Client Resources Permit Reform Makes Strange Bedfellows

A Joint Set of Act 250 Reform Proposals Being Considered by the Vermont Legislature

As the Vermont General Assembly reconvenes for the second year of its biennium, it returns to the issue of whether and how to reform Vermont’s venerable 50-year-old land use law, Act 250. Last session, the House Natural Resources, Fish and Wildlife Committee (the Committee) considered wide-ranging recommendations distilled from the work of the Commission on Act 250 over the preceding year. While these recommendations were discussed at length, no formal bill was ever offered and no consensus emerged with respect to these proposals.

As the legislative session recently commenced, a set of Act 250 reform proposals was jointly offered by strange political bedfellows: the Scott Administration and the Vermont Natural Resources Council (VNRC). On January 7, 2020, Peter Walke, the Deputy Secretary of the Agency of Natural Resources (ANR), and Brian Shupe, VNRC’s Executive Director, presented joint testimony to the Committee summarizing the proposed reform package that had been developed through their collaborative efforts. Draft bill language followed on January 14.

The resulting reform proposals address many of the issues raised during the preceding debates over Act 250 and identified by the Commission on Act 250. Each proposal is relatively focused and addresses a specific issue. There is no doubt that, even if a package along the lines of what is being proposed were to pass, many changes await. The recommendations set forth in the joint proposal, however, are significant, worthy of note, and should be understood by any Vermonter concerned about land use, the environment, housing, and economic development in our state going forward. Furthermore, it will be necessary to identify and highlight any unintended consequences of expanding or modifying certain aspects of Act 250 and its regulatory oversight of development.

This brief update will summarize the major components and themes of the reform package put forth by ANR and VNRC. This summary does not include every single element of the recommendations. Moreover, legislators will assuredly make changes to these proposals and introduce new concepts over the course of the upcoming session.

Changes to the Scope of Act 250 Jurisdiction

One of the core goals of Act 250 reform has been a productive tradeoff between additional protections for valuable natural resources while reducing regulatory burdens with respect to development within established growth centers. To that end, the proposed reforms recommend the following:

• Downtown development. The joint proposal recommends excluding development within State-designated Downtowns and Neighborhood Development Areas from Act 250 jurisdiction. Development within these areas exists, is subject to robust regulatory review, and is consistent with smart growth principles. To the extent existing projects are subject to an Act 250 permit, those conditions would continue in effect. If and when municipal permit amendments are required, the municipal permit would incorporate the Act 250 permit conditions and the Act 250 permit would go away. New projects within these existing areas of development would not need an Act 250 permit. An important question that arises, however, is whether these designated downtowns and neighborhoods encompass sufficient developed areas to make this change sufficiently meaningful, or whether growth centers and other developed areas should also be included.
• Ridgeline development. Currently, development above 2,500 feet in elevation except for agriculture and forestry requires an Act 250 permit. The joint proposal recommends reducing this jurisdictional threshold to include ridgelines with an elevation of 1,500 feet or more, again with an exemption for agriculture and forestry. State GIS mapping would identify the “ridgelines” falling within this jurisdictional definition. The relationship between this proposal and the permitting of telecommunications towers and wind turbines will likely be the subject of much debate.
• Habitat fragmentation. In order to prevent undue habitat fragmentation, the proposal recommends reviving a jurisdictional trigger relating to long roads accessing a parcel of one or more acres being developed. Jurisdiction would be triggered by 2,000 or more linear feet in new roads and driveways, and/or upgraded Class IV town highways.
• Development near interstate interchanges. Drawing on last session’s recommendations, it is proposed that Act 250 jurisdiction be extended to commercial or industrial projects located within 2000 feet of an interstate interchange. Alternatively, a municipality could opt out of this coverage if it demonstrates adequate safeguards covering the new jurisdictional area are in place.

Changes to the Act 250 Criteria Themselves

The joint proposal also seeks to modernize various criteria to better reflect Vermont’s environmental and land use priorities a half century after Act 250 was first enacted by the General Assembly. Among the proposed modifications are the following:

• Rivers and floodways. The joint proposal would bring Criterion 1(D) into alignment with ANR’s regulation of flood-prone areas and river corridors. It would do so by synchronizing Criterion 1(D)’s current concepts with “flood hazard areas” and “river corridors,” as defined under the pertinent ANR permit programs.
• Forest blocks and connecting habitats. The Commission on Act 250 had identified a need to provide further protection for forest blocks and connecting habitat. The joint proposal would add a new Criterion 8(C) that directly addresses undue adverse impacts on forest blocks and connecting habitat, as well as rare and irreplaceable natural areas. The proposal further contemplates rulemaking by the Natural Resources Board to create a mitigation program regarding this new subcriterion.
• Climate change. In order to address emerging climate change concerns, the joint proposal recommended two provisions. First, compliance with the stretch code for residential buildings would be added to Criterion 9(F). Second, a new Criterion 9(M) would be created requiring a showing that any proposed development or subdivision will employ design elements enabling the project “to withstand and adapt to the effects of climate change, including extreme temperature events, wind, and precipitation reasonably projected at the time of application.”

