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SENATE PROPOSAL OF AMENDMENT 2007-2008

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H.863

An act relating to creation and preservation of affordable housing and smart growth development

The Senate proposes to the House to amend the bill by striking out all after the enacting clause and inserting in lieu thereof the following:

Sec. 1.  LEGISLATIVE ACKNOWLEDGMENT

The general assembly gratefully thanks and acknowledges Gregory Brown, the executive director of the Chittenden County regional planning commission, for:

(1)  his time, commitment, and tenacity in helping to make the Vermont Neighborhood program a reality. 

(2)  his earlier, equally outstanding efforts that greatly contributed to the creation of the Vermont downtown program. 

(3)  his strong and committed leadership as the executive director of the Chittenden County regional planning commission between March 2003 and July 1, 2008, when he is scheduled to retire.

Sec. 1a.  FINDINGS AND PURPOSE

     (a)  Act 250 was enacted as a land use law in 1970 by a General Assembly concerned about large scale, unregulated development in Vermont.  At that time, few towns had planning and zoning, and for the ones that did, there was limited staffing to enforce those rudimentary municipal laws.  Revisions were made to Act 250 in 1973, including the addition of 11 new subcriteria to criterion nine, relating to matters such as agricultural soils, energy conservation, earth resources and development affecting public investments, but the focus of the law remained to review large scale developments as those developments were defined.  As a result, a large number of developments around the state have been designed to avoid Act 250 jurisdiction, resulting in no or limited review of the cumulative impact of incremental development of nine or fewer lots in scattered locations.

(b)  Some argued in the 1970s that Act 250 regulatory review should be based a comprehensive land use plan that would delineate all the lands of the state by use classifications, but provided for refinements based on more detailed studies at the regional and local levels. Others disagreed, arguing that the regulatory review process under Act 250 was sufficient.  In the end, no such measure was ever approved.  The requirement that there be an Act 250 state land use plan was deleted from the law in 1984. 

     (c)  Since that time, the General Assembly incrementally has enacted legislation to plan land uses and encourage municipalities to approve compact residential neighborhoods in and around traditional villages and downtowns and in planned growth centers in accordance with smart growth principles. This planning act furthers that goal.

     (d)  Among the strategies to expedite the development of housing in these locations is to exempt certain residential development from Act 250, where it is demonstrated that such proposed land state use review is redundant with municipal land use review, and, through the careful targeting of eligible locations to impacted areas served by infrastructure, the potential for unplanned impact to natural resources and environmental quality is negligible.

     (e)  Targeting limited state incentives to smart growth locations must be balanced with careful planned development in the surrounding countryside.  To this end, strategies for improving certain Act 250 criteria to better manage scattered residential development and to curb strip development along the state’s highways should be studied and recommendations brought back before the General Assembly for review and consideration.

     (f)  Through the use of higher Act 250 thresholds, coupled with strengthening criteria related to scattered development, rural growth areas, transportation and settlement patterns, Vermont can better achieve the state’s planning and development goal of maintaining Vermont’s historic settlement pattern of compact village and urban centers separated by rural countryside.

     (g)  As of May 1, 2008, there are 23 designated downtowns and 76 village centers, but not all of the designated downtown or village centers have zoning bylaws or subdivision regulations, reducing the number of Vermont Neighborhood eligible village centers to 24 and designated downtowns to 22.  There is one designated growth center.  Therefore, the regulatory relief and municipal revenue incentive provided by this act will initially apply to those 46 communities.

     (h)  The regulatory relief and the municipal revenue incentive for these 46 municipalities may encourage other municipalities to undertake the task of seeking designation as a downtown, village center or town growth center, enacting zoning bylaws and subdivision regulations, and then proceeding to obtain designation as a Vermont Neighborhood.

* * * Vermont Neighborhoods Program * * *

Sec. 2.  24 V.S.A. § 2791(15) is added to read:

(15)  “Vermont neighborhood” means an area of land that is in a municipality with an approved plan, a confirmed planning process, zoning bylaws, and subdivision regulations, and is in compliance with all the following:

(A)  is located in one of the following:

(i)  a designated downtown, village center, new town center, or growth center; or

(ii)  an area of land that is within the municipality and outside but contiguous to a designated downtown, village center, or new town center and is not more than 100 percent of the total acreage of the designated downtown, 50 percent of the village center, or 75 percent of the new town center.

