Vermont Legislature SmartTranscripts:

[Unidentified speaker (member or staff)]: Good afternoon, ladies and gentlemen. Thank

[Rep. Emilie Kornheiser (Chair)]: you. It is Tuesday, April 7, 01:15. We are continuing our work on H95. We are going to start by reviewing some updates to language on the property tax classifications with Kirby Heaton. And then we're going to go to a miscellaneous array of language with, let's say, JP Kirby. And we received a bunch of really technical edits from the tax department, and so Kirby made those. And that's what we're going look

[Kirby Keaton, Office of Legislative Counsel]: at. Good

[Rep. Mark Higley]: afternoon.

[Unidentified speaker (likely staff/guest)]: Kirby Keaton, legislative counsel.

[Kirby Keaton, Office of Legislative Counsel]: So as the chair mentioned, there are some tweaks to the language. Since you saw it last, we received some more feedback from the department oriented towards, you know, we're all evolving and seeing how this will play out in the real world and they got thinking and had some feedback. And then there's also some stuff in here I'll cover relating to some questions that I have that partly that were raised partly out of discussion and committee. And then not sure if the chair wants to, but we could start talking about effective dates or we can wait and talk about the effective So

[Rep. Emilie Kornheiser (Chair)]: effective dates when everything's all together and

[Kirby Keaton, Office of Legislative Counsel]: we

[Rep. Emilie Kornheiser (Chair)]: can see it all as one fell timeline.

[Kirby Keaton, Office of Legislative Counsel]: So what we're looking at is a different document. You'll see it starts with section 57. That's your foreshadowing of a very large amendment coming. I pulled out just the classification stuff to talk about right. So we start with the grand list, and we start with using the word dwelling units. There's two changes here. One was there was a reference to guidance from the commissioner. Here, if the department wanted removed, it's implied that there'll be guidance for assessing officials, so it's not legally mandatory. They wanted the as defined reference to refer to just the classifications definitions, so we made that change. But we have also, since the word dwelling unit is here, I'll jump right into that. The department pointed out how in our homestead chapter, with homesteads, we're dealing with the word dwellings. And here, we're also dealing with dwellings in the class, what would be the sub chapter on classifications, but they have different meanings. The biggest difference in the meaning is that with a homestead, the dwelling does not have to be usable year round, but because of the definitional changes that have been made for classification purposes, a dwelling in that context would need to be used year round or habitable year round if it's to be considered a dwelling. So to avoid confusion between dwelling homestead, dwelling classifications, they suggested a few different things. What we've landed on for this language is having a difference between the two by having just different terms. So classifications would use the term dwelling units, would have a different definition. These are all within their own chapters and the definitions are supposed to be used within that chapter legally, but there could still be confusion of using one definition out of one chapter for a different chapter. The hope is that having, using the term dwelling units for classifications is enough to distinguish it. Also, I'll just jump right ahead. You'll see language in here where we change the homestead language, where we also make it clear there that for purposes of the homestead and homestead declaration, a dwelling does not have to be happenable year round. So there's a lot of belt and suspenders in what we're going to be looking at, as far as covering our bases on both sides for both chapters. So there's dwelling units. Next change is also on the first page here for section 58 starting line 12, where there was some language from where this draft, where the framework for developing classifications was first drafted last session, and that language for the establishment of the property tax classification system had existed more or less unchanged since last year. And at that time it was kind of envisioned that a lot of this would operate through the grant list. After the Act 73 report from the department and then through committee work, this whole process is drifted less about being about assessment and the grant list, and more about the attestation that will be filed with the Department of Taxes, and the classification system will be run through that attestation for the most part. So given that the language that used to be here about having this information on the grant list, about having a property's classification being required to be put on the grant list, That's been removed because that's really not a necessary part of the system, and we haven't heard that there's a need for that information to be on the ground list. So instead of having that happen at all, the language has just been changed to remove it. So now the language says, for the establishment of tax classifications, each parcel of real estate shall be classified as one or more of the classifications listed under subsection B of this section, and based on information and guidance provided by the Commissioner of Taxes under this section and rules adopted under the Homestead Equity section. So this is an establishment provision that does not require the classification to be put on the grant list. It's basically the gist of what this change is.

[Rep. William "Bill" Canfield (Vice Chair)]: Do have questions now or later? Now is good. So is this state law

[Unidentified speaker (member or staff)]: This we're looking

[Kirby Keaton, Office of Legislative Counsel]: the proposed state law. This is what the bill would make state law for tax prosecutions.

[Rep. William "Bill" Canfield (Vice Chair)]: So I'm wondering why you removed it, why it doesn't show with the line through it.

[Kirby Keaton, Office of Legislative Counsel]: Because it's not current law, that's why it doesn't have the strike through. If we're changing current law, that's where you see strike throughs. It's when we have a version of proposed language and then that gets changed, the strike would just be new language, because it was never a law in the first place.

[Rep. William "Bill" Canfield (Vice Chair)]: So we took out proposed language and we inserted new proposed rules.

[Kirby Keaton, Office of Legislative Counsel]: So when it comes to Legis Council walking through things, that's why we have to use highlights and things to show you those changes, because it doesn't always show up in that case.

[Rep. Emilie Kornheiser (Chair)]: And these changes are We had barely finished our policy work on this language a

[Unidentified speaker (member or staff)]: month ago? A week? Some period of time.

[Kirby Keaton, Office of Legislative Counsel]: It's a while.

[Rep. Emilie Kornheiser (Chair)]: Oh, I have no idea if it was five years or three days. And then the tax department took sort of another really deep dive on it and had some technical suggestions. And so these are being responsive to their technical suggestions.

[Rep. William "Bill" Canfield (Vice Chair)]: Okay, I understand. Thank you.

[Rep. Mark Higley]: Do you know, Kirby, why the tech fireman said that they don't need that classification on the brain list? Because I think it would be something that would be important down the road to look at how many of those were.

[Kirby Keaton, Office of Legislative Counsel]: I was in a similar thinking. I've been aware that that language has been unchanged as we've worked through it, I never flagged it because I thought that there could be usefulness. But once they raised the question, we don't need it, and it would be extra work for assessing officials, and then they'd have to work with the department. And so then the question of, Is this necessary? Unless someone has an idea in mind for what it could be used for, because the grand list is public information. So if it is on the grand list, it would mean that annually your classification could change from year to year. But for any given year, a member of the public could look and see how a property is classified if they wanted to. Doing this means it won't be on the grand list and it's more like the confidential protected tax information like when you find your income taxes. It would be more like that kind of data now, by not having it on the ground list and public like that. There is a real world difference between these things, but the question is, do you want it public for a reason? Would the legislature want it public for a reason?

[Rep. Emilie Kornheiser (Chair)]: What I was thinking about is how homestead and non homestead is or even another example that I was thinking about is, some years, the majority of my income is as an independent contractor, and some years, the majority of my income is as a W-two employee. And that isn't public information. That's something that sort of changes every year, and the tax department is tracking. But I don't have the public able to sort of track about me. Well, I I mean, I guess we do have those financial disclosure forms, but I mean, just like as a regular person. Okay. Yeah. Again, somebody could go in

[Rep. Mark Higley]: and grab the full plate of tax laws, and they could look at whether or not somebody paid his homestead on homestead or now Yeah.

[Kirby Keaton, Office of Legislative Counsel]: You're right. There's ways to get the information if you really want to look for it. So it's not really about that. I think it is about this is work that doesn't need to happen and being at the agency having to do part of the work makes sense for them to say why. Okay. Cool. Thanks.

[Rep. Mark Higley]: Still have, what, 15 or 18 property classifications at the LISTER level? There's quite a few. Yeah. In here. In the commercial industry. Right. And

[Kirby Keaton, Office of Legislative Counsel]: those those are not the same as this. For different purposes. One bit of feedback was we didn't reference the commissioner of taxes without including that in the definitions. This is sort of legally optional because there is a provision in title 32 already covering this, but threw it in there. They brought it up, threw it in there. Commissioner means commissioner taxes. Subdivision 2, so that means the subdivision for renumbered by the way, just as a flag for you there. One became two. Dwelling was changed to dwelling unit. We talked about that. And then a flag for all the places where dwelling unit is used.

[Unidentified committee member]: We may have covered this with an edu then as a dwelling.

[Kirby Keaton, Office of Legislative Counsel]: An ADU could be a dwelling unit. Could be, thank you.

[Rep. Rebecca Holcombe]: On how it's well done.

[Rep. Emilie Kornheiser (Chair)]: That's helpful. Sure. We shall not

[Rep. William "Bill" Canfield (Vice Chair)]: dwell on that.

