)]: We did. Do you like to make a new motion?

[Edward "Teddy" Waszazak (Member)]: We need to amend it. Madam Chair, have the motion that we amend.

[Emilie Kornheiser (Chair)]: Waszazak moves that we amend seven seventy five. It's these two bills have the numbers are very hard

[Rebecca Holcombe (Member)]: for me. Know. Been struggling

[Emilie Kornheiser (Chair)]: five. Do we have a second? Work. Representative Masland seconds. Any discussion on the amendment?

[Rebecca Holcombe (Member)]: I'll object.

[Emilie Kornheiser (Chair)]: The amendment that removed the interest provision.

[Kirby Keaton (Legislative Counsel)]: Act of special fund.

[Emilie Kornheiser (Chair)]: Discussion? Seeing none, if the court can

[Bridget Burkhardt (Clerk)]: follow on the amendment.

[Kirby Keaton (Legislative Counsel)]: Oh,

[Charles Kimbell (Ranking Member)]: yes. I'm sorry. I want to be sure to properly attribute the amendment that I brought to the committee that was offered by a member of House General. It was after their discussion as a committee was over, but it was generally accepted by them. So it was not an official offering from the committee. Just wanna let you know that the member clarified that yesterday. It's okay with that.

[Emilie Kornheiser (Chair)]: And representative Kimbell, can you

[Bridget Burkhardt (Clerk)]: just be clear that we're still talking about draft? 1.1.

[Emilie Kornheiser (Chair)]: Yes. Yes. Yes. Okay.

[Charles Kimbell (Ranking Member)]: I think that is what representative Waszazak moved.

[Emilie Kornheiser (Chair)]: Yes. Okay. Yep. It was just a two part amendment.

[Kirby Keaton (Legislative Counsel)]: Yes. Yep.

[Carolyn Branagan (Member)]: It's the amendment, not the

[Emilie Kornheiser (Chair)]: whole bill.

[Bridget Burkhardt (Clerk)]: Yeah. The amendment. But not

[Emilie Kornheiser (Chair)]: the whole bill. Any further discussion on the amendment? Thank you for that clarification. And that clarification, the court please call the roll.

[Bridget Burkhardt (Clerk)]: Representative Branagan? Yes. I'll vote yes. Is Representative Burkhardt? Representative Higley? Yes. Representative Holcombe? Yes. Representative Kimbell?

[Charles Kimbell (Ranking Member)]: Yes.

[Bridget Burkhardt (Clerk)]: Representative Masland? Yes. Representative Ode? Yes. Representative Page?

[Woodman Page (Member)]: Yes.

[Bridget Burkhardt (Clerk)]: Representative Waszazak? Yes. Representative Canfield? Yes. And Representative Kornheiser? Yes. We have voted the amendment favorable eleven zero. Thank you.

[Emilie Kornheiser (Chair)]: And the bill as amended.

[Charles Kimbell (Ranking Member)]: Oh, yes.

[Kirby Keaton (Legislative Counsel)]: No, you're good.

[Charles Kimbell (Ranking Member)]: Please, take the question.

[Charles Kimbell (Ranking Member)]: Please, yeah, yeah. No.

[Emilie Kornheiser (Chair)]: Madam Chair,

[Charles Kimbell (Ranking Member)]: I move that we find seven seventy five as amended and favorable.

[Emilie Kornheiser (Chair)]: Thank you. Representative Waszazak moves that we find seven seventy five as amended

[Charles Kimbell (Ranking Member)]: Favorable. Second.

[Emilie Kornheiser (Chair)]: Representative Kimbell seconds. Is there any discussion of this? Representative Branagan.

[Carolyn Branagan (Member)]: Madam Chair, in order to be clear with my fellow community members and with you, I want to make sure everyone around the table knows that this morning I spoke with the Commissioner of Finance. He told me clearly that he did not know about this and did not approve of it and that he was going to go talk to the governor and get back to me. He's not gotten back to me yet. I'm happy to vote now if that's what you'd like to do, but I just want everybody to know why I'm going against it. Thanks.

[Kirby Keaton (Legislative Counsel)]: Do we have to vote right now, should we not? We Check with the

[Emilie Kornheiser (Chair)]: The vote is open.

