2023 Weekly Legislative Report #9

On Wednesday, the Senate Economic Development, Housing and General Affairs Committee unanimously voted out the omnibus housing bill they have been working on since the beginning of the session. Now labeled S.100, it takes a comprehensive approach to attacking the causes of the current crisis (as we have described in earlier articles) and members decided to take on some of the elephants in the room – including Act 250 – in an effort to spur development of housing in those compact settlement areas, designated areas, and smart growth centers where Vermonters agree housing should be located. The bill was taken up Friday morning for the first time in the Senate Natural Resources and Energy Committee. 

S.100 was voted out of committee against the backdrop of new information about the extreme lack of housing in Vermont. On February 16, the Vermont Housing Finance Agency (VHFA) reported “the median price of a Vermont home jumped to $310,000 in 2022, an historic 15% increase from the prior year. This is the largest annual percentage increase in the median sales price of primary homes since 1988 when the Vermont Department of Taxes began publishing home sales data. Among newly-built Vermont homes exclusively, the median price rose to $555,264 in 2022, up 21% from the prior year.” VHFA also noted that according to the US Census, among all the states, Vermont has the lowest vacancy rate in rental homes and second lowest among owned homes.  

The 54-page bill is titled An Act Relating to Housing Opportunities for Everyone. You read about many of its provisions last week. In your Advocacy staff’s estimation, the bill better addresses local concerns and is stronger as a result of this week’s work. 

Zoning 

The bill would prohibit a municipality from requiring more than one parking space per dwelling unit or accessory dwelling unit. Nonetheless, a municipality could require 1.5 parking spaces per dwelling if the development is located more than one quarter mile from public parking or the need cannot be reasonably met through use of on-street, public, or shared parking. 

The bill would establish that duplexes with the same dimensional standards as a single unit dwelling are allowed in any district allowing “year-round” residential development. If a zoning district allowing residential development is served by sewer and water, then 

• multi units with at least four units must be allowed,  
• bylaw requirements for building and lot dimensions would be required to allow four or more units per acre, and  
• mixed use and affordable housing developments could add an additional floor to exceed density limits for residential units by 40 percent as long as the structure complies with the Vermont Fire and Safety Building Code.  

“Served by water and sewer” is defined in the bill. It would specify that municipally adopted areas served by municipal water and sewer infrastructure that limit water and sewer connections and expansions shall not result in the unequal treatment of housing by discriminating against a year-round residential use or housing type allowed by the statute. 

No bylaw could limit the square footage of a duplex that otherwise complies with the applicable building code.  

The bill would allow emergency shelters to be located anywhere in town, and regulating the daily or seasonal hours of operation would constitute interfering with their intended functional use. “Emergency shelter” would be defined to mean “any facility, the primary purpose of which is to provide a temporary shelter for the homeless in general or for specific populations of the homeless and that does not require occupants to sign leases or occupancy agreements.” The Department of Children and Families indicated that this definition is one provided by the federal government. However, the plain language does not require any support, wrap around or information services, or staffing to assist those occupying the shelter and assure their safety. This has been the difficulty with the emergency housing hotel program, which has resulted in enormous staffing stress and expense at the municipal level to police and emergency medical services (often volunteer), who generally are not trained to deal with the situations they end up confronting. And, to that point, the bill now includes language stating that no bylaw shall have the effect of prohibiting or penalizing a hotel from renting rooms to provide housing assistance through the state’s general assistance fund or to any person whose room is rented with public funds. 

The bill would eliminate the provision in statute that allows any ten persons who may be any combination of voters or real property owners within a municipality to appeal a permit. More than any other change at the local level, this is likely to shorten the permit process and establish better chances of a development proposal being approved.  

Still able to appeal would be:  

• a person owning title to property;  
• a municipality or solid waste district empowered to condemn it and affected by a bylaw, who alleges that the bylaw imposes unreasonable or inappropriate restrictions;  
• the permitting municipality or any adjoining municipality;  
• a person owning or occupying property in the immediate neighborhood who can demonstrate a physical or environmental impact on the person’s interest; or  
• any department and administrative subdivision of the state owning property or an interest in property in the municipality. 

Under the provisions of the bill, a town could decide to allow a zoning administrator to approve subdivisions. A determination of an appropriate municipal panel that a development will not result in an undue adverse effect on the character of the area affected may not be appealed if the development seeking conditional use approval is in a designated downtown development district, growth center, or neighborhood development area. The appropriate municipal panel could not require a lot size larger than the minimum in the bylaws for housing or mixed-use developments, and it could not limit parking, building size, or density below the minimum unless it provides a specific written reason therefore. 