Changes to the Act 250 Permit Process

Much time was spent before the Committee last year discussing the Act 250 permit process and related appeal procedures. Certain advocates urged directing all zoning and Act 250 appeals to a new Environmental Review Board. Others cited the consistency and efficiencies associated with consolidating all land use and environmental permit appeals with the Environmental Division. Given the nature of the debate, compromise was difficult to find. In the part of their joint proposal generating perhaps the most immediate public response, the Administration and VNRC proposed a new approach to permits and appeals as an effort to streamline permit review and appeals, enhance the consistency of decisions, and improve opportunities for stakeholder input, all while maintaining a regional perspective regarding local projects. Whether their Solomonic proposal achieves these ends remains to be seen.

• Elimination of district commissions and creation of an Enhanced NRB. The joint proposal recommends doing away with the nine regional district commissions entirely and reconfiguring the districts into six regional districts based upon counties. The proposal would also create an “Enhanced” Natural Resources Board (ENRB) reviewing major project applications and hearing appeals of other Act 250-related matters. Other matters would be assigned to the six district coordinators as the ENRB’s delegees.

The ENRB would consist of three professional members akin to the Public Utilities Commission (PUC). Appointments to the ENRB would be processed through the Judicial Nominating Board process. The ENRB would hear and decide all applications for major projects or major amendments to existing permits. On these major application reviews, the three members of the ENRB would be joined by two commissioners from the district in which the project is located. These two additional commissioners would join the three permanent ENRB members in making findings of fact regarding a permit application. Matters of law and policy, however, would be decided by the three permanent members alone in an effort to achieve a degree of statewide consistency. Among other things, the district coordinators would then act as delegees of the ENRB and decide minor and administrative amendments to existing Act 250 permits, would decide requests for jurisdictional determinations, and would make other ancillary determinations. Permit application decisions by the ENRB or district coordinators would be appealed directly to the Vermont Supreme Court. Jurisdictional and other ancillary determinations by the district coordinators would first be appealed to the ENRB.

Three potential concerns are implicated by this proposal. First, this proposal does not avoid a return to dual appeal tracks that consolidated appeals before the Environmental Division eliminated. That is, there would again be a risk of inconsistent determinations regarding a project’s Act 250 permit and other municipal or State permits. Second, there is some question as to whether a single board can handle all major project reviews and appeals of ancillary determinations by district coordinators in a timely fashion. Third, if the ENRB opts to employ hearing officers to address these docket pressures, as authorized in the joint proposal, does that eliminate the benefit of having a five-person ENRB, including two regional commissioners, make findings of fact regarding a matter? That is, factual findings by a hearing officer are generally accorded some degree of deference, which would reduce the level of factual review actually being conducted by the ENRB members themselves. Nonetheless, this ENRB model is a creative effort at finding a solution to the Gordian knot before the General Assembly with reference to the Act 250 permit and appeal processes.

• Pre-application notice to enhance public participation. Again, borrowing from the PUC process, construction plans for any major project would need to be provided to adjoining landowners, municipal and regional planning commissions, and affected state agencies no less than 30 days prior to the filing of the application. This pre-application notice is intended to facilitate advance input that can potentially be addressed or incorporated by an applicant in the final application submitted for review.
• Presumptions for ANR permits. Currently, certain ANR permits are entitled to a rebuttable presumption if identified by rule. The joint proposal recommends the following: (i) under Criteria 1 through 5, submission of any state permit would automatically create a rebuttable presumption, but only with reference to issues addressed by the terms of the permit; (ii) technical determinations by ANR in any permit would automatically be accorded substantial deference by district coordinators and the ENRB; and (iii) under every criterion except Criterion 8, submission of any municipal permit automatically would create a rebuttable presumption, but again only with reference to issues addressed by the terms of the permit.

Like any collaborative effort, the package of reform proposals is an effort at compromise which seeks to address many of the goals and concerns cited by the Commission on Act 250. To that end, the Scott Administration and VNRC have attempted to pull together a set of proposed additions and changes to Act 250 which are concrete in nature. There is much of merit in the joint proposal, but significant questions and policy choices remain. What happens next is up to the General Assembly.