[Carolyn Branagan (Member)]: I just say that the bill has a long way to go before it becomes law. It does indeed. I'm a little frustrated with the clear vibes we're hitting out of the governor's office. I'd like to know one way or another.

[Emilie Kornheiser (Chair)]: I appreciate your use of the word vibes so much. And I am also frustrated with Commissioner Gresham's slow uptake on his work. And the administration has worked very closely on this bill, to my understanding. But I don't know. I don't know.

[Carolyn Branagan (Member)]: Commissioner of biases that he didn't know

[Emilie Kornheiser (Chair)]: And I also know this was a unanimous vote out of the House General Committee.

[Carolyn Branagan (Member)]: Are we tremendous, Betsy?

[Emilie Kornheiser (Chair)]: I don't

[Carolyn Branagan (Member)]: know. How

[Emilie Kornheiser (Chair)]: are we?

[Bridget Burkhardt (Clerk)]: Does anyone else have anything to say?

[Emilie Kornheiser (Chair)]: Okay. Seeing no further discussion, if the court please call the roll.

[Bridget Burkhardt (Clerk)]: Representative Branagan? No. Representative Burkhardt? That's me. I will vote yes. Representative Higley? No. Representative Holcombe? Yes. Representative Kimbell?

[Charles Kimbell (Ranking Member)]: Yes.

[Bridget Burkhardt (Clerk)]: Representative Masland? Representative Ode? Yes. Representative Page?

[James Masland (Member)]: Yes.

[Bridget Burkhardt (Clerk)]: Representative Waszazak? Yes. Representative Canfield? Yes. Representative Kornheiser? Yes. We have voted the bill favorable as amended nine-two-zero.

[Carolyn Branagan (Member)]: Thank you.

[Emilie Kornheiser (Chair)]: Thank you, everyone. Oh gosh, now we're ahead of schedule. Sorry, Representative Branagan. So we have seven fifty seven next, and we need we don't. I forgot. We don't. We're not ahead of schedule. Great. We need John. John's here. Don't know. We

[Bridget Burkhardt (Clerk)]: like you.

[Charles Kimbell (Ranking Member)]: Glad to be here.

[Carolyn Branagan (Member)]: Also sit under Cameron, though. I thought Cameron.

[Emilie Kornheiser (Chair)]: I can switch it later.

[Carolyn Branagan (Member)]: Which one

[Emilie Kornheiser (Chair)]: are we doing now?

[Charles Kimbell (Ranking Member)]: 757, which is different than 77577. Don't know. So

[Emilie Kornheiser (Chair)]: Harley's doing that one. But if it comes up, it's not present, Charlie.

[Carolyn Branagan (Member)]: Okay.

[Emilie Kornheiser (Chair)]: Team. John. Hello. Hello.

[John Gray (Office of Legislative Counsel)]: John Gray, office of legislative council. We are switching from 775 to 757.

[Emilie Kornheiser (Chair)]: I would like to officially lodge a complaint on the building for Ring.

[John Gray (Office of Legislative Counsel)]: I agree. I felt the same way when these came out.

[Rebecca Holcombe (Member)]: I will talk to someone about that.

[John Gray (Office of Legislative Counsel)]: If there's anything that I can accomplish this session I'm sorry. I'm sorry. I'm gonna screen share

[Rebecca Holcombe (Member)]: so I can stop talking in this phone.

[James Masland (Member)]: Go ahead.

[John Gray (Office of Legislative Counsel)]: So the only thing I consider change in this amendment, you saw a draft 1.1 from Cameron that he previously walked through. All of the changes for this draft 2.2 are in my sections. And what you'll recall from the previous draft is that we had tax provisions that exempted all mobile home sales from the sales and use tax and subjected them to the property transfer tax regardless of their status as real or personal property. This proposed amendment contains a different way of achieving parity between tax treatment for real property and personal property. And the way that it attempts to do this is by creating an effective tax rate under the sales and use tax that is comparable to what you would get under the property transfer tax. So that's the basic, way to understand it.