S. 100 would establish that the municipal plan shall be consistent with the goals of the municipal and regional planning statute, Title 24 Chapter 117. The municipal plan would need to:  

• include a recommended program for public and private actions to address housing needs as identified by the regional commission and state,  
• include specific actions to address low and moderate income housing needs, and  
• account not only for permitted accessory dwelling units but also any material impact of short-term rentals. 

As this bill is currently written, any energy codes or regulations a municipality adopts after July 1, 2023, could not be more restrictive than residential or commercial building energy standards, unless they were enabled by municipal charter. More stringent residential building codes could be enacted for homes larger than 1800 square feet if the Public Service Department approves the local proposed codes. 

The bill would dedicate $750,000 in FY24 from the General Fund to the Municipal and Regional Planning Fund and $300,000 to the Vermont Association of Planning and Development Agencies to hire housing navigators to work with municipalities and interested parties to identify opportunities, match communities with funding resources, and provide project management support. The language that initially (in 1988) directed 17 percent of the Property Transfer Tax to the Municipal and Regional Planning Fund, further divided that 17 percent (approximately $14 million based on 2021 Property Transfer Tax returns) so that 10 percent was directed to state GIS mapping, 70 percent would go to regional commissions (approximately $10 million using 2021 returns), and 20 percent to Municipal Planning Grants (approximately $2.9 million).  

Act 250  

Development would be defined to include the construction of housing with 25 or more units, constructed or maintained on a tract or tracts of land, owned or controlled by a person, within five miles and five years. Currently the law establishes Act 250 jurisdiction at 10 housing units constructed by a person within five miles of each other and five years – the so called 10-5-5 rule. Priority housing projects – those which are publicly subsidized – in designated areas would not be subject to Act 250. Other housing projects where 25 or more units were proposed by a developer on a tract or tracts of land within three months (yes, three months), or subdivisions partitioned for resale into 15 or more lots in a designated neighborhood development area within three months, would be subject to Act 250. There was discussion in committee of including locally designated smart growth areas in this exclusion from Act 250, however that fell by the wayside. 

Priority housing projects could be located in a designated village center that has permanent zoning and subdivision bylaws in place, in addition to the currently allowed designated downtowns, growth center, neighborhood development area, or new town center, and they would be exempt from Act 250.  

The bill would provide for an “Enhanced Designation” process whereby a municipality could apply to the Natural Resources Board (NRB) for an enhanced designation for any designated area. The NRB would publish model bylaws that a municipality seeking enhanced designation could adopt to address all Act 250 criteria (in fact there are more than 30) by January 1, 2024. If a town or city were granted enhanced designation for the designated areas, separate Act 250 jurisdiction would not apply. Likewise, the bill would provide for municipalities to be designated as the sole permitting authority for connections to municipal sewer and water systems. In both these instances, the developer would be saved both the money and time expended in applying for and securing duplicative permits. 

Additional Provisions 

The bill would require a property owner selling property on a class 4 highway or legal trail to disclose that the municipality is not required to maintain the highway or trail. 

An accessory dwelling unit, if rented overnight, would be considered a public building for purposes of the state fire safety code. By January 15, 2024, a report would be due to the legislature from the Division of Fire Safety that identifies other jurisdiction’s rules about fire and life safety in residential buildings. 

The bill would expand the capacity of the Human Rights Commission to prosecute violations of the state’s antidiscrimination laws including fair housing laws, and increase penalties for violations from $1000 to $10,000. 

The bill also includes numerous appropriations for programs designed to fund and spur the development of housing. Those proposed appropriations would eventually be incorporated in the appropriations bill for FY24. Included are funds for  

• mobile home and mobile home park improvements $500,000, 
• first generation home buyers $1,000,000,
• middle income home ownership $20,000,000,  
• rental housing revolving loans and improvement program $20 million each, and  
• $25 million to the Vermont Housing and Conservation Board for housing programs. 

Resources for this article: 

• S.100 as Introduced 
• S.100 Legislative Counsel Summary
• Legislative Counsel Primer on Act 250

Brad James, Finance Manager with the Agency of Education, met with the House Ways and Means Committee on Tuesday to update members on the predicted increase in education spending for FY24. As of Tuesday, 109 of 117 school district budgets that will be voted on at Town Meeting (93 percent) have been submitted to the agency. James noted that large budgets with capacity to change the education spending results– Burlington, Milton and Oxbow– had not yet been submitted to the Agency.   

