An act relating to regional planning and Act 250 Tier jurisdiction

A new nine-member task force is created to develop model zoning bylaws for residential opportunity overlay districts. Municipalities would have the option to adopt these codes, and residential development meeting code requirements would receive a certificate of compliance without a hearing or appeal. The task force must report by December 1, 2026 and ceases to exist on December 31, 2026.

Road jurisdiction (section 6001(3)(A)(xii)) is restored. The enacted version had deleted this provision entirely. The restored version defines roads and associated driveways as development for Act 250 purposes, with a look-back period for road length calculations extending to January 1, 2030.

Tier 3 rulemaking (section 22 of Act 181) is restored. The enacted version had repealed it. The restored provision requires LURB to adopt rules identifying critical natural resources for Tier 3 protection, with a final proposed rule deadline of June 30, 2028.

Major regional planning reforms are added to sections 4348 and 4348a, establishing a new future land use map with specific categories (downtown/village centers, planned growth areas, village areas, rural/conservation), a minor amendment process for changes under 10 acres, and a streamlined process for Tier 1B area status requests separate from regional plan amendments.

Section 4476 (formal review of regional planning commission decisions) is repealed, removing a layer of state oversight over RPC decisions.

A new defined term 'priority housing project' is added to 10 V.S.A. section 6001(35), covering mixed income housing or mixed use projects in designated downtown development districts, new town centers, growth centers, neighborhood development areas, or areas mapped as eligible for Tier 1B status.

A comprehensive 'smart growth principles' definition is added to section 4303(43), covering compact development, mixed-use centers, transportation choice, environmental protection, agricultural support, utility availability, business diversity, housing for diverse income groups, and settlement patterns avoiding sprawl.

A new Act 250 permit exemption is added for priority housing projects in municipalities with a population of 10,000 or more (section 6001(3)(D)(viii)).

A new exemption (dd)(4) allows 50 units or fewer of housing with at least 20 percent mixed income housing or mixed-use development in village centers without an Act 250 permit, until January 1, 2030.

Tax credit eligibility under section 5930bb is narrowed: applications must be located in Step 2 and Step 3 State designated centers or Step 1 centers where a portion is listed or eligible for listing in the National Register of Historic Places.

Detailed exemptions for accessory on-farm businesses (storage/sale of qualifying products, preparation/processing with 50 percent farm-origin requirement, and events/farm stays with noise and curfew limits) that were in the enacted version are not present in the passed version.

Multiple interim housing exemption deadlines are extended from January 1, 2027 or July 1, 2027 to January 1, 2030. This affects ADU exemptions, commercial-to-residential conversion exemptions (29 units or fewer), and all interim housing project exemptions in designated areas.

Regional or municipal plans due to expire in 2026 have their expiration extended to December 31, 2026.

Effective dates are modified: sections 12, 13, and 21 of Act 181 now take effect January 1, 2028 (previously December 31, 2026), section 21 also has a June 30, 2028 date, and section 19 (road jurisdiction) takes effect January 1, 2030 (previously July 1, 2026).

A new requirement (G) is added to Tier 1A area status criteria: municipalities must identify and plan for maintenance of significant natural communities, rare, threatened, and endangered species in the Tier 1A area or exclude those areas from the designation.

A new section requires the Department of Housing and Community Development to report by January 15, 2027 on recommendations to reduce negative impacts of discretionary review of residential development, including consideration of a Vermont Model Code, federal Right to Build Zone legislation, and incentives for municipalities.

$200,000 is appropriated in FY2027 to the Agency of Commerce and Community Development for additional model plans under the 802 Homes program, and $100,000 to LURB for public engagement and education on Tier 3 areas.

The entire residential opportunity overlay districts task force (original Sec. 1) was deleted. This nine-member body was tasked with developing model zoning bylaws, recommending adoption processes, and reporting to the legislature by December 1, 2026.