[Rep. Emilie Kornheiser (Chair)]: That was Bill. I just repeated that for the record.

[Kirby Keaton, Office of Legislative Counsel]: Yeah.

[Rep. Emilie Kornheiser (Chair)]: Or a good joke, as the case may be. Sorry.

[Unidentified speaker (likely staff/guest)]: Again,

[Kirby Keaton, Office of Legislative Counsel]: dwelling it. We are moving on. At the bottom of page three of this document, under the provisions relating to mixed use parcels, I flagged some of which here this so we changed a few things with mixed use parcels. The first thing is that originally, there's provisions stating that buildings shall be classified proportionally based on the percentage of finished floor space used. And we added a provision, which is this is the belt and suspenders thing from the homestead chapter. Improvements in structures on a homestead residential or a non homestead resident parcel shall be classified as non homestead residential unless for a business purpose. This is to say that for the second home classification, which is the non homestead residential, it's going to be treated like homesteads are done. And that's just the same concept. I think it's been imagined that that same concept will be used for classifications, but tax have flagged to just go ahead and put it in there. Subdivision two here, underlying land. This is one that I'm flagging for, based off the committee discussion. It said underlying land shall be classified proportionally based on the same percentage of finished floor space of the buildings. I think that there's room for ambiguity and for confusion later if when it comes to mixed use parcels, we've covered the buildings and the floor space and we've covered the underlying land, but we haven't addressed structures or fixtures that don't have floor space, but do have value. And this came actually out of representative Ode asked a question that made me start thinking about how people might be confused by that when we're talking about just buildings and land. The department might come back with further thoughts on this. I haven't had a chance to catch up with them to actually speak about it, but I think that we see things a little differently on this at the moment. But just as a placeholder, at least, that's in there to say that the underlying land, including improvements or fixtures that lack floor space, shall be classified proportionately. So that's a way to resolve when you've got, I don't know, a giant pool or a giant golden statue or something like that. And then someone's saying, well, this isn't a building and it's not land, so how are you going to put the second home rate on my giant golden statue like that? I don't know if that would actually come up, but I think there's things that could happen that we're not foreseeing, and so it's good to think about that and at least have some provision to try to resolve these ambiguities. Again, the Department might have another solution for that, but I thought at least put it in with the underlying land to settle it that way is a way to go. Subdivision three here says, notwithstanding any provision of this subsection to the contrary, the entire parcel lounge surrounding a homestead shall be classified as homestead in accordance with subdivision 40 fifty four zero one seven. That's part of the definition of homestead for this title. Then we've added, including any improvements or structures considered part of that homestead under subdivision seven f of the definition of homestead. This is the bell and suspenders to make sure that everything that we're saying when it comes to the mixed use and how this committee's discussed, how it's envisioned to work out for classifications aligns with what's said in Homestead. So this is just a clarifying provision that to, in numerous places, we're basically saying that nothing that classifications definitions are doing is meant to change any definitions when it comes to homesteading treatment works. And this is one of those. Subdivision four, if a portion of floor space is used for more than one purpose, the use for which the floor space is most often used shall be considered the primary use, and the floor space shall be dedicated to that use for purposes of text classification, except as provided for in the provision of the homestead definition that says, if you rent out part of your homestead, that has to be considered a business purpose. So this is belt and suspenders. We're just we're just saying except as provided for in a scenario that's already covered under the homestead definition. The next is the language relating to appeals. Originally or all along kind of for a while, the vision was that appeals would be handled like property valuation appeals are handled. And the department has pointed out, well, now that we've gotten into the dwelling use attestation or reliance on that for so much of this, the dwelling use attestation is more like the homestead and it's going to be administered like the homestead, and when it comes to people having issues with the commissioner making a decision relating to their homestead declaration, those appeals are done to the department, not through property evaluation process. And so that's true, and other things could come up too, other types of appeals that are decisions made by the commissioner. There's different ways of going about this, and this is an area that is going to require some more thinking about, more working on. I think the department is currently thinking about this topic, so what I've got here right now is basically making the appeals process based on the decision maker. If you're appealing a decision of an assessing official, you appeal it like property valuation appeal. If you're appealing a decision of the commissioner, then you appeal it like you would income tax appeals, which the reason why that references is because that's what referenced for Homestead is why that appeal process is chosen here. And then just one thing that would come up was if a person files an appeal with the wrong entity because we do have two choices here, then it's gonna that appeal will be considered timely, and then it will be forwarded to the correct entity. That's what we have now. There's I don't know the department's comfort with this, but I'm thinking that they're going to come back with more on this. Looking further down on page seven. This is adding language for the dwelling use application that it has the same deadline as the October 15 deadline for homestead acquisitions. And I'm going to flag a couple of other things that are not here, because the department has raised that they were policy issues and just didn't have the ability to go into. But just so that you're aware, and I don't know whether they're going to want to come in and talk to you about it or not, but they did raise one issue, which was whether any of this should allow municipal abasement of hardship arising from dwelling use attestations and the classification system. There There is is a hardship process relating to homestead declaration filings, but since that require some policy decisions and some possibly some significant statutory changes, it's not there. That's something they flagged. Another thing they flagged is

[Rep. Emilie Kornheiser (Chair)]: Sorry, the hardship for Homestead, it's a hardship that resulted from not having filed the Homestead, not a hardship from having to pay homestead tax.

[Kirby Keaton, Office of Legislative Counsel]: Definitely not that. Okay. But yeah.

[Rep. Emilie Kornheiser (Chair)]: I think that's a fair thing to add, I think, consistent. Yeah. Think this is a new form, and it's gonna be anything new takes a while to adjust to, and not too much.

[Kirby Keaton, Office of Legislative Counsel]: So do you want me to work

[Rep. Mark Higley]: that in?

[Rep. Emilie Kornheiser (Chair)]: That makes sense to me.

[Unidentified speaker (member or staff)]: Don't, if, yeah. Would just add

[Rep. Emilie Kornheiser (Chair)]: a quick point of that on the hardship for

[Unidentified speaker (likely staff/guest)]: owning property taxes. Boards of abatement can abate taxes

[Rep. William "Bill" Canfield (Vice Chair)]: if someone falls behind for,

[Rep. Emilie Kornheiser (Chair)]: you have a heart attack, you're

[Unidentified speaker (likely staff/guest)]: in the hospital, you don't work for three months. So just,

[Rep. Emilie Kornheiser (Chair)]: yeah. Might be a distinction without a difference, but I there's way for

[Kirby Keaton, Office of Legislative Counsel]: think in this case though, it's a slightly different process than that because there's a specific homestead.

[Rep. Emilie Kornheiser (Chair)]: Right. Talking about So in this context, we're talking about a hardship about filing or not filing the paperwork, not hardship related to the need to pay the taxes. So we're not changing the hardship for the need to pay taxes. That has its own system. But have you using the existing hardship for filing paperwork and not filing paperwork, extending it to all the paperwork makes sense to me personally. Anyone else have any?

[Kirby Keaton, Office of Legislative Counsel]: I can walk through hardship because I did actually include that language in case you wanted to talk about this topic, because it's not being changed at this point. But so for the Homestead declaration, hardship means an owner's inability to pay as certified by the commissioner of taxes in the commissioner's discretion or means an owner filing an incorrect or failing to file a correct Homestead declaration due to one or more of the following: full time military service, serious illness or disability, serious illness or death of an immediate family member, or disaster. So to basically allow the commissioner's hardship process to be done for dwelling use attestation filers.

[Unidentified speaker (member or staff)]: Focus on my phone.

[Unidentified committee member]: Yeah. And I agree. Thank you. But I I recognize also that we do that in some cases when we're increasing specificity with our language, some people are simply gonna be confused from time to time, and that's fine. So the language we have now, I

[Unidentified speaker (likely staff/guest)]: think, it provides allowance for that.

[Rep. Mark Higley]: My homework is not a sufficient excuse.

[Kirby Keaton, Office of Legislative Counsel]: So the other thing they brought up was Can

[Rep. William "Bill" Canfield (Vice Chair)]: I just mention, I always thought these four things were decided by the Board of Civil Authority? Somewhere along the way, I've got a hunch that not every town uses the Board of Civil Authority, but my town does, and they are the select board.