(B)  contains substantially all the following characteristics:

(i)  its contiguous land, if any, complements the existing downtown district, village center, or new town center by integrating new housing units with existing residential neighborhoods, commercial and civic services and facilities, and transportation networks, and is consistent with smart growth principles;

(ii)  it is served by either a municipal sewer infrastructure or a community or alternative wastewater system approved by the agency of natural resources;

(iii)  it incorporates minimum residential densities of no fewer than four units of single-family, detached dwelling units per acre, and higher densities for duplexes and multi-family housing; and

(iv)  it incorporates neighborhood design standards that promote compact, pedestrian-oriented development patterns and networks of sidewalks or paths for both pedestrians and bicycles that connect with adjacent development areas.

Sec. 3.  24 V.S.A. § 2793d is added to read:

§ 2793d.  DESIGNATION OF VERMONT NEIGHBORHOODS

(a)  A municipality that has a duly adopted and approved plan and a planning process that is confirmed in accordance with section 4350 of this title, has adopted zoning bylaws and subdivision regulations in accordance with section 4442 of this title, and has a designated downtown district, a designated village center, a designated new town center, or a designated growth center served by municipal sewer infrastructure or a community or alternative wastewater system approved by the agency of natural resources, is authorized to apply for designation of a Vermont neighborhood.  A municipal decision to apply for designation shall be made by the municipal legislative body after at least one duly warned public hearing.  Designation is possible in two different situations:

(1)  Per se approval.  If a municipality submits an application in compliance with this subsection for a designated Vermont neighborhood that would have boundaries that are entirely within the boundaries of a designated downtown district, designated village center, designated new town center, or designated growth center, the downtown board shall issue the designation.

(2)  Designation by downtown board in towns without growth centers.  If an application is submitted in compliance with this subsection by a municipality that does not have a designated growth center and proposes to create a Vermont neighborhood that has boundaries that include land that is not within its designated downtown, village center, or new town center, the expanded downtown board shall consider the application.  This application may be for approval of one or more Vermont neighborhoods that are outside but contiguous to a designated downtown district, village center, or new town center.  The application for designation shall include a map of the boundaries of the proposed Vermont neighborhood, including the property outside but contiguous to a designated downtown district, village center, or new town center and verification that the municipality has notified the regional planning commission and the regional development corporation of its application for this designation. 

(b)  Designation Process.  Within 45 days of receipt of a completed application, the expanded downtown board, after opportunity for public comment, shall designate a Vermont neighborhood if the board determines the applicant has met the requirements of subsections (a) and (c) of this section.  When designating a Vermont neighborhood, the board may change the boundaries that were contained in the application by reducing the size of the area proposed to be included in the designated neighborhood, but may not include in the designation land that was not included in the application for designation.  A Vermont neighborhood decision made by the expanded board is not subject to appeal.  Any Vermont neighborhood designation shall terminate when the underlying downtown, village center, new town center, or growth center designation terminates.

(c)  Designation Standards.  The board shall determine that the applicant has demonstrated all of the following:

(1)  the municipality has a duly adopted and approved plan and a planning process that is confirmed in accordance with section 4350 of this title, and has adopted zoning bylaws and subdivision regulations in accordance with section 4442 of this title;

(2)  the cumulative total of all Vermont neighborhood land located within the municipality but outside a designated downtown district, designated village center, or designated new town center is not more than 100 percent of the total acreage of the designated downtown district, 50 percent of the village center, or 75 percent of the new town center;

(3)  the contiguous land of the Vermont neighborhood complements the existing designated downtown district, village center, or new town center by integrating new housing units with existing residential neighborhoods, commercial and civic services and facilities, and transportation networks, and the contiguous land, in combination with the designated downtown development district, village center, or new town center, is consistent with smart growth principles established under subdivision 2791(13) of this title;

(4)  the Vermont neighborhood shall be served by one of the following:

(A)  a municipal sewer infrastructure; or

(B)  a community or alternative wastewater system approved by the agency of natural resources; and

(5)  the municipal zoning bylaw requires the following for all land located within the Vermont neighborhood:

(A)  minimum residential densities shall require all the following:

(i)  no fewer than four units of single-family, detached dwelling units per acre, exclusive of accessory apartments; and

(ii)  higher density for duplexes and multi-family housing; and

(B)  neighborhood design standards that promote compact, pedestrian‑oriented development patterns that include the following:

(i)  pedestrian scale and orientation of development.  Networks of sidewalks or paths, or both, are provided and available to the public to connect the Vermont neighborhood with adjacent development areas, existing and planned adjacent sidewalks, paths, and public streets and the designated downtown, village center, or new town center; and

(ii)  interconnected and pedestrian-friendly street networks.  Street networks are designed to safely accommodate both pedestrians and bicycles through the provisions of sidewalks on at least one side of the street, on-street parking, and traffic-calming features.

(6)  Residents hold a right to utilize household energy conserving devices.

(d)  Vermont Neighborhood Incentives for Municipalities and Developers.  Incentives for Vermont neighborhoods include the following:

(1)  the agency of natural resources shall charge no more than a $50.00 fee for wastewater applications under 3 V.S.A. § 2822(j)(4) where the applicant has received an allocation for sewer capacity from an approved municipal system; and 

(2)  Act 250 fees under 10 V.S.A. § 6083a for residential developments in Vermont neighborhoods shall be 50 percent of the fee otherwise applicable.  Fifty percent of the reduced fees shall be paid upon application, and 50 percent shall be paid within 30 days of the issuance or denial of the permit.

(3)  No land gains tax under chapter 236 of Title 32 shall be levied on the a transfer of undeveloped land in a Vermont neighborhood which is the first transfer of that parcel following the original designation of the Vermont neighborhood.

(4)  A municipality in which a designated Vermont neighborhood is located may retain and reallocate 75 percent of the state education tax portion of the property tax on the increased grand list value of affordable housing constructed in the Vermont neighborhood for a period of three years after the issuance of a certificate of occupancy for each housing unit.  For the purposes of this section, “affordable housing” means either or both of the following:

               (A) An owner occupied home in a Vermont neighborhood that is a homestead as defined in 32 V.S.A. § 5401(7) and the price of which does not exceed the maximum affordable price as determined by the Vermont housing finance agency.

(B)  Housing that is rented by the occupants whose gross annual household income does not exceed 60 percent of the county median income, or 60 percent of the standard metropolitan statistical area income if the municipality is located in such an area, as defined by the United States Department of Housing and Urban Development for use with the Housing Credit Program under Section 42(g) of the Internal Revenue Code, and the total annual cost of the housing, as defined at Section 42(g)(2)(B) is not more than 30 percent of the gross annual household income as defined at Section 42(g)(2)(C), and with a duration of affordability of no less than 15 years.

 (e)  Length of Designation.  Initial designation of a Vermont neighborhood shall be for a period of five years, after which, the expanded state board shall review a Vermont neighborhood concurrently with the next periodic review conducted of the underlying designated downtown, village center, new town center or growth center, even if the underlying designated entity was originally designated by the downtown board and not by the expanded state board.  However, the expanded board, on its motion, may review compliance with the designation requirements at more frequent intervals.  If at any time the expanded state board determines that the designated Vermont neighborhood no longer meets the standards for designation established in this section, it may take any of the following actions:

(1)   require corrective action within a reasonable time frame;

(2)  remove the Vermont neighborhood designation, with that removal not retroactively affecting any of the benefits already received by the municipality or land owner in the designated Vermont neighborhood; and

(3)  prospectively limiting benefits authorized in this chapter, with the limitation not retroactively affecting any of the benefits already received by the municipality or land owner in the designated Vermont neighborhood.

* * * New Town Center Acreage * * *

Sec. 4.  24 V.S.A. § 2793b(b)(2)(A) is amended to read:

(A) A map of the designated new town center. The total area of land encompassed within a designated new town center shall not exceed 125 acres.  In a municipality with a population greater than 15,000, the total area of land encompassed within a designated new town center may include land in excess of 125 acres provided that the additional area is needed to facilitate the redevelopment of predominately developed land in accordance with the smart growth principles defined under subdivision 2791(13) of this title and shall not exceed 175 acres.


