Rep. Charlie Kimball introduces H.134 to simplify land-use-change tax and exempt some affordable housing withdrawals

Representative Charlie Kimball, R‑Windsor‑5, told the House Agriculture, Food Resiliency, & Forestry Committee that he introduced H.134 to simplify the land‑use‑change tax process and to create an exemption for withdrawals of current‑use land used to develop affordable housing near designated centers.

Kimball said the bill makes two primary changes: it would revert the calculation when part of a parcel is withdrawn so the land‑use‑change tax is computed by prorating the parcel’s known grand‑list value instead of requiring a separate valuation of the subdivided portion; and it would exempt from the tax a portion of a parcel withdrawn to develop affordable housing if the parcel fronts a public road, meets the statutory definition of affordable housing in Title 24, is within a specified distance of a designated downtown, village center, planned growth area, or neighborhood development area, and does not cause fragmentation that undermines the policy goals of current use enrollment.

Why it matters: land‑use‑change tax can be large (Kimball cited a constituent who faced a preliminary bill “well over $20,000” and later “over $30,000”), can delay real estate transactions, and — proponents say — can discourage taking small portions of enrolled land out of current use for housing. Kimball and others said the current valuation process can be slow and complex for listers and the Division of Property Valuation and Review (PVR).

During committee discussion, a PVR representative identified practical details and potential administrative questions. Kirby, speaking for PVR, said land‑use‑change tax is “a tax of 10% of the fair market value of changed land,” that fair market value is generally reflected by the grand‑list value, and that under current law a subdivided portion is separately valued (a process PVR and listers say has caused inefficiencies and delays). Kirby described PVR’s existing tools (grand‑list values, land schedules and common level of appraisal adjustments) and noted PVR can put a lien on property when a land‑use‑change tax is owed.

Committee members discussed the bill’s second section — the affordable‑housing exemption — and raised several open questions the bill does not resolve. Those include: how to define or measure “fragmentation” in a way that protects contiguous forest or agricultural function; how far from a designated center the exemption should reach (the draft uses 3 miles, Kimball suggested a half‑mile might be more appropriate and noted Act 181 (2024) used a half‑mile standard for certain priority housing areas); and whether PVR should require proof (a developer agreement, recorded restriction, or other attestation) before granting the exemption or allow an honor‑system attestation subject to later audit.

Committee members also raised programmatic edge cases: vineyards and other small uses that were historically treated as developed but that triggered tax because they did not meet a 25‑acre minimum; the difference between forest‑block fragmentation (addressed in Act 118 of 2014 and the 2015 Vermont Forest Fragmentation Report) and agricultural soil fragmentation; and whether unchanged parcels would be unduly harmed by subdividing a frontage parcel for housing.

No formal committee vote or amendment was recorded in the transcript. Committee staff and members flagged several drafting items for follow‑up: tightening the definition of fragmentation, choosing an administrable distance from designated centers, and specifying whether and what form of proof PVR should require to support the affordable‑housing exemption. The bill text as discussed includes an effective date of July 1.

The hearing record shows committee members asking for objective, administrable standards rather than subjective language such as “undue hardship,” and staff said that the PVR and other agencies (Agency of Natural Resources, Vermont Natural Resources Council) have offered ideas for simplifying valuation. Kimball asked the committee for further engagement and suggested staff and agency input as the bill is refined.