[Kirby Keaton, Office of Legislative Counsel]: That process does exist, it still exists, and I think that's what Representative Waszazak is talking about. That one I would say is broader and there's more discretion for the town. But also as we've discussed recently, the town has to pay the difference in ed tax currently if abate that. This version of things that's come through the Department of Taxes and it's relating to these filings, it's not the same, but it's much more specific to specific issues that come up. And I think there's a history there because the legislation has become aware of some issues, especially relating to people who don't have a lot of income and don't know the file of homestead in order to save themselves some money. Some processes have been built over time for these situations.

[Rep. William "Bill" Canfield (Vice Chair)]: Changing the old way?

[Kirby Keaton, Office of Legislative Counsel]: We're not changing anything, what we're doing is expanding the current system. We're not changing the Board of Civil Authority at all. We'll be clear about that. We're expanding this Department of Taxes hardship process to also allow it for the classification systems. That's going to be new. So

[Rep. William "Bill" Canfield (Vice Chair)]: hardship the process that's under the Department of Taxes, where does that meet what the Board of Civil Authority does? Or are they the same?

[Kirby Keaton, Office of Legislative Counsel]: They're not the same. They're different and they're in different scenarios where they could come up.

[Unidentified speaker (member or staff)]: Can I use an example? Would that be helpful? So

[Rep. Emilie Kornheiser (Chair)]: if I had a tax bill, like a legitimate tax bill for my town, and as Teddy said, I had a medical event, and so I couldn't work, I could go to my board of civil authority and I could say, Can I have a payment plan? I have an economic hardship. That's for a bill that I am owed with no mistakes in the bill. Uh-huh. If I am a person who does not file my taxes regularly because I don't have an income, I might not realize that I need to file a homestead form. And my not filing up homes, I might not realize, like, might get my property tax bill, and I might not look at it very closely because it's in escrow. And then, like, months go on and I miss the deadline of having to fix the paperwork. And then I'm like, oh my god, my tax bill is way higher than it should be because I didn't file my homestead declaration. I could be in touch with the Office of the Taxpayer Advocate and say, I didn't file this paperwork, and it's a real economic hardship for me that I didn't file this paperwork. And the Department of Taxes could say, Yes, that's an economic hardship. You can fix your paperwork even though you're past the deadline. And the

[Rep. William "Bill" Canfield (Vice Chair)]: Board of Civil Authority couldn't do that?

[Rep. Emilie Kornheiser (Chair)]: No, because they're about saying whether or not you owe taxes to the town, not about sort of your status for your taxes. And that's current law.

[Kirby Keaton, Office of Legislative Counsel]: Thank you.

[Rep. William "Bill" Canfield (Vice Chair)]: Okay. And

[Rep. Emilie Kornheiser (Chair)]: so as we're adding a new piece of paperwork, we're just treating it the same way we treat the other piece of paperwork.

[Kirby Keaton, Office of Legislative Counsel]: The other issue that they brought up has to do there is a question of Currently, the way that this language approaches dwelling use attestations is that a homeowner or property owner will have to file either a Homestead Declaration or a dwelling use attestation every time. It's like one or the other will be irrelevant. So the department raised the question of, well, what if you just made non Homestead residential a default so that if you don't file, that's the classification you're given. And then that would cut out a lot of the paperwork, is I think the question. And it's fine point, but it's also a policy thing. We could change the language. What it would mean is that currently we have penalties for non filing failure to file when it comes to non homestead residential. We would take that language out because it wouldn't be necessary when we change it so that there's just a default classification, the efficient flow and use application.

[Rep. William "Bill" Canfield (Vice Chair)]: You're asking us if we wanted

[Kirby Keaton, Office of Legislative Counsel]: to Yeah. That's the point. And I guess if you the counterpoint would be you would have a situation similar to what we have with Pumstead where there's failure to file which is detrimental to the taxpayer but it had to do with a lack of knowledge or savviness on their part and they end up paying more. But that could happen even with what we have written here as well.

[Rep. William "Bill" Canfield (Vice Chair)]: I've been spending the last twenty years trying to get the people in my district to file, regardless of what they earned, to always file an income tax because it almost always affects their property tax. So I'm going try and get them to file to be out in the open and to look at it and then we can all say, you you could get a cheaper rate or you could get reimbursement or something.

[Beth St. James, Office of Legislative Counsel]: So now

[Rep. William "Bill" Canfield (Vice Chair)]: is that going be gone? I think that's what I did.

[Rep. Rebecca Holcombe]: I mean,

[Unidentified speaker (member or staff)]: sorry. Go I mean,

[Rep. Emilie Kornheiser (Chair)]: what I like about, if I'm understanding this right, what I like about this is it's treated very similarly to how the Homestead Declaration is treated. And so from my perspective, if more people are filing this paperwork, we're better normalizing the filing of this paperwork. And that might mean that more people are likely to actually file it even when it's in their best interest. So maybe I'm misunderstanding this language.

[Kirby Keaton, Office of Legislative Counsel]: I guess one way to put it in the context, if you're thinking about home sets like that, is making the change that they're suggesting would make it like Homestead in that if you don't file, you end up actually The way it was imagined when homestead was made is if you don't file, you end up paying a higher rate. But as we know, that's not always the case. For this, we think it would be the case because the expectation is that the tax rate multipliers that will be applied to non homestead residential properties will definitely result in a higher tax bill. So it would be like homestead in that and that the non filers should be treated similarly. I think what the chair was getting at was to get at the problem you were raising people aren't always aware that they need to do this thing and that it could negatively impact them, that maybe there's going to be more awareness of filings that need to be done because willing use attestations will be a filing and more tax payers will have a filing requirement. And if you make it a filing requirement across the board for every property owner, maybe that will increase participation or action.

[Rep. William "Bill" Canfield (Vice Chair)]: I thought it was already a requirement that everybody had to file.

[Kirby Keaton, Office of Legislative Counsel]: If you have a home state, you do have to file.

[Rep. William "Bill" Canfield (Vice Chair)]: And some people don't because they are in this bunk and feel like, no, I don't have to file or they're not aware something. I mean, I still do have probably a couple dozen people in my district who don't file

[Rep. Mark Higley]: for all my efforts,

[Rep. William "Bill" Canfield (Vice Chair)]: but a lot of them do file.

[Kirby Keaton, Office of Legislative Counsel]: So nothing we're doing with classifications unfortunately is going to solve that problem. But it is analogous when you're thinking about how much do you want classifications to work with that system, or how much do you want them to work? It's like a variation of that system.

[Rep. Emilie Kornheiser (Chair)]: And from your perspective, Kirby, does this seem consistent with that system? If

[Kirby Keaton, Office of Legislative Counsel]: you make the change they're suggesting, it's consistent in that homesteads right now, if you do not file, then you and your your property ends up being classified as non homestead. No. Under this system, there will also be a classification that's default if you fail to file. What they're suggesting in some ways is taxpayer friendly in situations where you would have been classified as non homestead residential, you didn't file. Well, the default non homestead residential, no harm, no foul. Under the language that we currently have proposed here, there's penalties. Although I think that we've changed it so that the penalties and we have to look at that again. There are no penalties if it's to your detriment.

[Rep. Bridget Burkhardt (Clerk)]: So right now, businesses just don't file because they're not homesteads. So they don't file a form at all. So if we went to the system of just saying, if you don't file a drone use attestation, you end up as non homestead residential, then you're throwing a bunch of businesses into that category that would otherwise be non homestead, non residential. Somebody is going to be affected by not filing a dwelling use attestation. So we just have to figure out.

[Rep. Emilie Kornheiser (Chair)]: And I think at some point in the conversation with Jake, and I'm sorry if I'm quoting him wrong, He was just sort of he was playing out the scenario of, is the default state the most expensive state, and is that the incentive to do your paperwork? Or is the default state the most expensive state, and that is not a fair system? Or do we create the default state something else with the assumption that people

[Kirby Keaton, Office of Legislative Counsel]: think the language that you do have, think the point that they're raising is that they're thinking of it from a tax administration perspective and when there is a non filer, what did they do? Under the language here, there's penalties and such for filing correctly and incorrectly and it's certainly inferred that the department will have to make a decision. And I think they're probably sitting there thinking part of why they're proposing this maybe, obviously I'm not speaking for them, but being in that position where there's no filing and then they have to decide how a property is being used and how to classify it. So having a default takes the decision making of the department out of it. And if that's not the case, then what is gonna happen? And is the department going to come back and say, there's 10% of businesses are non filers. So we're having to chase down and personally check 10% of all businesses in the state, and we can't. Something like that could happen.

[Rep. Mark Higley]: So Kirby, guess you keep saying that departments are the ones that are going to have to consider this, but isn't it the listeners that are going to have to consider it first?

