Vermont Legislature SmartTranscripts:

[Rep. Emilie Kornheiser (Chair)]: '26, and so we have a means committee. We are going to do this morning, we're gonna do a review of our regional assessment district language, a review of our non homestead residential tax classification language. Both have been updated with guidance from the tax department. My goal in both of those conversations is for us to get as far as we can to finalizing the language. So it's really like any final work can happen over next week, and we can be ready to go when we get back. I still don't know what the bill will be that they'll be in. And then we have a bill from OPR, H588, that we're gonna pick up and maybe vote on. And H802 was on the agenda, but JFO and legislative council are gonna are making some clarifications to it. And we're going to actually pick it up. I would cancel the testimony, and we're going to pick that up after break. And then after lunch, we're going to go through the long list of pieces that are in the miscellaneous tax bill. Similar process to what we're doing on RADS and property tax classifications, really just checking off what's Okay and what still needs work. If we check off something, it's Okay. I'm not planning further discussion on it until we vote on the full bill. And rural Vermont sent an email, I think, to everyone? Yes? No. No. Okay. Anyway, rural Vermont sent an email about some challenges that they had to some of the current use ag language. And so we're inviting them in to testify as part of that testimony block. And I think we'll find out more about that then. Oh, rural Vermont is, they're like one of the main farming advocacy organizations. Yeah. No, it's just yeah, farming. That's the whole phrase, and it helps the farming people.

[Rep. Rebecca Holcombe (Member)]: I didn't know if it was a capital R or a little R.

[Rep. Emilie Kornheiser (Chair)]: Thank you. It's capital R, capital B. I'll forward the email around. I didn't notice that no one else got it. I'm also hearing from a national expert on the federal education stuff. And then at 02:15, we are picking up a bill that we received from House Natural Resources Committee on producer responsibilities. And that's it. It's gonna be quite a day. We're gonna have so much fun. Yes. On PSA, yesterday I asked why a colleague's committee wanted to go the route that they went, and you said it wasn't appropriate for alleged counsel to answer that. You were correct. Thank you, sir. I did spend some time with Mark in the cafeteria this morning, and at an appropriate time, I can explain the logic of what they wanted to do. Okay. Thanks. And if anyone has anything in the bill that they are particularly interested in working on, representative Waszazak is taking the lead on edits to that.

[Rep. Edward "Teddy" Waszazak (Member)]: I'm meeting with the reporter. Okay. Thank you. Okay.

[Rep. Charles Kimbell (Ranking Member)]: We'll forward the email from rural Vermont sources. So sources, you could post it. Is that alright?

[Rep. Edward "Teddy" Waszazak (Member)]: Okay.

[Rep. Emilie Kornheiser (Chair)]: With that, Kirby, do wanna join us? Good morning. Morning.

[Kirby Keaton (Legislative Counsel)]: I'm Kirby Keaton with the set of counsel. You have to sing me part of it today. Progressing forms of fatigue. The most energetic, you'll get me. We have new language here relating to the regional assessment districts. We have a draft 3.1 as the chair mentioned before, this involves some modifications here and there based off of testimony, based off of committee feedback and based mostly off of the Department of Taxes feedback and what they've said they need to try to make this successful. So there's some, I don't want say drastic changes, but there's some significant differences between this and the last version that we'll talk about and I'll try to do my best as to why. So with that, first changes on line four, this previously said something to the effect of statewide and regional assessment districts. Texans chance to say, let's see the state out of it. As far as the name of the sub chapter, which doesn't have a lot of legal significance anyway. And then the next change is on line 13. It starts with the first steps in the dashboard section relating to regional assessment districts. Previously, there were subsections here relating to the establishment and also a statutory set of standards for the department to use in deciding RAD boundaries. This version of things takes a different route. It is doing it in a more of a type of approach that you often see with other things where it's kind of a report back thing. And we'll get to the report back at the bottom of this. But this statutory language goes with some sessional law at the bottom of the bill now, where the department will look at RAD boundaries after school districts have been decided, and then come back and say what they think they should be, and then the general assembly will have the opportunity to codify, as they put in the statute, those boundaries. Which will mean you're not going to look at any provisions relating to modifying the boundaries in the future, because under this approach, the statute would get modified to modify those boundaries in the future.

[Rep. Emilie Kornheiser (Chair)]: Can you describe some of the delegation of authority concerns?

[Kirby Keaton (Legislative Counsel)]: Yeah, so I did have some concerns with our previous versions where so there's, you know, in the Vermont constitution, which is based off of the US constitution, there's a non delegation doctrine, as in the constitution gives each of the branches of government certain powers. And the Constitution does not allow the sharing of those, which is fundamental to our whole system. The legislature makes laws. The executive manages and administers laws. And there's not to be mixing. Since we were in a position where the last version you looked at, it was set up so that a lot of power was being delegated to the Department of Taxes from the legislature to decide what the RAD boundaries are. And I did have concerns that I thought we were setting up standards, we were setting up some safeguards to make sure that we're following the constitution, but I still thought there was a pathway there for a court. If someone were to challenge it, say like in a municipality, that there was at least some vulnerability there where I couldn't a 100% say that if the court wanted to look at it a certain way, they could say, you know what, too much power was given to tax. There was a delegation of legislative power that's not allowed. So out of those conversations, those conversations that I did have with tax, had with colleagues of mine, such as the attorneys on Legis Council who work on municipal law and run into non delegation issues with that. In house, were brainstorming a lot of different ways so we could go about it. I'll say that this approach, which is coming from tax as an approach, makes sure that we are well clear of that issue because they're reporting back and you will be putting in the law what the rat factors are. So absolutely no room for anyone to argue that there was an unallowable delegation of legislative power. So that's what it does. With that, we can get into this language. Subsection A now says member municipalities of regional assessment districts shall fully reappraise their grant lists every six years. This is similar to what was there before. Member municipalities may contract jointly with one or more third parties to conduct the reappraisal. So we are back to May for this part, but it's not the end of the story. But initially there is, there's not required joint reappraisal under this language. So in subsection B, it says for the first full reappraisal conducted simultaneously by member municipalities as part of a regional assessment district, Each municipality may at its discretion conduct a reappraisal jointly, again, it may. For all subsequent simultaneous for full reappraisal by member municipalities as part of regional assessment district as determined pursuant to this subchapter, municipality shall conduct reappraisal jointly with one or more member municipalities. And this goes to the testimony from the Department. I think they were using the phrase walk, don't run. They're just wanting to incrementally ease into this system. So for the first step of RAD, mass reappraisals, there's a voluntary type element to participation, but after that first one, six years later, it would start to be joined. And so that allows a lot of time for setting things up properly, I think you've heard PACS has been very concerned about whether they can successfully set it up if it's mandatory right from the beginning. So we those changes, and again, there's a bunch of missing stuff here that related to setting up RAD boundaries and things like that, because that's handled in a different way now. Moving on, on page two, we have the standard guidelines and procedures that PVR is to use for this and that has not changed. But subsection B is different. The director of PVR will establish a schedule for each regional assessment district to fully reappraise every six years. That's the same. The director at the director's discretion may alter the reappraisal schedule for a RAD or one or more of a regional assessment districts member municipalities. If a municipality or regional assessment district fails to reappraisal the schedule established by the director into the subsection, the state may withhold the education, transportation, and other funds from the municipality until the director certifies that the municipality or regional assessment district has complied with this subsection. So that is giving the department plastic to use in administering this.

[Rep. Emilie Kornheiser (Chair)]: And that feels vaguely familiar to me from a past penalty system related to property textbooks collection. Does that look familiar to you?

[Kirby Keaton (Legislative Counsel)]: Yeah. I can't remember where it's perceived. I'm not thinking in current law where a great analogy for it, but that might have to do with me having given up that part of my portfolio to John Gray, who now is living in that world, where if it's an education finance related thing, maybe I'm just not thinking of it. But it's not unheard of.

[Rep. Emilie Kornheiser (Chair)]: Is it familiar to you? I know they

[Rep. Rebecca Holcombe (Member)]: expect to make whole funding if districts are

[Rep. Emilie Kornheiser (Chair)]: doing this. But this is like, I remember tax being, it's like a tax thing with municipalities. I remember seeing it as something related to tax.

[Kirby Keaton (Legislative Counsel)]: I think the tax department has ditched this before, and it says the state may withhold, not shut.

[Rep. Rebecca Holcombe (Member)]: Very, very important distinction.

[Rep. Charles Kimbell (Ranking Member)]: Is that in our current future state or in our future state, not current state? So you're talking about withhold the state, meaning the tax department may withhold the education opportunity payment?

[Kirby Keaton (Legislative Counsel)]: I think it would be good to give taxes testimony on what they are envisioning. Clearly it has to be some kind of funds that, well, they could have used the state on purpose, so that does not limit it to just things coming from the Department of Taxes. So it is quite broad.

[Rep. Bridget Burkhardt (Clerk)]: Wait, no, sorry, because

[Rep. Emilie Kornheiser (Chair)]: I wasn't at this question. If it's about It's about Are sure? Yeah.

[Rep. Rebecca Holcombe (Member)]: Is this an I don't know. Is this an area where parsimony might be judicious, where we just say you may withhold funds, because here we're specifying the funds. I mean, I know that this happened twice when I was secretary, but we made a decision not to touch education fund, we just withheld federal funds. Because that was enough pressure, It didn't disrupt the system, but it was enough pressure to get people to take seriously.

[Rep. Emilie Kornheiser (Chair)]: Actually, let's talk with tax, but where you're going makes sense to me. Yes. Leave some to the polls. I

[Kirby Keaton (Legislative Counsel)]: think this language would allow for that kind of discretion, but it could also allow the state to appoint all of the money, state's money to the

[Rep. Emilie Kornheiser (Chair)]: visa. Or

[Kirby Keaton (Legislative Counsel)]: they could choose to

[Rep. Rebecca Holcombe (Member)]: I think one would hope they were judicious, like you don't want to do harm, but you do need to have some discretion to put pressure sometimes, unfortunately.

