The Vermont Statutes Online

Title 24: Municipal and County Government

Chapter 139: State Community Investment Program

• § 5801. Definitions

  As used in this chapter:

  (1) “Community Investment Program” means the program established in this chapter, as adapted from the former State designated areas program formerly in chapter 76A of this title. Statutory references outside this chapter referring to the former State-designated downtown, village centers, and new town centers shall mean designated center, once established. Statutory references outside this chapter referring to the former State-designated neighborhood development areas and growth centers shall mean designated neighborhood, once established. The program shall extend access to benefits that sustain and revitalize existing buildings and maintain the basis of the program’s primary focus on revitalizing historic downtowns, villages and surrounding neighborhoods by promoting smart growth development patterns and historic preservation practices vital to Vermont’s economy, cultural landscape, equity of opportunity, and climate resilience.

  (2) “Complete streets” or “complete street principles” has the same meaning as in 19 V.S.A. chapter 24.

  (3) “Department” means the Department of Housing and Community Development.

  (4) “Downtown center” or “village center” means areas on the regional plan future land use maps that may be designated as a center consistent with section 4348a of this title.

  (5) “LURB” refers to the Land Use Review Board established pursuant to 10 V.S.A. § 6021.

  (6) “Infill” means the use of vacant land or property or the redevelopment of existing buildings within a built-up area for further construction or land development.

  (7) “Local downtown organization” means either a nonprofit corporation, or a board, council, or commission created by the legislative body of the municipality, whose primary purpose is to administer and implement the community reinvestment agreement and other matters regarding the revitalization of the downtown.

  (8) “Planned growth area” means an area on the regional plan future land use maps required under section 4348a of this title, which may encompass a downtown center or village center on the regional future land use map and may be designated as a center or neighborhood, or both.

  (9) “Regional plan future land use map” means the map prepared pursuant to section 4348a of this title.

  (10) “Sprawl repair” means the redevelopment of lands with buildings, traffic and circulation, parking, or other land coverage in a pattern that is consistent with smart growth principles.

  (11) “State Board” means the Vermont Community Investment Board established in section 5802 of this title.

  (12) “State Designated Downtown and Village Center” or “center” means a contiguous downtown or village a portion of which is listed or eligible for listing in the national register of historic places area approved as part of the LURB review of regional plan future land use maps, which may include an approved preexisting designated designated downtown, village center, or designated new town center established prior to the approval of the regional plan future land use maps.

  (13) “State designated neighborhood” or “neighborhood” means a contiguous geographic area approved as part of the Land Use Review Board review of regional plan future land use maps that is compact and adjacent and contiguous to a center.

  (14) “Vermont Downtown Program” means a program within the Department that coordinates with Main Street America that helps support community investment and economic vitality while preserving the historic character of Vermont’s downtowns. The Vermont Downtown Program provides downtowns with financial incentives, training, and technical assistance supporting local efforts to restore historic buildings, improve housing, design walkable communities, and encourage economic development by incentivizing public and private investments.

  (15) “Village area” means an area on the regional plan future land use maps adopted pursuant to section 4348a of this title, which may encompass a village center on the regional future land use map. (Added 2023, No. 181 (Adj. Sess.), § 66, eff. June 17, 2024.)

• § 5802. Vermont Community Investment Board

  (a) A Vermont Community Investment Board, also referred to as the “State Board,” is created to administer the provisions of this chapter. The State Board shall be composed of the following members or their designees:

  (1) the Secretary of Commerce and Community Development;

  (2) the Secretary of Transportation;

  (3) the Secretary of Natural Resources;

  (4) the Commissioner of Public Safety;

  (5) the State Historic Preservation Officer;

  (6) a member of the community designated by the Director of Racial Equity;

  (7) a person, appointed by the Governor from a list of three names submitted by the Vermont Natural Resources Council and the Preservation Trust of Vermont;

  (8) a person, appointed by the Governor from a list of three names submitted by the Vermont Association of Chamber of Commerce Executives;

  (9) three public members representative of local government, one of whom shall be designated by the Vermont League of Cities and Towns and two of whom shall be appointed by the Governor;

  (10) the Executive Director of the Vermont Bond Bank;

  (11) the State Treasurer;

  (12) a member of the Vermont Planners Association designated by the Association;

  (13) a representative of a regional development corporation designated by the regional development corporations; and

  (14) a representative of a regional planning commission designated by the Vermont Association of Planning and Development Agencies.

