PLANNING AND ZONING;

You asked us to summarize sHB 6640, AAC Smart Growth (LCO 4801), which the Planning and Development Committee favorably reported to the floor.

SUMMARY

This bill requires state, regional, and local plans of conservation and development to incorporate development design principles that allow for a mix of different land uses in a way that is compact, allows people to move around on foot, or gives them access to mass transit. It also specifies procedures for determining whether a local plan is consistent with the regional and state plan and whether the regional plan is consistent with the state plan. The bill requires the Council on Environmental Quality (CEQ) to report on the progress being made to achieve the state plan’s goals.

The bill requires the state to designate Priority Funding Areas (PFAs) and state agencies to target development projects at these areas. The agencies must do this by ranking projects based on the bill’s criteria, which award points based on a project’s location and the extent to which

it addresses specific planning goals. The bill sets narrow conditions under which agencies can fund development projects outside of the PFAs. It also exempts certain types of projects from the PFA targeting requirement.

The bill requires the Office of Policy and Management (OPM) to encourage and assist towns to complete build out analyses, which are projections of how towns will develop under their current land use regulations. It also allows towns that complete these analyses to place a two-year cap on the number of most new construction residential building permits they issue. It requires towns and organizations applying for state open space grants complete a build out analysis if more than 10% of the town’s land is undeveloped.

Lastly, the bill requires the Transportation Strategy Board to study how the state should designate metropolitan planning organizations.

STATE PLAN OF CONSERVATION AND DEVELOPMENT

Plan Elements

The bill adds more factors OPM must address when it revises the five-year State Plan of Conservation and Development (Plan of C&D). The plan’s policies generally favor locating proposed state-funded projects in places where the roads, sewers, and other supporting infrastructure already exist. The plan must include broad transportation, energy, and air policies; identify specific transportation proposals; and consider ways to conserve and develop greenways. The current plan expires in 2003, and the next revision is schedule for 2008.

The next time OPM revises the plan, it must identify geographic areas that are suitable for development based on the bill’s principles. OPM must identify areas where it is prudent and feasible to have different land uses that are arranged in a compact manner so that people can move around on foot or gain easy access to buses or trains. (The bill imposes the same requirement on local and regional planning bodies. )

The revision must also identify corridors along limited access highways and rail lines (i. e. , corridor management areas) and make recommendations that:

1. promote land use and transportation options that reduce the growth of traffic congestion,

2. connect infrastructure and land use planning decisions,

3. promote development that minimizes the cost of new infrastructure and maximizes the use of existing infrastructure, and

4. increase interlocal and regional cooperation.

(The bill imposes similar requirements on local and regional planning bodies. )

Addressing Plans’ Goals

The bill requires the Council on Environmental Quality (CEQ) to report on the progress being made toward achieving the goals and objectives of the Plan of C&D and the master transportation plan. CEQ must include this analysis in its annual environmental quality report, which measures the progress being made toward achieving the statewide environmental plan’s goals and objectives.

The bill also requires CEQ to determine whether plans to build highways and new state facilities could promote compact mixed use developments that generally allow people to walk or ride buses between different land uses. The council must specifically determine if it is feasible and prudent for these plans to promote compact, transit accessible, pedestrian-oriented mixed use development patterns and land reuses and if they actually do. By law, the council’s reviews and comments are advisory, and agencies are not required to adopt its recommendations.

PRIORITY FUNDING AREAS

Designation

The bill requires the legislature to designate Priority Funding Areas (PFAs) where state agencies must target development projects. Beginning January 1, 2004, the bill requires OPM to biennially recommend geographic areas for PFA designation. It must do this in consultation with the transportation, administrative services, environmental protection, and economic and community development commissioners.

OPM must submit its recommendations the Continuing Legislative Committee on State Planning and Development, which has until February 15 to submit its recommendations to the legislature for approval. The designations take effect upon approval, and OPM must include them in the 2008 revision and each subsequent revision of the Plan of C&D.

In recommending PFAs, OPM secretary must consider the geographic designations the state already uses to target development. These include locally designated redevelopment areas and state designated enterprise zones, distressed municipalities, targeted investment communities, and public investment communities. They also include regional centers, growth areas, and rural community centers, which are shown on the Plan of C&D locational guide. The secretary must also consider corridor management areas, which he must identify in the plan beginning with the 2008 revision.

Growth Related Projects

State agencies must target PFAs for “growth related projects” involving state-funded:

1. land acquisitions costing over $ 100,000;

2. property improvements costing over $ 100,000;

3. transportation equipment and facility acquisitions costing over $ 100,000; and

4. applications for state grants for over $ 100,000 that are submitted after July 1, 2004 for acquiring or improving land or acquiring transportation equipment or facilities.

These projects are mainly the same types of projects that must currently be consistent with the State Plan of C&D. Under current law, state projects costing over $ 100,000 must conform to the State Plan of C&D, which includes a map showing areas where the roads, sewers, and other supporting infrastructure already exits.

