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Act No.
Senate proposal of amendment H.
169 Page 1 of 1 This act summary is provided for the convenience of the public and members of the General Assembly.
949 An act relating to homestead property tax yields, the nonhomestead property tax rate, and technical changes to education finance.
It is intended to provide a general summary of the act and may not be exhaustive.
The Senate proposes to the House to amend the bill as follows:
It has been prepared by the staff of the Office of Legislative Counsel without input from members of the General Assembly.
First:
It is not intended to aid in the interpretation of legislation or to serve as a source of legislative intent.
By striking out Sec.
Act No.
1, property dollar equivalent yield, income dollar equivalent yield, and nonhomestead property tax rate for fiscal year 2027, in its entirety and inserting in lieu thereof a new Sec.
169 (H.949).
1 to read as follows:
An act relating to homestead property tax yields, the nonhomestead property tax rate, and technical changes to education finance Subjects:
Sec.
Education;
1.
taxation and finance;
PROPERTY DOLLAR EQUIVALENT YIELD, INCOME DOLLAR EQUIVALENT YIELD, AND NONHOMESTEAD PROPERTY TAX RATE FOR FISCAL YEAR 2027 For fiscal year 2027 only:
education property tax;
(1) Pursuant to 32 V.S.A.
special education;
§ 5402b(b), the property dollar equivalent yield shall be $9,395.00.
City of Barre;
(2) Pursuant to 32 V.S.A.
nonhomestead rate;
§ 5402b(b), the income dollar equivalent yield shall be $12,942.00.
education finance;
(3) Notwithstanding 32 V.S.A.
overpayment;
§ 5402(a)(1) and any other provision of law to the contrary, the nonhomestead property tax rate shall be $1.648 per $100.00 of equalized education property value.
tax increment financing district;
Second:
homestead yields;
By striking out Sec.
homestead property tax credit and renter credit;
2, Education Fund reserve;
census grant;
property tax rate offset, in its entirety and inserting in lieu thereof two new sections to be Secs.
statewide adjustment This act sets the property dollar equivalent yield at $9,401.00 and the income dollar equivalent yield at $12,960.00 for the purpose of setting homestead property tax rates in fiscal year 2027.
and 2a to read as follows:
This act sets the nonhomestead property tax rate in fiscal year 2027 at $1.643 per $100.00 of equalized education property value.
Sec.
This act makes a technical correction to the application of the statewide adjustment for determining property tax credits.
2.
This act also appropriates funds from the Education Fund to refund the City of Barre for overpayments from the City’s TIF district.
16 V.S.A.
This act additionally codifies the fiscal year 2027 uniform base amount for purposes of calculating census grants to support special education and adds a perpetual inflator.
§ 4001 is amended to read:
This act extends the existing exemption from the excess spending penalty for voter- approved bond payments to bonds approved by voters prior to July 1, 2026.
§ 4001.
This act also reduces the excess spending threshold in fiscal year 2028 from 118 percent to 115.5 percent of the excess spending base and annually reduces the excess spending threshold until reaching 112.5 percent of the excess spending base in fiscal year 2032.
DEFINITIONS As used in this chapter:
This act expands the renter credit for claim year 2027 only by increasing the statutory cap on the credit from $2,500.00 to $3,250.00 and increasing the factor for determining the maximum credit from 10 percent of fair market rent to 12.5 percent of fair market rent.
* * * (6) “Education spending” means the amount of the school district budget, any assessment for a joint contract school, career technical center payments made on behalf of the district under subsection 1561(b) of this title, and any amount added to pay a deficit pursuant to 24 V.S.A.
This act also permanently expands income sensitivity measures under the property tax credit system beginning in fiscal year 2028 by increasing the maximum income threshold from $47,000.00 to $50,000.00 for both the statewide and municipal circuit breakers.
§ 1523(b) that is paid for by the school district, but excluding any portion of the school budget paid for from any other sources such as endowments, parental fundraising, federal funds, nongovernmental grants, or other State funds such as special education funds paid under chapter 101 of this title.