  (b) The State Board shall elect a chair and vice chair from among its membership.

  (c) The Department shall provide legal, staff, and administrative support to the State Board; shall produce guidelines to direct municipalities seeking to obtain designation under this chapter and for other purposes established by this chapter; and shall pay per diem compensation for board members pursuant to 32 V.S.A. § 1010(b).

  (d) The State Board shall meet at least quarterly.

  (e) The State Board shall have authority to adopt rules of procedure to use for appeal of its decisions and rules on handling conflicts of interest.

  (f) In addition to any other duties confirmed by law, the State Board shall have the following duties:

  (1) to serve as the funding and benefits coordination body for the State Community Investment Program;

  (2) to review and comment on proposed regional plan future land use maps prepared by the regional planning commission and presented to the LURB for designated center and designated neighborhood recognition under 10 V.S.A. § 6033;

  (3) to award tax credits under the 32 V.S.A. § 5930aa et seq.;

  (4) to manage the Downtown Transportation and Related Capital Improvement Fund Program established by section 5808 of this title; and

  (5) to review and comment on LURB guidelines, rules, or procedures for the regional plan future land use maps as they relate to the designations under this chapter. (Added 2023, No. 181 (Adj. Sess.), § 66, eff. June 17, 2024.)

• § 5803. Designation of downtown and village centers

  (a) Designation established. A regional planning commission may apply to the LURB for approval and designation of all centers by submitting the regional plan future land use map adopted by the regional planning commission. The regional plan future land use map shall identify downtown centers and village centers as the downtown and village areas eligible for designation as centers. The Department and State Board shall provide comments to the LURB on areas eligible for center designation as provided under this chapter.

  (b) Inclusions. The areas mapped by the regional planning commissions as a center shall allow for the designation of preexisting, designated downtowns, village centers and new town centers in existence on or before December 31, 2025.

  (c) Exclusions. With the exception for preexisting, nonconforming designations approved prior to the establishment of the program under this chapter or areas included in the municipal plan for the purposes of relocating a municipality’s center for flood resiliency purposes, the areas eligible for designation benefits upon the LURB’s approval of the regional plan future land use map for designation as a Center shall not include development that is disconnected from a Center and that lacks a pedestrian connection to the Center via a complete street.

  (d) Approval. The LURB shall conduct its review pursuant to 10 V.S.A. § 6033.

  (e) Transition. All designated downtowns, village centers, or new town centers existing as of December 31, 2025 will retain current benefits until December 31, 2026 or until approval of the regional future land use maps by the LURB, whichever comes first. All existing designations in effect December 31, 2025 will expire December 31, 2026 if the regional plan does not receive LURB approval under this chapter. All benefits for unexpired designated downtowns, village centers, and new town centers that are removed under this chapter shall remain in effect until July 1, 2034. Prior to June 30, 2026, no check-in or renewals shall be required for the preexisting designations. New applications for downtowns, villages, and new town centers may be approved by the State Board prior to the first public hearing on a regional future land use map or until December 31, 2025, whichever comes first.

  (f) Benefits Steps. A center may receive the benefits associated with the steps in this section by meeting the established requirements. The Department shall review applications from municipalities to advance from Step One to Two and from Step Two to Three and issue written decisions. The Department shall issue a written administrative decision within 30 days following an application. If a municipal application is rejected by the Department, the municipality may appeal the administrative decision to the State Board. To maintain a downtown approved under chapter 76A after December 31, 2026, the municipality shall apply for renewal following a regional planning approval by the LURB and meet the program requirements. Step Three designations that are not approved for renewal revert to Step Two. The municipality may appeal the administrative decision of the Department to the State Board. Appeals of administrative decisions shall be heard by the State Board at the next meeting following a timely filing stating the reasons for the appeal. The State Board’s decision is final. The Department shall issue guidance to administer these steps.