Based upon the submitted budgets, education spending is expected to increase 7.8 percent over last year. In FY22 after subtracting offsetting revenues, those same districts spent $1,356,346,543 to educate 78,879.98 equalized pupils. In FY23, those districts spent $1,427,186,338 to educate 77,885.70 equalized pupils and in FY24, if all budgets are passed and after offsetting revenues, those districts would spend $1,538,242,659 to educate 76,500.76 equalized pupils. 

It is worth noting that Act 127 of 2022, the pupil weighting bill, established new weight for calculating the long-term membership of a school district beginning with FY25. Thus, the comparisons to “equalized pupils” will no longer be valid after FY24. With the adjustments to the pupil weights or long-term membership, many districts will see shifts in their tax rates. The Joint Fiscal Office reviewed Act 127 with the House Education and Ways and Means Committees in mid-January. 

An updated Education Funding Outlook was provided to the House Ways and Means Committee on Thursday. That outlook does not yet take into account the proposed school district budgets. That outlook, continuing a trend of including new items in the Education Fund obligations (such as the ongoing normal cost of teachers’ other post-employment benefits (OPEB), looks like it will include $29 million for universal school meals, a cost that will be borne mostly by the education property tax. 

Resources for this article: 

• Education Funding Data Presented by Brad James to House Ways and Means Committee 
• Joint Fiscal Office Education Fund Outlook, February 23, 2023 
• Joint Fiscal Office Review of Act 127 (Pupil Weights) 
• Act 127 (Pupil Weights) of 2022 

On Thursday, the Senate Finance Committee heard from VLCT Advocacy staff supporting S.60, a bill that would authorize the registered voters of a town to adopt local option taxes upon recommendation of the selectboard.  

Local governments have urged the legislature to grant general authority to cities and towns to adopt local option taxes for years. While those initiatives granting general authority have passed in the Senate many times, they have historically stalled in the House, keeping the vast majority of municipalities entirely reliant on the property tax for all tax revenues. Yet, history with the local option tax has demonstrated that a one percent local option tax does not reduce the sales and use or meals and rooms tax revenues that the state collects or tamp down people’s purchasing habits. 

Local budgets must account for inflation in all areas, including the retention of qualified personnel, essential services, and expanded lists of obligations – climate adaptation and municipal highways stormwater mitigation being two recent examples. The result is that municipal budgets based on property tax cannot generate the funds needed to implement all the obligations and initiatives for which they are responsible.   

Today there are 19 towns with a local option sales tax, 23 with local option rooms and meals taxes, and one with just a rooms local option tax. Note that some of those taxes have been adopted in the same towns, so the total number of towns that the legislature approved to enact voter adopted local option taxes is 25. Additionally, 76 municipalities are authorized to adopt local option taxes without going through the legislative charter change process – having been granted that authority in Act 60 which initially established the current education funding system. The municipalities adopting one percent local option taxes may retain 70 percent of the revenues. The other 30 percent is kept by the state to fund their Payment In Lieu of Taxes (PILOT) program that pays communities hosting state buildings.  

The cities of Burlington, St. Albans, and Rutland have independent authority to adopt local option taxes. 

It should be noted that when individual municipalities came before the House Ways and Means Committee to plead their case for a legislative blessing on a voter approved charter change establishing a local option tax, the charter change was approved. 

Your advocacy staff argued that it does not make sense for the legislature to continue to decide whether to authorize approval of a local option tax that the registered voters would impose upon themselves in the remaining 143 municipalities that might consider the option. The legislature eventually approves those charter changes and takes a considerable amount of their scarce time to delve into the minutiae of the individual proposal. As some legislators have opined, essentially the horse has left the barn.  

The Senate Finance Committee is likely to take up the local option tax discussion again before Town Meeting. 

