ARTICLE ON EXEMPT PROPERTY OWNERS INSURANCE/REPLACEMENT COSTS

 DEPARTMENT OF TAXES

 NEW LAW:  EXEMPT PROPERTY OWNERS

MUST REPORT INSURANCE REPLACEMENT COST

TO MUNICIPAL ASSESSORS

Act 73 Now in Effect
Earlier this year, Governor Peter Shumlin signed into law Act 73.  Pursuant to the new law, owners of certain tax exempt properties are required to provide assessing officials with the insurance replacement cost of each exempt property.  If the property is uninsured, the owner must provide a written explanation of why it is not insured.  The new requirement applies to most, but not all, exempt properties.

The new requirement is effective for 2014 grand lists.  Property owners are required to provide assessors with the above information before April 1st next year.  This is an annual filing requirement for property owners.

This new requirement is in addition to other provisions of Vermont law.  The municipality’s grand list must include either (i) the fair market value of each exempt property; or (ii) the insurable value reported to assessor.  As before, the grand list must also include the statutory authority for each exemption, the date the exemption becomes effective, and the year in which the exemption ends.   These requirements are found at 32 V.S.A. § 4152(4), (6).  The insurance replacement cost value required by Act 73 may be helpful in arriving at an estimate of the fair market value of a property.  For example, if the insurance value for a landed parcel is used, the Department of Taxes would encourage the municipality to also incorporate a land value derived from its land schedule to that value.

New Form for Easy Reporting Coming Soon!
The Department of Taxes will assist with collecting the insurance replacement values and ensuring property owners meet their obligations under Act 73.  Before the end of this year, the Department will distribute a new form that can be used by the owners of these exempt properties.  The form will align with the new data field on NEMRC so that municipalities can conveniently record the information required by Act 73.  The Department of Taxes is committed to supporting this effort.

For questions or suggestions on how the Department can assist with the reporting process, please contact Jim Knapp at 802-828-6638.  Below is a list of property owners who must report insurance values:                     

Owners of property used for public purposes.
Statutory Cite     32 V.S.A. § 3802(4)

Property owners that own land used for pious purposes.
Statutory Cite     32 V.S.A. § 3802(4)

Charitable organizations that own land used for charitable purposes.
Statutory Cite     32 V.S.A. § 3802(4)

Churches, church societies, conferences that own land used for parsonages, if the property is used by a minister in full  time operation of fellowship.
Statutory Cite     32 V.S.A. § 3804(4)

Libraries (public and private circulating libraries, not for profit).
Statutory Cite     32 V.S.A. § 3802(4)

Towns that lease property for educational purposes.
Statutory Cite     32 V.S.A. § 3802(4)

Colleges, academies, and other public schools.
Statutory Cite     32 V.S.A. § 3802(4)

College fraternities and the societies and corporation that own their property.
Statutory Cite     32 V.S.A. § 3802(5)

YMCA and YWCA.
Statutory Cite     32 V.S.A. § 3802(6)

Agricultural societies who own land used for annual fairs.
Statutory Cite     32 V.S.A. § 3802(9)

Operators of facilities/land for the abatement of pollution of the waters of the state of Vermont or waters within the purview of the New England Interstate Water Pollution Control Compact.
Statutory Cite     32 V.S.A. § 3802(12)

Charitable/non-profit organizations operating facilities for the humane treatment of animals.
Statutory Cite     32 V.S.A. § 3802(15)

Owners of personal property, machinery, inventory and equipment, ski lifts and snow-making equipment for a ski area.
Statutory Cite     32 V.S.A. § 5401(D)

Municipalities (property of the municipality, located within the municipality and used for the provision of municipal services including utility services).
Statutory Cite     32 V.S.A. § 5401(F)

Owners of machinery and equipment used for processing whey.
Statutory Cite     32 V.S.A. § 5401(G)

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