  (1) Step One.

  (A) Requirements. Step One is established to create an accessible designation for all villages throughout the State to become eligible for funding and technical assistance to support site-based improvements and planning. All downtown and village centers shall automatically reach Step One upon approval of the regional plan future land use map by the LURB. Regional plan future land use maps supersede preexisting designated areas that may already meet the Step One requirement.

  (B) Benefits. A center that reaches Step One is eligible for the following benefits:

  (i) funding and technical assistance eligibility for site-based projects, including the Better Places Grant Program under section 5810 of this chapter, access to the Downtown and Village Center Tax Credit Program described in 32 V.S.A. § 5930aa et seq., and other programs identified in the Department’s guidance; and

  (ii) funding priority for developing or amending the municipal plan, visioning, and assessments.

  (2) Step Two.

  (A) Requirements. Step Two is established to create a mid-level designation for villages throughout the State to increase planning and implementation capacity for community-scale projects. A center reaches Step Two if it:

  (i) meets the requirements of Step One or if it has a designated village center or new town center under chapter 76A of this title upon initial approval of the regional plan future land use map and prior to December 31, 2026;

  (ii) has a confirmed municipal planning process pursuant to 24 V.S.A. § 4350;

  (iii) has a municipal plan with goals for investment in the center; and (iv) a portion of the center is listed or eligible for listing in the National Register of Historic Places.

  (B) Benefits. In addition to the benefits of Step One, a center that reaches Step Two is eligible for the following benefits:

  (i) funding priority for bylaws and special-purpose plans, capital plans, and area improvement or reinvestment plans, including priority consideration for the Better Connections Program and other applicable programs identified by Department guidance;

  (ii) funding priority for infrastructure project scoping, design, engineering, and construction by the State Program and State Board;

  (iii) the authority to create a special taxing district pursuant to chapter 87 of this title for the purpose of financing both capital and operating costs of a project within the boundaries of a center;

  (iv) priority consideration for State and federal affordable housing funding;

  (v) authority for the municipal legislative body to establish speed limits of less than 25 mph within the center under 23 V.S.A. § 1007(g);

  (vi) State wastewater permit fees capped at $50.00 for residential development under 3 V.S.A. § 2822;

  (vii) exemption from the land gains tax under 32 V.S.A. § 10002(p); and

  (viii) assistance and guidance from the Department for establishing local historic preservation regulations.

  (3) Step Three.

  (A) Requirements. Step Three is established to create an advanced designation for downtowns throughout the State to create mixed-use centers and join the Vermont Downtown Program. A center reaches Step Three if the Department finds that it meets the following requirements:

  (i) Meets the requirements of Step Two, or if it has an existing downtown designated under chapter 76A of this title in effect upon initial approval of the regional future land use map and prior to December 31, 2026.

  (ii) Is listed or eligible for listing in the National Register of Historic Places.

  (iii) Has a downtown improvement plan.

  (iv) Has a downtown investment agreement.

  (v) Has a capital program adopted under section 4430 of this title that implements the Step Three requirements.

  (vi) Has a local downtown organization with an organizational structure necessary to sustain a comprehensive long-term downtown revitalization effort, including a local downtown organization that will collaborate with municipal departments, local businesses, and local nonprofit organizations. The local downtown organization shall work to:

  (I) enhance the physical appearance and livability of the area by implementing local policies that promote the use and rehabilitation of historic and existing buildings, by developing pedestrian-oriented design requirements, by encouraging new development and infill that satisfy such design requirements, and by supporting long-term planning that is consistent with the goals set forth in section 4302 of this title;

  (II) build consensus and cooperation among the many groups and individuals who have a role in the planning, development, and revitalization process;

  (III) market the assets of the area to customers, potential investors, new businesses, local citizens, and visitors;

  (IV) strengthen, diversify, and increase the economic activity within the downtown; and

  (V) measure annually progress and achievements of the revitalization efforts as required by Department guidelines.

