Committee reviews Act 181 tier system, timelines for municipal exemptions from Act 250

Legislative counsel told the Brabant House Committee on Commerce & Economic Development on April 23 that Act 181 retools the state's land-use review by replacing many project-type jurisdictional triggers under Act 250 with a location-based tier system and by creating a process for municipal areas to seek exemptions.

"Last year, the General Assembly passed Act 181," Ellen Chaykowski, attorney with the Office of Legislative Counsel, told the committee. "It was called An Act relating to Community Resilience and Biodiversity Protection through Land Use. But it really was a huge overhaul of our land use planning system." Chaykowski said the law created a three-tier framework (Tier 1A, Tier 1B, Tier 2 and Tier 3) that shifts some permitting responsibility from the state to municipalities for areas designated for dense development while increasing state oversight in ecologically sensitive places.

The change alters how the state decides whether a project needs an Act 250 permit. Under the decades-old Act 250 rules, jurisdiction often depended on project type and size (for example, commercial projects on more than 10 acres or 1 acre, depending on municipal zoning). Act 181 instead looks at site attributes and mapped natural resources: Tier 3 will include critical natural resources identified through rulemaking and will retain full Act 250 oversight; Tier 2 covers most of the state; Tier 1A and 1B cover downtowns, village centers and planned growth areas where municipalities may assume more review.

Chaykowski outlined key deadlines and processes the committee discussed. Regional planning commissions (RPCs) must update regional plans and maps to the new land-use categories by December 30, 2026; the Land Use Review Board will review those regional plans and must act within a 45-day review window. Municipalities may apply for Tier 1A status beginning January 1, 2026, but an individual town can apply only after its RPC map has been adopted and approved. Tier 1A is a broad exemption from Act 250 for areas that meet comprehensive criteria, including permanent zoning and subdivision bylaws, adequate municipal staff to administer local review, flood and river corridor bylaws, and adequate water/wastewater capacity or planned improvements.

Tier 1B is a narrower option aimed at housing: municipalities can designate Tier 1B areas that allow projects of up to 50 housing units to proceed without an Act 250 permit, subject to municipal regulations and infrastructure requirements; a town may have multiple noncontiguous Tier 1B areas, each with its own 50-unit allowance. Chaykowski said the statute requires municipalities to show they have or plan for water or wastewater capacity (or soils suitable for community systems) and that the board will provide guidance on how developed those plans must be before an application is approved.

The committee also reviewed interim housing exemptions that remain in effect while tiers and rules are being finalized. Those interim provisions allow specified exemptions (for example, 75 units in designated new town centers and 50-unit exemptions in village centers or certain urbanized areas) with phase-out dates the transcript records as 2027 (dates vary by exemption). Chaykowski cautioned that the exact timing and scope depend on the final maps and rulemaking, including the Land Use Review Board's work with the Agency of Natural Resources (ANR) to identify Tier 3 resources.

Committee members pressed for operational detail. They asked whether municipal staffing could include contracted staff or shared staff among small towns; Chaykowski said the statute calls for a qualitative demonstration that municipalities have adequate staff or capacity and that shared or contracted staffing arrangements and RPC support are commonly used. Members also asked about the meaning of "planned improvements" for water or wastewater capacity; Chaykowski said the board must develop guidance on the stage of planning and that the statute intentionally left some of that to the board to avoid a one-size-fits-all test.

Several members noted that RPCs are already mapping candidate centers and working with towns; one member who identified themself as chair of a town planning commission said RPC outreach had already flagged what the town would need to do to move from a Tier 1B designation toward Tier 1A. Chaykowski said the tiers and the municipal application processes will roll out over years: regional-plan updates in 2026, board review beginning in 2026, Tier 1A and 1B applications and approvals through 2027 and beyond depending on each region's schedule.

The committee did not take formal votes on any recommendations during the discussion. Members agreed to continue the conversation at a follow-up meeting after the committee hears from the treasurer and other staff on related drafts and fiscal implications.