* * * Codifying Agency of Natural Resources Incentives * * *

Sec. 5.  3 V.S.A. § 2822(j)(4)(D) is amended to read:

(D)  Notwithstanding the other provisions of this subdivision,:

* * *

(ii)  when a potable water supply is subject to the fee provisions of this subdivision and subdivision (j)(7)(A) of this section, only the fee required by subdivision (j)(7)(A) shall be assessed; and

(iii)  when a project is subject to the fee provision for the subdivision of land and the fee provision for potable water supplies and wastewater systems of this subdivision, only the higher of the two fees shall be assessed; and

(iv)  when a project is located in a Vermont neighborhood, as designated under 24 V.S.A. chapter 76A, the fee shall be no more than $50.00 in situations in which the application has received an allocation for sewer capacity from an approved municipal system.

* * * Codifying Higher Act 250 Thresholds * * *

Sec. 6.  10 V.S.A. § 6001(3)(B) and (C) are amended to read:  

(3)(A)  “Development” means:

* * *

(B)(i)  Smart Growth Jurisdictional Thresholds.  Notwithstanding the provisions of subdivision (3)(A) of this section, if a project consists exclusively of any combination of mixed income housing or mixed use and is located entirely within a growth center designated pursuant to 24 V.S.A. § 2793c or within a downtown development district designated pursuant to 24 V.S.A. § 2793, “development” means:

(i)(I)  Construction of mixed income housing with 100 200 or more housing units or a mixed use project with 100 200 or more housing units, in a municipality with a population of 20,000 15,000 or more.

(ii)(II)  Construction of mixed income housing with 50 100 or more housing units or a mixed use project with 50 100 or more housing units, in a municipality with a population of 10,000 or more but less than 20,000 15,000.

(iii)(III)  Construction of mixed income housing with 30 50 or more housing units or a mixed use project with  30 50 or more housing units, in a municipality with a population of 5,000 6,000 or more and less than 10,000.

(iv)(IV)  Construction of mixed income housing with 25 30 or more housing units or a mixed use project with 25 30 or more housing units, in a municipality with a population of 3,000 or more but less than 5,000 6,000.

(v)(V)  Construction of mixed income housing with 25 or more housing units or a mixed use project with 25 or more housing units, in a municipality with a population of less than 3,000.

(VI)  Historic Buildings.  Construction of 10 or more units of mixed income housing or a mixed use project with 10 or more housing units where the construction involves the demolition of one or more buildings that are listed on or eligible to be listed on the state or national register of historic places.  However, demolition shall not be considered to create jurisdiction under this subdivision if the division for historic preservation has determined the proposed demolition will have: no adverse effect; no adverse effect provided that specified conditions are met; or, will have an adverse effect, but that adverse effect will be adequately mitigated.  Any imposed conditions shall be enforceable through a grant condition, deed covenant, or other legally binding document.

(ii)  Notwithstanding the jurisdictional provisions of subdivision (3)(A) of this section, the higher jurisdictional thresholds set forth in subdivision 3(B)(i) of this section shall apply if a project consists exclusively of mixed income housing located entirely within a Vermont neighborhood designated pursuant to 24 V.S.A. § 2793d(a)(2).  In a designated downtown and in a designated growth center, the higher jurisdictional thresholds in subdivision 3(B)(i) shall apply to a project that consists exclusively of any combination of mixed income housing or mixed use and is located entirely within a growth center designated pursuant to 24 V.S.A. § 2793c or within a downtown development district designated pursuant to 24 V.S.A. § 2793.

(C)  For the purposes of determining jurisdiction under subdivisions (3)(A) and (3)(B) of this section:

(i)  Housing units constructed by a person partially or completely outside a designated downtown development district or designated growth center shall not be counted to determine jurisdiction over housing units constructed by a person entirely within a designated downtown development district or designated growth center.