[Emilie Kornheiser (Chair)]: This is how we're threading the needle of both good tax policy and the tax preference real concerns about how they could actually develop forms even for what the past legislation was.

[John Gray (Office of Legislative Counsel)]: And if the goal is to create consistency, which I think both this committee and house general had talked about, this is a step in that direction. So gonna be pretty straightforward. I think explaining the concept says the whole thing. There is something I do want to flag for you guys, but I'm on page 10. And as you know, we list out statutory purposes for our sales and use tax exemptions. And so there are two pieces here. One is updating the exemption for sales of mobile homes and modular housing. Previously, or under existing law, there's a 40% exemption, and that's included, as you can see in the structure language, is it's providing an exemption for the estimated portion of the cost attributable to labor. Now because you're just trying to achieve same treatment across real and personal property, I think you can just restrict this statutory purpose to we want mobile homes to be treated like traditional residential construction. So that's what you see in subsection S. There's another piece here I didn't note in my intro, but under the existing property transfer tax, I think this passed either last year or the year before, there's a wholesale exemption for new energy efficient mobile homes to achieve the same treatment for mobile homes, whether real or personal property, extend that same exemption under the sales and use tax to those. So that's what you're seeing here. The actual updates for the exemption are in section six. Subsequent change starts on page 11. As I just noted, the existing sales and use tax exemption for mobile homes is at 40%, and this proposes to change that to 90%. I did wanna flag here. This is based on figures that we received from JFO, a band of figures that you could fall within, like 88 to 92%, something like that, because the effective tax rate varies yearly, and depending on whether or not you include the clean water surcharge, you could end up with different figures here. This is a nice, whole number, 90% that's well within that band of achieving a comparable effective tax rate. So just wanting to note, you could potentially choose a slightly different figure here, but this is a clean figure that is within the range that JFO had provided to speak to this. And it's intended to achieve that effective tax rate for mobile homes that are treated as real property. The second piece is what we just talked about. This is a 100%. This will be a wholesale exemption for new mobile homes. And I can walk through the language here, but just know that it draws directly from the language that is used for the exemption from the property transfer tax. So it's new mobile homes that bear a label evidencing at a minimum greater energy efficiency under the ENERGY STAR program or the loans that are certified as zero energy ready homes by the US Department of Energy. So you get a full scale exemption for those, and you get this 90% exemption to create parity between property transfer tax and the sales and use tax payers. So hopefully that all makes sense. It's just trying to achieve the same economic effects for these kinds of homes without disrupting the underlying way in which the taxes are administered and without disturbing the relationship between property law and tax policy. Otherwise, the bill remains as is. I will note the effective dates section, page 12. Most of the act would take effect on 07/01/2026 as you've seen in the first version, but the sections five and six that I just walked through would take effect on 01/01/2027 to allow time for tax department to to implement or to stop.

[Rebecca Holcombe (Member)]: What's that?

[James Masland (Member)]: Can you sorry, Jen. Can you just re explain the

[John Gray (Office of Legislative Counsel)]: The 98%?

[James Masland (Member)]: In relation to the energy efficient.

[John Gray (Office of Legislative Counsel)]: Oh, sure. The energy efficient one is if you do have a new mobile home of this form, you're entirely exempt from the sales Entirely, exactly. In the same way that Not energy efficient, it's not. Exactly. Okay.

[Emilie Kornheiser (Chair)]: Okay. That's something we did a few years ago.

[John Gray (Office of Legislative Counsel)]: Yes, yeah, right, I was just trying to achieve the exact thing. Don't have

[Emilie Kornheiser (Chair)]: a fiscal note. We haven't looked at the fiscal note on this yet, and time will be here in a minute. Okay. Thanks. Any other questions about the language? Do folks need anything else before Ted arrives and we look at the fiscal note? Thank you very much, John. We are gonna take a fifteen minute break.

[John Gray (Office of Legislative Counsel)]: Thank you, guys.

[Emilie Kornheiser (Chair)]: Bye. Please don't go far.

[Charles Kimbell (Ranking Member)]: Fifteen, you said?

[Carolyn Branagan (Member)]: Fifteen.

[Emilie Kornheiser (Chair)]: But, like, actually