These Vermont Cities and Towns are Eligible to Enact Local Option Taxes Under Act 60 

Andover, Athens, Baltimore, Barnard, Berkshire, Berlin, Bethel, Brattleboro, Brighton, Clarendon, Dorset, Dover, Eden, Essex Junction, Essex Town, Fairfax, Fairfield, Fayston, Grafton, Granby, Greensboro, Groton, Irasburg, Isle La Motte, Jamaica, Jay, Killington, Kirby, Landgrove, Londonderry, Lowell, Ludlow, Lunenburg, Maidstone, Manchester, Mendon, Middletown, Springs, Morgan, Mt. Tabor, North Hero, Norton, Orange, Pawlet, Peru, Pittsfield, Pittsford, Plymouth, Reading, Readsboro, Royalton, Rutland Town, Ryegate, Sandgate, Searsburg, Sheffield, Sheldon, Springfield, Stannard, Stowe, Stratton, Troy, Vergennes, Vershire, Victory, Wardsboro, Warren, West Haven, West Windsor, Westmore, Weston, Williston, Wilmington, Windham, Winhall, Woodford, Woodstock.  

On Wednesday, the Senate Transportation Committee unanimously voted out this year’s Miscellaneous DMV bill. S.99 focuses on several Department of Motor Vehicles (DMV) specific laws; however, several provisions of the bill would affect local governments. 

Speed Limits 

The bill proposes to lower the speed limit from 50 MPH to 35 MPH on unpaved and unposted municipal roads. Currently under 23 V.S.A. § 1081, unless otherwise posted, all maximum speed limits on all state and municipal roads are set at 50 MPH. The bill proposes to set a lower maximum speed limit on unposted, unpaved town highways as defined in 19 V.S.A. § 301(7) and those appearing on the official town highway maps. This change is proposed by the committee as a safety measure responsive to requests from municipal officials managing, and residents living, on rural roads throughout Vermont. VLCT supports the proposal. 

The bill mandates VTrans to consult with VLCT and regional planning commissions and prepare materials disseminating information on the new statutory default speed limits to municipalities, law enforcement, and the general public by September 1, 2023. The new lower maximum speed limit on unpaved and unposted roads would take effect on January 1, 2024.  

Removal of Abandoned Vehicles 

S.99 would amend 23 V.S.A. § 2151 to make clear that a law enforcement officer has the authority to request an abandoned motor vehicle be removed by a towing business. Current law does not specify this.  

It would further amend 23 V.S.A. § 2153(a) to  

• increase the amount of time a towing company has to complete the paperwork with the DMV to remove an abandoned motor vehicle on private property and  
• increase the maximum time to complete the paperwork from 30 days to 90 days.  

It also increases the fees a towing company may charge for removal of abandoned motor vehicles on public property from a maximum of $40 to $125. 

Overweight Permits 

The bill would have VTrans collaborate with the Commissioner of Forest, Parks, and Recreation; VLCT; the Vermont Forest Products Association; and DMV to examine adding additional special annual permits to 23 V.S.A. § 1392 to allow for the operation of motor vehicles at a gross vehicle weight over 99,000 pounds. The study would consider: 

• Allowing for truck trailer combinations or truck tractor, semi-trailer combinations to transport cargo of legal dimensions that can be separated into units of legal weight without affecting the physical integrity of the load to bear a maximum of 107,00 pounds on six axles or a maximum of 117, 000 pounds on seven axles by special annual permit. 
• Limitations for any additional special annual overweight permits based on highway type, including limited access State highway, non-limited-access State highway, class 1 town highway, and class 2 town highway. 
• Limitations for any additional special annual overweight permits based on axle spacing and axle-weight provisions. 
• Reciprocity treatment for foreign trucks from a state or province that recognizes Vermont vehicles permitted at increased gross weights. 
• Additional penalties for gross vehicle weight violations. 
• Impact of additional overweight permits may have on the forest economy and the management and forest cover of Vermont’s landscape. 

The report is due back to the legislature by January 15, 2024.  

S.99 is on the Senate floor today for second reading.

Project-Based Tax Increment Financing

This week VLCT Executive Director Ted Brady testified to the Senate Finance Committee about the importance of legislative authorization of project-based tax increment financing. Despite the Local Fiscal Recovery Fund money that Vermont's municipalities received last year and the federal and state competitive funding available, every VLCT member could come up short on any major infrastructure project that could catalyze housing growth. Unlike larger TIF districts, this program would be within reach of even the smallest communities.

The written testimony.

Ranked Choice Voting in Local Elections 

In a surprise move on Thursday in the Senate Government Operations Committee, the committee chair expressed their intention of moving forward with a ranked-choice voting bill, not for Presidential elections, as proposed in S.32, but for municipal elections. The Vermont Municipal Clerks and Treasurers Association and the Secretary of State expressed concerns with implementing a ranked-choice voting system in time for the 2024 presidential election. There is no new language proposed just yet, but it appears the Secretary of State’s office will return with language to amend S.32. The new language would give municipal legislative bodies the authority to implement ranked-choice voting for local elections as early as 2024. It would establish a study committee to outline how Vermont can implement a statewide ranked-choice voting system for state elections by 2026 and for the 2028 presidential election. 