The definition of development related to road construction (10 V.S.A. section 6001(3)(A)(xii)) and the Tier 2 and 3 provisions (Sec. 21) were deleted entirely rather than amended.

The requirement for the Department of Housing and Community Development to report on reducing negative impacts of discretionary review of residential development (including a potential Vermont Model Code) was removed.

The exemption for one accessory dwelling unit within or appurtenant to a single-family dwelling (until January 1, 2028/2030) was removed from 10 V.S.A. section 6081(bb).

The exemption for converting a commercial structure to 29 or fewer housing units (until January 1, 2028/2030) was removed from 10 V.S.A. section 6081(cc).

Interim housing exemptions in designated areas (75-unit and 50-unit thresholds) no longer include mixed-use development, narrowing the types of projects that qualify for Act 250 permit exemption.

The fourth interim housing exemption (50 units with at least 20 percent mixed income in village centers, until January 1, 2030) was removed entirely.

A new Joint Legislative Environmental Oversight Committee of six members (three House, three Senate) was created to exercise oversight over the Land Use Review Board and Agency of Natural Resources permitting processes. It sunsets on July 1, 2029.

$30,000 is appropriated from the General Fund in fiscal year 2027 for the State Natural Resources Conservation Council to contract with the Vermont Council on Rural Development and Vermont Association of Conservation Districts to develop a public engagement plan on working lands protection.

The Land Use Review Board must deliver three reports: on Act 250 jurisdiction over commercial activities on farms (by November 15, 2026), on effects of Act 250 mitigation on primary agricultural soils (by July 1, 2027), and on criterion 9(L) effectiveness for retail/service businesses outside village centers (by November 15, 2027).

Regional planning commissions must now provide member municipalities with written descriptions of map changes, old-versus-new maps, and information about how to obtain Tier 1A or 1B status under the new structure. Energy compliance review by the Department of Public Service was added to the regional plan process.

The definition of 'priority housing project' in 10 V.S.A. section 6001(35) was removed.

Effective dates for key sections were pushed from December 31, 2026 to January 1, 2028, and the criterion 8(c) rulemaking deadline was changed to June 15, 2027.

The bill's entire purpose changed from creating a task force to develop model zoning bylaws for residential opportunity overlay districts to providing technical clarification, transitional certainty, and implementation alignment for the 2024 Act 181 land use restructuring framework.

Added new future land use map categories for regional plans including downtown or village centers, planned growth areas (with detailed criteria including walking distance, multimodal connections, complete streets), village areas (larger than village centers), and rural/conservation areas with Tier 3 overlay identification.

Repealed Section 4476 (formal review of regional planning commission decisions), eliminating a prior judicial review mechanism.

Added definition of 'sprawl repair' as redevelopment of lands with buildings, traffic and circulation, parking, or other land coverage in a pattern consistent with smart growth principles, and redefined designated centers to be approved through LURB review of regional plan future land use maps rather than through the prior separate designation process.

Added definition of 'development' in Act 250 to include road construction providing access to a tract of land, with rules for calculating road length including roads built after January 1, 2030.

Added new statutory definition of 'priority housing project' as a discrete project consisting exclusively of mixed income housing or mixed use located in designated downtown development districts, new town centers, growth centers, neighborhood development areas, or Tier 1B eligible areas.

Added comprehensive 'smart growth principles' definition requiring compact mixed-use centers, transportation choice, environmental protection, agricultural/forest industry support, utility availability, business diversity, housing for diverse income groups, and settlement patterns that avoid scattered development, limited transportation options, farmland fragmentation, infrastructure extension across undeveloped land, and linear highway development.

Added Act 250 permit exemption for priority housing projects in municipalities with population of 10,000 or more, and extended the downtown development district exemption from January 1, 2027 to January 1, 2028 with a new requirement that at least 51 percent of the parcel be within one-half mile of the designated center boundary.