(ii)  Five Year, Five Mile Jurisdiction Threshold.  Within any continuous period of five years, housing units constructed by a person located entirely within a designated downtown district or, designated growth center, or designated Vermont neighborhood shall be counted together with housing units constructed by a that person located partially or completely outside a designated downtown development district or, designated growth center, or designated Vermont neighborhood to determine jurisdiction over the housing units constructed by a person partially or completely outside the designated downtown development district or, designated growth center, or designated Vermont neighborhood and within a five-mile radius.

(iii)  Each Project Stands Alone.  All housing units constructed by a person within a designated downtown development district or, designated growth center within any continuous period of five years, commencing on or after the effective date of this subdivision, or designated Vermont neighborhood shall be counted together, but only if the housing units are part of a discrete project located on a single tract or multiple contiguous tracts of land.

* * *

(v)  Per Project Increased Thresholds for Land Subdivision in Vermont Neighborhood; Per Project Threshold for Permanently Affordable Housing.  Notwithstanding subdivision (C)(iii) of this subdivision (3), any affordable housing units, as defined by this section, (3)(A)(iv) and subdivision (19) of this section, jurisdiction shall be determined exclusively by counting housing units, and when counting housing units to determine jurisdiction, only housing units in a discrete project on a single tract or multiple contiguous tracts of land shall be counted, regardless of whether located within an area designated under 24 V.S.A. chapter 76A, provided that the housing units are affordable housing units, as defined by this section, that are subject to housing subsidy covenants as defined in 27 V.S.A. § 610 that preserve their affordability for a period of 99 years or longer, and that are constructed by a person within a designated downtown development district, designated village center, or designated growth center, shall count toward the total number of housing units used to determine jurisdiction only if they were constructed within the previous 12-month period, commencing on or after the effective date of this subdivision.

* * *  Rules on Mixed Income Housing * * *

Sec. 7.  10 V.S.A. § 6001(27) is amended to read:

(27)  “Mixed income housing” means a housing project in which at least 15 percent of the total housing units are affordable housing units:

(A)  (Owner occupied Housing) owner-occupied housing, the purchase price of which does not at the time of first sale exceed the new construction, targeted area purchase price limits established and published annually by the Vermont housing finance agency; or

(B)  (Affordable Rental Housing) housing that is rented by the occupants whose gross annual household income does not exceed 60 percent of the county median income, or 60 percent of the standard metropolitan statistical area income if the municipality is located in such an area, as defined by the United States Department of Housing and Urban Development for use with the Housing Credit Program under Section 42(g) of the Internal Revenue Code, and the total annual cost of the housing, as defined at Section 42(g)(2)(B) is not more than 30 percent of the gross annual household income as defined at Section 42(g)(2)(C), and with a duration of affordability of no less than 15 years.


* * * Act 250 Fees In Vermont Neighborhood * * *

Sec. 8.  10 V.S.A. § 6083a(d) is amended to read:

(d)  Vermont Neighborhood Fees.  Fees for residential development in a Vermont neighborhood designated according to 24 V.S.A. § 2793d shall be no more than 50 percent of the fee otherwise charged under this section, with 50 percent due with the application, and 50 percent due within 30 days after the permit is issued or denied.

* * * Vermont Neighborhood Chapter 117 Conditional Use Appeals * * *

Sec. 9.  24 V.S.A. § 4471(e) is added to read:

(e)  Vermont Neighborhood.  Notwithstanding subsection (a) of this section, a determination by an appropriate municipal panel shall not be subject to appeal if the determination is that a proposed residential development within a designated downtown development district, designated growth center, or designated Vermont neighborhood seeking conditional use approval will not result in an undue adverse effect on the character of the area affected, as provided in subdivision 4414(3)(A)(ii) of this title.

* * * Report * * *

Sec. 10.  REPORT ON POLLUTION CONTROL SYSTEM

By no later than January 15, 2009, the secretary of natural resources shall report to the legislative committees on natural resources and energy with regard to the agency’s implementation of and compliance with the municipal pollution control priority system rules, and as to the impact of these rules on development.