The bill specifies that the funding for the growth related projects could take the form of grants, loans, loan guarantees, and principal and interest rate reductions. It also specifies that the funding could take the form of tax credits, such as those the state gives to developers who clean up and redeveloped contaminated properties. Under current law, projects funded through tax credits do not have to be consistent with the State Plan of C&D.

Agencies can fund growth related projects outside of PFAs if:

1. the failure to do so would create an extreme inequity, hardship, or disadvantage that clearly outweighs the benefits of locating the project in a PFA;

2. there is no reasonable alternative for the project in a PFA in another location; and

3. the project must be located away from other developments due to its operation or physical characteristics.

In addition, agencies can provide funds outside of PFAs if they are needed to comply with state environmental and health standards. But they cannot provide funds outside of these areas for economic development purposes.

Within one year after the legislature designates PFAs, agencies must annually prepare a report describing the growth related projects they funded outside of these areas and their reasons for doing so.

Exempted Projects

The bill explicitly exempts agencies from complying with the PFA requirement if the project involves:

1. maintaining, repairing, expanding, or renovating existing facilities;

2. acquiring land for parks, conservation, open space, or telecommunications towers needed for public safety;

3. acquiring easements for agricultural, conservation, or historic purposes; or

4. any other activity that is not specifically subject to the PFA requirement.

The bill also exempts projects funded by the economic and community development commissioner if they involve buying or rehabilitating existing single or multifamily homes finance with federal dollars or state revenue bond funds. The commissioner can provide funds if adhering to the PFA requirement would conflict with the laws or rules under which the project received the federal or state revenue bond financing. He can also provide the funds if the requirement prevents him from funding an existing project, including one that needs funds to avoid defaulting on the federal or state financing.

Project Ranking

The bill requires agencies to rank development projects based on their location and the extent to which they address certain planning goals. As Table 1 shows, the bill’s scoring requirements favor projects proposed in PFAs, since they automatically get five points. All projects get a point if they are proposed in another state designated area or address a specific planning goal. Consequently, projects proposed in PFAs could earn up to 11 points while those proposed outside of these areas can earn up to six.

Table 1: Project Ranking Requirements

All agencies must amend their regulations to implement this ranking system after the legislature approves PFAs. While the bill requires the agencies to review their regulations for this purpose, it also requires them work with towns to ensure that the agencies’ programs and activities sustain rural villages.

Federal Projects

The bill requires OPM to encourage federal agencies to site facilities in PFAs designated in urban areas. Federal Executive Order 12072 requires federal agencies to consider siting facilities in these areas as a way to help strengthen or preserve them.

LOCAL AND REGIONAL PLAN ELEMENTS

The bill adds new factors local and regional planning commissions must consider when preparing their respective development plans. Local plans must provide for a system of principal thoroughfares, parkways, bridges, streets, sidewalks, and other public ways in places where these elements are appropriate. Current law allows plans to include recommendations for this system.

Local and regional plans must incorporate development design principles that allow for a mix of different land uses in a way that is compact, allows people to move around on foot, or gives them access to mass transit.

The bill expands the types of programs local commissions can recommend as a way to implement their plans. These programs currently include capital project budgets, land use and building code enforcement, affordable housing implementation plans, and greenway protection and preservation plans. The bill allows commissions to propose PFAs and plans for schools and corridor management areas.

CONSISTENCY REVIEWS

Local Plans

The bill requires regional planning agencies (RPAs) to comment on the extent to which proposed changes and revisions to local plans of C&D are consistent with the region’s plan of development and the state’s plan of C&D. It does this by involving RPAs earlier in the statutory process for changing and revising local plans. It also requires the RPAs to submit their comments to the legislative bodies as well as the planning commissions. The bill requires planning commissions to notify OPM about the plan’s consistency with the state plan.

The current process for changing and revising plans is as follows:

1. A local commission must hold a public hearing on the changes or revisions before it adopts them.

2. At least 65 days before the hearing, the commission must send copies of the changes or revisions to the local legislative body and the RPA. Both bodies may comment on the changes or revisions and submit them to the planning commission before its public hearing (but neither is required to comment on the extent to which the changes or revisions are consistent with the regional or state plan).

3. The legislative body may hold a hearing on the plan and endorse all or parts of it.

4. Before holding a hearing on the plan, the planning commission must file a copy of the plan in the offices of the town and special taxing district clerks. It must also publish a newspaper notice to that effect and about the time and place of the hearing. It must run the notice twice, the first between 15 and 10 days before the hearing and the second not less than two days before the hearing.

5. If that body did not endorse the entire plan or endorses only parts of it, the planning commission must then adopt the plan or the parts the legislative body did not endorse by a two-thirds vote.

6. The plan takes effect on the date the commission prescribed, and the commission must publish a newspaper notice to that effect.