  (vii) Has available public water and wastewater service and capacity.

  (viii) Has permanent zoning and subdivision bylaws.

  (ix) Has adopted historic preservation regulations for the district with a demonstrated commitment to protect and enhance the historic character of the downtown through the adoption of bylaws that adequately meet the historic preservation requirements in subdivisions 4414(1)(E) and (F) of this title, unless recognized by the program as a preexisting designated new town center.

  (x) Has adopted design or form-based regulations that adequately regulate the physical form and scale of development with compact lot, building, and unit density, building heights, and complete streets.

  (B) Benefits. In addition to the benefits of Steps One and Two, a municipality that reaches Step Three is eligible for the following benefits:

  (i) Funding for the local downtown organization and technical assistance from the Vermont Downtown Program for the center.

  (ii) A reallocation of receipts related to the tax imposed on sales of construction materials as provided in 32 V.S.A. § 9819.

  (iii) Eligibility to receive National Main Street Accreditation from Main Street America through the Vermont Downtown Program.

  (iv) Signage options pursuant to 10 V.S.A. § 494(13) and (17).

  (v) Housing appeal limitations as described in chapter 117 of this title.

  (vi) Highest priority for locating proposed State functions by the Commissioner of Buildings and General Services or other State officials, in consultation with the municipality, Department, State Board, the General Assembly committees of jurisdiction for the Capital Budget, and the regional planning commission. When a downtown location is not suitable, the Commissioner shall issue written findings to the consulted parties demonstrating how the suitability of the State function to a downtown location is not feasible.

  (vii) Funding for infrastructure project scoping, design, and engineering, including participation in the Downtown Transportation and Related Capital Improvement Fund Program established by section 5808 of this title. (Added 2023, No. 181 (Adj. Sess.), § 66, eff. June 17, 2024.)

• § 5804. Designated neighborhood

  (a) Designation established.

  (1) A regional planning commission may request approval from the LURB for designation of areas on the regional plan future land use maps as a designated neighborhood under 10 V.S.A. § 6033. Areas eligible for designation include planned growth areas and village areas identified on the regional plan future land use map. This designation recognizes that the vitality of downtowns and villages is supported by adjacent and walkable neighborhoods and that the benefits structure must ensure that investments for sprawl repair or infill development within a neighborhood is secondary to a primary purpose to maintain the vitality and livability and maximize the climate resilience and infill potential of centers.

  (2) Approval of planned growth areas and village areas as designated neighborhoods shall follow the same process as approval for designated centers provided for in 10 V.S.A. § 6033 and consistent with sections 4348 and 4348a of this title.

  (b) Transition. All designated growth center or neighborhood development areas existing as of December 31, 2025 will retain current benefits until December 31, 2026 or upon approval of the regional plan future land use maps, whichever comes first. All existing neighborhood development area and growth center designations in effect on December 31, 2025 will expire on December 31, 2026 if the regional plan future land use map is not approved. All benefits that are removed for unexpired neighborhood development areas and growth centers under this chapter shall remain active with prior designations existing as of December 31, 2025 until December 31, 2034. Prior to December 31, 2026, no check-ins or renewal shall be required for the existing designations. New applications for neighborhood development area designations may be approved by the State Board prior to the first hearing for a regional plan adoption or until December 31, 2025, whichever comes first.

  (c) Requirements. A designated neighborhood shall meet the requirements for planned growth area or village area as described in section 4348a of this title.

