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 downtown and village centers by submitting the regional plan future land use map adopted by the regional planning commission. The Department and State Board shall provide comments to the LURB and the regional planning commission on areas eligible for center designation as provided in section 4348 of this title.
(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(c) [Repealed.]
(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, unless recognized by the program as a preexisting designated new town center.
(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) a portion of the center is listed or eligible for listing in the National Register of Historic Places, unless recognized by the program as a preexisting designated new town center;
(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) A portion of the center is listed or eligible for listing in the National Register of Historic Places, unless recognized by the program as a preexisting designated new town center.
(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; 2025, No. 152 (Adj. Sess.), § 18, eff. July 1, 2026; 2025, No. 179 (Adj. Sess.), § 9b, eff. July 1, 2026.
