Bill As Introduced S.184

1 BILL AS INTRODUCED S.184 2 2007 Page 1 3 4 1 S.1842 Introduced by Senator Illuzzi of Essex-Orleans District, Senator Carris of 3 Rutland District, Senator Condos of Chittenden District, 4 Senator Miller of Chittenden District, and Senator Racine of 5 Chittenden District6 Referred to Committee on 7 Date: 8 Subject: Conservation; Uniform Environmental Covenants Act 9 Statement of purpose: This bill proposes to adopt the Uniform Environmental 10 Covenants Act, which establishes a process to be used when contaminated real 11 property is to be remedied to a level that is consistent with the potential 12 environmental risks posed by a particular use. The covenant manages the 13 potential risks presented by the residual contamination, and it assures that 14 controls designed to manage the potential environmental risk of residual 15 contamination will be reflected on the land records and effectively enforced 16 over time as a valid real property servitude.17 AN ACT RELATING TO THE UNIFORM ENVIRONMENTAL 18 COVENANTS ACT19 It is hereby enacted by the General Assembly of the State of Vermont: 5 www.leg.state.vt.us 1 BILL AS INTRODUCED S.184 2 2007 Page 2 3 4 1 Sec. 1. LEGISLATIVE FINDINGS2 The Uniform Environmental Covenants Act allows for the long-term 3 enforcement of remediation measures to be contained in a statutorily defined 4 agreement known as an “environmental covenant,” which will be binding on 5 subsequent purchasers of the property and be listed in the local land records. 6 The fundamental purpose of this act is to remove various legal impediments to 7 the use of such restrictions and to thereby lessen liability concerns of sellers 8 and lenders associated with the redevelopment and sale of contaminated 9 property while at the same time requiring state approval of the remediation and10 control plan as well as notice to surrounding landowners, local governments, 11 and other parties in interest. By ensuring these “institutional controls” are 12 maintained and enforced, the act helps fulfill the dual purposes of such 13 restrictions: the protection of human health and the economically viable reuse 14 of the property in question. Specifically, the act:15 (1) helps to return previously contaminated property to the stream of 16 commerce, by allowing the owners of that property to engage in responsible 17 risk-based remediation and then transfer or sell the property subject to18 state-approved controls on its use.19 (2) gives a broad array of interested parties the ability to enforce the use 20 and activity restrictions contained in an environmental covenant, thereby 5 www.leg.state.vt.us 1 BILL AS INTRODUCED S.184 2 2007 Page 3 3 4 1 helping to ensure those controls will remain in place and prevent secondary 2 harms.3 (3) protects valid environmental covenants from being inadvertently 4 extinguished by application of various common law doctrines, adverse 5 possession, tax lien foreclosures, less-restrictive zoning changes, and 6 marketable title statutes.7 (4) requires the agency of natural resources to be a signatory to the 8 covenant, thereby ensuring that risk assessments and control mechanisms are 9 based on sound science and adequately protect human health and surrounding 10 properties, and that notice of the covenant and associated controls is provided 11 to affected third parties.12 (5) does not supplant or impose substantive cleanup standards or 13 liability; rather it validates approved site-specific controls resulting from an 14 environmental response project, and makes sure those controls are maintained 15 as long as necessary to meet the objective for which they were approved. 16 Sec. 2. 10 V.S.A. chapter 166 is added to read:17 CHAPTER 166. UNIFORM ENVIRONMENTAL COVENANTS ACT18 § 7201. SHORT TITLE 19 This chapter may be cited as the Uniform Environmental Covenants Act.20 § 7202. DEFINITIONS21 In this chapter: 5 www.leg.state.vt.us 1 BILL AS INTRODUCED S.184 2 2007 Page 4 3 4 1 (1) “Activity and use limitations” means restrictions or obligations 2 created under this chapter with respect to real property.3 (2) “Agency” means the agency of natural resources or any other 4 federal agency that determines or approves the environmental response project 5 pursuant to which the environmental covenant is created.6 (3) “Common interest community” means a condominium, cooperative, 7 or other real property with respect to which a person, by virtue of the person’s 8 ownership of a parcel of real property, is obligated to pay property taxes or 9 insurance premiums, or for maintenance, or improvement of other real 10 property described in a