* * * VHFA Sunset Repeal * * *

Sec. 11.  10 V.S.A. § 625(1) is amended to read:

(1)  The residential housing is primarily for occupancy by persons and families of low and moderate income, or qualifies for financing with proceeds of federally tax-exempt obligations, or at least 20 percent of the units are for occupancy by persons and families of low and moderate income;

* * * Land Gains Tax * * *

Sec. 12.  32 V.S.A. § 10002(p) is added to read:

(p)  Also excluded from the definition of “land” is a transfer of undeveloped land in a Vermont neighborhood which is the first transfer of that parcel following the original designation of  the Vermont neighborhood.

* * * Housing Tax Credit * * *

Sec. 13.  32 V.S.A. § 5930u is amended to read:

§ 5930u.  TAX CREDIT FOR AFFORDABLE HOUSING

(a)  As used in this section:

(1)  “Affordable housing project” or “project” means a rental housing project identified in 26 U.S.C. § 42(g) or owner-occupied housing identified in 26 U.S.C. § 143(e) and (f) and eligible under the Vermont housing finance agency allocation plan criteria.

* * *

(9)  “Allocation plan” means the plan recommended by the committee and approved by the Vermont housing finance agency, which sets forth the eligibility requirements and process for selection of eligible housing projects to receive affordable housing tax credits under this section.  The allocation plan shall include requirements for creation and retention of affordable housing for low income persons, and requirements to ensure that eligible housing is maintained as affordable by subsidy covenant, as defined in 27 V.S.A. § 610 on a perpetual basis, and meets all other requirements of the Vermont housing finance agency related to affordable housing.

(b)(1)  Affordable housing credit allocation.  Prior to the placement of an affordable housing project in service, the owner, or a person having the right to acquire ownership of a building, may apply to the committee for an allocation of affordable housing tax credits under this section.  The committee shall advise the allocating agency on an affordable housing tax credit application based upon published priorities and criteria.  An eligible applicant may apply to the allocating agency for an allocation of affordable housing tax credits under this section related to an affordable housing project authorized by the allocating agency under the allocation plan.  In the case of a specific affordable rental housing project, the eligible applicant must also be the owner or a person having the right to acquire ownership of the building and must apply prior to placement of the affordable housing project in service.  In the case of owner‑occupied housing units, the applicant must apply prior to purchase of the unit and must ensure that the allocated funds will be used to ensure that the housing qualifies as affordable for all future owners of the housing.  The allocating agency shall issue a letter of approval if it finds that the applicant meets the priorities, criteria, and other provisions of subdivision (2) of this subsection.  The burden of proof shall be on the applicant.

(2)  Upon receipt of a completed application, an allocation of affordable housing tax credits with respect to a project under this section shall be granted to an applicant, provided the applicant demonstrates to the satisfaction of the committee all of the following:

(A)  The owner of the project has received from the allocating agency a binding commitment for, a reservation or allocation of, an out-of-cap determination letter for, Section 42 credits, or meets the requirements of the allocation plan for development of units to be owner-occupied;

(B)  The project has received community support.

* * *

(g)  In any fiscal year, the allocating agency may award up to $400,000.00 in total first-year credit allocations to all applicants under this subchapter for rental housing projects; and may award up to $100,000.00 per year for owner‑occupied unit applicants.  In any fiscal year, total first-year allocations plus succeeding-year deemed allocations shall not exceed $2,000,000.00 $2,500.000.00.

* * * Property Transfer Tax * * *

Sec. 14.  32 V.S.A. § 9602(1) is amended to read:

A tax is hereby imposed upon the transfer by deed of title to property located in this state.  The amount of the tax equals one and one quarter one‑quarter percent of the value of the property transferred, or $1.00, whichever is greater, except as follows:

(1)  with respect to the transfer of property to be used for the principal residence of the transferee:  the tax shall be imposed at the rate of five-tenths of one percent of the first $100,000.00 in value of the property transferred and at the rate of one and one quarter one-quarter percent of the value of the property transferred in excess of $100,000.00; except that no tax shall be imposed on the first $110,000.00 in value of the property transferred if the purchaser obtains a purchase money mortgage funded in part with a homeland grant through the Vermont housing and conservation trust fund or which the Vermont housing and finance agency or U.S. Department of Agriculture and Rural Development has committed to make or purchase and tax at the rate of one and one-quarter percent shall be imposed on the value of that property in excess of $110,000.00.


