 But I'm going to start with the first document, the high level summary. That's the one page summary that really goes over the main points in this bill because it is for a tax bill, it is quite long. Usually the bills I'm walking you through in your committee are much shorter than this. Many of these changes are conforming changes because of the breadth of what this bill does. It eliminates the property tax credit and the homestead tax. So most of the changes that you see at towards the end of the bill, it's sort of front loaded at the first few pages of the bill. The rest of the bill tends to be conforming changes. So as you've just discussed, the main major policy shift and tax policy shift in this bill is creating a new resident education tax. So the tax rate is the education spending of the taxpayer school district divided by the yield. So as Deb did point out and Senator Hardy emphasized this as well, this isn't changing the whole structure, it's changing the tax base. So the tax base would be federal adjusted gross income. So it's AGI of every Vermont resident that applies to both homeowners and renters. And that's an important point as we go through that renters would be subject to this tax. And in this bill, there is currently no credit that's proposed. There is a new definition of the yield, but it's not dramatically different. Under current statute, there's the yield for homeowners who pay based on property value and those who pay the majority who pay based on income. This eliminates those two has one yield and it's very similar to the existing yield language. It's just that it's the education tax rate. And so the yield is the amount of spending per equalized pupil that would result if the resident education tax rate was 1% and if the Ed fund stabilization reserves were maintained at their statutory rate, which is 5% of the prior year's appropriations. Can you share screen? Oh, absolutely. With us, I think it might be easier if we can all look at it rather than going back and forth here on the agenda. And I apologize, I don't know how I got into a Senate finance through the website that didn't have today's graphs or handouts on it. I went out and came back in somehow and there they are. So there are charts from Deb there. Okay. Yes. So I will share my screen. You will find these if you wanna follow along online under my name for S212. Let me give me just a moment. Great. So everyone should have the sort of high level one page summary now. So I'm under the first bullet point looking at the definition of the yield. So it is very similar to the existing statute. It's the amount that will be raised. In this case, it's the resident education tax rate at 1% under current statute for the homestead rate. It's $1. So it's very similar. To note, there was a question about how this would impact different tax years at different income levels. The bill does provide for reduction in the tax rate for lower income filers. And it's a progressive reduction. So for single filers who have adjusted gross income of $25,000 or less, the maximum reduction would be 85 or 80% of the tax rate. And for joint filers with AGI of $50,000 or less, they would get that maximum. And then it phases out for amounts of AGI above that. Tax payments are required under the bill either by quarterly wage withholding or through quarterly estimated tax payments. And then there would be an annual reconciliation when the individual files their income tax return. So that would be at the time of filing the income tax return. And the way that taxpayers would withhold would be based on the prior year statewide average rate for the education tax. And taxpayers would choose the rate at which they would withhold from their paycheck at 75% of the prior year's rate, 100% or 125%. All of the education tax revenues would be deposited into the education fund in the way that property tax revenues are currently. As I mentioned previously, this bill does eliminate both the homestead education property tax and the existing property tax credit. So many of the bill sections that you see are just conforming changes. So it's repealing a lot of references to the property tax credit as well as the homestead tax. The non homestead education property tax is still imposed under this proposal in S212. And I did try and explain part of what you were just discussing about how the property tax would apply when an individual has a homestead that's greater than two acres. So you would subtract, you'd essentially have an exemption for the homestead and the two acres around that dwelling. And then the anything above the two acres would be subject to the non homestead property tax. So in that case, you could have an individual take two different examples. You could have a homestead owner who has a property that's 1.75 acres. They would not be paying any property tax on that. They would just be paying the education tax on their income. An individual who has say a nine acre property, the first two acres surrounding their home, their homestead would be subtracted and the remaining seven acres would be subject to the non homestead tax. And then that individual would also be paying the resident education tax. Like it is today. Yeah. The way it is today. Yes, that's not a change. Okay, okay, thank you. Okay, let's keep going. And another important point is that this bill does continue to provide the existing render credit, which starting for filers right now is significantly different. That was reformed in 2020. So that has not been changed in any way. And that is one of the outstanding questions in this bill is how to handle renters. And that brings us to the final major change under this bill, which is creating a new education fund advisory committee. So it'd be an ongoing committee to monitor the entire education funding system that would be required to report and make annual recommendations back to the general assembly. They would take on the December 1st tax rate letter. The committee does include the commissioner of taxes the secretary of education. So they're currently involved with