7. The commission must file copies of the adopted plan in the offices of the town and special district clerk.

8. The legislative body may then hold another public hearing on the adopted plan.

The process under the bill is as follows:

1. The planning commission submits a “preliminary plan” to the RPA for review and comment.

2. The RPA then has 65 days to submit an advisory report to the commission and the legislative body. The report must say whether the plan is consistent with the regional and state plans.

3. After receiving the advisory report, the commission may change the plan to address the RPA’s comments. It must also notify OPM about any inconsistencies between its plan and the state plan and explain the inconsistencies.

4. The commission must submit the preliminary plan to the legislative body for its review and comment. The legislative body must hold a public hearing on the plan, after which it must submit its findings and suggestions to the commission.

5. The commission may revise the plan after considering the legislative body’s comments and suggestions, the RPA’s consistency findings, and the public testimony from the legislative body’s hearing.

6. The commission must hold a public hearing on the proposed final plan. Before doing so, it must file a copy of the plan in the offices of the town and special taxing district clerks. It must also publish a newspaper notice to that effect and about the time and place of the hearing. It must run the notice twice, the first between 15 and 10 days before the hearing and the second not less than two days before the hearing. After the hearing, the commission must submit the final proposed plan to the legislative body.

7. The legislative body may endorse or reject the entire plan or parts of it. It may also submit comments and recommended changes to the commission.

8. The commission may adopt or revise the plan by a single resolution or by successive resolutions. The voting requirement depends on whether the legislative endorsed the plan or only parts of it. If the legislative body endorsed the entire plan or endorsed sections of it, the planning commission must adopt the plan or the sections that were not endorsed by a two-thirds vote.

9. The plan takes effect on the date the commission prescribed, and the commission must publish a newspaper notice to that effect.

10. The commission must file copies of the adopted plan in the offices of the town and special district clerk.

11. Within 65 days after adopting the plan, the commission must notify the RPA and OPM about any inconsistencies between the local plan and the regional and state plans, respectively. In notifying OPM, the commission must explain any inconsistencies between its plan and the state’s.

Regional Plans

The bill requires RPAs to revise their regional plans by July 1, 2005. It also requires OPM to review the revised plans and subsequent amendments or revisions for consistency with the State Plan of C&D. It must do this before the RPAs formally adopt the changes.

Under current law, RPAs must hold public hearings on proposed amendments and notify the OPM secretary, the public, and the region’s local planning commissioners and chief executive officers about the time and place of the hearings. The bill drops the notice requirement with respect to OPM, and instead requires RPAs to submit the revised plans or amendments to the secretary at least 65 days before the hearing. The bill imposes no deadline by which OPM must give its comments and recommendations, including those regarding consistency with the state plan. It requires the RPAs to note on the record any inconsistencies between their plans and the state’s.

RPAs must notify OPM again after adopting the changes or revisions about any inconsistencies with the state plan and the reasons for them.

BUILD-OUT ANALYSIS

The bill requires OPM to establish, within available appropriations, a technical assistance program designed encourage and help towns conduct a build-out analysis, which is a planning method that allows towns to see the full extent to which they would be developed under their current zoning and subdivision regulations. In establishing the program, the secretary must provide technical material describing the initial maps and source materials that towns must use to prepare the analysis, the method for storing and displaying relevant geographic data, and the procedures towns can use to review the analysis and how it was prepared.

The program must help towns prepare a build-out analysis that addresses land use needs and goals. It must specifically identify places where the bill’s design principles can be applied. These principles favor mixing different land uses in a way that is compact, allows people to move around on foot, or gives them access to mass transit. The analysis must also help towns develop strategies to manage growth and determine the need for open spaces.

ANNUAL BUILDING PERMIT CAP ON NEW HOUSING CONSTRUCTION

The bill allows towns to impose short-term annual caps on the number of building permits for constructing new housing. The cap does not apply to proposed affordable housing projects or to housing that is part of a site or subdivision plan that the town approved before the ordinance’s effective date.

A town can impose the cap only if it completed a build-out analysis and adopted an ordinance setting the cap, which can be no higher than the average number of building permits the town issued for new housing during three prior calendar years. The cap must expire two years after the ordinance’s effective date or the date when the town adopted a revised plan of conservation and development, whichever happens first. The town must wait at least 10 years before it can impose another cap, which must also be proceeded by a build-out analysis.

OPEN SPACE GRANTS

The bill requires build-out analyses as a pre condition for receiving state grants to acquire open space in towns where 10% or more of the land is undeveloped. The analysis must be attached to the grant applications.

METROPOLITAN PLANNING ORGANIZATIONS

The bill requires the Transportation Strategy Board (TSB) to study how the state should designate metropolitan planning organizations (MPOs), which it must do in order to receive federal transportation funds. The study must evaluate how MPOs are established and their composition. It must also recommend the number of MPOs the state should have and how they can efficiently increase coordination among different groups. The TSB must submit its report to the governor and the transportation and planning and development committees by January 1, 2004.

JR: eh