recorded covenant that creates the common interest 11 community.12 (4) “Environmental covenant” means a servitude arising under an 13 environmental response project that imposes activity and use limitations.14 (5) “Environmental response project” means a plan or work performed 15 for environmental remediation of real property and conducted:16 (A) under a federal or state program governing environmental 17 remediation of real property, including that under chapter 159 of this title;18 (B) incident to closure or post-closure of a solid or hazardous waste 19 management unit, if the closure is conducted with approval of an agency; or20 (C) by a person voluntarily complying with requirements to 21 remediate a site under this title.5 www.leg.state.vt.us 1 BILL AS INTRODUCED S.184 2 2007 Page 5 3 4 1 (6) “Holder” means the grantee of an environmental covenant as 2 specified in subsection 7203(a) of this title.3 (7) “Person” means an individual, corporation, business trust, estate, 4 trust, partnership, limited liability company, association, joint venture, public 5 corporation, government, governmental subdivision, agency, or 6 instrumentality, or any other legal or commercial entity.7 (8) “Record,” used as a noun, means information that is inscribed on a 8 tangible medium or that is stored in an electronic or other medium and is 9 retrievable in perceivable form.10 (9) “State” means the state of Vermont.11 § 7203. NATURE OF RIGHTS; SUBORDINATION OF INTERESTS12 (a) Any person, including a person that owns an interest in the real 13 property, the agency, or a municipality or other unit of local government, may 14 be a holder. An environmental covenant may identify more than one holder. 15 The interest of a holder is an interest in real property.16 (b) A right of an agency under this chapter or under an environmental 17 covenant, other than a right as a holder, is not an interest in real property.18 (c) An agency is bound by any obligation it assumes in an environmental 19 covenant, but an agency does not assume obligations merely by signing an 20 environmental covenant. Any other person that signs an environmental 21 covenant is bound by the obligations the person assumes in the covenant, but 5 www.leg.state.vt.us 1 BILL AS INTRODUCED S.184 2 2007 Page 6 3 4 1 signing the covenant does not change obligations, rights, or protections granted2 or imposed under law other than this chapter, except as provided in the 3 covenant.4 (d) The following requirements apply to interests in real property in 5 existence at the time an environmental covenant is created or amended:6 (1) An interest that has priority under other law is not affected by an 7 environmental covenant unless the person that owns the interest subordinates 8 that interest to the covenant.9 (2) This chapter does not require a person that owns a prior interest to 10 subordinate that interest to an environmental covenant or to agree to be bound 11 by the covenant.12 (3) A subordination agreement may be contained in an environmental 13 covenant covering real property or in a separate record. If the environmental 14 covenant covers commonly owned property in a common interest community, 15 the record may be signed by any person authorized by the governing board of 16 the owners’ association.17 (4) An agreement by a person to subordinate a prior interest to an 18 environmental covenant affects the priority of that person’s interest but does 19 not by itself impose any affirmative obligation on the person with respect to 20 the environmental covenant.5 www.leg.state.vt.us 1 BILL AS INTRODUCED S.184 2 2007 Page 7 3 4 1 § 7204. CONTENTS OF ENVIRONMENTAL COVENANT2 (a) An environmental covenant must:3 (1) state that the instrument is an environmental covenant executed 4 pursuant to this chapter;5 (2) contain a legally sufficient description of the real property subject to 6 the covenant;7 (3) describe the activity and use limitations on the real property;8 (4) identify every holder;9 (5) be signed by the agency, every holder, and, unless waived by the 10 agency, every owner of the fee simple of the real property subject to the 11 covenant; and12 (6) identify the name and location of any administrative record for the 13 environmental response project reflected in the environmental covenant.14 (b) In addition to the information required by subsection (a) of this section, 15 an environmental covenant may contain other information, restrictions, and 16 requirements agreed to by the persons who signed it, including any:17 (1) requirements for notice following transfer of a specified interest in, 18 or concerning proposed changes in