 But I think we have everyone will Baker, are you there will. I'm here. Okay. And you and Jill Rimmick is also here you're going to talk to us a little bit about the history. The question I asked I don't know if you were here and not was, did we always tax electric poles and wires, or, you know, when we thought, as we do with broadband there was a necessity to get everybody hooked up as quickly as possible. And when did we start and how did we do it and whatever. We're just we're just starting on this very technical road. Okay. So first Joe, Rimmick is also here and Joe, please chime in if you'd like. It's my name is will Baker legal counsel at the Vermont tax department. I, let me just start by saying that the underlying premise here is that real property subject to property tax land and buildings subject to property tax. Personal property business personal property is subject to municipal tax, unless the municipality has decided not to tax it. And I believe that only for about 44 municipalities tax business personal property at this point. So that's sort of that. That's, that's the underlying foundation here. And I should also mention that of our 30 tax types property tax is actually not one of my specialties so we may have to research questions further and get back to the committee. I also point out that property taxes is a is a it's spread over 251 towns so we probably can't get you specific answers about our is every single category subject to tax because we would have to go and go and look the tax department itself doesn't list the properties, the municipalities do. And finally, even looking at the grand list. We, we often don't get the level of specificity that this committee may want in other words. If I run a shoe store or consulting firm, it, that's still real property, commercial property, and it would be listed in the grand list as commercial property, whether it's a shoe store or consulting firm. We, we can't zero in hone in on the grand list, as far as internet providers, or any one out any bit other business, probably to the level that you would be most helpful to you. The taxation of polls and wires. Okay, what's taxable who taxes them. Generally, there's, there's a couple different categories, but there's no, Jill correct me if I'm wrong, but I don't think the word internet appears anywhere in the property tax statutes. So it's not like we do not have a internet provider category of property and there's no specific rules internet providers. But with there are some other categories that that come into play here but following the underlying premise that all landed buildings are subject to property tax and personal properties, some, depending on the town you're in subject to municipal tax cable like cable TV provider who might also provide broadband internet through their cable network. The, the landed buildings for a cable TV provider or internet or cable TV provider would be subject to property tax and cables lines fixtures and polls would be taxed would be subject to education tax. They're included in the definition of non homestead property and education tax. Okay, if Comcast strings fiber or cable or whatever on polls owned by Green Mountain power. Who pays the property tax on that cable. I think, I think it probably depends on who owns them if Comcast if it's Comcast cable and they string it in a particular municipality, it would be subject to education tax cables lines fixtures and polls are subject to the education tax. If they don't own the poll but they own the cable then I imagine that is the value that they would list that they would on which they would be taxed in the town. There are some specific rules that are slightly different for telephone companies in Vermont. And it is possible that some telephone companies as defined also provide internet. Yep. And then. Senator Cummings you asked about the history. My observation of this chapter of title 32 is that it does not change very often, and it's been in place for quite some time. Unfortunately, before before 1947 I don't have a good way to research here at home that the statutes are current, our current style of our statutes really got started in about 1947. So that would be more like legal historical research that we might have some paper materials in our office but I'm not in our office. But, you know, I think that this has been the general structure for quite some time, maybe forever. I did review some materials. Not quite on point it's not property tax but we did have a franchise tax in Vermont on telephone and telegraph companies since 1882 that it went in in 1882. So we have certainly been identifying telephone companies for tax for quite some time. And I think that exempted them in the, in the, for the purpose of encouraging building out of that service that there certainly could have been one. Certainly could have been incentives to do that I know that there was, there wasn't that were incentives to do that I just, I don't see anything on the property tax side. The property tax area, suggesting anything like that. Okay. Any questions for Mr Baker. Thank you Michael. I was getting tired of looking at the top of your head. So you can talk. Thank you Mr Baker. I don't know if you have a question of a previous witness. I don't know if you can answer it but we were informed that the revenues from property taxes on telephone polls I don't know if it's limited to telephone polls has dropped substantially in the last few years. I was a concern about that. And I just don't understand how polls and wires whether it's