VLCT is looking forward to working closely with the committee and the Secretary of State to develop language that works for those cities, towns, and villages that choose to implement ranked-choice voting on their own.  

S.32 as introduced 

Civilian Oversight of Law Enforcement 

VLCT Advocacy staff testified in the Senate Government Operations Committee on Tuesday in opposition to S.75, a bill that would give municipalities the authority to create civilian oversight boards over law enforcement. Although the bill as written would give permissive authority to create such boards, the bill as currently written would open municipalities to tremendous financial risk and liability exposure, and gives unprecedented legal, employment, and budgetary authority to unelected individuals. VLCT strongly supports civilian advisory boards at the local level. Several of these boards currently exist in municipalities across the state, including Bennington, Milton, Lyndon, Brattleboro, Essex, St. Albans City, and Barre City. If a municipality wants to create an independent civilian oversight, rather than advisory, board, the structure and authority of such a board needs to be carefully crafted to meet the individual needs of the community. This approach was successfully done almost three decades ago by the City of Rutland and is included in the city’s charter. Communities are currently able to create advisory boards that meet the needs of their community, and those that would like to create oversight boards similar to what the City of Rutland has done can seek a charter amendment structured specifically for their municipality.  

VLCT's written testimony.  

House Government Operations and Military Affairs Committee  

Elections

This week the committee continued work on two elections bills: the first we wrote about in our Week #6 Legislative Report, and the second is H.97. It appears that H.97 will be the bill that moves forward with the inclusion of several of the provisions of the committee bill. It focuses on the “Sore Loser” law, candidate filing deadlines, campaign finance restrictions, write-in candidate standards, and the collection of demographic information. 

This is the most recent version of H.97. 

Law Enforcement

The committee also took testimony on two committee bills related to law enforcement.  

The first committee bill focuses mostly on domestic violence. It would mandate the Domestic Violence Involving Law Enforcement Model Policy from 2010 be updated by the Law Enforcement Advisory Board to meet current needs and contemporary standards. After the statewide model policy is updated, every law enforcement agency in the state, including constables exercising law enforcement authority, would have to adopt the policy by July 1, 2024. The bill also proposes that the issuance of a final relief from abuse order be added to the list of professional misconduct of law enforcement under Vermont Criminal Justice Council (VCJC) review. Lastly, the bill would mandate the VCJC to collect and report aggregate data regarding domestic and sexual violence and complaints of professional misconduct resulting in the filing of charges or stipulations or the taking of disciplinary action. 

The second committee bill focuses on fair and impartial policing and broader professional regulations. It proposes to amend statute to remove the minimum number of hours mandated for fair and impartial policing training and instead mandate that all law enforcement must demonstrate competency in fair and impartial policing to maintain certification. It would mandate the VCJC adopt rules with respect to Advanced Roadside Impaired Driving Enforcement training and law enforcement certification. The bill would amend the law related to roadside stop data collection and add that the date, time, and location of stops be collected and tracked. Lastly, the bill would mandate that, prior to hiring a law enforcement officer, a hiring agency must have access to all previous employers’ performance reviews of the potential hire. Currently this is only required for the most recent employer the officer is coming from.  

The committee is working toward voting out the bills before crossover in the coming weeks.  

Zoning 

Advocacy staff testified on Wednesday in the House Human Services committee expressing concern about H.222, a bill that would include in the section on “required provisions and prohibited effects” of the municipal planning statutes, “recovery residences as defined in 18 V.S.A. section 4812, serving not more than eight people”. The referenced section is not in current law, but is proposed in another bill. Currently, a residential care home or group home operated under state licensing or registration serving not more than eight people must be allowed in the same way a single-family residence is. Staff testified that the statute would need to specify that in the same way, a recovery residence is operated pursuant to state licensing or registration or supervision. 

The next Advocacy Chat is Monday, February 27 at 11 AM. 

The Weekly Legislative Report is authored by

Karen Horn, VLCT Public Policy & Advocacy Director
Gwynn Zakov, VLCT Municipal Policy Advocate

Editing and proofreading provided by

Ione L. Minot, Content Specialist