use of, applications for building permits 19 for, or proposals for any site work affecting the contamination on, the property 20 subject to the covenant;5 www.leg.state.vt.us 1 BILL AS INTRODUCED S.184 2 2007 Page 8 3 4 1 (2) requirements for periodic reporting describing compliance with the 2 covenant;3 (3) rights of access to the property granted in connection with 4 implementation or enforcement of the covenant;5 (4) a brief narrative description of the contamination and remedy, 6 including the contaminants of concern, the pathways of exposure, limits on 7 exposure, and the location and extent of the contamination;8 (5) limitation on amendment or termination of the covenant in addition 9 to those contained in sections 7209 and 7210 of this title; and10 (6) rights of the holder in addition to its right to enforce the covenant 11 pursuant to section 7211 of this title.12 (c) In addition to other conditions for its approval of an environmental 13 covenant, the agency may require those persons specified by the agency who 14 have interests in the real property to sign the covenant.15 § 7205. VALIDITY; EFFECT ON OTHER INSTRUMENTS16 (a) An environmental covenant that complies with this chapter runs 17 with the land.18 (b) An environmental covenant that is otherwise effective is valid 19 and enforceable even if:20 (1) it is not appurtenant to an interest in real property;5 www.leg.state.vt.us 1 BILL AS INTRODUCED S.184 2 2007 Page 9 3 4 1 (2) it can be or has been assigned to a person other than the 2 original holder;3 (3) it is not of a character that has been recognized traditionally 4 at common law;5 (4) it imposes a negative burden;6 (5) it imposes an affirmative obligation on a person having an 7 interest in the real property or on the holder;8 (6) the benefit or burden does not touch or concern real property;9 (7) there is no privity of estate or contract;10 (8) the holder dies, ceases to exist, resigns, or is replaced; or11 (9) the owner of an interest subject to the environmental 12 covenant and the holder are the same person.13 (c) An instrument that creates restrictions or obligations with 14 respect to real property that would qualify as activity and use 15 limitations except for the fact that the instrument was recorded before 16 the effective date of this chapter is not invalid or unenforceable because17 of any of the limitations on enforcement of interests described in 18 subsection (b) of this section or because it was identified as an 19 easement, servitude, deed restriction, or other interest. This chapter 20 does not apply in any other respect to such an instrument.5 www.leg.state.vt.us 1 BILL AS INTRODUCED S.184 2 2007 Page 10 3 4 1 (d) This chapter does not invalidate or render unenforceable any 2 interest, whether designated as an environmental covenant or other 3 interest, that is otherwise enforceable under the law of this state.4 § 7206. RELATIONSHIP TO OTHER LAND-USE LAW 5 This chapter does not authorize a use of real property that is 6 otherwise prohibited by zoning, by law other than this chapter 7 regulating use of real property, or by a recorded instrument that has 8 priority over the environmental covenant. An environmental covenant 9 may prohibit or restrict uses of real property which are authorized by 10 zoning or by law other than this chapter.11 § 7207. NOTICE12 (a) A copy of an environmental covenant shall be provided by the 13 persons and in the manner required by the agency to:14 (1) each person that signed the covenant;15 (2) each person holding a recorded interest in the real property 16 subject to the covenant;17 (3) each person in possession of the real property subject to the 18 covenant;19 (4) each municipality or other unit of local government in which 20 real property subject to the covenant is located; and21 (5) any other person the agency requires.5 www.leg.state.vt.us 1 BILL AS INTRODUCED S.184 2 2007 Page 11 3 4 1 (b) The validity of a covenant is not affected by failure to provide a 2 copy of the covenant as required under this section.3 § 7208. RECORDING4 (a) An environmental covenant and any amendment or termination 5 of the covenant must be recorded in every municipality in which any 6 portion of the real property subject to the covenant is located. For 7 purposes of indexing, a holder shall be treated as a grantee.8 (b) Except as otherwise provided in subsection 7209(c) of this title, 9 an environmental covenant is subject to the laws of this state governing10 recording and priority of interests in real property.11 § 7209. DURATION; AMENDMENT BY COURT ACTION12 (a) An environmental covenant is perpetual unless it