the December 1st letter. It would put them on this committee and the committee would be making the recommendation. The committee does have other members in addition to the commissioner of taxes and secretary of education, it has expert public members with expertise in education financing. Each of the bodies of the general assembly would appoint two of those individuals. And then there would be one public member appointed by the governor. The committee does need to report and I'll talk about this in just a moment, but they would need to report and their initial report back to the general assembly with a few key points of what has not been completely ironed out in this bill. One would obviously be the first recommended education tax rates and the yield. The committee would also need to propose a new structure for the renter credit program. And this is to address those renters who may be paying both on their income. So they'd be paying the resident education tax and then they may also be paying rent that includes the portion of the non-homestead property tax within their rent that their landlord would be charging them. And many of the renters that would have to declare and pay the new resident education tax would not be eligible for the existing renter credit, which won't go into great detail about all of those changes that are made in 2020, but that is based on income and family size. So this especially would, this first report would particularly need to focus on those renters who would be paying both taxes and not receiving a credit. Lastly, one of the areas that the bill did not go into great detail about or make some of the policy decisions about our penalties for late filings of the resident declaration, which is really the equivalent of the homes, the current homestead declaration, or someone does not file. So I will pause there. I'm going to stop sharing my screen. And I don't know if it makes more sense to look at each individual section of the bill or to go through some of the outstanding questions or to take questions. I open to what the committee would like to do. I do have a detailed section by section. Yeah, I think a detailed. Senator Hardy, do you have a question? But no, I actually have a comment. I just wanted to let everybody know that the Education Fund Advisory Committee portion of this bill was actually also one of the recommendations of the pupil waiting task force that we create that regardless of whether we do the income tax thing, the task force felt like it would be helpful overall to have this body overseeing and doing work in the interim on education finance issues, the weights, the taxes, the categorical aids, whatever it is. And that work is not being done now? Not regularly. There is a process for doing the December one memo, but that's kind of all there is. And so this would expand that to have more attention paid by people who understand the system into updating parts of the system, like I said, whether it's the weights, whether it's the rates, whether it's the penalties, whatever it is. So that was part of the task force recommendations as well. Okay. So committee, where would you like to go next, Senator Pearson? Well, I'm curious. Ms. Brighton said that JFO was, I don't know where to direct or ask Abby to go, but so I have a sort of separate question, which is JFO schedule, do we have a sense of when they're able to help us get those runs? Because I agree with you, Madam Chair, that's sort of starting to put meets on whether or not this can advance or our speed and all that. Okay. And I don't know. We all know we lost Mark, and Mark staffed most of the weighting study and was our 20 year, well, he staffed, I understood a lot of the property tax stuff that he was. He staffed it until he left. And so he did about half of it and then he left. And so we've lost our long memory there. And we are, I see Julia, we've got new folks that, there's Julia, you popped over to the other side, new folks that are working their way through this, but Deb, we know Deb hasn't had someone from JFO able to sit down and just kind of profile and just kind of proof out the runs. And so what I can do is perhaps Julia, you can ask Catherine to let us know what kind of a timeframe you think they can get that done in. Yeah, I'm happy to do that. I'll reach out to Catherine and have some offline discussions with Deb and our little Ed Finance team as we're all trying to get up to speed on this big proposal and get back to the committee. And our lead on the Ed Finance's home doing childcare so his wife can recover from COVID. But he is working during naps and in the evening. So maybe he can take a look at the runs during those times. He's just, at least for this week, we're hoping next week everything's back to normal. Maybe this is something he can do in his spare time. As all parents of young children know they have tons of. So do you wanna have Abby just walk us through a section by section? And then we've got, the last thing on the agenda is that overpayment of property tax, the barry bill that Abby has done, Abby, right, yes, has done a new drafting, taking in all the feedback from the auditor. And that is the last thing on our agenda, but that would put us a whole half hour ahead. I don't know that I can do that. But I'm looking at faces and I don't see anyone on Friday afternoon that's really ready to delve into this on an in-depth word for word basis. This isn't a new system. We've all been grappling with understanding the old system. Now we're grappling with this one. And the first question for me is, is this a simpler fairer system? And I think Deb has given us some charts. We can look at those. We can see how quickly we can get the runs in because that for me is where I see, well, all right, we've got these credits that are gonna go to people in this income bracket. I need to see how that works out. And then I think we need to give people time to look at it. I think we need to, once we have everything, make sure that the tax department comes in and talks to us. And we're dealing with property tax and