telephone or cable whatever, get valued or assessed. And, you know, we hear a lot of talk about the desire to use those polls by some companies for various purposes, and I don't know if their value goes up and who does reassessment or reappraisal like we do with homes. Can you educate us a little bit on this. Jill. I can, I can start maybe Jill can can fill in some details. Telephone companies do enjoy a little bit specialized tax treatment. And that's because of our telephone personal property tax in Vermont which is a very old old tax also has not changed very much over the years. So for a telephone company and a telephone company is developed is defined as someone operating a telephone business. Pretty broad definition. Of course land and building subject to property tax, as usual, as you might expect, but the polls and lines. There's a special telephone personal property tax on those on that equipment. And that's a tax on the net book value of the personal property tax. And then their exempt from any municipal personal property tax and the personal property, the state personal property tax is on the net book value of those assets, which I believe the prior was correct. In the general statement that that's a that is a number that is straight shrinking over time. As those assets are older and over older. And my understanding is that there's not a whole lot of conventional telephone upgrades occurring right now I'm not, I don't have the technical background for that so I don't know exactly what I'm talking about when I say that I mean, I mean that the older, the older tell what I think as an old fashioned telephone line upgrades, so attacks on the net book value that the tax base on on that would and and is shrinking over time. So, there seems to be, I'm sure you could probably come up with or we could come up with some examples, without my produce some inequities, but in terms of a struck by you say there's no right for municipality to tax the telephone that holds. Is there an example of similar utility property that had that enjoys that exemption. I, I believe that's correct that if the asset is subject to the telephone personal property tax it is not subject to any municipal personal property tax. Is there any comparable situation like that. The only thing I can think of is utility property that's actually owned by the municipality and occurring in that municipality that would also be exempt from municipal tax. That's the only exam that's only similar example I can think of. Well, a starting point for, for me, or for this committee might be to do some comparison to how other states treat this property. Do you know off the top of your head whether other states have updated their statutes to to reflect the loss in revenue or the inequities of certain personal property of a utility being exempt while we all pay our own tax other businesses pay taxes on their personal property. I don't, I don't know specifically. I know we've made changes I think one of the issues is that the, who's the last person you know that put in a landline. They were rid of their landlines and going to cell phones. I know we've had the smaller telephone systems in a number of years ago, because they were regulated they had to go through full PUC hearings to do bundled programs they have to the lifeline connectivity and cell phones don't and void voice over internet. So if Comcast or any of those providers, we can't tax that right we can't tax internet. Anything going over there I don't know about cell phones do we tack and we came up with cell towers were vague as to how they got defined so the industry is changing the feds have tied our hands in some areas. And yet we've still got some regulated utilities out there and telephone. The service has been restored if everybody's not getting the same pop ups, I'm getting. So we're back online lives. Senator Pearson and then Senator McDonald. I'm the proposal that has come to us is to let the co ops build some infrastructure that will be used by the CUDs now if the CUDs could build it. We've all agreed they would not be subject to the property tax. And it's an interesting question because it's a it's a question of ownership. Technically but really the user, you know the person that's using it. It's already clear that wouldn't be tax so I guess I'm, you know, if the CUDs could contract with the the co op to do the work of building it. That would also not be subject to the property tax the trick is the co op has access to a very favorable financial interest instrument to be able to fund the whole thing. My question is, from your point of view, is there a concern is there an integrity issue if we if we give them this exemption for this purpose to me it does seem to jive with our desire to build that broadband and our desire to make it be fiber and to empower the CUDs. So I'm just curious if you would have concerns with this proposal if it has integrity to you. I don't I don't know a whole lot about this proposal and I frankly I don't know what a CUD is. It's a community community union district communications union district fiber fiber central Vermont fiber. We have defined them as municipalities. Okay. And I, I perhaps jail remix and chime in on this as well from the tax department's point of view, what we always really like to see is clear definitions of an exemption from tax or clear definitions of what is subject to tax. So, me personally, I don't have any concerns if if certain property was going to be exempt for certain use, as long as that would be workable for the