[Kirby Keaton, Office of Legislative Counsel]: So under the system that we have in the words on the page now, the listeners are only going to be checking to see how many dwelling units are in a building. That's the only role they have at this point. The rest of it is basically on the property owner to give the rest of the information to the department each year, and then for the department to have to check for compliance and administer all that.

[Rep. Emilie Kornheiser (Chair)]: The same way we do homestead.

[Rep. Mark Higley]: What do mean, a major task on your part? On

[Rep. Emilie Kornheiser (Chair)]: whose part?

[Rep. Mark Higley]: Taxes. The apartment of taxes.

[Rep. Emilie Kornheiser (Chair)]: I mean, it's the same, that's what we do for homestead and non homestead right now.

[Rep. Mark Higley]: Well, we have a role there as well, visitors.

[Rep. Emilie Kornheiser (Chair)]: But is it an official role or an unofficial role?

[Rep. Mark Higley]: Well, I treat it pretty officially. I mean, I know somebody's, like you said, living there and having a Yes.

[Unidentified speaker (member or staff)]: Is that your statutory role, or is

[Rep. Emilie Kornheiser (Chair)]: that something you do as sort of a person like? Yeah, yeah, yeah. And so I think the intent here is to not sort of increase the statutory role for listers and knowing that, like, right now, the tax department regularly talks to people in towns to check up on complaints just like that.

[Rep. Mark Higley]: So they're gonna make some sense of the tax department comes back and says, yeah, this person's either. I

[Rep. Emilie Kornheiser (Chair)]: think one thing that's cool about this is that the tax department's also gonna be able to cross reference with income tax records to verify things in a way that a town official could not.

[Unidentified speaker (member or staff)]: Are we saying that they have to do that or they No.

[Rep. Emilie Kornheiser (Chair)]: Just I mean, compliance is and we try not to put too much compliance into statute because they don't want the public to know their tricks. I don't know a good way of phrasing that.

[Rep. William "Bill" Canfield (Vice Chair)]: Well, wait. That detail what what's the problem with your own thought?

[Rep. Emilie Kornheiser (Chair)]: I think in the context of the tax classifications, we're trying to decide what we want the default no paperwork has been filed status

[Unidentified speaker (member or staff)]: to be. Is that a good summary?

[Kirby Keaton, Office of Legislative Counsel]: Yeah. Think that's at the heart of all of it. How do you go about that? If you keep the language as it is, it means that there will be a filing requirement for every property owner. And in the case of non filers, the department will have to figure it out. And there's penalties for, obviously, fraudulent filings, but also for filings where there was an error that's to the benefit of the property owner.

[Rep. Bridget Burkhardt (Clerk)]: Did you hear us?

[Unidentified speaker (likely staff/guest)]: I heard some, that's why

[Rep. Emilie Kornheiser (Chair)]: I came over.

[Rep. William "Bill" Canfield (Vice Chair)]: But now, for fault, it goes to the abatement board and they might end up in a tax sale.

[Kirby Keaton, Office of Legislative Counsel]: No. If they're too total Carolyn, I think it'd be helpful

[Rep. Emilie Kornheiser (Chair)]: for you to that's about sort of total tax liability. And if just, like, let that all go. It has nothing to do with what we're talking about, really. I mean, everything is deeply connected, but, like, the need to pay your full property tax and the abatement process for that is sort of outside of the the scope of this.

[Kirby Keaton, Office of Legislative Counsel]: We're talking about really in the front end of deciding what a property tax bill is going to look like. And what you're talking about, especially like you're talking about the very end of the process where it's been due, it's overdue. So we're on different parts of the process. This is about in the first place deciding the classification which then results to what tax rate will be applied. Then billing would have to.

[Rep. William "Bill" Canfield (Vice Chair)]: I I don't don't see where one stops and the other ends, but anyway, whatever.

[Rep. Emilie Kornheiser (Chair)]: Representative Krishna.

[Unidentified speaker (member or staff)]: Yeah. I

[Rep. Bridget Burkhardt (Clerk)]: think so is there a situation where a business would not be filing business taxes? I'm just trying to think about, probably

[Beth St. James, Office of Legislative Counsel]: you're nodding

[Rep. Bridget Burkhardt (Clerk)]: your head, yes. Is there a situation where that would happen?

[Kirby Keaton, Office of Legislative Counsel]: Yeah. Okay. Prior to this.

[Rep. Mark Higley]: Could be a mentor and there could be an LLC that lends the property to the commercial business. So is the LLC in that mixed use property filing at attestation?

[Rep. Emilie Kornheiser (Chair)]: But would that LLC file income taxes, business taxes?

[Rep. Mark Higley]: Yes.

[Rep. Bridget Burkhardt (Clerk)]: Because that was my thought

[Unidentified speaker (member or staff)]: about Well, that's a

[Rep. Emilie Kornheiser (Chair)]: representative for Kurt, finisher.

[Rep. Bridget Burkhardt (Clerk)]: Because my thought was trying

[Beth St. James, Office of Legislative Counsel]: to figure out how to make

[Rep. Bridget Burkhardt (Clerk)]: the least amount of paperwork for everybody. And so if we defaulted to the highest rate, I was worried about harming businesses who accidentally didn't file a form. But it's one thing to tap on another form if you're filing your taxes. Because I think that's where a lot of homestead declarations get missed. It's folks who don't have to file incomes because if they're just in a position of not needing to. And so they don't think, oh, I need to have a form filled out at the same time because they're not doing income tax. But businesses would be doing income tax every year anyway. It would

[Rep. William "Bill" Canfield (Vice Chair)]: be an additional form that

[Rep. Bridget Burkhardt (Clerk)]: they would need to fill out to make sure that they weren't falling into non homestead residential. But I would think this category of non homestead residential, a lot of those folks are probably not filing income tax in Vermont because their income tax is getting filed someplace else.

[Kirby Keaton, Office of Legislative Counsel]: The department would absolutely be the best to speak on their ability to check on these things. I mean, I think you're onto something, but it's going to get into the weeds of how the returns and what they can access on their returns.

[Rep. Emilie Kornheiser (Chair)]: I think this is a good moment to ask

[Unidentified speaker (member or staff)]: Jake a question. Hi, Jake. Nice to see you.

[Rep. Emilie Kornheiser (Chair)]: We are going through technical edits, suggestions from text. And this language is definitely a policy decision, and we're assuming intent of the tax department. But maybe you could speak to the intent of the tax department, basically, which status the default status is. If you don't file, to some degree, where are you?

[Jake Goldman, Vermont Department of Taxes]: Jake Goldman, tax department. If you are the owner of a dwelling unit that's fit for year end computation, the default tax classification would be non homestead preservation.

[Rep. Emilie Kornheiser (Chair)]: And if you had a business property that wasn't residential, how would we be sure that they would not fall into that category?

[Jake Goldman, Vermont Department of Taxes]: They would be just the non homestead, non or whatever it's called, and we would know that because they don't have a dwelling entity on the on the property, there's no homestead detection file, So that is what it would have to be.

[Rep. Emilie Kornheiser (Chair)]: And you all would figure that out in your office, basically?

[Jake Goldman, Vermont Department of Taxes]: It would be the listeners would have to classify as they do now, but they would know, okay, no development here, if I don't have a homestead on this, so it's got to be non homestead, non residential.

[Kirby Keaton, Office of Legislative Counsel]: What about long term rental stuff?

[Jake Goldman, Vermont Department of Taxes]: If you are the owner of a long term property with the dwelling unit that go to pieces of long term rental, you would want to file an infestation saying that the chat is not included, it's going to be used. And then that information comes from that experiment, goes to the town, kind of with small sets now, and then the town would classify that parcel. They're asking what

[Kirby Keaton, Office of Legislative Counsel]: if that property owner was a non file with the department be able to figure all that out?

[Jake Goldman, Vermont Department of Taxes]: Good question. So right now if you rent at least one unit, you are required to file a landlord certificate, which is a retrospective thing about the prior year, who did you rent to? This is a new requirement that could be appended to the landlord certificate saying, tell us about your units and how they will be used in the coming year. So hopefully they're filing already, so it's consistent. But if they fail to file, then it would be nonmultiple potential.

[Kirby Keaton, Office of Legislative Counsel]: Is that your take on the current language? Don't know if you missed the discussion, but it was I admit that in an email from AbbVie, the URL, there were two policy suggestions on there, and I told him that we haven't changed that language yet, but I did mention that the department flagged these things. And one of the items was to make it expressly the default to be non homestead residential and then to do away with the consequences for being a non filer because the default would be there.