[Rep. Charles Kimbell (Ranking Member)]: Especially if the RADS don't line up with school districts. This gets really funky.

[Rep. Emilie Kornheiser (Chair)]: Let's tentatively make that edit, and we'll check with tax credit.

[Kirby Keaton (Legislative Counsel)]: I'm not sure if I heard

[Rep. Emilie Kornheiser (Chair)]: So just have it be May withhold funds.

[Kirby Keaton (Legislative Counsel)]: Oh, it already does that.

[Rep. Emilie Kornheiser (Chair)]: To just remove the education and transportation.

[Kirby Keaton (Legislative Counsel)]: Okay. It's May withhold funds. Funds, period. Don't know if legally that's much different.

[Rep. Emilie Kornheiser (Chair)]: I know. It's just going

[Rep. Rebecca Holcombe (Member)]: to raise a lot of poop.

[Rep. Emilie Kornheiser (Chair)]: He gave up your butt and he lost it.

[Rep. Edward "Teddy" Waszazak (Member)]: Director may alter a reappraisal schedule

[Kirby Keaton (Legislative Counsel)]: for the yeah, we're

[Rep. Edward "Teddy" Waszazak (Member)]: going to say. So you have 10 towns in Iran, town ASAP, they want to do it in year three. The director can say, no, no, no, you have to do it in year two.

[Kirby Keaton (Legislative Counsel)]: I think this language is more specifically going in a situation where, especially at the beginning of this system, let's say there's a RAD where most of the towns are digging, but one of them just did it to give that flexibility to say, That one doesn't happen. That one will say that the one you did last year will say, That's fine. Waive that. The other ones will, but you'll still be on this six year schedule with the others that's in your wrap. Stuff like that. That

[Rep. Mark Higley (Member)]: was my question, representative, as well. Only I'm going to elaborate a little bit. You gave the example of one year. I'm going to give you the example of maybe even four years, or three years, if the pound is done at three years prior to that date that's set, the PBR is going say good to go, or they going to say boom?

[Kirby Keaton (Legislative Counsel)]: That's probably why Jill looked a little bit stressed out last time she was here. We have to make those hard decisions, and people aren't necessarily be happy, but that's the position PBR will be in after the judgment calls.

[Rep. Mark Higley (Member)]: Alright, thanks.

[Kirby Keaton (Legislative Counsel)]: Okay. And then finally, there's a subsection C that's new. The director shall determine when the first simultaneous full reappraisal has been completed. And this is necessary because some of the things we were talking about before are triggered from the simultaneous that's, you know, after the first simultaneous reappraisal is when participation in the rat starts to become equatorial. So there needs to be a referee saying when that happened. The appeal sections, thankfully, were not changed for the most part, which is for me, I know that's what really matters for me, the biggest pain. Did add

[Rep. Emilie Kornheiser (Chair)]: John and Gray are becoming the same person a

[Rep. Charles Kimbell (Ranking Member)]: little bit.

[Rep. Mark Higley (Member)]: What's that?

[Rep. Emilie Kornheiser (Chair)]: John Gray are becoming the

[Kirby Keaton (Legislative Counsel)]: same person a little bit. It's fun. It's important. I'm just kidding, obviously.

[Rep. Emilie Kornheiser (Chair)]: I know. Yeah.

[Kirby Keaton (Legislative Counsel)]: I don't know if John is.

[Rep. Emilie Kornheiser (Chair)]: Did the same joke yesterday. I did? No, John did.

[Kirby Keaton (Legislative Counsel)]: Oh, okay.

[Rep. Charles Kimbell (Ranking Member)]: It's here for

[Kirby Keaton (Legislative Counsel)]: him. Mine is definitely a joke.

[Rep. Edward "Teddy" Waszazak (Member)]: I don't

[Kirby Keaton (Legislative Counsel)]: know about John.

[Rep. Edward "Teddy" Waszazak (Member)]: Oh, that's funny.

[Kirby Keaton (Legislative Counsel)]: There's just a few little technical tweaks that were made in the appeals. This has to do with the evaluations that are done by PVR and clarifying that they would not go to the RAD appeal boards. And I had overlooked one area, which I think is petroleum and gas facilities, which is section 3,621, the PVR value, so that was left out, so we just added that as one of the areas where PVR does the valuation.

[Rep. Emilie Kornheiser (Chair)]: I'm just going to take a brief moment to say that Abby from TACT is watching and texted me to say that it is it's current law. The so that penalty section is current law, and it just got repealed and then sort of added back in.

[Rep. Edward "Teddy" Waszazak (Member)]: Oh, okay. The withholding funds?

[Rep. Emilie Kornheiser (Chair)]: The withholding funds. Like that it was familiar because it is in current law, but just not your area you They work just moved it. She can also come in and say it to everyone if people would prefer that.

[Rep. Rebecca Holcombe (Member)]: And is she comfortable, if she likes the way it's written?

[Kirby Keaton (Legislative Counsel)]: Wrote it.

[Rep. Emilie Kornheiser (Chair)]: Well, we can have her. That's the end of my back and forth via text. She

[Kirby Keaton (Legislative Counsel)]: wrote it, that's why I Okay, that's fine. Okay, so this more on the technical side, but there's repeal of all of this current law sections relating to PVR ordering, reappraisals and such, because under the new RAD system, this will all be worked out differently. So this won't be necessary. Most of these changes, by the way, are coming on. We'll get to the effective at the end, but most of this stuff is coming online together, obviously, in years into the future. So this current law will stay as it is until there's the changeover to the RAD system. We've added a little clarifying provision for the equalization study section. Previously, has said all municipalities in a regional assessment district shall be treated as a single entity for purposes of equalization process under this section, which would mean that they have the same CLA. Tax has asked to add the clarifying language provided at least one simultaneous full reappraisal has been completed by the member of municipalities.

[Rep. Edward "Teddy" Waszazak (Member)]: When we're saying simultaneous, do we truly mean simultaneous or are we in that?

[Kirby Keaton (Legislative Counsel)]: We don't really mean simultaneous. We were looking at before, PVR will make the call when it's considered simultaneous. But that doesn't necessarily mean that every single because maybe PBR gave an exception to one of the municipalities in that year, for instance. They might still call that simultaneous. Reaffrayable. Okay, there's just a provision here. The approach that this language is taking, just so you know, is to we've already been over this before, but I'll go over it again, because we're looking at it is to repeal the statutory sections from Act 73 relating to regional assessment districts and the transition provisions, because this language is replacing all of that. Drafting And wise, there's a couple of different ways to go about this. One is to try to amend act 73. The other is to just repeal it and start fresh. I'm partial to the start fresh, because when you start If this amended Act 73, and then this got amended later, and then you get to amending this Act that amended this Act that amended Act 73. So in my mind, at least, the way my brain works is cleaner to do it this way. Another repeal that's been added to that, though, is Chapter 131, which is the Board of Civil Authority appeals chapter in statute. All of the sections relating to RAD appeals will be replacing the Board of Civil Authority appeals. So we have that. There's one section that is being moved out of there, which has to do with PVR evaluations, but the rest of that check would be appealed. We still have an $8.50 per parcel fee here for grand list maintenance.

[Rep. Emilie Kornheiser (Chair)]: I think I've heard from techs that they would like to actually just leave that. They think that's an appropriate number. But I don't know. I don't remember if they said sitting in the chair or not.

[Rep. Charles Kimbell (Ranking Member)]: I guess the highlight might be about the right cost.

[Rep. Emilie Kornheiser (Chair)]: Okay, so let's unhighlight. Sorry,

[Rep. Edward "Teddy" Waszazak (Member)]: didn't hear the agenda from Union Square that it wasn't for them?

[Rep. Emilie Kornheiser (Chair)]: No, this is for maintenance, not for

[Rep. Bridget Burkhardt (Clerk)]: Right now, this is maintenance and reappraisal.

[Rep. Emilie Kornheiser (Chair)]: We're saying this is just

[Rep. Bridget Burkhardt (Clerk)]: for maintenance. This is now just going to be maintenance. That's the right thing.

[Kirby Keaton (Legislative Counsel)]: And the language that we have for compensation for reappraisal has not changed from last version. So as a reminder, it's the commissioner shall estimate the cost of the municipalities for reappraisal and transfer the municipality, the lesser of two thirds of the estimated cost or $66 per gram less parcel. And that's going to be over six years. So if you were thinking of it in an annual way, would be 11 a year.

[Rep. Mark Higley (Member)]: I'm sure I think I mentioned this before, but if we stay with the $8.50 per parcel, we know what that amount is currently. But we don't really know we could probably figure out the $66 But I think it's important for me to understand what that new full cost would be.

[Rep. Emilie Kornheiser (Chair)]: Okay. We will ask JFO to do that. And I also think maybe the league said, and I thought it was a really good point, that we need some sort of small town minimum.

[Rep. Charles Kimbell (Ranking Member)]: I thought that was on the $8.50 per parcel for maintenance of ground last night. Was it? I think so. Okay. Because of a certain amount of cost, I think it was, like, $10,000 estimated cost to maintain the groundless, and some wouldn't get up to $10,000.

[Rep. Emilie Kornheiser (Chair)]: Can someone work with Kurt Vita? Work Kurt Vita.

[Rep. Edward "Teddy" Waszazak (Member)]: You.

[Rep. Emilie Kornheiser (Chair)]: Sorry, Representative Higley, are you saying that you just want a fiscal estimate for the bill, or you want a fiscal estimate for what towns need? Ideally,

[Rep. Edward "Teddy" Waszazak (Member)]: things would match.

[Rep. Mark Higley (Member)]: Just to estimate something we're doing could possibly increase the cost of your appraisals as well. Mean, if we're going to require all assessors to be licensed, I'm sure they're not going to keep their current fees. There may be other things in there as well that I haven't picked out, it would be a good start to play.