This act additionally makes conforming changes to the excess spending penalty and income sensitivity measures to account for the rollout of the foundation formula in fiscal year 2030.
(A) [Repealed.] (B) For all bonds approved by voters prior to July 1, 2024, voter- approved Voter-approved bond payments toward principal and interest shall not be included in “education spending” for purposes of calculating excess spending pursuant to 32 V.S.A.
This act limits increases in tuition paid to a public or approved independent receiving school for fiscal years 2028 through 2032 to the annual growth in statewide education spending.
§ 5401(12).
Multiple effective dates, beginning on July 1, 2026 VT LEG #390299 v.2
* * * Sec.
2a.
32 V.S.A.
§ 5401 is amended to read:
§ 5401.
DEFINITIONS As used in this chapter:
* * * (12) “Excess spending” means:
(A) The per pupil spending amount of the district’s education spending, as defined in 16 V.S.A.
§ 4001(6), plus any amount required to be added from a capital construction reserve fund under 24 V.S.A.
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§ 2804(b).
(B) In excess of 118 112 percent of the statewide average district per pupil education spending increased by inflation, as determined by the Secretary of Education on or before November 15 of each year based on the passed budgets to date.
As used in this subdivision (B), “increased by inflation” means increasing the statewide average district per pupil education spending for fiscal year 2025 by the most recent New England Economic Project cumulative price index, as of November 15, for state and local government purchases of goods and services, from fiscal year 2025 through the fiscal year for which the amount is being determined.
(C) A school district’s excess spending shall be zero if any of the following conditions are met:
(i) the district’s education spending is not greater than the district’s educating spending for the preceding school year;
(ii) the district’s per pupil education spending is not greater than the district’s per pupil education spending for the preceding school year;
or (iii) the Secretary of Education, with the advice of three business managers and three superintendents selected by the Secretary, determines that the increase in the district’s per pupil education spending above the excess spending threshold was for good cause or beyond the district’s control, such as due to emergency capital expenditures or substantial loss of pupils or offsetting revenues.
* * * Third:
By striking out Sec.
6, effective date, in its entirety and inserting in lieu thereof five new sections to be Secs.
6–10 to read as follows:
Sec.
6.
32 V.S.A.
§ 6066(b) is amended to read:
(b)(1) An eligible claimant who rented the homestead shall be entitled to a credit for the taxable year in an amount not to exceed $2,500.00 $3,250.00, to be calculated as follows:
(A) If the claimant’s income is less than or equal to the extremely low-income limit, the claimant shall be entitled to a credit in the amount of 10 12.5 percent of fair market rent.
(B) If the claimant’s income is greater than the extremely low- income limit but less than or equal to the very low-income limit, the claimant shall be entitled to a percentage of the credit that is proportional to the claimant’s income that is less than the very low-income limit, determined by:
(i) subtracting the claimant’s income from the very low-income limit;
(ii) dividing the value under subdivision (i) of this subdivision (1)(B) by the difference between the extremely low-income limit and the very low-income limit;
and (iii) multiplying the value under subdivision (ii) of this subdivision (1)(B) by 10 12.5 percent of fair market rent.
(C) If the claimant’s income is greater than the very low-income limit, the claimant shall not be entitled to a renter credit.
(D) A claimant who is eligible for a renter credit, including pursuant to this subsection (b), and who receives a rental subsidy shall be entitled to a credit in the amount of 10 12.5 percent of gross rent paid.
(E) A renter credit shall be prorated by the number of calendar months in the taxable year during which the claimant rented the homestead, except for a credit based on gross rent paid under subdivision (D) of this subdivision (b)(1), and by the portion of the principal dwelling used for business purposes, if the portion used for business purposes includes more than percent of the floor space of the dwelling.
(2) The Commissioner shall calculate the credit under subdivision (1) of this subsection (b) using the fair market rent corresponding to a number of bedrooms equal to the number of personal exemptions allowed under subdivision 5811(21)(C) of this title for the taxable year, provided that for claimants who resided with any person who was neither the claimant’s dependent nor jointly filing spouse at any time during the taxable year, the Commissioner shall reduce the credit by 50 percent.