is:13 (1) by its terms limited to a specific duration or terminated by 14 the occurrence of a specific event;15 (2) terminated by consent pursuant to section 7210 of this title;16 (3) terminated pursuant to subsection (b) of this section;17 (4) terminated by foreclosure of an interest that has priority over 18 the environmental covenant; or19 (5) terminated or modified in an eminent domain proceeding, but20 only if:5 www.leg.state.vt.us 1 BILL AS INTRODUCED S.184 2 2007 Page 12 3 4 1 (A) the agency that signed the covenant is a party to the 2 proceeding;3 (B) all persons identified in subsections 7210(a) and (b) of 4 this title are given notice of the pendency of the proceeding; and5 (C) the court determines, after hearing, that the termination or6 modification will not adversely affect human health or the 7 environment.8 (b) If the agency that signed an environmental covenant has 9 determined that the intended benefits of the covenant can no longer be 10 realized, a court, under the doctrine of changed circumstances, in an 11 action in which all persons identified in subsections 7210(a) and (b) of 12 this title have been given notice, may terminate the covenant or reduce 13 its burden on the real property subject to the covenant. The agency’s 14 determination or its failure to make a determination upon request is 15 subject to review pursuant to chapter 220 of this title.16 (c) Except as otherwise provided in subsections (a) and (b) of this 17 section, an environmental covenant may not be extinguished, limited, 18 or impaired through issuance of a tax deed, foreclosure of a tax lien, or 19 application of the doctrine of adverse possession, prescription, 20 abandonment, waiver, lack of enforcement, or acquiescence, or a 21 similar doctrine.5 www.leg.state.vt.us 1 BILL AS INTRODUCED S.184 2 2007 Page 13 3 4 1 (d) An environmental covenant may not be extinguished, limited, or 2 impaired by application of subchapter 7 of chapter 5 of Title 27, relating to 3 marketable record title.4 § 7210. AMENDMENT OR TERMINATION BY CONSENT5 (a) An environmental covenant may be amended or terminated by 6 consent only if the amendment or termination is signed by:7 (1) the agency;8 (2) unless waived by the agency, the current owner of the fee 9 simple of the real property subject to the covenant;10 (3) each person that originally signed the covenant, unless the 11 person waived in a signed record the right to consent or a court finds 12 that the person no longer exists or cannot be located or identified with 13 the exercise of reasonable diligence; and14 (4) except as otherwise provided in subdivision (d)(2) of this 15 section, the holder.16 (b) If an interest in real property is subject to an environmental 17 covenant, the interest is not affected by an amendment of the covenant 18 unless the current owner of the interest consents to the amendment or 19 has waived in a signed record the right to consent to amendments.5 www.leg.state.vt.us 1 BILL AS INTRODUCED S.184 2 2007 Page 14 3 4 1 (c) Except for an assignment undertaken pursuant to a 2 governmental reorganization, assignment of an environmental covenant3 to a new holder is an amendment.4 (d) Except as otherwise provided in an environmental covenant:5 (1) a holder may not assign its interest without consent of the 6 other parties;7 (2) a holder may be removed and replaced by agreement of the 8 other parties specified in subsection (a) of this section; and9 (3) a court of competent jurisdiction may fill a vacancy in the 10 position of holder.11 § 7211. ENFORCEMENT OF ENVIRONMENTAL COVENANT12 (a) A civil action for injunctive or other equitable relief for 13 violation of an environmental covenant may be maintained by:14 (1) a party to the covenant;15 (2) the agency;16 (3) any person to whom the covenant expressly grants power to 17 enforce;18 (4) a person whose interest in the real property or whose 19 collateral or liability may be affected by the alleged violation of the 20 covenant; or5 www.leg.state.vt.us 1 BILL AS INTRODUCED S.184 2 2007 Page 15 3 4 1 (5) a municipality or other unit of local government in which the 2 real property subject to the covenant is located.3 (b) This chapter does not limit the regulatory authority of any state 4 or federal agency charged with enforcement of environmental laws 5 other than this chapter with respect to an environmental response 6 project.7 (c) A person is not responsible for or subject to liability for 8 environmental remediation solely because it has the right to enforce an 9 environmental covenant.10 § 72 12. REGISTRY; SUBSTITUTE NOTICE11 (a) The agency of natural resources shall