[Rep. Edward "Teddy" Waszazak (Member)]: And

[Rep. Mark Higley (Member)]: where the money is coming from, I mean.

[Kirby Keaton (Legislative Counsel)]: So so the next change we have on page 16 here is the tax department positions. Previously, the department had asked for a hearing officer and a docket clerk positions. And those positions were going to be closer to when the RAD appeals boards were being set up. The change here is that tax is not asking for a docket clerk right now. They are asking for a hearing officer, in the way that the language is phrased for HR purposes is, one exempt position for the purpose of hearing property valuation appeals. And it's fiscal year 2027, so a little sooner than what the language had before.

[Rep. Emilie Kornheiser (Chair)]: The docket clerk is for '29? Is that what it was previously?

[Kirby Keaton (Legislative Counsel)]: My understanding is they'll come, as they start to have that need, they'll come back.

[Rep. Emilie Kornheiser (Chair)]: So this

[Rep. Rebecca Holcombe (Member)]: moved up the date, so is this in this year's budget?

[Rep. Emilie Kornheiser (Chair)]: No. It's not. That's something we would need to figure out with the preparations today.

[Rep. Rebecca Holcombe (Member)]: And did they say why exempt? Not classified. But we can ask them.

[Kirby Keaton (Legislative Counsel)]: I I can get an educated guess. I mean, Hearing officers tend to be exempt. And

[Rep. Emilie Kornheiser (Chair)]: they're in a different I don't know if you've ever looked at the tax department org chart, but I just happened to do it recently for some other reason. And so the hearing officers are on their little branch of independence.

[Kirby Keaton (Legislative Counsel)]: Answer well directly to the commissioner kind of position. That's a

[Rep. Emilie Kornheiser (Chair)]: much more articulate way of saying what I said.

[Rep. Rebecca Holcombe (Member)]: So

[Rep. Mark Higley (Member)]: do we have in here, regardless of whether it's

[Rep. Emilie Kornheiser (Chair)]: a hearing officer or a doctor or clerk, where the appeals go first?

[Rep. Mark Higley (Member)]: I mean, do they go

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

[Rep. Mark Higley (Member)]: hearing officer, do they go to the PBR, do they go tomorrow? This hearing officer

[Kirby Keaton (Legislative Counsel)]: will be the appeals PBR. It would not be like the director trying to run an administrative appeal hearing. It would be this person's job is to do that and they would presumably hire someone who has the experience in property valuation in the law around it to do it in a professional way.

[Rep. Mark Higley (Member)]: So again, appeals would come into that individual first. That's where they would submit your appeals to the hearing house.

[Kirby Keaton (Legislative Counsel)]: From the RAD board, from the RAD appeals board. If the normal flow happens, it would be grievance, then the RAD appeal board just like the BCA now and then appeals from there would go, if they're made to the commissioner, which is the language used here, it's not actually to the PBR director, it's to the commissioner. The appeals to the commissioner would be heard by this position, the hearing officer position, not the actual commission.

[Rep. Mark Higley (Member)]: Okay, guess it's just as long as folks know or will know who will send it to, through an address or email or something from the RAD appeals court. They're going to be set up in form that people are to know this is where the appeals go.

[Kirby Keaton (Legislative Counsel)]: And there is language in here to try to predict when people may be confused by that. So we have language where if a person appeals to the wrong entity, that entity will forward it to the correct entity and it will count as being timely filed.

[Rep. Emilie Kornheiser (Chair)]: Thank you.

[Kirby Keaton (Legislative Counsel)]: I'm not sure if we've covered every instance where someone might make a mistake like that, but there's some instances where if

[Rep. Edward "Teddy" Waszazak (Member)]: that happens. Mr. Waszazak? This might be answered later in the bill, but we have a report back where we will determine the right boundaries after potential school district boundaries are decided, but not yet operational yet. Basically, I'm trying to figure out why this has to start in FY20, so in the grant.

[Rep. Emilie Kornheiser (Chair)]: The actual position or the whole thing? No, actual position

[Kirby Keaton (Legislative Counsel)]: is earlier than the rest of the timeline.

[Rep. Emilie Kornheiser (Chair)]: Tax department can answer that question.

[Kirby Keaton (Legislative Counsel)]: I think the tax,

[Rep. Mark Higley (Member)]: yeah, sure.

[Rep. Edward "Teddy" Waszazak (Member)]: I

[Rep. Emilie Kornheiser (Chair)]: think they need the I think an interesting thing that we've never spent any time talking about last year, because there was a lot going on last year and I think is worthy of just naming, is that in Act 73 and last year's budget, we significantly increased both funding for contractors and staff at the Agency of Education. And we did not do that for the Department of Taxes at all in any way. And they had half the policy in that enormous piece of legislation and have really big new initiatives going. And they had a really solid staff team that's been doing incredible work. But I just think it's an interesting thing to keep in mind, given how much new stuff we had them take on and how much incredible work they've done up until this point to get that going.

[Rep. Edward "Teddy" Waszazak (Member)]: And I don't at all disagree with that.

[Rep. Emilie Kornheiser (Chair)]: No, I wasn't. I've been thinking about it a lot this week, and I just thought I would take a minute to say it.

[Rep. Edward "Teddy" Waszazak (Member)]: Yeah, and that's business. My reaction to this is that there are many other parts of state government who desperately need staff because I'm mad about

[Rep. Rebecca Holcombe (Member)]: flood stuff, anyway. Okay. On that, I think two other questions that keep coming up for me. We actually took a very different strategy with the agency. We gave them temporary staff and we gave them a ton of money for consultants. That is not the same as building the capability to manage ongoing operations. And could we also, is it possible to understand, I mean, I'm concerned about what we also heard about staffing shortages. And can we actually get a list of how many, we know how many positions they're carrying. We don't know how many bodies are in place. Can we even just get from the administration how many bodies are at AOE and how many are at tax?

[Rep. Charles Kimbell (Ranking Member)]: We have a tax, but I think we can get that.

[Rep. Emilie Kornheiser (Chair)]: I look to Charlie because he's It would

[Rep. Rebecca Holcombe (Member)]: be helpful to know because positions are not the same as employees.

[Rep. Emilie Kornheiser (Chair)]: Oh, absolutely.

[Rep. Charles Kimbell (Ranking Member)]: They have 167 positions, I think, and they had a 12% vacancy in their claims adjusters, but then 5% across the rest of the staff.

[Rep. Rebecca Holcombe (Member)]: It's important to know who's there, because we are putting through very significant and consequential policy, again, if it fails because there aren't people in place, that's a problem, and I think the problem is even worse at AOE, so I think we should know what those bodies are.

[Rep. Edward "Teddy" Waszazak (Member)]: Can give you

[Rep. Charles Kimbell (Ranking Member)]: guys a tax, can also always ask AOE about that.

[Rep. Rebecca Holcombe (Member)]: Maybe I'll ask, and I can ask, education, maybe they've had. Yeah, I'll ask them.

[Rep. Edward "Teddy" Waszazak (Member)]: Okay,

[Kirby Keaton (Legislative Counsel)]: so there's the position changes. The next thing we have here are the conforming changes for the repeal of Board of Civil Authority appeals. Reminder, Board of Civil Authorities will continue to exist, and they have other responsibilities beyond this. Don't want anyone to think that we are getting rid of Words of Human Authority. The next section we have did have some changes from tax. We had this is the transition language that was from Act 73. We've repealed the Act 73 transition language just to replicate it here. Early on, was feedback from TACS that some of the things under subsection A were going to be difficult. So in the language you looked at previously, I had actually taken this stuff out and only had the second part of the transition language. For this version, Taxi said, Let's have it exactly the same as x73, but change the dates. So that's what you're looking at here. This is the Act 73 language for transition over to RADS, except things are pushed out a year. So 2027 became or I think this is pushed out two years, actually. Is pushed out two years. So I'll go through what it says now. Director of PVR shall not order any new municipal reappraisal of grand list properties that is not part of a regionalized reappraisal system on or after 01/01/2028. That was in Act 73 because the idea was to slow down the ordering of new mastery appraisals under current law so that the municipalities were prepared to transition over the new system. But again, a lot of these changes in the language you're looking at now are taking a slower approach to things. So instead of stopping what's in Subdivision 1 here in 2026, it's moving that out too. Subdivision 2 is a reappraisal order for which the municipality does not have a contract in place before 01/01/2031. It shall no longer have the force and effect of law on or after 01/01/2031. Originally that's at 2029. And third, a municipality shall not enter into a new reappraisal contract on or after 01/01/2028, except for those that are part of a regionalized reappraisal system. So again, this language is being added back. It's from Act 73 for the transitions, but it is extended out two years. And then we did have this language before, but we've also extended out the dates two years. On So or before January 15, from 01/15/2028 to 01/15/2031, the Commissioner of Taxes shall submit a report to Ways and Means and Senate Finance relating to the progress made in preparing for the implementation of RADS pursuant to this Act.

[Rep. Mark Higley (Member)]: Madam Chair, so that last number three,

[Rep. Emilie Kornheiser (Chair)]: the municipality shall not enter into a new rip risk contract on or after 01/01/2020. Do we know how many towns might be in that boat right now? Again, the vote of having a contract starting in 2028? No, but I bet Jill does. We can ask her. However, Charlie has something in his bag that he's gonna share with you.

[Rep. Mark Higley (Member)]: Even there could be, I mean, when we did earlier pretty close-

[Rep. Bridget Burkhardt (Clerk)]: Yeah, no, it's usually

[Rep. Emilie Kornheiser (Chair)]: the contracts are pretty far out.

[Rep. Charles Kimbell (Ranking Member)]: Was what I was gonna say. We do have from PBR when the appraisal contracts are supposed to start. So that's in their report. So when this is about when you can enter into a new contract, not when it's scheduled to happen.