company or the district the utility to identify what is within this exemption and what isn't. And then likewise for municipal assessors on the state to to do the same. Okay. One, one other comment I'll make about that is, I could see a problem occurring if they conducted both taxable and exempt business over the same piece of equipment. My thinking there is a cable television cable and a cable broadband modem or, you know, something like that where you're using you're using the underlying asset for perhaps more than one thing. And if those are if the tax treatment is different for those two things, I could see that being a complication for the company to sort of try to pro rate or calculate in some way, how, how much of it is being used for the taxable purpose or the exempt purpose that that could be problematic. But if the whole, if the whole asset is being used for one purpose, and we had a clear definition of that purpose and taxable or exempt that that would certainly satisfy me and probably the tax department. Okay. Jill, any thoughts. Hi everyone Jill Remick. I'm the director of property valuation and review at the tax department. I wanted to just go back and provide a little bit more foundation to one of the original questions about how utilities are currently assessed. If you do try to find information about utilities and the statute different utilities exist in different places and so it is. It's not sort of all really laid out very clearly and you can tell over time things have been added and amended so in some cases regarding like cable TV and electric it's pretty outdated and unchanged from a long time ago but then we do have sections in there specifically for things like solar and cell tower. So it's a partnership between the state and the municipalities. I think that's part of why this is so challenging and hard for us to give you folks definitive answers because you have it. We aren't able to report to you okay this is what broadband providers are currently being assessed at and this is what they're paying in property tax because the statute the way it is right now doesn't contemplate the term broadband right you can get it from your cable like I have mine through my TV cable that my house my mom in the Northeast Kingdom has a satellite dish and that's how she gets her internet so it's it's it's hard to quantify I don't want you folks to think we're trying to be evasive but. But right now you know as with a lot of the property evaluation then when there's something physical there's real property or personal property that's measurable that we can assess we can do that. I think what we're running up against here is that I do think. You know utility valuation in Vermont is a little right for some revisiting and freshening just in general to keep up with what's happening in 2021 where it really hasn't changed substantially for the past several years and. So I wanted to make sure that I just made that clear that that depending on the type of utility in the sort of bucket that falls in it's treated a little differently in statute. And either and every year we collect a inventory from all the utilities so to get it like the the polls and the lines and things like that we collect that every year from all of the municipality or all the utilities. And then we we have a formula related to what's called the handy Whitman it's a it's a national formula it's sort of a standard of what the inventory nationally is doing and that gives us a value. So then the municipality can either use that value or they can come up with their own utility value so if you have a particularly high value commercial utility in your in your town you may want to actually take the time to invest in having. You know a professional utility appraiser actually provide that valuation the state does have a partnership with the towns related specifically to the Trans Canada hydro so there is an expert utility appraiser who provides their expertise and they're valuing on those. It's not something that we have the expertise in house at the tax department to actually do that it's a pretty specialized field. So I'm happy to have this sort of come before you folks we can sort of start to unpack some of these pieces. But right now you know we've kind of built this the system you know the technology is moving faster than than the statute and the tools that we have to come up with proper values. In other states we spend a lot of time with our counterparts in New Hampshire as you can imagine property taxes is worth while investment for their, their valuation team at their tax department, you know they have a whole staff of folks who do utility valuation. And it's, it's really much more based on sort of an income approach on a business model it's almost like their team does more of an audit of their, you know, FCC filings and things like that and that's how they come up with the value and then they can they can apportion that. You know, based on number of ratepayers in towns or, you know, we're also kind of unique in that we divided by municipalities in a lot of places maybe more like the county or statewide so we have been doing a lot of looking into what Vermont could do better you know what tools would help us more accurately to capture what we need and also to get us some more training and how we can support the towns to come up with these values so utilities is definitely something we've been, we've been trying to dig into a little bit deeper. But yeah, to Will's point to depending on the type of utility it is, it is treated