[Jake Goldman, Vermont Department of Taxes]: That would be a preference. You don't need a penalty. I mean, assuming in a future statement that our congressional presidential could be the highest rate, you don't need a penalty and you want a situation where you're rather than the middle of second home or homeowner doesn't have to file anything.

[Kirby Keaton, Office of Legislative Counsel]: And so yeah, you just

[Jake Goldman, Vermont Department of Taxes]: want the default to be the highest rate without a penalty.

[Rep. Emilie Kornheiser (Chair)]: And That's what this language does.

[Kirby Keaton, Office of Legislative Counsel]: It does not expressly make that the default, which, and since that's not expressed, my read on it, is that it leaves it to the department to do the compliance work that Jake was just describing partly there to figure it out. But if you want to make it a default, that would be a tool that they would have. It would be a settled question, and that's what happens. Okay.

[Rep. Emilie Kornheiser (Chair)]: Let's sit with this a little bit and keep on going with that So

[Kirby Keaton, Office of Legislative Counsel]: going back to the document here, page nine, we just have welling changed to dwelling unit in many places. For the transition language, if you recall, the idea was to repeal everything from Act 73 related to classifications that were contingencies and transition provisions, and then to reinsert them. So not to remove them permanently, but just to reinsert those. And in some cases, the language has been updated through the community process here. I've flagged the education reform timeline has shifted and I don't currently know, and I'm not sure if it is currently known. So just trying to flag dates as we go, and as we start to work on all this with John and Beth too, there's going to be effective date questions that keep coming up. One thing that's flagged here is for the transition, is it for calendar year 2028 that the department starts setting this up, or do we need to change that date to a different thing?

[Rep. Emilie Kornheiser (Chair)]: Let's leave all the dates to be figured out once we have all the dates in front of us.

[Kirby Keaton, Office of Legislative Counsel]: I'll just keep trying to continue to flag these things. And so so this is the transition stuff. Right now, it's 2028. May change. This is just the repeal smear thing from Act 73. The idea is this is this is gonna be effective on passage, and then the all the replacement language would be effective on passage is the idea. So just more dates. There's some new language here. This is coming again from clarification for the department that pointed out. This the this is belt and suspender stuff like I mentioned before in the definition of a homestead. This is where we're putting in the language relating to dwelling used exclusively by the owner for this person part of the homestead. That's the part of the classifications where we were dealing with the issue of a duplex in which a person uses the entire thing as their homestead. Current law doesn't directly address that. This would make it so that for homesteads, the current laws addresses it, and we're also adjusting for classifications. And this is also where we're adding to the homestead definition, the clarification, the belt and suspenders that a dwelling for purposes of a homestead does not have to be fit for your rehabilitation. It's not going to change your classification. We've got a lot of language at this point where I think it should be very clear that the classifications definitions should not affect anyone's eligibility for a homestead or changing it from the current law treatment. I'm not gonna go into effective dates yet because my I'm thinking that that's gonna be covered later when we're talking about the whole package. That's classifications where we set I'll find a couple of things that I anticipate the department will come back on. There's also a couple of things we brought up that are policy decisions for you. I was told to add the hardship to address the hardship situation next time, but that's where we are. And I'm done.

[Unidentified speaker (member or staff)]: Anyone? Anything?

[Rep. William "Bill" Canfield (Vice Chair)]: Hardship. What did you just say, Bob?

[Kirby Keaton, Office of Legislative Counsel]: The chair asked that we make the hardship process that we're talking about that applies to homestead declarations and a failure to file those that federal department of taxes can use to make corrections in certain situations hardship, that we allow that for dwelling use attestation filings also.

[Unidentified speaker (likely staff/guest)]: Okay.

[Unidentified speaker (member or staff)]: And then the part

[Rep. Emilie Kornheiser (Chair)]: that we still need to figure out is to get totally clear on this, the best language for this default state.

[Kirby Keaton, Office of Legislative Counsel]: There's the appeals language too, so I think the department's gonna have lost out.

[Rep. William "Bill" Canfield (Vice Chair)]: So I guess the thing that's bothering me about this whole new hardship thing is that I know of cases in small towns or not where someone has been able to intervene on behalf of a property owner and somehow work out a problem so that the taxes get paid to the happiness of the town and the person keeps their property. I'm worried that in this new thing now where the tax department is in charge, they don't know the people, they don't know the family, they don't know what other resources they've got to deal with. And the person ends up being forced to sell?

[Kirby Keaton, Office of Legislative Counsel]: Under current law, it comes to homesteads, if there's a mistake and a problem, a person can reach out to the department. Usually it's the taxpayer advocate, like Jeff Dooley, he comes to the taxpayer advocate, and he talks about people reaching out to him. And he frequently says like, most of what I do has to do with the homestead. Like he said that, like this is what we're talking about. Basically expanding that. So if with this new system, with this new filing requirements for a dwelling use attestation, to let people do that too, to reach out to the department and get some help in certain situations when they've made a mistake with their filing of the dwelling use attestation. I'm being asked to basically expand the options for taxpayers to reach out and get help with.

[Rep. Emilie Kornheiser (Chair)]: But we're not messing with the thing that the Board of Civil Authority does at all. Are not touching that.

[Kirby Keaton, Office of Legislative Counsel]: Not taking away any options for people to try to reach out and get help, just adding one. And to contextualize it, it's going to probably be businesses most of the time because of the context here.

[Rep. William "Bill" Canfield (Vice Chair)]: I see that, I haven't thought of the situation that Bridget brought up, But yeah, but the ones that I deal with, most of the time are mistakes on the part of the owner. He either doesn't file or forgot to file or something. But I know the family. I know to call the two daughters. They all band together to pay his taxes or something. It's knowing who's who in a small town that the tax department doesn't know.

[Kirby Keaton, Office of Legislative Counsel]: The tax department can help by make, if the statute allows it, they can correct the filing so that the person isn't hit as hard and doesn't owe as much taxes. That's their part.

[Rep. William "Bill" Canfield (Vice Chair)]: Property tax?

[Kirby Keaton, Office of Legislative Counsel]: Yes.

[Rep. William "Bill" Canfield (Vice Chair)]: Well, I've never seen that happen.

[Kirby Keaton, Office of Legislative Counsel]: They forgive what's owed, but they can try to make a correction to the filings under certain circumstances, I want to say. So that the bill effectively ends up going down because the property gets classified correctly. In this case, will be that, hey, I have a business, we're getting hit with the second home tax rate, we need to get the business tax rate, and the department, if the statutory requirements are all met, could say, yes, this is creating a hardship for you, we will make the correction. Even though under the law, we don't have to make the correction because you missed your deadlines, you made some mistakes, but we can fix it. It's essentially lawless. That is what would happen under what I'm being asked to put in here.

[Rep. Mark Higley]: I'm extenuating the sentence. So John and Susie are in a car accident. They both spent a month in the hospital and they miss their filing date, so suddenly their tax rate is higher. They're like, hey, we were in the hospital, we couldn't possibly fill out this out, we were in a coma. You gotta give me the lower rate. And the tax department would probably say, well, that's too bad, you should have thought no. They would say that's a hardship and then that you'll get the lower rate.

[Rep. Bridget Burkhardt (Clerk)]: Another thing that's been happening, I've had people come to me and say this has been happening, sometimes the tax filing software, if it's national tax filing software, doesn't pick up our homestead declaration. So, actually in our house got a surprise bill last year that sort of said, this is a much higher bill. And we were like, woah, that was not expected. And it was because the tax filing software that we used had not picked it up. And so then we had to go back through the process of making sure that that homestead declaration was filed. So it's not even a severe hardship. It's just a mistake or a miss. And so I was trying to figure out but it's a different situation than if you're just not filing at all because you don't need to file income taxes to even know that you need to go

[Unidentified speaker (member or staff)]: and file for a different day. Thanks,

[Beth St. James, Office of Legislative Counsel]: Kirby.

[Rep. William "Bill" Canfield (Vice Chair)]: You're amazing,

[Rep. Emilie Kornheiser (Chair)]: So Beth has a very miscellaneous collection of language that addresses a bunch of pizzas that have been floating around. And they're all in one document

[Unidentified speaker (member or staff)]: because they all have to be somewhere.

[Beth St. James, Office of Legislative Counsel]: I'm Beth St. James, the author of the legislative pronouns.

[Rep. Emilie Kornheiser (Chair)]: Sorry, one more thing to say about. I'm sorry. Sorsha is printing things for people, but tomorrow we're going look at the whole bill altogether. So you'll get new versions of everything this morning. Please plant a tree over the weekend. Back to you, Beth.