Added multiple interim housing exemptions requiring no Act 250 permit: 75 units or fewer in designated centers with public sewer/water (until 2030), 50 units or fewer on 10 acres or less in village centers within one-quarter mile or in urbanized areas over 50,000 near transit (until 2030), projects in downtown development districts with permanent zoning (until 2030), and 50 units or fewer with at least 20 percent mixed income in village centers (until 2030).

Added Act 250 permit exemption for all projects located entirely within Tier 1A areas, and for Tier 1B areas limited to 50 units or fewer on 10 acres or less.

Extended the accessory dwelling unit (ADU) exemption from July 1, 2028 to January 1, 2030, and extended the commercial-to-residential conversion exemption (29 units or fewer) from July 1, 2028 to January 1, 2030.

Extended the Tier 3 rulemaking deadline for LURB to file its final proposed rule from February 1, 2026 to June 30, 2028, and extended effective dates of several Act 181 provisions from December 31, 2026 to January 1, 2028.

Added provision extending expiration dates of any regional or municipal plans due to expire in 2026 until December 31, 2026.

Added requirement that Tier 1A area status applicants demonstrate they have identified and planned for maintenance of significant natural communities, rare, threatened, and endangered species in the area or excluded those areas from the Tier 1A designation.

Added requirement that LURB review draft regional plans for conformance 60 days before the first public hearing, and that regional planning commissions hold two or more public hearings on any proposed plan or amendment.

Added process allowing minor amendments to regional plan future land use maps (fewer than 10 acres) without a full plan amendment, requiring only a letter of support from the municipality and LURB guidance on what constitutes minor.

Added detailed process for how municipal panels must handle previously issued Act 250 permits in Tier 1A areas: conditions must be transferred to municipal permits, notice must be provided to LURB, decisions must include specific findings, and final actions must be recorded in municipal land records.

Added new Section 10 requiring the Department of Housing and Community Development to report by January 15, 2027 on reducing negative impacts of discretionary review of residential development, including a potential Vermont Model Code, federal Right to Build Zone legislation value, and incentives for municipalities.

Changed State Community Investment Program tax credit eligibility to only Step 2 and Step 3 State designated centers, or Step 1 centers where a portion is listed or eligible for listing in the National Register of Historic Places.

New Section 1 creates a task force of nine members (including legislators, planning professionals, housing officials, environmental groups, and affordable housing advocates) to develop model zoning bylaws for residential opportunity overlay districts. In areas where municipalities adopt the codes, qualifying residential development would receive a certificate of compliance from a zoning administrator with no hearing or appeal. Grants would be available to help municipalities adopt the codes. The task force must report to the legislature by December 1, 2026 and dissolves on December 31, 2026.

The Act 250 permit exemption for one accessory dwelling unit per single-family dwelling was extended from July 1, 2028 to January 1, 2030.

The Act 250 permit exemption for converting a commercial structure to 29 or fewer housing units was extended from July 1, 2028 to January 1, 2030.

Multiple interim housing exemptions (for projects of 75 units or fewer in designated centers, 50 units or fewer near village centers or transit, and projects in downtown development districts) were extended from January 1, 2027 or July 1, 2027 to January 1, 2030.

The priority housing project exemption for designated downtown development districts, neighborhood development areas, and growth centers was extended from January 1, 2027 to January 1, 2028.

The deadline for the Land Use Review Board to file its final Tier 3 rulemaking with the Secretary of State was extended from February 1, 2026 to June 30, 2028.

The effective date for certain sections of 2024 Acts and Resolves No. 181 (including definitions in 10 V.S.A. 6001) was changed from December 31, 2026 to January 1, 2028, and the road development section effective date was changed from July 1, 2026 to January 1, 2030.

The bill header was changed from 'AS PASSED BY SENATE' to 'BILL AS INTRODUCED AND PASSED BY SENATE' and the page count was reduced from 27 to 21 pages, reflecting the restructured document with the new task force section added at the front.