MEREDA Continues to Improve Real Estate Development Climate – Succeeds in Changing Two Laws to Streamline Processes and Minimizes Two Fee Increases During 2017 Legislative Session

by Andrea Cianchette Maker, Esq., Pierce Atwood, LLP, Public Policy Counsel to MEREDA

Based on a survey of MEREDA members in the summer of 2016, MEREDA‘s proactive Public Policy  Committee developed legislation to address difficult governmental challenges faced by the real estate development community.  Of the three bills MEREDA submitted, two were enacted and the third was not (at least not this session).  Also, during the session, MEREDA actively engaged in negotiations that resulted in lower fee increases that impact developers.

One of the new laws, Public Law 2017, Chapter 104, has two parts.  The MEREDA Public Policy Committee and Counsel worked closely with other stakeholders to enact this law, which will help promote infill development and encourage the renovation and rehabilitation of older buildings.  The first part of the new law removes a complete regulatory process when dividing a new or existing building into three or more dwelling units in those municipalities that require both site plan review and subdivision review.  Under the new law, after June 30, 2018, the project no longer will need to undergo subdivision review if the municipality has a site law. In those municipalities that do not have a site law, a subdivision review will continue to be required for these projects.  The second part of this new law provides that when any type of project undergoes subdivision review and receives one or more waivers from the subdivision requirements, the developer will have up to two years (from the current 90 days requirement) to file the waiver or variance in the registry of deeds.  The law will take effect 90 days after the legislature adjourns.  MEREDA thanks Senator Nate Libby (D) of Androscoggin County, for sponsoring this bill.

Another bill that arose in the Public Policy Committee deliberations was passed into law as Public Law 2017, Chapter 241. This new law, which MEREDA worked on in collaboration with the Regional Organization of Municipal Attorneys, states that any municipal land use decision that requires review by more than one municipal board must receive a final decision from each board before any of those decisions can be appealed to Superior Court.  This bill will shorten the judicial process for such decisions.  The legislation was submitted in response to a 2016 Maine Supreme Judicial Court decision in a case entitled Bryant v. Town of Camden.  This law will take effect 90 days after the legislature adjourns.  MEREDA thanks Senator Cathy Breen, (D) of Cumberland County for sponsoring MEREDA’s concept draft of this legislation and acknowledges the good work of ROMA in working on similar legislation.  Ultimately, MEREDA’s concept bill was withdrawn in deference to ROMA’s bill, which was amended and then enacted into law.

MEREDA also submitted a third piece of legislation regarding dimensional standards, which created a complex set of implications that needed more time to address than was available to the Legislature’s Committee on State and Local Government this session, and ultimately the bill did not pass.  But as is often the case when a new bill is introduced, the legislation generated awareness and yielded productive discussions of the issues surrounding Maine’s existing dimensional standards variance law.  MEREDA’s Public Policy Committee will review this bill to determine whether it might be fruitful to try to advance it in the next Legislature.

In addition to introducing legislation, MEREDA reactively engaged in negotiations to lower proposed new fees on developers.  After lengthy negotiations and persistence by MEREDA, the Fire Marshal agreed to a fire plan review fee of 1.5/10 of 1% (or .00015) of the cost of construction of the portion of the project that is required to be reviewed by the Fire Marshal’s office.  This fee is anticipated to sufficiently fund the Fire Marshal’s fire plan review activities.  The Fire Marshal’s original proposal was a 3% rate and applied to the “cost of the project” which was undefined and we feared overly broad.  By adopting the language “the portion of the project that is subject to State Fire Marshal review” the intention is to assess the fee only on the cost of construction or reconstruction of the building shell and the components that are within that shell before the walls are enclosed.

MEREDA also advocated to lower and cap the amount of the new fee structure for participating in the DEP’s Voluntary Response Action Plan.  The DEP’s original fee proposal was 3% of the assessed value of the property at the time of filing the VRAP application.  MEREDA was the only organization to testify on this bill.  While we spoke favorably about the program and the people who administer it, we opposed such a significant fee increase.  We succeeded in reducing the fee to 1% of the assessed value of the property at the time of filing the application, up to a fee cap of $15,000. This is a substantial decrease from the original 3% proposal.  While most new laws will take effect 90 days after the Legislature adjourns, this new law will take effect on January 1, 2018.  Until then, the current fee structure of $500 filing fee and $50 per hour for staff time will remain in place.

In enacting clarifying laws that reduce redundancies in permitting processes and that clarifies decision-making processes, MEREDA continues to improve the climate for real estate development in Maine.

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