Committee hears debate on H.134 current-use changes; experts back predictable penalty but warn against weakening it

The Vermont House Committee on Agriculture, Food Resiliency & Forestry heard extended testimony on H.134 and related current-use issues, with experts urging an administrative fix that would make the land use change tax predictable for landowners while cautioning against weakening the penalty that discourages short-term “parking’’ of enrolled land.

Jamie, a VNRC staff member who testified for the Vermont Natural Resources Council, told the committee that a working group of land‑use stakeholders had reviewed the current-use program and concluded the development penalty had become a weak deterrent in many cases. “It was…seen as a very weak penalty,” Jamie said, adding that the average breakeven point under the current formula is about six to seven years, meaning landowners enrolled longer than that typically see a net financial benefit from enrollment.

The committee heard that the working group — which included representatives from the Vermont Land Trust, Vermont Woodlands Association, Vermont Farm Bureau, The Nature Conservancy, Rural Vermont and Audubon Vermont — examined options to preserve program viability while responding to housing pressures. Jamie said the group favors retaining a meaningful development penalty and recommended an administrative change that would provide upfront predictability for landowners: an online calculator or chart based on municipal land schedules that estimates the land use change tax for a withdrawn parcel.

Why it matters

Committee members were presented data the witness said showed substantial parcel‑classification shifts: using property tax classification data from 2005–2020, Jamie said the share of parcels classified as undeveloped “Woodland’’ declined by about 19 percent over that period; much of that change correlated with conversion to parcels with dwellings. Separately, USDA Forest Service estimates cited in testimony put recent annual forest conversion on the order of 12,000 acres per year (an estimate that fluctuates by year, the witness said).

Those trends framed the debate between preserving long‑term working lands and increasing opportunities for housing. Representative Boston, a committee member, questioned whether a modest easing could create housing opportunities for local residents: “I would be happy to have [an out‑parcel] have a smaller amount of land and let Vermonters be able to stay here,” Boston said, urging consideration of homestead or workforce exceptions that would not encourage widespread parcelization.

Administrative proposal vs. penalty change

Jamie described a technical proposal developed with tax consultant Deb Brighton to calculate a predictable penalty using average parcel values from municipal land schedules. Under that approach, the appraised value of a withdrawn portion would be estimated by town and parcel size so landowners would know the charge before they subdivide or sell. Jamie said the proposal would reduce administrative burden on listers who currently must wait for appraisals, and would prevent landowners from being surprised by a bill after the sale.

Jamie said the working group favored keeping a meaningful penalty because the 6–7 year breakeven currently in place helps ensure enrolled land is not treated as a short‑term convenience. “We do feel it’s really important to stay with the current penalty and not weaken it,” Jamie said, while acknowledging the committee’s housing concerns and saying targeted exemptions could be designed carefully.

Targeted exemptions and mapping

Committee discussion touched on Representative Charlie Kimball’s idea to exempt some withdrawals in designated growth areas. Jamie noted that the Tier 1A/1B mapping process being developed by regional planning commissions will not be finalized until next year, and suggested the committee could overlay those maps with current‑use enrollments to estimate acreage affected before deciding on exemptions. Jamie also recommended stakeholders and the tax department produce detailed design options that balance housing access, farmland viability, and administrative feasibility.

Numbers and examples cited in testimony

- Average breakeven under the current penalty: about six to seven years (testimony). - Parcel‑classification change (2005–2020): testimony cited a roughly 19% reduction in parcels classified as undeveloped Woodland over that period (based on property tax classification data). - USDA Forest Service recent annual forest conversion estimate cited in testimony: about 12,000 acres per year (noted to vary year to year). - Example cited by witnesses: a withdrawal that produced a land use change tax of about $30,000 on a parcel with an assessed value near $300,000 (committee members raised the question of how long such parcels had been enrolled to assess fairness).

Next steps

Witnesses and committee members generally endorsed fixing the administrative lag first — the upfront calculator or chart — as an immediate improvement. Several members proposed treating revisions to the penalty or exemptions as a longer, two‑year effort to allow GIS overlays, work with the tax department’s Property Valuation and Review unit, and draft guardrails (for example, homestead or income‑targeted provisions) that would limit potential loopholes.

Jamie closed by urging the committee to consult legislative counsel and the tax department about statutory authority required to implement an alternative administrative approach and to convene stakeholder groups for design recommendations. The committee scheduled further work and expected testimony from legislative counsel and tax‑department staff at an upcoming meeting.