[Rep. Edward "Teddy" Waszazak (Member)]: Is that? Oh,

[Rep. Rebecca Holcombe (Member)]: yeah. Thank you.

[Kirby Keaton (Legislative Counsel)]: Is That makes sense. True. So so

[Rep. Emilie Kornheiser (Chair)]: So I could sign a contract that starts in 2,030 tomorrow.

[Rep. Charles Kimbell (Ranking Member)]: Yes.

[Rep. Emilie Kornheiser (Chair)]: And it would not be and that contract could still go through Yes. Under

[Rep. Edward "Teddy" Waszazak (Member)]: I

[Kirby Keaton (Legislative Counsel)]: think the point I would like to get across is This is setting to push things out quite a bit. I'm not saying there's any of pop judgment or anything, but just so that you are aware. The current system will continue to do its thing and the language here is not disrupting that really. I think the difficult part will become when you switched over to RADS and you still have so many municipalities who still have contracts in place from the old system and things like that. So I think that is going to be the interesting transition period. Tax has been concerned to make sure that this is written in a way where we're not disrupting a whole lot of stuff right now, including going ahead and scheduling this year a reappraisal a few years from now.

[Rep. Mark Higley (Member)]: Okay, thanks.

[Rep. Rebecca Holcombe (Member)]: Just want to say, sort of phasing of contract transitions is going to be necessary in any working process. It will be necessary in any school district process that we are spending a tremendous amount of time phasing and carefully transitioning our tax and assuming that mergers can happen in a year. There's just a of a lot of this stuff that we're talking to.

[Rep. Emilie Kornheiser (Chair)]: I think the education committee certainly has it in mind, and it's trying to figure out Yes, the shape of the understood.

[Rep. Rebecca Holcombe (Member)]: Anyone else have anything? What are you doing?

[Rep. Charles Kimbell (Ranking Member)]: I was trying to figure out the years that they're scheduling out for, but I couldn't find it in the DVR report. But I know they're 2033, I think is when they're scheduling it for now.

[Kirby Keaton (Legislative Counsel)]: That rings a bell with me. It's pretty far out. Okay, so the next thing we have is something new. This is language from the tax department on regional assessment district boundaries. This is the session log that is meant to involve a report back to the General Assembly to put the RAD boundaries in the statute. It says the commissioner of taxes shall identify and submit proposed geographic boundaries for regional assessment districts that are aligned with school district boundaries and have a minimum of 10,000 parcels to the House Committee on gov ops and ways and means and to Senate Finance and government operations. B, notwithstanding subsection A, the section, the commissioner may at the commissioner's discretion, identify a regional assessment district boundary that includes more than one school district or identify more than one regional assessment district boundary within one school district. So they could go either way, which we've had versions of language like that before that we've looked at too. Sub C, it is the intent of the general assembly to enact regional assessment boundaries based on the commissioner's geographic boundaries proposed under this section. That's, I guess, Tat's way of saying, please listen to our recommendations. As your alleged counsel person, I could say that there's no legal binding. I

[Rep. Emilie Kornheiser (Chair)]: think it was in talking like I'll own that in talking to the department about this, I was like, oh my goodness, I really don't want you to hand us a thing that we then need to relitigate internally because there's just enough of that right now. And I think this was their sort of gestural nod towards, Don't worry, you can just check a box. You don't have to relitigate. Obviously, we will rid Of the

[Rep. Bridget Burkhardt (Clerk)]: course, we will have full

[Rep. Edward "Teddy" Waszazak (Member)]: faith in

[Rep. Emilie Kornheiser (Chair)]: a future legislature to relitigate this issue. Yes.

[Rep. Rebecca Holcombe (Member)]: Your mic is on.

[Rep. Edward "Teddy" Waszazak (Member)]: We go.

[Rep. Rebecca Holcombe (Member)]: Thanks, Jake. Even those technicals I've pressed the time.

[Kirby Keaton (Legislative Counsel)]: Effective dates. What we have now is that the transition provisions, repeal of the Act 73 secondtions that are being replaced, Those are on passage. The regional assessment district boundaries report that we're just looking at will take effect and the boundary submission to the General Assembly shall be due on the January immediately following the enactment of new school district boundaries by the General Assembly. This is TAC saying, we're not going to do this unless you do what you need to do first. Under this language, if you were to, in this session, establish School District Foundries, then next January, TACS would report back on RAD boundaries. If that does not happen this session, and its next session, the school district boundaries are established, then it would be the January after that the taxable report back. And then, you know, things some of contingencies start kicking in if you take longer than two years.

[Rep. Emilie Kornheiser (Chair)]: Can you change it to the fifteenth day of the December? So it's can you move it a month prior?

[Rep. Edward "Teddy" Waszazak (Member)]: I thank you. Can I

[Rep. Rebecca Holcombe (Member)]: go back to the previous I'm a little self processing the previous section with the intent language? I'm trying to figure out what how this parallels. Are those exceptions? Because here, we are dealing with tax in the legislature what in education is done by the state board. And I'm thinking not about Act 73, because presumably we're writing law not just for Act 73, but for a long time so that you don't have to keep changing what you do at tax. I'm just thinking, what's the best long term way to support transition around RAD boundaries?

[Rep. Emilie Kornheiser (Chair)]: Oh, so if the RAD boundary needs to change in the future? Yeah. I mean, in ten, twenty years. And so I think that gets to the delegation of authority concern that Kirby and Jim Devlin had.

[Kirby Keaton (Legislative Counsel)]: So the way the way that this is set up, the answer is that the general assembly would do that in statute.

[Rep. Rebecca Holcombe (Member)]: But the discretion Does it only come to us if it's coming from the commissioner? What if

[Kirby Keaton (Legislative Counsel)]: I mean, if it's in statute, you can change statute whenever you want.

[Rep. Emilie Kornheiser (Chair)]: So a RAD could come to us or a constituent can come to us or something from

[Kirby Keaton (Legislative Counsel)]: would be No one could come to us. Would be It's called Nepalgy. I think the trade off there is legislature has full power over that, is not reliant on the department taking action or anything, but the system becomes slower because it starts to become legislative process required in order to make any adjustments. I think that's

[Rep. Rebecca Holcombe (Member)]: why I was asking A, it's slower, B, it's not systematic. It's dependent on someone being upset and coming to us and people have different capacities to do that.

[Kirby Keaton (Legislative Counsel)]: It could be based on administrative concerns that the department brings. They bring administrative suggestions every year.

[Rep. Emilie Kornheiser (Chair)]: We do. We are setting up an advisory board, frankly, on Ed Finance issues. That sort of is like a board. We'll have some authority. So that's sort of an interesting Interesting.

[Rep. Rebecca Holcombe (Member)]: Absolutely. Absolutely. So if you want

[Rep. Emilie Kornheiser (Chair)]: to think about this and come back with You

[Kirby Keaton (Legislative Counsel)]: would have an opportunity later, of course, to also change the statute to make it more flexible, I should say.

[Rep. Edward "Teddy" Waszazak (Member)]: We could, all simple,

[Rep. Emilie Kornheiser (Chair)]: could throw in something that says, Every

[Rep. Edward "Teddy" Waszazak (Member)]: ten years, the general assembly shall review rat boundaries.

[Rep. Emilie Kornheiser (Chair)]: You could. I guess I don't personally feel concerned about the idea that there's going be something wrong with the red boundaries and no one's going to tell us about it. I think that's sort of coming down.

[Rep. Rebecca Holcombe (Member)]: It's not an issue. I'm just wondering that parallel processes between different standards of approaches. I

[Rep. Charles Kimbell (Ranking Member)]: have two questions, not necessarily on this section, but I guess one is if school boundaries don't get readjusted school district boundaries, This is all contingent upon that. Does it make sense to move forward with regional assessment districts in the absence of new school boundaries? Does this sell out for?

[Kirby Keaton (Legislative Counsel)]: Yes, so the first no to the other. The contingencies from Act 73 have been included here. So you have this contingency about ACTS will not report back about boundaries, but it's not the only

[Rep. Charles Kimbell (Ranking Member)]: Still makes good policy to move ahead with regional assessment districts in the house.

[Rep. Edward "Teddy" Waszazak (Member)]: That's my point.

[Rep. Rebecca Holcombe (Member)]: This should be good policy that can stand on the table. Here

[Kirby Keaton (Legislative Counsel)]: we go. Here's the The remainder of the facts shall take effect on So this is the bulk of it. This is the rad stuff. The remainder of this act shall take effect on 01/01/2031, and best pushback, by the way, note that. Provided a regional assessment district appeals boards shall commence jurisdiction and further provided the general assembly enacts new school district boundaries on or before 07/01/2027. So if you don't meet that 07/01/2027 goal, this is written to become ineffective entirely. So

[Rep. Charles Kimbell (Ranking Member)]: the second question I have is on page six. We had some testimony on board members shall not be panelists for hearing in the town in which they come from. So that was raised as a concern about the composition of an appeals group if we have multiple people or multiple parcels. Anyway, I'll just flag that for something we should discuss probably as whether or it's a policy. You have a Well, I think we had talked about no two members coming from the same municipality. So that it's 4B, think, something like that. Page six.

[Rep. Rebecca Holcombe (Member)]: What B is different?

[Rep. Charles Kimbell (Ranking Member)]: There we go. Board members shall not be a panelist for appearing involving property located and misspelled at which member it's represented.

[Rep. Emilie Kornheiser (Chair)]: That means That's different from what you said previously. I know, that's the point. I think that's the point.

[Rep. Charles Kimbell (Ranking Member)]: That's my point. It's a question about, that means if from the RAD board of say 30 members, actually more, then you're restricting the people you can pick from that in order to serve as appeals. And if in a year in which there's a lot of appeals because of a new appraisal, then you're maybe crippling that board in terms of the number of people that are here. So I thought that one other construct we could say is that a board member, the appeals board shall have no more than two members from the same municipality on that appeals board. I don't know if that's more workable, but I think that was flagged for us as a

[Rep. Emilie Kornheiser (Chair)]: I think it was a really good point that she made. Yeah, a concern.