[Beth St. James, Office of Legislative Counsel]: Beth St. James, Office of Legislative Counsel. So I will share my screen. A slight preview of what you'll see tomorrow in that this has already been formatted as a committee amendment to H95. This has not been edited. I've seen typos. There are things not underlined that should be underlined.

[Rep. Emilie Kornheiser (Chair)]: Too bad. In books, that means please don't point those out or correct them. It's not necessary.

[Beth St. James, Office of Legislative Counsel]: Thank you. First instance of amendment. This is instances not strike all. No. You guys got to pay attention. It's to section four of the underlying bill of H. Nine fifty five as introduced, which is the section that talks about the startup grants for seesaws. And all your amendment is doing is keeping everything that's already in there, striking out what was added as a subsection C and replacing it with new language. And this is just the appropriations piece for adding money to the grant program. So the budget that left the House made some amendments to the Act 73 appropriations to AOE. And what this language in the first instance of amendment does is make it an allowable use of some of that money. It makes adding money to the Seesaw startup grant program an allowable use of some of that money, some of the Act 73 appropriations. So of the funds appropriated to AOE in 2025, Acts and Resolves Number 73 in that section, as amended by section C103, and then fancy words that are referring to the budget without actually saying it's the budget, dollars 30,000 shall be used to provide additional funding to the Seesaw Startup Grant Program. And you're going to see this concept repeated in the next couple of amendments. So not making a new appropriation, making an appropriations traveling in the budget, making this language an allowable use of that appropriation. Second instance of amendment, section 17 of H. 55, as introduced, is all of the appropriations for the study committee reimbursement grants, the Seesaw executive director grants, etcetera. We're going to strike that entire section and put in a new section 17 to do the following. The programmatic language remains the same. It's not highlighted. Yellow highlighting represents language that's different from the underlying bill. So, AOE is still required to pay up to $10,000 to a study committee form pursuant to Section 13 of this act to reimburse participating school districts, yada yada yada. That language is all in at age nine fifty five as introduced. The only language your amendment is actually changing is the way the appropriation is formatted. So no longer is it a new appropriation, It is saying that the money needed to fund these grants is going to come out of the Act 73 appropriations that you've amended in the budget. So again, making an allowable use of an appropriation of the targeting. Subsection B. This concept is in Act H. Nine fifty five as introduced. We had to change the wording based on how the appropriation is going to be drafted. Of the funds appropriated to AOE in Act 73, amended by the budget, dollars 442,000 shall be granted to the Vermont Learning Collaborative within forty five days of passage of this act for the purpose of hiring facilitators. And then BTLC is allowed to use up to $32,000 for administrative costs. Same concept drawn on page three, subsection C, the Seesaw Executive Director Grant appropriation. Instead of a new standalone appropriation, we are saying that the Act 73 language that was amended in the budget, this is an allowable use of that money to fund the Seesaw Executive Director Grant grants. And that is it for appropriations. Any questions before I keep going? This was complicated to work out, I'm glad that we can move on. Very grateful to JFO for partnering on that language. Third instance of amendment is to the effective date, the contingency language. So you're going to strike out what the bill does as it's introduced and replace it with a whole new Section 18, which is amending the effective date section of Act 73. And this is where we change some of contingencies and we add some contingencies. We also push out the foundation formula from 07/01/2028 to 07/01/2030. Subsection E, section 61A, is Curtin still here? Can I phone a friend on what this does?

[Kirby Keaton, Office of Legislative Counsel]: We're going to be removing that change to the effective dates because the language I just showed you repeals section D Mark. We don't need to change those effective

[Unidentified speaker (likely staff/guest)]: dates. Great.

[Beth St. James, Office of Legislative Counsel]: Section F We'll spend time on

[Rep. Emilie Kornheiser (Chair)]: what that means once we have

[Unidentified speaker (member or staff)]: the whole thing together. Subsection

[Beth St. James, Office of Legislative Counsel]: F are the contingencies for the foundation formula. So keeping what education did, pushing the foundation formula out from 2028 to 2030, and then amending the language slightly here to make it clear that this contingency, that votes have happened on proposals to form a unified union school district, this contingency is going to be met regardless of whether there's actually any votes that occur or not. So if votes do occur, they have to happen by 11/07/2028 for the contingency to be met. But if no votes have occurred, long as school districts have had an opportunity to study the advisability of forming a new unified school district, then Subdivision A would be met. No change to subdivision B, no change to subdivision C, and no change to subdivision D. Subdivision I'm sorry, subdivision. Subsection G is the same language I just went over. This is for a piece of the tuition statute. It's had a slightly different contingencies. We're keeping most of those, but anything related to school district boundaries, that language is gonna track the foundation formula contingency language, and so it's the same. And then there are no contingencies in subsection H, but we just didn't wanna forget it. Fourth instance amendment.

[Rep. Emilie Kornheiser (Chair)]: Wait, so everyone, we're moving on to a whole new idea now. Closing up that idea. Okay.

[Beth St. James, Office of Legislative Counsel]: Fourth instance of amendment. We're going to strike out section 21, which is the pre K report, and put in new language also for a pre K report. So building bright futures in consultation with JFO, shall make recommendations regarding the appropriate funding level per pupil to provide a categorical grant sufficient to fund ten hours of pre K education in public and private settings

[Rep. Emilie Kornheiser (Chair)]: and the appropriate funding level for people to account for administrative costs at the school district of residence. And then keeping the rest of the language the same. I think JFO still needs to do a little bit of work on this language with Building Bright Futures to figure out who and how is gonna be responsible for what. Even if everyone, I encourage the committee to not get too attached to this language because we're gonna have a to change it for the people who actually

[Unidentified speaker (member or staff)]: have to do work.

[Rep. Emilie Kornheiser (Chair)]: Yes, representative Ode.

[Unidentified speaker (member or staff)]: I appreciate that you're gonna make changes for the people who are gonna be doing work, but we've told them we want a categorical plan. And I don't, have we had this on hand?

[Rep. Emilie Kornheiser (Chair)]: We have not.

[Unidentified speaker (member or staff)]: So I was not necessarily thinking I liked that idea. Okay. So I just would like to, I mean, we could have something that says, this is what a catabolic plant would look like, and this is how we look at leaf weight them in the formula. Don't want, you have only one choice to get out of me.

[Rep. Emilie Kornheiser (Chair)]: Full transparency. I am frustrated that we have been studying this problem for five years, and we continue to end like that is not anyone's fault around this table, and certainly not your fault, Representative Ode. And it's not any staff's fault. Just repeating frankly the exact same study language that we had last year, it seems like we're gonna wind up in the exact same situation we were in this year. And so in effort to move things together, I think there are implications to using the foundation formula in this context. They're very outside of this committee's jurisdiction.

[Unidentified speaker (member or staff)]: I doubt so. I mean, I just don't know.

[Rep. Emilie Kornheiser (Chair)]: Yeah, you're saying that. Yeah. Yes, yeah, Okay. Appreciate So we will keep this open and keep on talking about it. Representative Holcombe?

[Rep. Rebecca Holcombe]: Yeah, I have similar concerns.

[Unidentified speaker (member or staff)]: I mean, I think

[Rep. Rebecca Holcombe]: the employer has studied this 10 times in the last ten years, and we never changed the way we approach the problem. And part of it is the nature of the system we set up. So if we're not really- Sasha can help you. So I guess I would just have some, would like to see some consideration around that, or we'll just give you My prediction is we will be back in these exact same situation next because the fundamentals haven't changed. I also am very concerned because we came up earlier based on the great language that you suggested that provoked a rich conversation around some of the things that we can't even answer because we don't have the data. And I want to make sure that if we're asking DFO and Belling by our futures to work on this, we're being really clear about what needs to be collected. So that data flow and early bird futures can actually do that. Because if we wait, then it's too late. They won't be able to get the data. Yes.

[Rep. Emilie Kornheiser (Chair)]: Language needs work. Let's move on to the next language.

[Beth St. James, Office of Legislative Counsel]: We're not going to leave this instance of amendment yet because there's some highlighting there. And I'm just going point out that we have language here that requires AOE to provide any necessary data to the folks doing the report. Fifth instance of amendment is a new section to be Section 21A to fit in your pre kindergarten education reader assistant setting. Amending section eight twenty nine in title 16, which is the pre kindergarten education statute in the tuition budgets and average daily membership subsection, adding a new subdivision that reads, as part of the data reporting process required pursuant to subsection 4010c of this title, a district of residence shall also report annually to the agency of education the number of hours of pre kindergarten education received by each pre K child for whom it has provided pre K education or on whose behalf it is paid tuition pursuant to this section.

