Vermont Chamber News

Amid a lengthy debate and amendments, the Senate is poised to approve H.687, which will be another step towards codifying the historic agreement on location-based jurisdiction. The bill would then need to go back to the House to review changes. The bill removes barriers to residential development in smart growth areas with interim exemptions. Notably, the Vermont Chamber successfully advocated for Act 250 appeals to remain with the Environmental Court. In a compromise to secure this, the future of appeals would be studied, and a report would be due back to the legislature for further consideration in 2026.

Here is a breakdown of much of what the Senate version of the bill would do over the next 3 years:

Development Exemptions: Establishes exemptions for all development in Tier 1A up to 49 units of housing in mixed-use developments in Tier 1B. Interim exemptions include:

• All housing within downtowns until July 1, 2028.
• Up to 75 units in new town centers, growth centers, and neighborhood development areas until July 1, 2028.
• Up to 50 units within ¼ mile of village centers with zoning and in urbanized areas of 50,000 people near transit routes until July 1, 2028.

Name Change and Authority Expansion: The Natural Resources Board becomes the Land Use Review Board (LURB), the five-member board will be appointed by the Governor and have the authority to hear appeals and review regional plans and maps.

Tier 1A Area Application Process: Municipalities can apply from 2026 or after regional plan approval, with LURB guidelines issued by 2026.

Review of Applications for Tier 1A: LURB to manage the workload of District Commissions. Leaves Act 250 permit appeals at the Environmental Division of the Superior Court and will further study the issue.

Act 250 Amendments: Definitions added for forest blocks and habitat connectors. Rules to be adopted for Act 250 in areas with highly sensitive natural resources administration and mapping.

Regional Planning Process: LURB to review future land use maps and Tier 1B designations. RPCs submit to LURB plans and maps which must comply with requirements. Village areas are given Tier 1B status unless the town requests not to have it.

Appeal Changes: The threshold for appeals increased from 10 to 25 people.

Taxation Adjustments: A new property transfer tax rate of 2.5% for residential properties that will not be used as a principal residence, are fit for habitation all year, and are not used for a long-term rental. A temporary education property tax exemption was introduced for flood-impacted communities.

Safety Guidance for Short-Term Rental (STR) Operators: The Division of Fire Safety provides health and safety rules guidance for STR platforms; operators are required to post guidance.

The Senate Natural Resources and Energy Committee combined the Senate’s housing bill with the House’s Act 250 modernization bill, creating a 171-page omnibus bill. While much of the legislation incorporates a historic compromise on Act 250, a substantial poison pill remains. Appeals of Act 250 permits would move from the environmental courts to a newly established professional board. The Vermont Chamber is advocating against this transition. A legal appeal of a complicated development process requires a legal review in a court, not an informal review by a politically appointed quasi-judicial board that does not have legal expertise.

The Vermont Chamber has supported a compromise of establishing a working group to dig into underlying issues that result in Act 250 appeals leading to timely and expensive disputes and ultimately development delays and how best to address them. The Senate Economic Development, Housing, and General Affairs Committee has done a walk-through of the bill and is looking at opportunities to bolster parts of the bill that will address Vermont’s housing crisis. With only weeks remaining in the session, the bill still has several more hoops to jump through before reaching the Governor’s desk. As it currently stands, it is poised for a veto.

H.687 was the subject of lengthy, and at times fiery, House floor sessions this week. The bill establishes a plan and timeline to modernize Act 250 with a tiered and location-based jurisdiction, including exemptions in smart growth areas. The proposed changes for Vermont land use would take place over the coming years to allow for considerable public outreach and input. In total, there were 11 amendments to the bill with all but one passing. This included an amendment to extend Act 250 housing exemptions passed last year in the HOME Act. The bill was ultimately passed by the House on a split voice vote, sending a message to the Senate that further changes will need to be made if the bill is to garner enough widespread support to withstand a potential veto.

The bill will now go to the Senate, where the Natural Resources Committee has been reviewing S.311, the Senate’s housing and Act 250 omnibus bill, in anticipation of receiving H.687. The Vermont Chamber testified before the committee this week in favor of the approach to Act 250 appeals that S.311 makes, keeping appeals to Act 250 decisions in the court with increased support. The committee is likely to make H.687 the final vessel for Act 250 modernization this session.