[Rep. Edward "Teddy" Waszazak (Member)]: Does it

[Rep. Emilie Kornheiser (Chair)]: work for folks if Charlie works with Yes. Herbie to okay. Tighten that sentence. Okay. Change that sentence. Great. Okay.

[Rep. Edward "Teddy" Waszazak (Member)]: Thank you.

[Rep. Emilie Kornheiser (Chair)]: Cool. I'm gonna close on top on this. Yes? Just have to say I'm concerned about the contingency. I think that's I mean, if

[Rep. Rebecca Holcombe (Member)]: this is good policy, we should

[Rep. Emilie Kornheiser (Chair)]: be perfect with policy. I can And we can talk about that a lot more. I think that every aspect connected to Act 73, there's someone there are multiple people who think that about each section, and we're gonna need to grapple with that. Thank you, Kirby. Oh, you're staying there. Let's, I don't know, wiggle our toes or something to Yep. Okay. Moving to non homestead residential tax classification. And we might be bumping five eighty eight because of some fiscal note stuff. So in case anyone's No. I don't know yet.

[Kirby Keaton (Legislative Counsel)]: Adaptations? Yeah. It's just a class patient's only just dropped through both the line.

[Rep. Edward "Teddy" Waszazak (Member)]: Oh, we're good. Keep it. Keep it. It.

[Rep. Emilie Kornheiser (Chair)]: Kirby, you share the language with us? Thanks so much, sir.

[Kirby Keaton (Legislative Counsel)]: Yes, so this is the tax classifications and language. There are fewer changes. This is also a new draft 3.1. I think the Rasol is also a 3.1. There are fewer changes here, also highlighted. As a reminder of what we're looking at, the content of all of this goes to creating a new property tax classification in the future based off of non homestead residential properties, potentially taxing them at a higher rate. Also, those changes involve contingencies from Act 73 that are mentioned on the other policy changes taking place that were implemented in Act 73. With that, get to changes. To leave her testimony, it was at a time in which I was working on drafts and taxes reviewing drafts and things were changing a lot. So you last heard testimony from Abby wanting a particular approach to the employer issue when it comes to long term rentals under the class Should have let me do that for whole time.

[Rep. Edward "Teddy" Waszazak (Member)]: No need for next Saturday.

[Rep. Emilie Kornheiser (Chair)]: He accepts cookies. I thought this was just your wind up. Can

[Rep. Edward "Teddy" Waszazak (Member)]: see a laptop, by the way.

[Rep. Charles Kimbell (Ranking Member)]: But he has these He's all the live ball games referring to things.

[Kirby Keaton (Legislative Counsel)]: Yeah, No no. This whole time I was walking in different ways. So anyway, you can join me now on page four. So far I made it. Abby had some language, I had some language, we were going back and forth, and at the time of testimony, it sounded like the committee was happy with what Abby brought. So that's what you're looking at now. So it says, a long term rental we can back up if you want the refresher, under the classification system, if it's a long term rental, that would mean that the property or that portion of the property at least that's used as a long term rental would be classified as non homestead, non residential, which would be presumably a lower rate than if it were non homestead residential. So we have definitions for why a long term rental means a dwelling for which rent is paid for the rights of occupancy for periods of at least thirty days, with combined rental periods in the current calendar year that total at least six calendar months, which need not be consecutive, and there is a bona fide landlord tenant relationship between the parties. We have this clarifying subdivision Jig B here that says, long term rental also means previously we had broken out employer or employee housing and farm worker housing. This iteration of it just combines the two and says, also means a dwelling used by an employer. This is the new part that Abby had pointed out Previously we weren't specifying use by the employer to house the employer's employees. It was based more off of a long term dwelling means dwelling for employees. So anyways, that clarification is added for at least six calendar months, which need not be consecutive next to our calendar year. As used in this section, employee needs an individual who is reported by an employer for purposes of unemployment insurance. So that's pretty much the same as what we said before other than the clarifying part about specifying the ruling is used by the employer.

[Rep. Emilie Kornheiser (Chair)]: Can you back up? Just like that definition of long term rental, we heard testimony about sort of desires to change that. And just wanna name that I sort of I had a conversation with Taks about that. There's just like While we're sort of sitting on that section And the whole idea of sort of knowing in advance how you're going to use a property versus knowing after the fact how you're going use a property. And we talked about how And so when we're done with Kirby and we talk to Jake, I just wanna name that there are some ideas on how to address that. Back to you. Sure. I just wanted to say it while we were on that section.

[Kirby Keaton (Legislative Counsel)]: Yeah. And

[Rep. Mark Higley (Member)]: that's, you're also talking about reducing the six months to three months too, isn't that?

[Rep. Emilie Kornheiser (Chair)]: Maybe, so let's, yeah, let's get into that.

[Kirby Keaton (Legislative Counsel)]: Anyway, there's not a huge substantive change here, but I will point out to what degree there is any kind of substantive change among the various definitions we've looked at. So this defines employee basically based off of having a UI requirement, which is what you looked at before. And then for farm employee, it uses this definition for farm employee. Then without regard for whether the employee has a UI requirement, because as we discussed before, farm employees often usually do not have a UI requirement, so we use this other reference. Previously, we used the current definition of farmer to identify the farm employee's employer. This definition does a similar thing. The actual substantive difference, and I can pull up this non BSA4469A if you want. By referencing the current use definition for farmer, there's I think, three different ways that a person can qualify as a farmer under VES. This definition is based off of 50% farm income, which is one of the ways under current use a person can be considered a farmer. So as far as any substantive difference between the definitions, I think that that is really good. How you to identify the employer of the farm employees? I think in committee discussion, we had talked about the 50 farm income thing, I've used that as an example of going over it the first time, And that's what this does, is like that example that we went over. So I don't know if the Katie wants to discuss that or not, that's just, as far as telling you the difference between this and what you looked at before, I think legally, substantively, that's the difference. It's just how you identify the farmer who is the employer. Again, this version is based off of having 50% of your income being farm income.

[Rep. Mark Higley (Member)]: Which is a little stricter than the current use of both.

[Kirby Keaton (Legislative Counsel)]: The current use definition, there are some other ways to be considered pharma. We can pull those up, I just don't know if you want to spend time on it.

[Rep. Rebecca Holcombe (Member)]: Does anyone need to see that? Sure. Okay.

[Unidentified Member]: I appreciate that definition you're using, Kirby, is straightforward. And it is or it is, which makes it easier

[Rep. Emilie Kornheiser (Chair)]: out there in the world if we have wishy washy kind of things. Nothing straightforward.

[Unidentified Member]: Well, to the best of our ability.

[Rep. Emilie Kornheiser (Chair)]: Well, I appreciate not redefining things when there's definitions other places, that's my favorite thing. There you go,

[Rep. Edward "Teddy" Waszazak (Member)]: is that

[Rep. Emilie Kornheiser (Chair)]: what you're trying to say? Yeah. There's a definition for it, just happens to be in a different spot. Yes. Yes. Yeah. Exactly.

[Kirby Keaton (Legislative Counsel)]: What's there?

[Rep. Rebecca Holcombe (Member)]: Jake, you're welcome to sit over there, you want.

[Kirby Keaton (Legislative Counsel)]: Subsection eight(one) Farm Employee means an individual employed by a farm employer for farming operations. We have to look at the other definitions to see what those things mean. Farm employer means a person earning at least one half of his or her. That should be updated, but we don't say that anymore. Annual gross income from the business of farming, as that term is defined under The US tax code. That's another way of saying farm in town. That's what you have using this definition. That's the language you have. This is the language that was suggested by the department that Abby went over during testimony last time you heard testimony on this. And it's completely workable, you know, obviously. I'm not saying that any of these things are any better than the other.

[Rep. Mark Higley (Member)]: Think I have a question. We point out what is a farmer and relation to this legislation, but we don't seem to identify what an employer is, such as a corporate employer who hires foreign workers to

[Rep. Emilie Kornheiser (Chair)]: think Kirby can answer that.

[Rep. Mark Higley (Member)]: Are we going to be covering that as well? Should we?

[Kirby Keaton (Legislative Counsel)]: I think part of why I think it's probably ideal to use the unemployment insurance requirement is that it answers so many things for us. You don't have to define it. It's all part of that existing UI system to identify who's an employer, who's an employee, and also it's something that's tracked by the Vermont Department of Labor, so TACS has the ability to easily check as well. Most of those things are answered. They're still within UI certain jobs that don't have a UI requirement, which would be left out. Think that's the if there's a caveat about that approach, there's that. Alternatively, you could use the current use definition of pharma. Subdivision big A there is essentially the same thing as what you just looked at, the recommended definition from tax, but also that definition would leave out the farm crops way of qualifying. So there are additional ways to qualify here, which has to do with the production of farm crops and getting into the weeds on that stuff. If you do want to make it simple and leave it as farm income, then the language that you have works straight. If you want to try to broaden it, this is a different way.

[Rep. Emilie Kornheiser (Chair)]: Does everyone now that we understand it, does everyone feel like this has brought it? No. Great. I just fell in a little

[Rep. Bridget Burkhardt (Clerk)]: bit because I have it's almost like one of Charlie's exercises with the cards because I have specific So in our area, in Chittenden County, there are several different farms that definitely are farming, but also have a lot of other activities to kind of support the income of that piece of property. They may have employees. And my question is, so if they're not technically farm employees, would they live?

[Rep. Emilie Kornheiser (Chair)]: They live on the farm? Yeah. Okay, great. Okay. Just wanted to make sure.