[Rep. Rebecca Holcombe]: I think it might be worth clarifying whether the Pre K is provided as part of the Act 166 Pre K. There are also districts that pay for pre kindergarten through EEE. They buy additional hours because they want to accept full day exposure.

[Rep. Emilie Kornheiser (Chair)]: But differentiating between the funding source between one hundred sixty six and three ks?

[Beth St. James, Office of Legislative Counsel]: The PPP pursuant to this section does that.

[Rep. William "Bill" Canfield (Vice Chair)]: Why do we need to do this?

[Rep. Emilie Kornheiser (Chair)]: Because we have been studying the same thing for five years because we can't ever get answers to that ten specific years. I'm certain they can. So I think that I could spend a week driving around with a clipboard and get this information, frankly, representative Branagan. It would be a very annoying week. I'd have to go to every school in the state with my clipboard, but I'm sure that every school in the state knows this.

[Rep. William "Bill" Canfield (Vice Chair)]: I haven't been able to deal

[Rep. Rebecca Holcombe]: other ones. Actually don't. Okay. No, they do. And I think it's actually more complicated. I think another piece of it is that they aren't gonna collect things they aren't required to. And then the other is that we also don't like the answers they give us, and so we keep asking again hoping they give us a different answer. I just think it's complicated. I could not do

[Rep. Emilie Kornheiser (Chair)]: it in a week, Representative Branagan. It's summer.

[Kirby Keaton, Office of Legislative Counsel]: I

[Unidentified speaker (member or staff)]: don't know. I mean,

[Rep. Emilie Kornheiser (Chair)]: not to say, I think that there has not been the resources that have been levied to solve the problem that are required. And I'm just using myself as an example of a resource. It's going to take a, It's a big actual paperwork lift to get an answer.

[Unidentified speaker (member or staff)]: Talk about that paragraph with the cancer on the grant issue. I was listening to what you're saying, I was saying, Yeah, and you know where I'd go? I'd go to the business matter and the special education person, and I, you know, even if we went to, they need to be at the table. I mean, know what's going on

[Rep. Emilie Kornheiser (Chair)]: in their schools. And the folks in the agency of education can work with all of those folks in those schools to get the data, right?

[Unidentified speaker (member or staff)]: At the agency of education? Have I was going back, I was going back, and it suddenly occurred to me, wait a minute, Building Bright Futures and Joint Fiscal Office, that's not the people that are

[Kirby Keaton, Office of Legislative Counsel]: doing for that part.

[Rep. Emilie Kornheiser (Chair)]: So the Building Bright Futures has a federal grant to create a data system, they can tell us more about it, but to create a data system between CDD and AOE because they are our statutory data something. Beth is going to pull up the statutory data.

[Rep. William "Bill" Canfield (Vice Chair)]: I'm going

[Beth St. James, Office of Legislative Counsel]: show you how I do

[Rep. Emilie Kornheiser (Chair)]: it too.

[Beth St. James, Office of Legislative Counsel]: Okay. So we've got 33, 46, zero two. Look at that.

[Rep. Emilie Kornheiser (Chair)]: Your secrets.

[Beth St. James, Office of Legislative Counsel]: I think right futures counsel.

[Unidentified speaker (member or staff)]: That's not super helpful. Is there any definitions?

[Beth St. James, Office of Legislative Counsel]: Okay. They are a regional entity to support the creation of an integrated system of early care, health, and education at the local level. This is who they're made up of. They function as a public private partnership with the ability to raise and disperse funds. And they advise the administration and the General Assembly on all of this. They monitor the overall system. They develop an early care health care education system. They review and formulate recommendations for policies and rules. They work with the various secretaries on coordinating budgets and policies that affect the care, health, and education of young children. They identify and reduce duplication of services. They work with the agencies to coordinate, etcetera. So they have quite an extensive charge. So we just looked at this language regarding collecting data related to hours. We're in the same statute. We're in the rule subsection. This is the pre K statute. AOE and DCF jointly have developed rules that do a whole bunch of things. And by the time we get to subdivision 10, which is to establish a system by the agency and Department of Children and Families to jointly monitor and evaluate pre K education programs, we're adding Building Bright Futures to this requirement.

[Unidentified speaker (member or staff)]: Carol you good?

[Rep. Emilie Kornheiser (Chair)]: Okay, you think they'll talk to the building?

[Unidentified speaker (likely staff/guest)]: It'd be a bunch

[Unidentified speaker (member or staff)]: of people in the schools? Who? Building Bright Futures or

[Beth St. James, Office of Legislative Counsel]: AOE or Andy? Yes, that's

[Rep. Emilie Kornheiser (Chair)]: the agency of education's job.

[Unidentified speaker (likely staff/guest)]: Think

[Rep. Rebecca Holcombe]: at some point, I think it's worth considering complexity as a cost in and of itself. I see it in just three places just on this one little page. First of all, when people have co responsibility and they don't agree, nothing happens. And that happens repeatedly in this sector. And part of it's because they have two sets of federal statute and two sets of federal rules, two sets of state statute, two sets of state rules that often disagree. So it becomes quite ossified. And with Building Bright Futures, we've taken a two headed hydra and added a third head. And now they're going to have to all three negotiate how to make this sector work. And the entire reason we're doing this is because we're trying to use education funds off the property tax to fund childcare. And that's a choice. I do think it's in our interest to try to do this in the most streamlined and efficient way possible, Because sometimes dual administration or three administration, triple administration, I don't know what the word is, it can become very cumbersome. And it's also a little interesting to non education, given the and all the rules around use of property taxes for education, it's interesting to have a non education entity directing use of education funding. So it's just an interesting thing to put out on the table since it shows up in people's school budgets.

[Rep. Emilie Kornheiser (Chair)]: What is the non education part?

[Rep. Rebecca Holcombe]: Well, just think if you're going to have

[Rep. Emilie Kornheiser (Chair)]: Private partnerships

[Rep. Rebecca Holcombe]: and Department of Children and Families making decisions that are specific to them, being shared responsibly. I do think it's worth considering.

[Unidentified speaker (member or staff)]: Yes, Bridget Burkhardt? Can I read something from my full concern? Sure,

[Rep. Emilie Kornheiser (Chair)]: you don't have to get my permission for that. I'm not the speaker. Alright,

[Unidentified speaker (member or staff)]: This looks concerning to me because it seems to envision this ten hours in the A1 paragraph, only ten hours of service. That's the current model for providing financial assistance to private preschool providers, Universal Pre K. However, the ten hours being subsidized by the state is far fewer hours than some school districts provide and perhaps fewer than most school districts provide when serving preschool students in their buildings. So if this ten hour subsidy was intended to replace current weights, then public schools will receive far less money to serve these students, so much so that it may no longer make sense for a public preschool to operate a program which would severely reduce the availability of preschool. And then the second point, fixing the same amount, doesn't say that here, for private and public, but the public has to meet higher standards. That's an issue. So those are some issues. Those are some issues, yeah. And do you think that this paragraph should

[Rep. Emilie Kornheiser (Chair)]: be I think there's a, if we are going, if the state's gonna pay the districts that are offering forty hours a week of pre K, then we need to guarantee that all districts in the state are subsidized to pay for forty hours of pre K. And that is a significant expansion of education budget costs. If that is what we're interested in doing, that's a separate conversation. There's also the question of should all of it be covered by the child development division? This body decided not to, that ten hours a week is covered out the Ed Fund as pre K. To my understanding, districts that are right now offering more than ten hours, some of those districts are covering that by billing CPFAP, and are in fact sometimes covering the costs in a way that's quite innovative. That is also something that we don't have enough details on and we need to study. What my goal, and it's a narrow goal, is to say the weights that we have in current law do not work and will work even right now under current law, and will be even worse under the foundation formula. And right now, we have districts making very district maximizing decisions based on current law that could put us in a real bind in a couple years if it continues this way. So I hear that everyone doesn't like this language. The Education Committee and the Human Services Committee also cannot come into agreement in the language. And so we'll go back to the drawing board about language.

[Rep. Rebecca Holcombe]: I just have to register a protest because the language we use to talk about school districts' decisions is pretty negative. And they're not just trying to self optimize. They are dealing with the reality of a voucher system. And if you live in a rural district, plays very differently than if you're in

[Rep. Emilie Kornheiser (Chair)]: an urban district. I've never heard a superintendent say, we're not trying to provide access to high quality pre kindergarten, but it's a very different proposition when you have a mandatory voucher program and you live in different parts of the state. So keep it. I absolutely do. I don't think that maximizing the opportunities to your district is a negative way to describe anything. I think it is actually like you're maximizing the needs of the students in your district. You get your hands tied and your foot tied to a ball because they can't manage resources in a cost effective way. Okay, so I'm gonna put this language away, and we're gonna move

[Beth St. James, Office of Legislative Counsel]: on to the next section.