we're gonna have to hear from the town clerks and see how, cause at one point they were really thrilled of the state to take over the collection. And then they figured out what it was going to cost them and they weren't as thrilled as having the state. So... Cost them meaning? Pardon? When you say what was gonna cost them? They get paid for processing the state education. They get so much per parcel. All right, I knew. The teacher is watching. And that would have to work out too, but I think we'd need to hear from them. Collections, who would earn the money from collecting delinquent taxes? That's the other question we're gonna wanna hear from the clerks on. Because this would essentially put the homestead property tax collection into the tax department. And it would be paid on an installment or annually, I guess. It could be done on an income deduction but that would take something from your employer. So there's some things to be worked out there. I personally have always said the reason we get so many complaints about the property tax and not about income or your credit card payments if you ever add up the interest that gets paid on credit cards is because you pay them off in monthly installments. If you ever had to pay your credit card or your credit card interest payments off once a year you'd probably scream and the same with your income tax. And so anything we can do to kind of spread that tax out will make it easier no matter what basis we charge it on. If you can make it more than, I think the most is four times a year. We might peel your dozen quarters but some towns still do it annually. Other towns do it twice a year and some of them give you a credit if you pay it all at once. A discount if you pay it, at least they used to. They may not anymore, but we are messing in the town clerk's territory and I do that judiciously. Senator Hardy. Yeah, I was just wondering, Abby, you have sort of three things that the overview you just went over than the bill itself, which is obviously the most detailed and then an interim one. Do you think it would be helpful to go through that interim one or is that just gonna be- That's what we're talking about. Yeah. Because you'd like, I can do the section by section rather than look, I mean, it's a 46 page bill. So I do go through every section and summarize what it's doing. So I think this section by section would probably be the most- Okay, why don't we do that? And then we've been through it. If we can do that in, again, fairly quickly, because I think we're gonna need more information and time to process it before we start getting into word smithing and tweaking. Okay. I will share my screen then in just a moment. I can't see you, so I hope you can see my screen. We can see your screen again. I can't see anybody either, so holler if you have a question. Okay, so this is the section by section for the bill as introduced. And the first section is really just a technical change. It's to eliminate the word property from the title of the chapter, so that it says education taxes instead of education property tax because it inserts this new resident education tax into that chapter. I've kept the bill as chronological in terms of the statute as much as possible, but there are some subdivision headings with the asterisk so that you can situate yourselves in the bill. I start with education taxes and then I move into the ed fund advisory committee, education fund renter credit, and then the end of the bill is a series of repeals. So in the very first real substantive section, it's section two, this is the section of statute that has all the property tax definitions in it. It makes one change that then creates a whole bunch of other changes throughout the bill, which is to strike the reference to tax for the equalized property grand list. It just removes the facts because it will no longer just be the property tax grand list. It will have both homestead and non-homestead properties in it. So that is one, when you're talking about municipal responsibilities, they will still be appraising, listing all properties and creating the grand list, both for homestead and non-homestead. So this does not change that process. This also importantly changes the definition of homestead and you had the perfect setup for this change, your discussion earlier about current use versus property tax and the property tax credit. The homestead definition as it is currently for determining a homestead property does not make any reference to the two acres, that two acre piece is for the property tax credit. So what the bill does is it repeals the property tax credit definition and puts it into the overarching definitions relating to homestead. So it would make a homestead at the dwelling and the two acres surrounding each dwelling. And it also pulls in some other language from the property tax credit, which is being repealed from that chapter and putting it in here about the treatment of cooperatives and mobile home park cooperatives. The definitions for education spending adjustment, dollar equivalent yield and income dollar equivalent yield. So that's the property and the income yields are all repealed and that's because there's no longer the property tax credit, it's now the resident education tax rate calculation. As I mentioned before, there is a new yield definition and this is language that was in the summary that we went over earlier. The yield means the amount of spending per equalized people that would result if this new resident education tax rate was 1% and if the ed fund reserves were maintained at their set story amount, which is 5%. So that's in the definition section. There are a few other changes if you're looking at the language, again, there are more conforming changes to remove references to homestead property tax or to the property tax credit. And then again, a lot of changes when it's talking about the grand list, anytime there was mention of property tax grand list, the word tax is being repealed. In section 5402, this is the rate section. So one clarifying change that was made in here