[Rep. Bridget Burkhardt (Clerk)]: Yeah. Okay. They're not technically farm employees because the farm might make 48% of its income from actual

[Rep. Rebecca Holcombe (Member)]: Wouldn't they be employees? Well, that's

[Rep. Bridget Burkhardt (Clerk)]: my question. So then would they help to It's just My question is

[Rep. Emilie Kornheiser (Chair)]: Okay,

[Rep. Bridget Burkhardt (Clerk)]: so would those employees, if the farm doesn't technically meet the definition of 50% of its income being a farm, would those employees then have to fall under the unemployment insurance definition? Because maybe I'm misunderstanding. I thought you either had a sort of unemployment insurance bar or you were a farm employee. And if there are farm employees that kind of fall in this hazy middle, they're employed in farm work, but that farmer might not be considered a farmer under these definitions.

[Rep. Emilie Kornheiser (Chair)]: So my understanding is that basically all people who work for money are within the UI definition, except for farmers and folks who are incarcerated.

[Rep. Bridget Burkhardt (Clerk)]: You're saying that those

[Rep. Emilie Kornheiser (Chair)]: That's true?

[Kirby Keaton (Legislative Counsel)]: There's a few others.

[Rep. Emilie Kornheiser (Chair)]: Okay. Who are the few

[Kirby Keaton (Legislative Counsel)]: People that pop?

[Rep. Rebecca Holcombe (Member)]: Let's do that offline. I

[Kirby Keaton (Legislative Counsel)]: recall that the farm workers are on a list of four. Obviously, of Labor would be the testimony you're really looking for on UI.

[Rep. Emilie Kornheiser (Chair)]: Represent Burkhardt, I feel fairly sure that your issue is covered, but I'm going ask you to figure it out with Kirby later. Or actually, even whoever does UI law.

[Kirby Keaton (Legislative Counsel)]: So he does UI law. Okay.

[Rep. Emilie Kornheiser (Chair)]: It's a delightful rabbit hole.

[Rep. Bridget Burkhardt (Clerk)]: Sorry. No, no, no.

[Rep. Emilie Kornheiser (Chair)]: It's a useful one. I'm just saying, once you go into UI law, you don't ever come back out again. Okay. And we're gonna keep on going.

[Kirby Keaton (Legislative Counsel)]: So, I apologize if I called that rabbit hole.

[Rep. Emilie Kornheiser (Chair)]: You did not. No, it's an important. I want to make sure that everything is covered,

[Kirby Keaton (Legislative Counsel)]: right? So, now, you're fully aware of what you're referencing with the definition you have there for long term rentals. Non homestead, non residential was changed because this language has removed the caveat that the department had requested to automatically put buildings that have five or more dwelling units automatically into non home Fajan residential. By removing that automatic inclusion, it would mean that buildings that have five or more units, including short term rentals, those short term rentals with previously in the previous language you had, those short term rentals in a larger building would be not treated as the second home, the non homestead residential rate. They would have been treated as apartments, would have been treated as non homestead, non essential. So this would remove that language to change that treatment so that all short term rentals across this language would get that same treatment as non homestead residential. The department, of course, has testified that makes some of the administration a bit more difficult to do this.

[Rep. Emilie Kornheiser (Chair)]: Does anyone want to hear from Jake on that again?

[Unidentified Member]: Yes, so fine. I'm the only one putting up my hands. You're okay.

[Rep. Bridget Burkhardt (Clerk)]: Mark to two. Everyone wants to

[Rep. Emilie Kornheiser (Chair)]: hear what Jakes has said. Sure.

[Jake Feldman (Vermont Department of Taxes)]: The chief element tax department, we do recommend at least at first to include the bigger apartment buildings in non residential. The reason is that while there may be some very small number of apartments in those bigger buildings that are short term rental, it constitutes a tiny part of the tax base, but a massive amount of work for both local officials and landlords. So that is why at least at first, we would recommend keeping that in non homestead, non residential, bigger parking buildings.

[Unidentified Member]: Because of the amount of work.

[Jake Feldman (Vermont Department of Taxes)]: Work in a very tiny, tiny part of the backspace.

[Rep. Charles Kimbell (Ranking Member)]: If I may ask Jake a question, I think you identified the number of short term rentals and larger apartment buildings in previous testimony.

[Jake Feldman (Vermont Department of Taxes)]: We know that there's 2,000 apartments in Vermont that are rented short term, so we do not have data on how many of those are in smaller apartment buildings. Like right, you still have on Liberty Street as a short term rental, small old farmhouse versus these bigger buildings, we don't know, but we do know that Burlington doesn't allow that kind of thing. That's where a lot of the bigger buildings are, so I could try to get more granular on that data. Just to put

[Rep. Charles Kimbell (Ranking Member)]: in context, 2,000 units, how many residential units?

[Jake Feldman (Vermont Department of Taxes)]: 75,000 apartments.

[Rep. Emilie Kornheiser (Chair)]: And

[Jake Feldman (Vermont Department of Taxes)]: how many residential units is something like 265,000? Total or less than units.

[Rep. Emilie Kornheiser (Chair)]: And so I For me, I feel like we're talking about a fairly small Venn diagram of apartments that might be taxed as apartments and not as short term rentals in this context. And it's worth waiting a few years while all the rest of this sorts out to figure out if that needs to be addressed.

[Rep. Rebecca Holcombe (Member)]: Yeah. I appreciate your saying wait a few years. I think what we know is people respond powerfully to incentives, and so it's the kind of thing you'd want to track, but I think the case that you don't want to make a lot of work for no big squeeze for little Jews, I get that right.

[Rep. Mark Higley (Member)]: The other thing, Madam Chair, that I think you would address, I think is a lot of times if they have somebody that has filed a pharmacy or they don't know for sure to give me a view, they could maybe have to go on thirteen,

[Rep. Emilie Kornheiser (Chair)]: not going to pick up the OPR bill until eleven ish for anyone who's waiting for that one. The time of year where the agenda is gonna change every five minutes, so refresh your agendas.

[Rep. Edward "Teddy" Waszazak (Member)]: What else, Kirby? What else? What else?

[Kirby Keaton (Legislative Counsel)]: There's just some clarifying language added to the appeals as they apply to classifications. The language that we already had was persons agreed by a decision to classify property for taxation purposes under this section may appeal in the manner provided for property valuation appeals under this title. So there's that. Clarifying language added. The commissioner shall provide written guidance for municipalities to follow when hearing such appeals and technical assistance if requested by a municipal official responsible for such appeals. This is to get at, I think the issue was that municipalities may need help. And this is the help that we have at the state level to provide. Could try to go farther, I ran this by tax and they thought, it was weird to talk about Jake while he's in the room, but I'm pretty sure Jake was like, that seems fine.

[Rep. Rebecca Holcombe (Member)]: Jake, fine. It's fine, great.

[Rep. Emilie Kornheiser (Chair)]: Jim, would you like us to all say hello to you? I am. Hello, Jim. Nice to

[Rep. Rebecca Holcombe (Member)]: see you. You look terrific.

[Rep. Mark Higley (Member)]: Was nice to see

[Rep. Emilie Kornheiser (Chair)]: you all. Thank I'm

[Rep. Mark Higley (Member)]: just curious as to how your committee member was

[Rep. Edward "Teddy" Waszazak (Member)]: doing this. He's

[Rep. Emilie Kornheiser (Chair)]: doing really well, thank you.

[Unidentified Member]: It's not up to you to meet, but

[Rep. Edward "Teddy" Waszazak (Member)]: you know.

[Rep. Rebecca Holcombe (Member)]: We're actually getting supervised during feasts,

[Rep. Emilie Kornheiser (Chair)]: so I'm

[Rep. Mark Higley (Member)]: so happy you're here to check up on it.

[Rep. Charles Kimbell (Ranking Member)]: We think it's a big deal.

[Rep. Mark Higley (Member)]: I heard he made a big deal speech on floor last year. Is that true?

[Rep. Emilie Kornheiser (Chair)]: It is, but we're gonna go back to testimony now.

[Kirby Keaton (Legislative Counsel)]: So the next thing we're going look at is dwelling used for attestation, which is a key part of the administration. There were some changes. Previously what you looked at was some language for dwelling use attestation and also some additional language for the penalty for a fraudulent filing. What it was silent about though was whether there is a penalty for accidental errors. So we do have language that addresses that now. Subsection G is the existing language relating to homesteads, because homesteads are intermingled with this classification system, because homestead is one of the classifications. So here are some changes to the existing law on erroneously filed homesteads or incorrect, not always, whatever. Subsection G. If the property is identified in a declaration, this is a homestead declaration under subsection B of this section, it is not the taxpayer's homestead, we are removing the part here about, or if the owner of a homestead failed to declare a homestead, because that's addressed later, I will back up and say there is going to be a different, slightly different world when it comes to file lengths. Under current law, you could file a homestead for a property that is not really your homestead and maybe benefit, or maybe not benefit, right? Because we have, the key part is there are different rates for homesteads and non homesteads in different municipalities. Under current law, with how our system works, is it's really town to town as to whether it's helpful or not as helpful for you to file a phone stand. So under current law, there's a different penalty structure for failures to file because it could go either way. That is how things are. Under the new system, it will always be better to be a homesteader. And it will always be the worst as far as what you have to owe in taxes to be a short term rental or a second home. Things are going to be written differently because there's different incentives there that the law is trying to keep people within. That's So what these changes are about. So this is not changing current law for now. This is changing current law in the future when classifications aren't there, just to be clear. So we are changing the homestead penalties. It says, if the property identified is not the taxpayer's homestead, the commissioner shall notify the municipality and the municipality shall issue a corrected tax bill that may, this is current law, where municipality may choose to impose a penalty. That is current law, they are allowed to do that. So the municipality may, if the governor body, if the select board has approved this, include a penalty of up to the changes going from three to 5%. The 3% penalty under current law is for basically when an accident was made and it was not in favor of the taxpayer. Under current law, there is up to an 8% penalty when the mistake was made and it was in favor of the tax payers and they were going to financially gain from that. Because we now have a system where it's going to be always clear depending on your classification, whether it is beneficial or not, there is language changes here. So instead of three, it is just, you make a mistake with the homestead, it's going to be five. It will always benefit you to claim a homestead when it's not your homestead. So the penalty is just always fine and it would always be to the benefit of a mistake like that to the taxpayer. There's language below here is where if the owner of a homestead fails to declare a homestead as required. So this would be the instance where it's not in the taxpayer, like the mistake that was made was not in their favor and there is no penalty under this language. It's just, we're gonna correct it and move on.