[Rep. Emilie Kornheiser (Chair)]: If you two wanna work together before tomorrow to come up with a couple paragraphs for this that the two other committees can also agree with, we can look at it tomorrow.

[Beth St. James, Office of Legislative Counsel]: I'm on page nine of this document and the sixth instance of amendment, and this is going to be the main Basically everything Kirby went over today and everything that's new. We're done amending education's work, now we're adding sections that are brand new. So we've got this green highlighting here to represent we don't know how many sections we're adding yet, so we're just going to leave those blank. So the first new section as a new reader assistance heading here for data collection. We're adding a new section, section 22, and we're amending 16 BSA forty ten subsection C, which part of your Which is in the education funding chapter. This is where all your weights live. It's also where the requirement that each school district report student data for each of the weighting categories lives. In current law, right here, each school district shall annually report to AOE by a date established by the agency the information needed in order for the agency to compute the weighting categories. We're adding on page 10 clarification that it's for all resident students in grades pre K through 12. In order to fulfill this obligation, a school district that pays public tuition on behalf of a resident student to a public school in another school district, an approved independent school, an out of state school provider, current law just says the school district may request that the receiving school collect some of the demographic information related to weighting categories. And if it's requested, then the receiving school has to provide that information in a timely manner. We're striking all that language, and we're saying, for all your tuition students, each school district shall require each resident student in pre K through grade 12 on whose behalf the district pays tuition to complete a form or forms developed by the school district in order to obtain the information needed in order for the agency to compute the weighting categories under subsection B of this section for all students residing in that district, including students that are educated by a receiving school.

[Unidentified speaker (likely staff/guest)]: Beth, did you mean

[Rep. Mark Higley]: for development school district? Form reform is developed by the school district and not by the state?

[Beth St. James, Office of Legislative Counsel]: I mean whatever you tell me to mean.

[Rep. Emilie Kornheiser (Chair)]: The former form should be developed by the state. Thank you. And I think have been developed by the state.

[Beth St. James, Office of Legislative Counsel]: For all waiting categories?

[Rep. Emilie Kornheiser (Chair)]: Oh, maybe not all waiting categories. Thank you, Beth. I'm so glad that you have details. That was a major portion of brain. Again,

[Beth St. James, Office of Legislative Counsel]: I don't work in the field. This may be an area where you need extra language development requirements.

[Rep. Emilie Kornheiser (Chair)]: This would be another great area for our rulemaking list too.

[Beth St. James, Office of Legislative Counsel]: Do you want that to be in rule or form? Form.

[Rep. Emilie Kornheiser (Chair)]: And there was something in the language of when the income form was created about a need to consult with people who know things about such things. The Universal Income Declaration Form on '27? Okay, I'll take a look at that.

[Kirby Keaton, Office of Legislative Counsel]: Okay. Yes?

[Rep. William "Bill" Canfield (Vice Chair)]: Yes, I should, but I don't know why this isn't being done already.

[Rep. Emilie Kornheiser (Chair)]: Yeah, me either. I'm kind

[Rep. William "Bill" Canfield (Vice Chair)]: of floored that it's gone.

[Rep. Emilie Kornheiser (Chair)]: I will confess that I feel personally like when we passed one twenty seven, we used some maze when we should have used some shells, I wanna take some responsibility for that. We used some maze when we should have used some shells, and I wanna take responsibility back.

[Unidentified speaker (member or staff)]: We all worked on it together.

[Rep. Emilie Kornheiser (Chair)]: Know. I said some responsibility, not all the responsibility. Work hard on this. I think, Teddy should take some responsibility too, really. Yeah, exactly. Representable. I think part

[Rep. Rebecca Holcombe]: of it is the rules changed and figuring out ways for a tax capacity system is very different, so they probably didn't have the need that they're going to We have a need for a higher level. Cause you can use the direct serve to figure out the proportion and apply that to different So my guess is, I mean, part of the problem is we went to Universal Meals. It became difficult to collect the forms from some kids. And so then they started using direct serve. And once you do direct serve, it's a proportion. And that can be your weight, I assume, for

[Rep. Emilie Kornheiser (Chair)]: My understanding is that we can't use direct cert in a number of locations that follow within this. And direct cert had not happened yet when we talked to Universal Housing Board. So there is some

[Rep. Rebecca Holcombe]: Well, you can't use it if you're not doing Universal meals. But the other thing is something to think about. The federal guidelines are changing, too. And we may want to have, know Julia mentioned slight that we need to get students who are learning English. We need to get good data on that. We can use it, but it's also clear that some of the federal categories may shift as well. So we may need to.

[Rep. Emilie Kornheiser (Chair)]: And we do have some flexibility. So we can check that language. My memory of the language in 01/2027 is it's actually quite comprehensive so that if directed went away, we would actually have backup systems for it. But we can look at that again. Because clearly, there were things about that that weren't harsh and perfect at the time. So exciting that we're doing this. Should have done

[Unidentified speaker (member or staff)]: it sooner. Glad we're doing it now. Yes? Other thoughts? Great.

[Beth St. James, Office of Legislative Counsel]: Oh, we're switching topics. New Reader Assistance heading, special education funding. I believe you all have looked at this language before, but just not with me. And so the only changes to this intent language regarding maintenance of effort and special education funding is highlighted in yellow. So if it's not highlighted and you've already looked at this language that the language that's not highlighted has a change.

[Rep. Emilie Kornheiser (Chair)]: And the Special Education Association sent an email after thoroughly looking at it and said, Yay, thank you so much. I don't remember if I've already got an email. Will find it and forward it if I did not. Did I forward it? Great. No. I will state that as a no. I will forward the email.

[Beth St. James, Office of Legislative Counsel]: So it is the intent of the general assembly to ensure that Vermont complies with federal maintenance of effort requirements and any education funding reform. It is the intent of the General Assembly that the state shall maintain an education funding structure in which special education is funded through a supplemental reimbursement, weighted student count or grant model that reflects eligible special education costs. And it is the intent of the General Assembly that implementation of Act 73 or any future education funding reform shall not limit the right of students with disabilities. I believe that's it for changes to this language. Another brand new Reader Assistance Heading.

[Rep. William "Bill" Canfield (Vice Chair)]: Need you

[Unidentified speaker (member or staff)]: to slow down one second. Seeing no objections, I am informally finalizing that language. Special education responded supplemental reimbursement weighted student count or grant model that reflects eligible special education costs so okay so it'll be decided later how that and who's decided that when?

[Rep. Emilie Kornheiser (Chair)]: So JFO study and AOE is doing some work too, and they'll have to decide it next year.

[Rep. Rebecca Holcombe]: Federal law requires, I mean, literal definition of FAPE is free and appropriate public education, which in Vermont is defined by the education quality standards. I don't know how a school district can ensure FAPE or access to FAPE in a school that does not meet education policy standards. So I wonder if this needs to apply. I think all students that are publicly funded need to conform to the Vermont Education Quality Standards. Other question for Beth. Personally think, well, no, this is a policy decision. I think it makes sense to require them to meet the same standards, or we can't ensure their program meet faith. And it affects where districts are

[Rep. Emilie Kornheiser (Chair)]: I'm sorry, all independent schools would have to meet the education quality standards as part of this paragraph that was approved by the Special Education Association? They were asked about,

[Rep. Rebecca Holcombe]: they were focused on the different issues at this time,

[Unidentified speaker (member or staff)]: That's we leave the

[Rep. Emilie Kornheiser (Chair)]: a huge policy decision that is very much outside of the jurisdiction of this committee.

[Rep. Rebecca Holcombe]: I don't mean it's a real problem, particularly when you're

[Unidentified speaker (member or staff)]: I'm talking about fine for you

[Rep. Emilie Kornheiser (Chair)]: to tell me, but I haven't have requested requested tuition.

[Rep. Rebecca Holcombe]: I think that it also relates to the funding form, because if you are not holding people with the same standards, they should not be receiving the same tuition.

[Unidentified speaker (member or staff)]: That's true. Is that my jurisdiction?

[Rep. Emilie Kornheiser (Chair)]: Not being I don't know, I need to take a break. That's what I'm doing now. I'm gonna go get a cup of coffee. Right, good.

[Unidentified speaker (member or staff)]: Ten minutes.