  (d) Benefits. A designated neighborhood is eligible for the following benefits:

  (1) funding priority for bylaws and special-purpose plans, capital plans, and area improvement or reinvestment plans, including priority consideration for the Better Connections Program and other applicable programs identified by Department guidance;

  (2) funding priority for Better Connections and other infrastructure project scoping, design, engineering, and construction by the State Community Investment Program and Board;

  (3) eligibility for the Downtown and Village Center Tax Credit Program described in 32 V.S.A. § 5930aa et seq.;

  (4) priority consideration for State and federal affordable housing funding;

  (5) certain housing appeal limitations under chapter 117 of this title;

  (6) authority for the municipal legislative body to lower speed limits to less than 25 mph within the neighborhood;

  (7) State wastewater application fee capped at $50.00 for residential development under 3 V.S.A. § 2822(j)(4)(D);

  (8) exclusion from the land gains tax provided by 32 V.S.A. § 10002(p); and

  (9) the authority to create a special taxing district pursuant to chapter 87 of this title for the purpose of financing both capital and operating costs of a project within the boundaries of a neighborhood. (Added 2023, No. 181 (Adj. Sess.), § 66, eff. June 17, 2024.)

• § 5805. Grants and gifts

  The Department of Housing and Community Development may accept funds, grants, gifts, or donations of up to $10,000.00 from individuals, corporations, foundations, governmental entities, or other sources, on behalf of the Community Planning and Revitalization Division to support trainings, conferences, special projects, and initiatives. (Added 2023, No. 181 (Adj. Sess.), § 66, eff. June 17, 2024.)

• § 5806. Designation data center

  The Department, in coordination with the LURB, shall maintain an online municipal planning data center publishing approved regional plan future land use maps adoptions and amendments and indicating the status of each approved designation within the region, and associated steps for centers. (Added 2023, No. 181 (Adj. Sess.), § 66, eff. June 17, 2024.)

• § 5807. Better Places Program; crowd granting

  (a)(1) There is created the Better Places Program within the Department of Housing and Community Development, and the Better Places Fund, which the Department shall manage pursuant to 32 V.S.A. chapter 7, subchapter 5. This shall be the same Fund created under the prior section 2799 of this title.

  (2) The purpose of the Program is to utilize crowdfunding to spark community revitalization through collaborative grantmaking for projects that create, activate, or revitalize public spaces.

  (3) The Department may administer the Program in coordination with and support from other State agencies and nonprofit and philanthropic partners.

  (b) The Fund is composed of the following:

  (1) State or federal funds appropriated by the General Assembly;

  (2) gifts, grants, or other contributions to the Fund; and

  (3) any interest earned by the Fund.

  (c) As used in this section, “public space” means an area or place that is open and accessible to all persons with no charge for admission and includes village greens, squares, parks, community centers, town halls, libraries, and other publicly accessible buildings and connecting spaces such as sidewalks, streets, alleys, and trails.

  (d)(1) The Department of Housing and Community Development shall establish an application process, eligibility criteria, and criteria for prioritizing assistance for awarding grants through the Program.

  (2) The Department may award a grant to a municipality, a nonprofit organization, or a community group with a fiscal sponsor for a project that is located in or serves an area designated under this chapter that will create a new public space or revitalize or activate an existing public space.

  (3) The Department may award a grant to not more than three projects per calendar year within a municipality.

  (4) The minimum amount of a grant award is $5,000.00, and the maximum amount of a grant award is $40,000.00.

  (5) The Department shall develop matching grant eligibility requirements to ensure a broad base of community and financial support for the project, subject to the following:

  (A) A project shall include in-kind support and matching funds raised through a crowdfunding approach that includes multiple donors.

  (B) An applicant may not donate to its own crowdfunding campaign.

  (C) A donor may not contribute more than $10,000.00 or 35 percent of the campaign goal, whichever is less.

  (D) An applicant shall provide matching funds raised through crowdfunding of not less than 33 percent of the grant award. The Department may require a higher percent of matching funds for certain project areas to ensure equitable distribution of resources across Vermont.

  (e) The Department of Housing and Community Development, with the assistance of a fiscal agent, shall distribute funds under this section in a manner that provides funding for projects of various sizes in as many geographical areas of the State as possible.

  (f) The Department of Housing and Community Development may use up to 15 percent of any appropriation to the Fund from the General Fund to assist with crowdfunding, administration, training, and technological needs of the Program. (Added 2023, No. 181 (Adj. Sess.), § 66, eff. June 17, 2024.)