[Rep. Rebecca Holcombe (Member)]: Spark the intent here, just in the spirit of paperwork reduction, does the flow have to go this way? I mean, aren't there more homestead than not homestead buyers? So I'm looking at Jake. This creates the burden of every single person on this island, the homestead thing. What if it went the other way around? I don't know.

[Rep. Emilie Kornheiser (Chair)]: Maybe I'm misunderstanding. I was thinking that every

[Rep. Rebecca Holcombe (Member)]: Go ahead, Jake. Did you weigh that? I don't know if you weighed that.

[Rep. Edward "Teddy" Waszazak (Member)]: The general tax firm, we didn't contemplate a default homestead kind of world, we're more continuing with the current world where homesteads have to file this year, which I think is what you're talking about.

[Rep. Rebecca Holcombe (Member)]: Yes. I'm wondering, does it make sense to have a default category be the biggest category and then cascade from there?

[Rep. Edward "Teddy" Waszazak (Member)]: Right, well, right. If this default category is like the worst tax category and so there's no set to file.

[Rep. Rebecca Holcombe (Member)]: And if

[Rep. Edward "Teddy" Waszazak (Member)]: you don't file, which I imagine, like, somebody who lives in New Jersey but wants to place in a style, they may not file. Right. The not home step right.

[Rep. Emilie Kornheiser (Chair)]: Think there's also an we've spent time taking testimony about folks who are taxpayers who are low income enough that they don't file income taxes, and then might not know that they're eligible for property tax credits and income adjustments. And the filing of the homestead, I think, is a helpful trigger towards actually accessing that. I just was trying to No, it's

[Rep. Rebecca Holcombe (Member)]: a great to merit. There's cost both ways. Absolutely.

[Rep. Emilie Kornheiser (Chair)]: I think it's an interesting question.

[Kirby Keaton (Legislative Counsel)]: So we're keeping the current law here where if there was fraudulent intent, it's a 100% penalty of education tax. The Department has said that fraud is hard to prove and usually it's the Department having to look into that. So there is a substantive change here where in cases of fraud when it comes to homesteads in the future, it would be the Department of Taxes looking into that and not the municipality and imposing that 100% penalty.

[Rep. Rebecca Holcombe (Member)]: What's the logic from moving it one way or another?

[Kirby Keaton (Legislative Counsel)]: To moving it to tax?

[Rep. Rebecca Holcombe (Member)]: There's, again, consolidation of

[Kirby Keaton (Legislative Counsel)]: This was a recommendation from tax, but my understanding is because of the work needed to do that. And also, I think tax has in their possession the homesteads.

[Rep. Rebecca Holcombe (Member)]: Jake, can add to that?

[Rep. Edward "Teddy" Waszazak (Member)]: Yeah, sorry, Jake, on the text where I basically, like Burkhardt said, fraud is rare at parking per roof, and it's got a more spigot type of text where I would want to handle rather than continue to the data account.

[Rep. Emilie Kornheiser (Chair)]: We've talked about data matching between income tax records and things like that, and then a tax wouldn't be able to do that.

[Rep. Mark Higley (Member)]: Is there a date change at all? Is it the same date for the folks that did file a homestead to get it squared away?

[Rep. Edward "Teddy" Waszazak (Member)]: It's shorter, as I know.

[Kirby Keaton (Legislative Counsel)]: You haven't changed any dates. So that is the homestead. Of course, is the dwelling use attestation as well. The beginning of this is the same language we looked at last time, but there will be a new requirement for dwelling use attestation in cases where property is not a homestead. As far as penalties though, those are the changes that we're looking at. It's just the inclusion of the penalties. So before we had one subdivision too, it's been broken out for not fraud and fraud. Fraud stays the same. It is the 100% penalty same as the homestead when it comes to a fraudulently filed Drawing Use Attestation. But we have slightly different language now for cases where Drawing Use Attestation has errors or omissions, but the commissioner does not find that there was fraud. In that case, the commissioner shall notify the municipalities and the municipality shall issue a corrected tax bill similar to the homestead situation with the same penalty as above for the homestead penalty in the cases of an error, so 5%. Those penalties would be handled by the municipality in that case. With swelling use attestations, if there was an error or omission and the commissioner finds it fraudulent, under this language, commissioner is the one assessing the penalty and handling those cases. And so that's what we have for the penalties.

[Rep. Emilie Kornheiser (Chair)]: If someone under current law has a homestead, and they file their homestead, and then two months later they get the best job offer ever, and they move to Hawaii, rent out their home, how do they withdraw their homestead?

[Kirby Keaton (Legislative Counsel)]: Good news to tell us.

[Rep. Rebecca Holcombe (Member)]: One second, I was

[Rep. Emilie Kornheiser (Chair)]: just like, it was fully there in that, and it was great. So good right now. What?

[Kirby Keaton (Legislative Counsel)]: They have two jobs where you're going?

[Rep. Emilie Kornheiser (Chair)]: No. The person is only where I'm going only is one job. Maybe no jobs. Maybe it's just like it's a free home in Hawaii.

[Kirby Keaton (Legislative Counsel)]: There's a process with

[Rep. Emilie Kornheiser (Chair)]: But they have a very high second home tax rate, just for the record. Yeah.

[Rep. Edward "Teddy" Waszazak (Member)]: Gonna buy you a loan to help them. The

[Rep. Rebecca Holcombe (Member)]: tax department for classification.

[Kirby Keaton (Legislative Counsel)]: There's a process for withdrawing and amending and changing, then Jake directly handles that a lot more than I do, so I would defer if

[Rep. Edward "Teddy" Waszazak (Member)]: Jake told the tax burden, there's almost an withdrawal form. I don't know if that's in law or something that we impacted, but can

[Rep. Charles Kimbell (Ranking Member)]: certainly withdraw your you're required to withdraw your homestead if

[Rep. Edward "Teddy" Waszazak (Member)]: you find out that it's not going be your homestead.

[Rep. Emilie Kornheiser (Chair)]: And we're not changing that. And so if someone, say, was declared non homestead, nonresidential, and then they wound up not being able to rent out for the sort of period that they thought they would, then they could change that under current law and under this future law. It would only

[Kirby Keaton (Legislative Counsel)]: be future law, right? There would have to be a similar process worked out to what Jay just described. We haven't tackled that in statute directly, but I don't see it conflicting with what you are looking at now for the penalties because this is about errors and omissions for the filing of rolling use attestation. If the real world ends up being differently than at the time the attestation was filed, I'm not sure that would be comparable to error and omitted, especially if the person comes back later to correct it and say, Actually, this is how it's called.

[Rep. Emilie Kornheiser (Chair)]: And I'm being less direct than is necessary. I was trying to work through this sort of desire I had for the attestations to be looking backwards rather than looking forwards. Because I feel like it's easier to know what happened in the past than it is to know what will happen in the future. And particularly in the case of something like a rental property, where you don't know if you're gonna be able to rent that out into a few long term chunks or medium term chunks, or if you'll need to rent it out entirely short term. And so it seems like I didn't realize how that there was a whole system for withdrawals. And so I want us to just spend a little bit of time thinking through this idea that someone could say prospectively, I think that I will be able to rent this out in this way, and then it turns out that you can't.

[Kirby Keaton (Legislative Counsel)]: I think one issue you're raising is, in a practical sense, because of the way this is set up, assuming it doesn't change, the penalties that we're talking about, the department wouldn't be in a position to decide whether a penalty applies until it was after the fact. Halfway through the year, when the property hasn't been used as a long term rental, there would still be time or to nonetheless qualify. Situations like that. So it's going to be after the fact that you're looking at least as far as the tool thing.

[Rep. Charles Kimbell (Ranking Member)]: Just to make sure it's another option on the record, someone that is a second home when they come to make it their primary residence. So are they going to get a reduction in their property tax bill?

[Kirby Keaton (Legislative Counsel)]: A late file homestead declaration, as long as it comes in before the deadline.

[Rep. Mark Higley (Member)]: Could we clarify again for my benefit, maybe others as well, but the example that we gave of a bakery downstairs and at Airbnb upstairs, 25% of the area, floor area, was Airbnb and 75 was beyond homestead. We have to do the same thing for the land currently, right? Splitting upon square footage. I guess my question a while back was whether or not it would definitely be easier for assessors and ministers to just have in that particular case all the way in as non homestead and maybe I just ask the tax department what their position is on that.

[Rep. Edward "Teddy" Waszazak (Member)]: James Masland, experiment, it's a policy choice. It creates some funny situations and potential new bolts, Like if you imagine fantastic gentleman farm and they have an outbuilding that they use for a pottery studio or something, then they report the pottery studio as a commercial use and that would immediately change their entire land on youth into non homesteads, non residential. So there's awkwardness there.

[Rep. Mark Higley (Member)]: And just to follow-up too though, but my understanding as well is if it's a homestead property and they have an Airbnb on it, the land all is in homestead rent, correct? Sorry, repeat that. Yeah, so if using a similar example but not having it be a bakery having it be your home and they had an air bnv in it or attached to it, whatever. But the land would all be in the homestead.

[Kirby Keaton (Legislative Counsel)]: Yes, we're not changing current law. That's current law. I just wanted to

[Rep. Emilie Kornheiser (Chair)]: No, it's all I want us to keep on checking this.

[Rep. Mark Higley (Member)]: Okay, thanks.