establish and maintain a 12 registry that contains all environmental covenants and any amendment 13 or termination of those covenants. The registry may also contain any 14 other information concerning environmental covenants and the real 15 property subject to them which the agency of natural resources 16 considers appropriate. The registry is a public record for purposes of 17 subchapter 3 of chapter 5 of Title 1, pertaining to access to public 18 records.19 (b) After an environmental covenant or an amendment or 20 termination of a covenant is filed in the registry established pursuant to 21 subsection (a) of this section, a notice of the covenant, amendment, or 5 www.leg.state.vt.us 1 BILL AS INTRODUCED S.184 2 2007 Page 16 3 4 1 termination that complies with this section may be recorded in the land 2 records in lieu of recording the entire covenant. Any such notice must 3 contain:4 (1) a legally sufficient description and any available street 5 address of the real property subject to the covenant;6 (2) the name and address of the owner of the fee simple interest 7 in the real property, the agency, and the holder if other than the agency;8 (3) a statement that the covenant, amendment, or termination is 9 available in a registry at the agency of natural resources, which 10 discloses the method of any electronic access; and11 (4) a statement that the notice is notification of an environmental12 covenant executed pursuant to this chapter.13 (c) A statement in substantially the following form, executed with 14 the same formalities as a deed in this state, satisfies the requirements of15 subsection (b) of this section:16 “ 1. This notice is filed in the land records of the Town of [insert 17 name of jurisdiction in which the real property is located] pursuant to 18 10 V.S.A. § 7212.19 2. This notice and the covenant, amendment, or termination to 20 which it refers may impose significant obligations with respect to the 21 property described below.5 www.leg.state.vt.us 1 BILL AS INTRODUCED S.184 2 2007 Page 17 3 4 1 3. A legal description of the property is attached as Exhibit A to 2 this notice. The address of the property that is subject to the 3 environmental covenant is [insert address of property][not available].4 4. The name and address of the owner of the fee simple interest 5 in the real property on the date of this notice is [insert name of current 6 owner of the property and the owner’s current address as shown on the 7 tax records of the municipality in which the property is located].8 5. The environmental covenant, amendment, or termination was 9 signed by [insert name and address of the agency].10 6. The environmental covenant, amendment, or termination was 11 filed in the registry on [insert date of filing].12 7. The full text of the covenant, amendment, or termination and 13 any other information required by the agency is on file and available 14 for inspection and copying in the registry maintained for that purpose 15 by the agency of natural resources at [insert address and room of 16 building in which the registry is maintained]. The covenant, 17 amendment, or termination may be found electronically at [insert web 18 address for covenant].”5 www.leg.state.vt.us 1 BILL AS INTRODUCED S.184 2 2007 Page 18 3 4 1 § 72 13. UNIFORMITY OF APPLICATION AND CONSTRUCTION2 In applying and construing this uniform act, consideration must be 3 given to the advantages of promoting uniformity of the law, where 4 appropriate, with respect to its subject matter among states that enact it.5 § 72 14. RELATION TO ELECTRONIC SIGNATURES IN GLOBAL6 AND NATIONAL COMMERCE ACT7 This chapter modifies, limits, or supersedes the federal Electronic 8 Signatures in Global and National Commerce Act (15 U.S.C. § 7001 9 et seq.) but does not modify, limit, or supersede Section 101 of that act 10 (15 U.S.C. § 7001(a)) or authorize electronic delivery of any of the 11 notices described in Section 103 of that Act (15 U.S.C. § 7003(b)).12 Sec. 3. 27 V.S.A. § 606 is amended to read:13 § 606. LIMITATION OF ACTIONS14 Nothing in this subchapter shall extend the periods for the bringing 15 of an action or suit or for the doing of any act required under existing 16 statutes of limitation, nor affect the operation of existing statutes 17 governing the effect of the recording of or of the failure to record 18 instruments affecting real estate. Nothing in this subchapter shall affect19 environmental covenants entered under the Uniform Environmental 20 Covenants Act established in 10 V.S.A. chapter 166.5 www.leg.state.vt.us

Bill As Introduced S.184

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