is to the non-homesed tax rate. And that is just clarifying that the rate is $100 per equalized education property value. And also that that's unless otherwise set by the general assembly, that's no change to current law. It's just putting it all into the same section. This rate section has the important repeal of the homestead tax rate. It adds in language that's under, that's sorry, it repeals language relating to interim homestead tax rates for school districts when they haven't voted their budgets by June 30th, and then it adds that language into the new residential education rate. Also repealed is the current requirement for the commissioner of taxes to determine a homestead tax rate for union or unified union school districts. The language again is added in to the new resident education tax rate section. Some of this language might need a little bit of tweaking some of the technical parts of this don't all line up mathematically, but I won't go into that much detail here. There is one fee that's repealed. I mentioned that this bill doesn't really address a lot of the penalties and fees. However, this one fee that currently goes to towns to cover the cost of issuing a new property tax bill is repealed because that particular fee was for late property tax credit claims. So that's something that would need to be addressed by the new Ed fund advisory committee. What are the penalties? What are the appropriate penalties to charge for late or non-filed decorations? Where I think a lot of questions are going to come up and where there's probably still work to be done in ironing out a lot of your questions and a lot of the details for this new tax. A lot of those questions can really focus on this section four. That's the section that creates this new resident education tax. And this is the language that I just walked you through in the high level summary, but just a few main points. Again, the tax rate is still influenced. It's still determined by the education spending of the taxpayer school district. It's divided by the yield. Then that rate is applied to federal adjusted gross income. So it's each Vermont resident, both homeowners and renters. One thought, one sort of legal perspective, one additional change that you might wish to make is to adjust based on your discussions now is potentially moving the tax base to taxable income instead of federal adjusted gross income. That's a pretty big policy decision. This using federal adjusted gross income is not going to pull in any standard deductions, personal exemptions, any of those adjustments that happen for Vermont taxpayers income tax liability. So that's just one policy thing to keep in mind. As I mentioned, it creates a new yield. There is a reduction that phases out but for lower income earners, the tax rate is allowed to be reduced up to 80%. For individuals who have $25,000 or less if they're single filers or $50,000 of AGI or less. Again, as we mentioned, the structure for receiving the payments an individual can either have withholding from their wages or if they are self employed, for example, they would pay estimated tax payments like how they do for income tax. And then this will be followed up by an annual filing at the same time as filing the income tax return. Withholding would be at a elective rate. So the taxpayer like how with the W-4 an individual just tells their employer how much to withhold. This bill does require employers to withhold it at an amount that the taxpayer chooses. So it's either 75, 100% or 125% of the prior year statewide average tax rate. Again, all of these tax revenues go into the education fund. And then here as I was mentioning in the previous section a couple of technical or not technical seas are important for school districts that haven't voted their budgets by June 30th. There's some language in there about how to set that tax rate. And as well, there's language about setting a tax rate for taxpayers who are towns who are part of more than one school district. I'm going to just keep going in interest of time but if there are any questions, please do interrupt me. I just can't see anyone. So I'm just going by what I hear. In section six, again, we have some conforming changes. It's repealing references to the tax grand list, property tax grand list. It's now just the property grand list. This clarifies as part of the discussion that was had earlier that if a homestead is on a parcel two acres or less the entire parcel will be homestead property. So it will not be subject to the non-homestead property tax but for the portion of a property that is over two acres the non-homestead property tax only applies to that amount over two acres. The next two sections are again, repealing references to tax when referring to the grand list. There is an important change here. It just clarifies in section 5404A of Title 32 that section seven of the bill. Municipalities that have a TIF district will be collecting property taxes on non-homestead properties only. Section eight, again, repeals references to tax when referring to the grand list. And then there are some clarity that may need some more work about the types of values that the commissioner of taxes has to report two towns as well as what has to be provided on property tax bills. There's language put in a few years ago requiring an explanation of the homestead tax rate. This changes it so that the commissioner would need to provide language to towns for the new resident education tax. Section nine of the bill adds the common level of appraisal to the list of values that the director of PVRS report to the town clerks and to the secretary of education by certain dates each year. So these are some existing reports that just add other values that need to be reported. In section 10, the duties of municipalities are amended slightly. It clarifies again that the collection of the property tax is only for non-homestead tax. It also repeals a section relating to the homestead property tax overpayment offset where if an individual is overpaid that that can be used against an income tax