[Rep. Emilie Kornheiser (Chair)]: What's exciting is this is

[Rep. Rebecca Holcombe (Member)]: not gonna become we have a

[Rep. Emilie Kornheiser (Chair)]: we still once we pass this, we'll still have another year where we can find all the anomalies. May not be here at all, Cheers. Me either.

[Rep. Rebecca Holcombe (Member)]: Me either. Are you announcing something?

[Rep. Emilie Kornheiser (Chair)]: Yeah. Water's good. You know? We're in

[Kirby Keaton (Legislative Counsel)]: a loop to Hawaii without. I

[Rep. Emilie Kornheiser (Chair)]: think that the finished square footage is in here somewhere. Teddy? Yep. You can

[Kirby Keaton (Legislative Counsel)]: look at that again. There there haven't been changes in this version, so we've we've gone past that, but we could revisit.

[Rep. Emilie Kornheiser (Chair)]: Is it finished in this?

[Kirby Keaton (Legislative Counsel)]: A square feet? Oh, that's still silent. Can you

[Rep. Emilie Kornheiser (Chair)]: be loud on that?

[Rep. Edward "Teddy" Waszazak (Member)]: Pretty loud.

[Kirby Keaton (Legislative Counsel)]: Are you asking to make the change to specify that basically the unfinished portion of a building would not count.

[Rep. Emilie Kornheiser (Chair)]: Yes. And doing that because I believe that Jake, you flagged that you would like clarity on that.

[Rep. Edward "Teddy" Waszazak (Member)]: I think we need it.

[Kirby Keaton (Legislative Counsel)]: Okay, great. I also think that Murphy is gonna be

[Rep. Edward "Teddy" Waszazak (Member)]: much more reliable. Great. Very cool. Okay.

[Rep. Charles Kimbell (Ranking Member)]: There's a definition in stashing somewhere of what finished means.

[Rep. Edward "Teddy" Waszazak (Member)]: I don't know. Yes.

[Kirby Keaton (Legislative Counsel)]: Is there?

[Rep. Rebecca Holcombe (Member)]: It's a legit fence. Because I found out that a poured concrete floor that isn't polished makes your house count as unfinished space. Of course, it used to. It was not intentional.

[Rep. Charles Kimbell (Ranking Member)]: Was for property

[Kirby Keaton (Legislative Counsel)]: valuation, though? Well, whatever. Yes. It might not be a statute if it was for property valuation because that would be that's different.

[Rep. Rebecca Holcombe (Member)]: Okay. I don't know. I've had the Spanish

[Rep. Mark Higley (Member)]: since first.

[Rep. Emilie Kornheiser (Chair)]: Really? I remember a whole debate about that. Okay. Cool. Onwards.

[Kirby Keaton (Legislative Counsel)]: The options would be to leave it undefined and leave it for tax to figure that out or to try to find an existing definition.

[Rep. Emilie Kornheiser (Chair)]: You try to find an existing definition, if

[Rep. Edward "Teddy" Waszazak (Member)]: you can't find one, let us know. Thank you. A

[Kirby Keaton (Legislative Counsel)]: little scared of using Chitt. There's controversy around it.

[Rep. Rebecca Holcombe (Member)]: Is this Chittenden?

[Kirby Keaton (Legislative Counsel)]: A little bit.

[Rep. Rebecca Holcombe (Member)]: I have

[Rep. Emilie Kornheiser (Chair)]: no idea.

[Kirby Keaton (Legislative Counsel)]: We have a repeal of the Act 60 three-61A transition data collection. That goes to what I said before, where we're just doing repeal and replace for that transition language. So all of the classifications related things that have not already happened, such as the classification report, are repealed here, but this language will be replacing that. And we have a new section from tax from the tax department on rate multipliers and intent. This this actually is the Department had asked to add back in this contingency from Act 73. So this is a contingency that was in Act 73.

[Rep. Emilie Kornheiser (Chair)]: Did we take it out?

[Kirby Keaton (Legislative Counsel)]: I think earlier drafts just

[Rep. Emilie Kornheiser (Chair)]: Oh, okay. So we just hadn't

[Kirby Keaton (Legislative Counsel)]: The decision hadn't been made about contingencies, I think, and so some of them were left out. At this point, I believe all of the possible contingencies have been added back.

[Rep. Emilie Kornheiser (Chair)]: I think we should only pass statute for the rest of the biennium that is contingent on something.

[Kirby Keaton (Legislative Counsel)]: Make the whole session contingent on school districts? It

[Rep. Emilie Kornheiser (Chair)]: was a joke, everyone.

[Kirby Keaton (Legislative Counsel)]: So this was one of the contingencies for x 73, which is to make cloud applications or this is not even a contingency, actually. This is just an intent type language that you will reevaluate the tax rate multipliers, in the future. And then here's the contingency, which is in order to ensure a successful implementation of education finance reform, I should probably massage that because it's no longer set forth in this act now that we're taking out act 73. But in the absence of legislative action on or before 07/01/2028, that creates a new tax rate multiplier. This is repealed. So this is saying you're still on that timeline that before 07/01/2028, you will set the multipliers and the rest of the classifications is contingent on that. As a reminder, under the classifications report that the department put out, there are sections on rate multipliers. We haven't actually talked about that, but that exists.

[Rep. Emilie Kornheiser (Chair)]: And we're not gonna change the rate multipliers until we have more information after we pass this. Representative Higley.

[Rep. Mark Higley (Member)]: Madam Chair, so this is back up to the rate multiplier. One of the big concerns I have with going down this road, not knowing in advance of what that might be. And I guess I'd just like to ask, what are the conditions that we're going to look at to make that decision? Mean

[Rep. Emilie Kornheiser (Chair)]: Excitingly, that's in the report.

[Rep. Mark Higley (Member)]: Why couldn't we make it? I mean, we should know from the tax environment a rough idea as to what that kind of We only got 2,000 Airbnbs now. I know if there's a big but again, that's a real conundrum for me to continue to go down this road and not have an idea as to what we're gonna be taxing.

[Rep. Emilie Kornheiser (Chair)]: I believe that Representative Waszazak also wants to set the rates now. I imagine you both want to set the rates differently from each other. But I don't want to speak for either of you. I personally feel that good tax policy means you don't set a rate until you know what the base is, and we don't know what the base is. And we're not going to know what the base is until tax does a bunch more stuff. And if you're wondering sort of what we'll take into account, there is pretty clear parameters hypothesized in the report that Jake wrote. And there's language in Act 73 about exactly what we will consider in a second report from tax before we set the rates. Kirby can show you that language.

[Kirby Keaton (Legislative Counsel)]: Yeah. So Act 73 did give directions to tax, say, if we wanna set this in a way that it pays for the the new the property tax credit, the new version of that, what's what should it be? And and they did that. Right.

[Rep. Charles Kimbell (Ranking Member)]: So so

[Kirby Keaton (Legislative Counsel)]: Yeah. So so you could check that out to get at least a tentative idea of what this might look like.

[Rep. Mark Higley (Member)]: Thank you. I see it. And

[Rep. Emilie Kornheiser (Chair)]: then there's a second report that comes next year or the year after. That's like a final sort of it's like a second version of that.

[Rep. Edward "Teddy" Waszazak (Member)]: Right before he said it.

[Kirby Keaton (Legislative Counsel)]: Yeah. Check

[Rep. Emilie Kornheiser (Chair)]: back upon check back.

[Rep. Rebecca Holcombe (Member)]: Represent what's that?

[Rep. Emilie Kornheiser (Chair)]: Or did you okay. Can we have a last one? Okay.

[Rep. Rebecca Holcombe (Member)]: Can can you Okay, you help me understand what you see as the, how does changing tax classifications and taxing second homes differently, how does that support education finance reform?

[Rep. Emilie Kornheiser (Chair)]: How does it support what? Education finance reform?

[Rep. Rebecca Holcombe (Member)]: Why is that necessary to

[Rep. Emilie Kornheiser (Chair)]: You mean why is there a contingency? Because we exist in a political universe.

[Rep. Mark Higley (Member)]: Say again, I'm sorry about

[Rep. Charles Kimbell (Ranking Member)]: that.

[Rep. Emilie Kornheiser (Chair)]: Because we exist in a political universe. That's the best answer I have for you.

[Kirby Keaton (Legislative Counsel)]: Is

[Rep. Emilie Kornheiser (Chair)]: there anything else in there? Is there anything else in the bill?

[Kirby Keaton (Legislative Counsel)]: Effective dates. So the transition provisions take effect 01/01/2027 provided contingency full district boundaries. And then we do have the language in here already, the Act 73 contingencies. So again, in multiple different places, if things don't move forward as intended classification disappears. You probably don't need me to tell you that that does not stop you from coming back again. Keep coming back to the well, even if contingencies aren't met.

[Rep. Emilie Kornheiser (Chair)]: Anderson, really?

[Unidentified Member]: Well, I would have said that it was because we're trying to find a way to encourage voters to improve their school budgets. And by creating another grouping for property tax, which is where we get, what is it, 30% or 40% of our school funding,

[Rep. Mark Higley (Member)]: We

[Unidentified Member]: put, I'm trying to understand this, not that I'm going to vote for it, but understanding what we would do. This would allow more money from a different source because we create a different source to pour into the Ed fund. That may or may not be political, but I think that's

[Rep. Emilie Kornheiser (Chair)]: I think that is also a very good answer, yes. Perhaps more nuanced than mine. You think

[Rep. Rebecca Holcombe (Member)]: just about money is about removing the incentive to hold houses vacant as hedges on the stock market in some places. I mean, I think we have policy that is disincentivizing housing right now, and our tax policy is disincentivizing housing in some areas. But what I worry about is that this is a three legged dog or maybe a two legged dog, we're telling them to run faster, but if the leg is broken, then they don't get enough. And I just hope we can either get somewhere or ask whether we can give up good times policies.

[Rep. Emilie Kornheiser (Chair)]: I think with that, we're gonna take a five minute break.