Senate fast-tracks, passes S.160 to abate education property taxes for 2023 flood damage

The Senate moved quickly to address flood damage from summer 2023, suspending rules to take up S.160 and passing the bill by voice vote.

Senator from Chittenden Central introduced S.160, described as "an act relating to state education property taxes and flood related damage," and asked the Senate to suspend rules so the chamber could consider it immediately. After committee reports from Finance and Appropriations, the Senate advanced the bill through second and third readings and passed it on the floor.

Why it matters: The bill authorizes the tax commissioner to abate school taxes for properties damaged in the July 1–October 15, 2023 flood period when a property meets a substantial-damage test (50% loss) or has a loss of use or access lasting 60 days. The measure also clarifies that FEMA disaster payments for repairs or replacement "do not count as household income" when calculating income-sensitive property tax adjustments, and it directs the Commissioner to coordinate refunds with the Agency of Education. Senate Finance reported a fiscal impact to the Education Fund of $1,100,000.

Committee and floor discussion: Senator Cummings, reporting for the Committee on Finance, said the 50% threshold mirrors FEMA practice to avoid costly state appraisals and explained mechanics for reimbursing towns that borrowed to pay school taxes if collections were disrupted. The Appropriations Committee reported it reviewed the bill with the sponsor and found no general-fund impact.

On the floor, the Senator from Madison asked whether properties in places that were not declared eligible for individual FEMA assistance (for example, parts of Addison County) would be excluded under the bill’s language; the reporter replied that the bill intentionally limits eligibility to areas covered by federal disaster declarations but that amendments could be considered. The same senator cited a landslide in Ripton as an example of severe, localized damage that could be excluded under the federal-trigger approach.

Another senator asked whether multistory commercial buildings in downtown Montpelier whose first floors were destroyed but whose total building loss did not meet 50 percent would be ineligible; the committee explained that relying on the FEMA 50% substantial-damage standard was a practical choice to avoid state-level appraisals and inconsistent municipal abatement standards.

Procedural actions and outcome: The Senate voted by voice to suspend rules to take up S.160, later voted to suspend rules to move the bill through all remaining stages, and then passed S.160 on third reading. The Senate also voted to message its actions to the House. Floor votes were recorded as voice votes in the transcript ("the ayes have it"); no roll-call tallies were provided in the posted proceeding.

What’s next: The Senate authorized messaging the passage to the House for further action. Implementation steps described in debate include tax-commissioner rulemaking, Agency of Education reimbursement procedures, and potential amendments in the other chamber.

Selected quotes from the floor:
"We did essentially the same things after Irene...this gives the tax commissioner the power to abate the school tax for any town that was damaged in the flood between July 1st and October 15, 2023," said Senator Cummings, reporting for the Committee on Finance.

The Senator from Madison said: "There was a house completely destroyed and lost to a landslide in Ripton on a date when no other properties were destroyed. That property should have its property tax abated in the same way."

Implementation details and clarifications: The bill sets eligibility criteria tied to the federal declaration window and the FEMA 50% substantial-damage standard; it also counts 60 days of loss of primary structure use or loss of key utilities as qualifying. The fiscal note attached to the bill estimates a $1,100,000 impact on the Education Fund; sponsors characterized that amount as small relative to broader Education Fund needs. The transcript indicates the Department of Financial Regulation will brief the Finance Committee on flood insurance options and market changes.

The session adjourned with scheduling announcements and the Senate standing adjourned until 10 a.m. Tuesday, January 23.