NC Brownfields Section Implements New Application Fee, Penalty Assessment, and Construction Oversight Fee Schedule
The North Carolina Department of Environmental Quality (“NCDEQ”) Brownfields Section (the “Section”) recently announced upcoming changes to the fees it charges in connection with participation in the Brownfields Program. The fee increases and new cost assessments will go into effect on November 1, 2025. Notably, the Section will now impose construction oversight-related fees and penalties for non-compliance.
These important updates include:
- The application fee to participate in the Section’s “fast-track” program - Redevelopment Now – will increase from $30,000 to $45,000 per application. Applicants seeking to participate in the Ready-for-Reuse Program on the Redevelopment Now track will also pay $45,000 per application. The Section anticipates generating approximately $2,025,000 in annual revenue from Redevelopment Now and Ready-for Reuse Redevelopment Now projects.
- The application fee to participate in the Section’s Standard Program will increase from $8,000 to $12,000 per application, which is expected to increase the projected revenue from Standard projects by $40,000 annually.
- Municipalities and local governments participating in the Brownfields Section will pay $8,000 per application.
Likely of most interest to prospective developers is the new “implementation fee” that will be imposed by the Section during the period of “active construction.” The Section has stated this implementation fee – which will be assessed at a maximum rate of $10,000 per year – is intended to cover the Section’s review costs for environmental management plans (“EMP”) and vapor intrusion mitigation plans (“VIMP”), including potential costs after construction is complete, if ongoing monitoring is required. Revenue from the new fees will be used to help offset the cost of inspections, monitoring, and compliance review conducted by Section staff.
According to information shared during a recent Brownfields Section Stakeholder Meeting, any Brownfields project that includes a vapor intrusion mitigation system (“VIMS”) can expect to be charged the maximum $10,000 construction / implementation fee each year during construction, while projects that do not have a VIMS may be able to negotiate lower annual fees. The fee will be first assessed when construction begins and will terminate once the final redevelopment summary report is submitted. Notably, fees associated with a partial year of construction will be prorated.
The Section also announced that it will begin charging “cost recovery fees” for “non-compliance issues that are an otherwise unrecovered cost to the state.” Session Law 2025-53, which was adopted earlier this year, authorizes the Section to recover costs for resolving non-compliance issues. While no fee schedule or range of potential penalties was presented in the announcement, the Section has stated that the amount of those fees will “be based on recovering the costs to the state consistent with the statute.” Similarly, the announcement did describe specific potential violations but noted that fees could be assessed for situations such as failure to submit annual land use restrictions updates, or other “more significant noncompliance issues.” Thus, it will be interesting to track the types of violations and noncompliance that are noted by the Section, and the amount of penalties assessed in connection with those violations, as inspections and compliance monitoring will likely increase in coming years.
Notably, Session Law 2025-53 also revised the brownfields tax statute (N.C. Gen. Stat. §105-277.13) to clarify that improvements made to a Brownfields Property after the Prospective Developer is enrolled in the Brownfields Program, but before the Brownfields Agreement has been recorded, are eligible to receive Brownfields tax incentives. Because some North Carolina counties had recently interpreted the Brownfields tax statute differently, this clarification is critical to ensuring that the Brownfields tax incentives are applied consistently to Brownfields projects throughout the state. If you have questions regarding the timing and applicability of the Brownfields tax incentive for your project, please reach out to a member of the Moore & Van Allen Environmental Practice Group.
As with the implementation of any new program, we anticipate there will be questions that arise as these new fees begin to be assessed in coming months. The Moore & Van Allen Environmental Practice Group will be tracking these situations and any related trends and will be available to discuss as questions arise.