The Cost of Maine VRAP Protection to Increase
The cost to obtain liability protection under Maine’s very popular Voluntary Response Action Program (VRAP) will soon increase. Effective January 1, 2018, the cost of Maine DEP assistance in reviewing a voluntary response action plan will increase to 1% of the assessed value of the property at issue at the time the request is submitted, except the fee may not exceed $15,000. The existing cost of DEP assistance under VRAP is significantly less; a modest initial fee of $500 plus an hourly rate not to exceed $50 per hour. This increase in VRAP fees results from legislation enacted this session, P.L. 2017, ch. 92.
The Maine Legislature established VRAP in 1993. VRAP allows an applicant to voluntarily investigate and clean up a contaminated property to the Department’s satisfaction in exchange for liability protection under multiple Maine statutes and protection from Department enforcement actions. VRAP is intended to encourage the clean-up and redevelopment of contaminated properties, and has been extremely successful in bringing blighted properties back to productive use.
Initiated by the Department, this increased fee legislation is intended to stabilize VRAP and fully fund it moving forward. The Department does not favor the current hourly fee program and anticipates significant cuts in federal Brownfield funding under the Trump Administration.
Representatives of the regulated community objected to an initial bill that had proposed a fee of 2% of assessed value with no cap, and remain concerned that a fee of up to $15,000 may have a chilling effect on developers entering VRAP, thereby leading them to turn to greenfield sites. See, e.g., testimony. This would leave more brownfield properties contaminated, not redeveloped, and not generating significant property taxes.
Another issue under the new act is how “the property” will be defined. A reliable source within the Department has informed us that contiguous parcels seeking VRAP protection will be combined and considered “the property” for purposes of determining the assessed value, and thus the fee. Whether noncontiguous properties in the same vicinity will be considered “the property” will need to be determined on a case-by-case basis.
Whether this increase in VRAP fees will cause developers to avoid VRAP remains to be seen. In the meantime, developers have the rest of 2017 to file VRAP applications under the current fee program.
If you have questions regarding this legislation, the VRAP process, or development of property in general, please do not hesitate to contact Tom Doyle (email@example.com or 207-791-1214) or Ken Gray (firstname.lastname@example.org or 207-791-1212).