Sec. 15. 24 V.S.A. § 2792(a) is amended to read:

(a)  A “Vermont downtown development board,” also referred to as the “state board,” is created to administer the provisions of this chapter. The state board members shall be composed of the following permanent members, or their designees:

(1)  The the secretary of commerce and community development;

(2)  The the secretary of transportation;

(3)  The the secretary of natural resources;

(4)  The secretary of human services;

(5)  The the commissioner of public safety;

(6)  The commissioner of housing and community affairs; and

(5)  a person appointed by the governor from a list of three names submitted by the Vermont Natural Resources Council, the Preservation Trust of Vermont, and Smart Growth Vermont;

(6)  a person appointed by the governor from a list of three names submitted by the Association of Chamber Executives; and

(7)  Three three public members representative of local government, one of whom shall be designated by the Vermont league of cities and towns, and two shall be appointed by the governor.

Sec. 16.  SMART GROWTH; STUDY COMMITTEE

(a)  A smart growth study committee is created to:

(1)  Study Act 250 (10 V.S.A. § 6086) criterion 5, relating to traffic, criterion 9(H), relating to scattered development, criterion 9(L), relating to rural development, and other criteria identified by the committee, to determine the effectiveness of those criteria to promote compact settlement patterns, prevent sprawl, and protect important natural resources, and to make recommendations to improve the effectiveness of those criteria in preserving the economic vitality of Vermont’s existing settlements and preventing sprawl development.

(2)  Evaluate the development potential of existing designated downtowns, new town centers, and village centers and evaluate the community and natural resource impacts of developing surrounding lands.

(3)  Make recommendations for incentives designed to encourage municipalities to preserve Vermont’s working landscape and to develop Vermont neighborhoods and new housing.

(4) Develop recommendations for how best to conduct periodic assessments of the effectiveness of the designation programs established under chapter 76A of Title 24.

(b)  The committee shall be composed of the following 13 members:

(1)  Two members of the house, one from the committee on general, housing and military affairs and one from the committee on natural resources and energy.

(2)  Two members of the senate, one from the committee on economic development, housing and general affairs and one from the committee on natural resources and energy.    

(3)  A representative from each of the following organizations: 

(A)  Vermont homebuilders and remodelers association.

(B)  Lake Champlain regional chamber of commerce.

(C)  Vermont planners association.

(D)  Vermont association of planning and development agencies.

(E)  Smart growth Vermont.

(F)  Vermont natural resources council.

(G)  Vermont natural resources board.

(H)  Vermont association of realtors.

(I)  Vermont league of cities and towns.

(J)  the land use law center at Vermont Law School

(c)  The four legislative members shall be entitled to per diem compensation and reimbursement of necessary expenses as provided to members of standing committees under 2 V.S.A. § 406 for attendance at a meeting when the general assembly is not in session.

(d)   The chair shall be elected from any of the four legislative members by the members of the study committee from among the four legislative members.  The committee shall meet as needed, and the legislative council shall provide administrative support. 

(e)  The committee shall issue a brief report on its findings and recommendations and draft legislation to the house committees on general, housing and military affairs and on natural resources and energy and the senate committees on economic development, housing and general affairs and on natural resources and energy on or before January 15, 2009. 

* * * State Surplus Land Inventory * * *

Sec. 17.  STATE SURPLUS LAND IN CLOSE PROXIMITY TO OR
               WITHIN A DOWNTOWN, VILLAGE CENTER, OR NEW TOWN CENTER; INVENTORY AND PROGRAM PROPOSALS 

(a)  The secretary of commerce and community affairs, in consultation with Vermont Housing Finance Agency, the Vermont Housing and Conservation Board, and any other interested parties, shall:

(1)  compile an inventory of state lands deemed to be surplus to state needs and located in close proximity to or within a designated downtown, a designated village center, a designated new town center or a designated growth center that would be appropriate for developing housing that meets the community housing needs;

(2)  develop program recommendations for the use of suitable state surplus land that will ensure that housing development on this land includes a substantial amount of affordable housing, including permanently affordable housing; and

(3)  recommend processes and mechanisms for transfer of the land to assure its use for housing development whether by outright sale, long-term lease, or some other appropriate mechanism.

