Committee reviews H.134 amendment to change land-use-change-tax valuation and allow limited abatement for affordable housing

A legislative committee reviewed draft committee amendment 2.4 to H.134 that would authorize the state to use a proration formula — rather than treating a withdrawn portion as a separate parcel — to calculate the land‑use‑change tax and would create limited abatement for small withdrawals developed as affordable housing or long‑term rentals.

The amendment, explained by Kirby (staff member), would direct the Property Valuation and Review (PVR) division to develop a formula or chart to estimate fair‑market value for the withdrawn acreage based on the portion of enrolled acreage and the parcel’s grand list value. "It's kind of trying to get the best of both worlds there," Kirby said, describing the change as an administrative approach that avoids on‑the‑ground reappraisals but may lower assessed value in many cases.

The committee discussed the policy tradeoff: proration simplifies valuation work but can produce lower tax bills and thereby reduce the financial disincentive to remove land from current‑use status. "And it's not, I think the thing here that probably is obvious is we're not getting into what any of the numbers are here," Kirby said, noting the draft asks PVR to use its expertise to set the methodology rather than prescribing numerical factors in the statute. The memorandum attached to the draft lists a July 1 effective date; the committee observed that PVR would need to apply the methodology once the provision becomes effective.

The amendment also adds a subsection on abatement for withdrawn land used to develop housing. Under the draft, abatement could be allowed only if specified conditions are met, including: no more than 2 acres are withdrawn for the purpose of developing affordable housing; the taxpayer has not previously received abatement under subsection G (this includes prior abatement received through trusts or LLCs); the withdrawn land fronts an existing public road; the withdrawal and development are exclusively for one or more of the enumerated housing uses (affordable homeownership or property used for long‑term rentals); and the development meets a density requirement stated in the draft.

Committee members sought clarification about the density rule and how it would interact with local zoning. Kirby read the draft’s density threshold and the group discussed its effect: committee discussion interpreted the draft as requiring roughly 2 units per acre (equivalently 1 unit per half acre), but speakers warned that state law sets different baseline density expectations in specific areas (for example, designated new town centers and growth centers) and some towns have much lower allowable densities. One committee member noted that in some towns zoning allows only one unit per five or 10 acres, and that local zoning could therefore block a developer who otherwise met the abatement criteria.

Representative Buck asked clarifying questions about whether the proration language reverses prior policy; Kirby and other members said the draft attempts to replicate a simpler proration approach while adjusting for the fact that small parcels can carry relatively higher per‑acre value. The committee discussed interpretation questions (for example, how to treat parcels that straddle inside/outside tier boundaries) and said that where requirements overlap the stricter standard would likely control unless PVR interprets otherwise.

Speakers mentioned getting feedback from other parties. Kirby said they had heard from Deb Brighton and had been consulting with Jill and Ellen (staff) while preparing the text; the committee noted they might get additional input from PVR and from regional planning commission staff before finalizing language. The group paused the discussion for a midday break and planned to resume the item later in the meeting with RPC staff available to advise on technical issues.

No formal motion or vote was recorded in the transcript on this draft; the bill remained under committee consideration at the end of the recorded segment.

Ending: The committee did not take a vote during the recorded session and scheduled further review with technical input from PVR and regional planning commission staff. The bill's draft sets a July 1 effective date for provisions that require PVR to apply the new valuation approach once it is in force.