On May 8, 2024
State News

Vermont Senate passes Act 250 reform bill after whirlwind debate

It’s not the end of the road for the bill, which seeks to make major changes to the state’s half-century-old land use law

By Carly Berlin

Editor’s note: This story, by Report for America corps member Carly Berlin, was produced through a partnership between VTDigger and Vermont Public.

After a flurry of last-minute deliberations, the Vermont Senate passed a mammoth bill on Friday afternoon, May 3, that makes sweeping reforms to the state’s land use and housing policies.

The bill, H.687, relaxes the reach of Act 250 — Vermont’s half-century-old land use review law— in existing development centers, a move proponents hope will clear red tape and encourage more housing growth amid an acute housing shortage. It also lays the groundwork for extending Act 250’s protections over to-be-determined ecologically sensitive areas. 

The bill’s passage marks a major juncture for legislators, who for years have attempted — and failed — to thread the needle on modernizing Act 250. Proponents of H.687 argue it strikes the right balance between protecting Vermont’s natural resources in an era of climate change while also lowering barriers to more housing development. 

“I hope that we can all look ahead and celebrate both the places that we’ve allowed to further thrive, the people that we’ve allowed to live here,” said Sen. Kesha Ram Hinsdale, D/P-Chittenden Southeast, before voting in favor of the bill late Friday. “And also the places that we love and care about, that we get to still gaze upon and celebrate. And that’s truly what makes us Vermont.”

Yet the bill has more hurdles to clear. The Senate made fundamental changes to the version passed by the House in March; as lawmakers race toward a planned adjournment date of May 10, time is running out for the two chambers to reconcile their differences.

And as lawmakers consider their next moves, they also face the possibility of a veto from Gov. Phil Scott. The Republican governor has criticized earlier versions of H.687, arguing that it does not go far enough to promote housing development, particularly in rural areas. The Senate passed H.687 with 18 votes in favor and 10 against, making the likelihood of a veto override — which requires a two-thirds majority — questionable.

Who should hear Act 250 appeals? 

One of the Senate’s major changes to the bill involves who will hear appeals of Act 250 permits. The Senate’s version keeps appeals in the judicial system, while teeing up a study to consider moving appeals out of the courts and to a new quasi-judicial board. 

“There’s no reason to make a decision now,” Sen. Christopher Bray, D-Addison, told colleagues during an all-Senate caucus yesterday. He noted that moving appeals to the new board had arisen as a contentious issue, and proposed the study instead.

The House’s version of H.687 would have shifted appeals to such a board, modeled after the Public Utility Commission. Proponents argue that shifting appeals out of the courts would speed up the process, and allow the new board to make precedent-setting decisions on policies. 

The Senate’s approval of a study appears as something of a concession to the Scott administration, which has voiced its strong opposition to shifting appeals to the new board. Officials have argued that the move would in fact increase the time it takes a developer to get a permit and potentially increase development costs.

Housing policies in the mix

H.687 sets in motion a years-long process to chop Vermont into a series of “tiers” that will dictate how development is treated under Act 250, loosening the law’s reach in some municipalities and strengthening its protections over “critical natural resources areas.” 

Yet the actual boundaries of those tiers are largely left up to future mapping and rulemaking efforts. In the meantime, the bill sets up a number of interim exemptions from Act 250, including one for all housing projects within the state’s 24 designated downtown areas through July 2028, and up to 50 units in dozens of village centers around the state.

The sprawling bill — which multiple senators lamented they had not had enough time to fully read and comprehend — includes a laundry list of other housing policies and money for programs outside of the Act 250 realm.

It creates a new property transfer tax on second homes, expected to bring in about $10 million this coming year. It places a property tax valuation freeze on some newly constructed and rehabbed homes in areas impacted by last year’s catastrophic flooding. The bill also includes flood disclosure requirements for home purchases, rental agreements, and mobile home lot leases.

A last-minute amendment Friday would have placed a temporary moratorium on no-cause evictions in municipalities that have already voted to approve the protections for tenants, but have faced roadblocks at the state house. The amendment failed, though, as senators considered it not to be pertinent to the bill. 

H.687 will now be sent back to the House, and leadership can decide to either concur with the Senate’s changes or request a conference committee to allow members of the two chambers to hash out their differences. 

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