Sec.
7.
32 V.S.A.
§ 6067 is amended to read:
§ 6067.
CREDIT LIMITATIONS Only one individual per household per taxable year shall be entitled to a property tax credit under this chapter.
An individual who received a homestead exemption or credit with respect to property taxes assessed by another state for the taxable year shall not be entitled to receive a credit under this chapter.
No taxpayer shall receive a renter credit under subsection 6066(b) of this title in excess of $2,500.00 $3,250.00.
No taxpayer shall receive a property tax credit under subdivision 6066(a)(3) of this title greater than $2,400.00 or cumulative credit under subdivisions 6066(a)(1)-(2) 6066(a)(1), (2), and (4) of this title greater than $5,600.00.
Sec.
8.
32 V.S.A.
§ 6066(b) is amended to read:
(b)(1) An eligible claimant who rented the homestead shall be entitled to a credit for the taxable year in an amount not to exceed $3,250.00 $2,500.00, to be calculated as follows:
(A) If the claimant’s income is less than or equal to the extremely low-income limit, the claimant shall be entitled to a credit in the amount of 12.5 10 percent of fair market rent.
(B) If the claimant’s income is greater than the extremely low- income limit but less than or equal to the very low-income limit, the claimant shall be entitled to a percentage of the credit that is proportional to the claimant’s income that is less than the very low-income limit, determined by:
(i) subtracting the claimant’s income from the very low-income limit;
(ii) dividing the value under subdivision (i) of this subdivision (1)(B) by the difference between the extremely low-income limit and the very low-income limit;
and (iii) multiplying the value under subdivision (ii) of this subdivision (1)(B) by 12.5 10 percent of fair market rent.
(C) If the claimant’s income is greater than the very low-income limit, the claimant shall not be entitled to a renter credit.
(D) A claimant who is eligible for a renter credit, including pursuant to this subsection (b), and who receives a rental subsidy shall be entitled to a credit in the amount of 12.5 10 percent of gross rent paid.
(E) A renter credit shall be prorated by the number of calendar months in the taxable year during which the claimant rented the homestead, except for a credit based on gross rent paid under subdivision (D) of this subdivision (b)(1), and by the portion of the principal dwelling used for business purposes, if the portion used for business purposes includes more than percent of the floor space of the dwelling.
(2) The Commissioner shall calculate the credit under subdivision (1) of this subsection (b) using the fair market rent corresponding to a number of bedrooms equal to the number of personal exemptions allowed under subdivision 5811(21)(C) of this title for the taxable year, provided that for claimants who resided with any person who was neither the claimant’s dependent nor jointly filing spouse at any time during the taxable year, the Commissioner shall reduce the credit by 50 percent.
Sec.
9.
32 V.S.A.
§ 6067 is amended to read:
§ 6067.
CREDIT LIMITATIONS Only one individual per household per taxable year shall be entitled to a property tax credit under this chapter.
An individual who received a homestead exemption or credit with respect to property taxes assessed by another state for the taxable year shall not be entitled to receive a credit under this chapter.
No taxpayer shall receive a renter credit under subsection 6066(b) of this title in excess of $3,250.00 $2,500.00.
No taxpayer shall receive a property tax credit under subdivision 6066(a)(3) of this title greater than $2,400.00 or cumulative credit under subdivisions 6066(a)(1), (2), and (4) of this title greater than $5,600.00.
Sec.
10.
EFFECTIVE DATES (a) This section and Secs.
1 (yields), 3 (statewide adjustment correction), 4 (Barre TIF overpayment refund), and 5 (census grant inflator) shall take effect on July 1, 2026.
(b) Secs.
6 (renter credit expansion) and 7 (renter credit cap increase) shall take effect on July 1, 2026, and apply to claim year 2027.
(c) Secs.
2 (exclusion of capital indebtedness from excess spending) and 2a (excess spending threshold) shall take effect on July 1, 2027.
(d) Secs.
8 (renter credit narrowing) and 9 (renter credit cap reduction) shall take effect on July 1, 2027, and apply to claim years 2028 and after.