liability. That language is added into the resident education tax sections. So it's just shifting. It's a lot of, as I said, conforming changes. So shifting a lot of provisions that currently exist to homestead property tax to this new resident education tax. Section 5410 in section 11 of the bill, it keeps the existing language around the homes of the declaration but renames it and applies it to the resident education tax. So it will now be called the resident declaration of domicile. What is a definite change in policy is that rather than just homestead owners declaring domicile, all Vermont residents, so that includes renters will be required to declare domicile for purposes of the education taxes. It does remove reference to the homestead tax for late filing penalties. And it clarifies what happens if an individual fails to declare domicile. Does not provide for a new penalty but it, which is something that the education fund advisory committee may need to consider. It does require the commissioner of taxes to determine the individual's tax liability under the resident education tax and bill that taxpayer. The education fund advisory committee. So I'm just gonna pause because that's all of, that's the bulk of the new tax and the new structure. The next few sections are about the committee. Okay, any questions at this point? Okay, keep going. It's gonna take a while before we have a grasp enough to ask questions. Sure, and I'm trying to just point out that we can probably grasp an advisory committee. Yeah, so this is a little simpler and really creating a new oversight, a more of a monitoring function after the tax structure commissions work, this would sort of continue that examining of the, from the big picture, but also really in the weeds about both overall recommendations annually, but also what the tax rate should be set at. So it shifts the commissioner of taxes, December 1st letter responsibilities to this committee instead of just the Department of Taxes. Granted under under current statute, the commissioner is required to consult with the secretary of administration and JFO, but this shifts it to the Ed Fund Advisory Committee. Also, as I mentioned, the committee is required to report in this language, it's honored before January 15th of next year to the money committees, education committees, ways of means in education and Senate finance and education in the Senate. It would be a recommendation for the first tax rates and the yield under the resident education tax. Any recommendations to restructure the existing renter credit program and then of course penalties and then any other recommendations that the committee thinks are important to make. The next few sections are a lot of cleanup in the what's currently the homestead property tax credit and renter credit chapter 151 of title 32. A lot of the changes are repealing reference to the property tax credit. One important note here is in section 16 of the bill, this did come up in your discussion today, I believe Senator Pierson, you mentioned what would happen if there were a transfer because the new resident education tax follows the income, that's the base. It wouldn't, in theory, follow the seller, but I mean, both individuals if there were already Vermont residents would be paying this. There is sort of an outstanding question of what the appropriate rate would be if the individuals either moving out of the state or moving to a different town with a different school district and a different tax rate. So that's a level of detail that the bill doesn't go into. It doesn't really address that currently. So most of these sections are just removing any reference to the property tax credit and any language stating that a certain section only applies to the renter credit. So it's really, this just becomes the renter credit chapter. The next section starting with section 22 of the bill relate to the education fund. So again, it's repealing references to the homestead tax rate, replacing that with resident education tax rate, removing references to tax from that equalized grand list. Another important point is that it clarifies that the stabilization reserve, which is the reserve that's a 5% of the prior year's appropriations from the Ed Fund. Any, that the Education Fund Advisory Committee will be reviewing that reserve annually. So it's giving them another sort of oversight role in the Ed Fund system. I'm skipping over some sections here. Section, because again, they're conforming changes, but in section 26 of the bill, there was a policy decision made there for the tax treatment of unorganized towns and gores. And it applies a 2% resident education tax rate to those towns. And it repeals any references to property tax credit. That is the bulk of the policy changes. The next few sections, I have listed out everything that's been repealed just in case there's any confusion there, there are veterans exemptions that are repealed because those are only applied to homesteads. So those were taken out because homesteads will no longer be subject to property tax. So there are a lot of repeals that are being made there. And then sections 28 to 32 of the bill are other cross references throughout title 32 to either the homestead declaration or the homestead tax or the property tax credit. Important dates in section 33 of the bill is that only really this effective date section and the Ed Fund Advisory Committee take effect on passage. All of the structural changes take effect in one year. So it would be July 1st, 2023 with the understanding that the Ed Fund Advisory Committee would be coming back with recommendations next session and that that would give the legislature time to make any changes before the property tax structure took effect July 1st, 2023. And that is the end of the section by section. Okay, any questions at this point? Okay, if not, I'm gonna suggest we take a five minute break before we come back with Abby rest your voice and get a glass of water or something and we'll see if we can't do that property tax over payment bill and then be on our way.