Ways and Means hears report: no immediate change to current‑use categories; recommends process fixes

The Ways and Means Committee on May 21 heard from Jill Remick, director of Property Valuation and Review at the Vermont Department of Taxes, who said the department and the Current Use Advisory Board do not recommend creating new use‑value categories for the Current Use Program at this time.

Remick told the committee the report was prepared following Act 146 of 2022 and focused on the program change that allowed “reserve forest land” to be enrolled under current use. “We do not recommend expanding use value categories at this time in this report,” she said, noting the change from Act 146 is still recent and reserve forest land enrollments remain small.

The report and discussion addressed why the department reached that recommendation and flagged several technical fixes the department would pursue. The Current Use Program reduces property tax valuation on enrolled acreage by replacing grand list value with a per‑acre use value; Remick described the program’s three existing statewide use values (agriculture, forest land, and a higher forest value for more‑remote forest acreage), how those values are calculated, and how the Common Level of Appraisal (CLA) is applied to align annually updated use values with multi‑year grand list valuations.

Why it matters: Current use valuations lower property taxes for enrolled landowners and shape incentives for how land is used, conserved or developed. Changes to use values or enrollment rules could affect municipal and education tax revenues, landowner decisions about development or subdivision, and conservation outcomes.

Key details from the report and committee discussion

• Use values and recent enrollment: The department said use values are set through formulas and interagency consultation (the Agency of Agriculture provides inputs for agricultural values; the Department of Forests, Parks and Recreation provides inputs for forest values) and have been broadly stable. Remick told the committee that, at the time the report was written, fewer than 2,000 acres of reserve forest land were enrolled out of about 2,000,000 acres of forest land statewide. “So again, it might seem like we want to sort of slice and dice different categories, but it’s a little too recent after that most recent change to really see if we think we need more categories,” Remick said.

• Three statewide use values: Remick described three primary statewide categories used to compute the tax benefit (agriculture, forest land, and a separate forest category for more‑remote acres). The agricultural calculation uses multi‑year rental and production inputs and is capitalized to smooth volatility; the forest calculation uses stumpage and management cost inputs. Enrolled farm buildings that qualify as part of a farm unit are taxed at zero; use value applies only to land.

• CLA and timing: Committee members asked how the CLA is applied. Ashley Kehrighan, a staff member who spoke during the hearing, summarized the department’s explanation: “The CLA impacts the tax rate, not the value,” clarifying that CLA is used to time‑adjust an annually updated use value so it is comparable to grand list values updated less frequently.

• Land use change tax and appeals window: The department flagged a procedural problem with the land use change tax process. Under current statute, a landowner has 14 days to appeal a fair‑market assessment set by the local lister/assessor when property is removed from current use. Remick told the committee that 14 days is often too short in practice—owners may receive mail slowly, need to consult consulting foresters or attorneys, or otherwise cannot complete an appeal in time—so appeals then show up to the Tax Department instead of at the lister/assessor level. Remick said the department would recommend allowing a 30‑day appeal window for the land use change tax: “We would like to have folks be able to appeal the value of land exchange tax 30 days instead of 14 days,” she said.

• Proposal for a transparent formula: To reduce unpredictability, the department and its advisory board have been testing a formula or table to estimate land use change tax liability at the time a landowner contemplates withdrawal. Remick said the goal is a web‑fillable tool that captures the statute’s policy aim—penalizing parcelization—while making liabilities more predictable for landowners and towns. The advisory board has been engaged on this item and the department said it will continue testing the approach with real‑world examples.

• Eligibility rules and policy tradeoffs: Committee members raised the 25‑acre eligibility rule and the 50% gross‑income requirement for smaller farms. Remick said those rules can exclude otherwise active farming operations and that the Agency of Agriculture has signaled it may revisit the agricultural calculation and related rules. She also noted many states use different designs (some have income‑based eligibility; others vary withdrawal penalties), and Vermont historically had more granular categories tied to soil quality.

• Other enrollment concerns: The department noted enforcement and administration rely heavily on self‑reporting at transfer or when listers/assessors notice changes. Remick also noted statutory development definitions (building, road construction, clearing, or breaking a parcel under the 25‑acre threshold) and that failures to follow forest management plans create separate penalties and potential program exclusion.

What the committee heard about next steps

The department and the Current Use Advisory Board are not recommending immediate addition of new use‑value categories. The department will continue to test the proposed land use change tax formula, consult with the advisory board and partner agencies, and monitor enrollments of reserve forest land following Act 146. Remick said other agencies (notably the Department of Forests, Parks and Recreation and the Agency of Agriculture) are expected to provide additional analysis; FPR was noted as scheduled to report back next year on the outcomes of the reserve forest enrollment change from Act 146.

No formal motions or votes were taken during the committee hearing. The committee discussion closed with participants agreeing to continue work off session and to revisit proposals and potential statutory fixes during the next legislative cycle.

Where to find the materials: Remick pointed members to the department’s report and to supplementary Current Use Program tables the department publishes showing benefits by town and ownership. The department also suggested the Joint Fiscal Office and other partner agencies as resources for budgetary or statewide education‑revenue implications.