differently in statute, and it might be personal property that is taxed to the municipal level it may not be. So it's, it's worth a discussion. Okay, Sandra McDonald. Madam chair and it's interesting to know that utility may be ripe for changes. And we're discussing value here. broadband, at least symmetrical broadband has been valued by many in the recent years as the single most valuable thing we can do for economic development. So my question is from witnesses who've just testified, is there any reason why they think a law which said not withstanding current practices. This broadband to be defined as, as you know, symmetrical up to such and such or federal definition of broadband. Is there any reason why such a law would be overthrown by for being preempted or etc etc. And that's pretty much it. They have a reason to share it if they don't have a reason say they can say no. And the second question would be if we were to draft such a bill. If they come and comment on it, and whether or not they thought it was a wise and thoughtful way to achieve the number one valued economic development tool of broadband throughout the state of Vermont. Those are my two questions. And who is, who is your question aimed at. Well, we've had one witness said that they didn't say any reason why we couldn't pass such a law. Would we be preempted? Sure, I think I think the way that it could be effective and and implemented is to be really clear to your point about what the definition of broadband is and in so many of these cases the utility is offering multiple services. And how, how to parse out, if you are a Comcast or something that that uses it for telephone and cable and broadband, you know how you parse that out if you're treating them differently for taxation purposes. So as long as those things can be clearly defined so that we at PVR and then the municipality can quantify that value. I'm sure that the providers would love to come in. I haven't interacted much with broadband providers, but we've certainly had conversations with like electric telephone and other other utility providers. So I would assume they would also want to come in and speak about how that might impact their liability or their decision about whether they do offer broadband using their existing infrastructure or build out. So I'm sure there's others in the, in the industry who would love to participate in that conversation and have much more to say than I would. Oh yeah. Well, if Ms. Chair, I'm sure if we were to say that it is not to be taxed, then the value of what the thing is that isn't going to be taxed is would be interesting to discuss. But, you know, zero times something is zero. For broadband on cooperatively owned poles to be leased under certain conditions to provide broadband service to those areas. Now maybe some will tell us whether that would be a good idea or not. Okay. In the interest of achieving the number one goal professed by many for our economic development. I think we're the ones that are going to decide if it's a good idea or not. Okay, well then we don't need to witnesses to comment on that. Are we ready to present them with a bill that they can comment on whether it does and it's clear enough to do the job. Right. And whether or not it's legal. That's my question. I had one other example if you don't mind, I know it's getting late. One of your questions was just about how different entities are treated differently. I don't think there's any pocket that's sort of getting away with anything but certainly the sort of inventory and tracking of the resources is our biggest challenge at PVR in the town's biggest challenge if we don't know about it we don't know that we're missing that, you know, missing to identify that entity. One that comes to mind that I think is timely is the railroad corporate tax so we still at PVR value railroads based on their track mileage and collect revenue on that and disperse that among the towns based on the miles of track. And because of that those those railroad entities that's their payment of their corporate tax so they're exempt from corporate tax. There are ways to I think it might have been Senator Pearson who was asking about, you know, making sure that we're capturing the right, the right assessment through the right venue so there are other examples where that that goes in the reverse right that if they're, they're not paying real real property tax it doesn't mean they're not in another way maybe, you know, paying some form of of assessment on their property. I think it's going to make it more complicated I apologize. I know, I know, I pay corporate taxes. Not corporate. Okay, so the answer is no then that's, that's not an issue from the co op point of view or paying taxes on this, or if it is an issue, someone please say so. Okay. All right, I don't know if it is if anyone knows that or not. Things have changed. The railroads are not the economic drivers and necessities they were 50 years ago 60 years ago. Things have changed for landline telephones and our challenges to make sure that our taxing structure is fair. And, you know, doesn't disadvantage anyone and also helps encourage behavior perhaps we'd like to see. So with that, not seeing any other questions I'm going to say thank you to everyone. And we will see the rest of the committee here tomorrow afternoon. I think faith has posted the agenda. It will be up it's pretty full for next week to get any issues you'd like to have put on the agenda to me, and we'll find the space to get them in. And we'll just keep getting on.