(b)  On or before January 15, 2009, the secretary of commerce and community development shall issue a report that includes an inventory of state surplus land and recommendations developed pursuant to the goals of subsection (a) of this section.  The report shall be provided to the house committees on corrections and institutions and on general, housing and military affairs and the senate committees on institutions and on economic development, housing and general.

* * * VHFA Economic Stimuli * * *

Sec. 18.  3 V.S.A. § 523(e) is amended to read:

(e)  The committee may formulate policies and procedures deemed necessary and appropriate to carry out its functions.  Notwithstanding the foregoing, the committee shall consider, consistent with chapter 147 of Title 9, subsection 472a(b) of this title, 16 V.S.A. § 1943a(b), and 24 V.S.A. § 5063a(b), investing up to $17,500,000.00 with the Vermont housing finance agency to assist in its homeownership financing programs for persons and families of low and moderate income as defined in 10 V.S.A. § 601(11).

Sec. 19.  INVESTMENT OF STATE MONEYS

The treasurer is hereby authorized to establish a short-term credit facility for the Vermont housing finance agency in an amount of up to $30,000,000.00 to be used as interim financing for its homeownership mortgage loan program as authorized under chapter 25 of Title 10.

Sec. 20.  VERMONT NEIGHBORHOOD REPORT; AGENCY OF
               COMMERCE AND COMMUNITY AFFAIRS

On or before January 15, 2013, the secretary of commerce and community affairs shall issue a report on the status of the Vermont neighborhood program to the senate committees on economic development, housing and general affairs, on natural resources and energy, and on finance, and the house committees on general, housing and military affairs, on natural resources and energy, and on ways and means.  The report shall include all the following:

(1)  The number of Vermont neighborhood applications and designations.

(2)  The number of housing units, including a description, size, selling price, and location of each, permitted and constructed in each Vermont neighborhood.

(3)  The number and description of rental housing properties permitted or constructed in each Vermont neighborhood and the rental charges for each unit.

(4)  Any other information useful to determining the success of the Vermont neighborhood program to stimulate housing development and encourage smart growth.

Sec. 21.  Regional Planning Commission Report on Infill
               Opportunities

     By no later than January 15, 2009, each regional planning commission is requested to inventory and map locations within its region that are served by municipal wastewater and water supply services and that are otherwise suitable for infill development and redevelopment, giving due regard to the location of important natural resources and primary agricultural soils.  The inventory and map shall be provided, by January 30, 2009, to the committees of the general assembly with jurisdiction over housing, natural resources, and agriculture.

Sec. 22.  EFFECTIVE DATES; SUNSET; LIMITATIONS

This act shall take effect on passage except as follows:

(1)  No “Vermont Neighborhood” designations under Chapter 76A of Title 24 may be made after June 30, 2013.  This limitation shall be noted in the published annotations to Section 2793d of Title 24.

(2)  Sec. 11 (VHFA Sunset Repeal) of this act shall take effect on July 1, 2008, at which time the prospective repeal provisions of Sec. 7a of No. 189 of the Acts of the 2005 Adj. Sess. (2006) shall have no force or effect.

(3)  Sec. 13 (VHFA Home Ownership Tax Credit) of this act, amending 32 V.S.A. § 5930u, shall take effect July 1, 2008.

(4)  Sec. 14 (Low Income Home Ownership Program) of this act, amending 32 V.S.A. § 9602, shall apply to transfers on or after July 1, 2008.

(5)  Sec. 19 (Short Term Loan form State Treasury to VHFA) of this act shall sunset July 1, 2009.

And after passage, the title of the bill is to be amended to read:

     AN ACT RELATING TO MUNICIPAL PLANNING, CREATING VERMONT NEIGHBORHOODS AND ENCOURAGING SMART GROWTH DEVELOPMENT.



Published by:

The Vermont General Assembly
115 State Street
Montpelier, Vermont


www.leg.state.vt.us