HF 1154

as introduced - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am

A bill for an act
relating to environment; adopting the Uniform
Environmental Covenants Act; amending Minnesota
Statutes 2004, section 115B.17, subdivision 15;
proposing coding for new law as Minnesota Statutes,
chapter 114D.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

UNIFORM ENVIRONMENTAL COVENANTS ACT

Section 1.

new text begin [114D.01] SHORT TITLE.
new text end

new text begin This chapter may be cited as the Uniform Environmental
Covenants Act.
new text end

Sec. 2.

new text begin [114D.05] DEFINITIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Scope. new text end

new text begin For the purposes of this chapter,
the definitions in this subdivision have the meanings given.
new text end

new text begin Subd. 2. new text end

new text begin Activity and use limitations. new text end

new text begin "Activity and use
limitations" means restrictions or obligations created under
this chapter with respect to real property.
new text end

new text begin Subd. 3. new text end

new text begin Agency. new text end

new text begin "Agency" means the Pollution Control
Agency, Agriculture Department, or another state or federal
agency that determines or approves the environmental response
project pursuant to which the environmental covenant is created.
new text end

new text begin Subd. 4. new text end

new text begin Common interest community. new text end

new text begin "Common interest
community" means a condominium, cooperative, or other real
property with respect to which a person, by virtue of the
person's ownership of a parcel of real property, is obligated to
pay property taxes or insurance premiums, for maintenance, or
for improvement of other real property described in a recorded
covenant that creates the common interest community.
new text end

new text begin Subd. 5. new text end

new text begin Environmental covenant. new text end

new text begin "Environmental covenant"
means a servitude arising under an environmental response
project that imposes activity and use limitations.
new text end

new text begin Subd. 6. new text end

new text begin Environmental response project. new text end

new text begin "Environmental
response project" means a plan or work performed for
environmental remediation of real property and conducted:
new text end

new text begin (1) under a federal or state program governing
environmental remediation of real property;
new text end

new text begin (2) incident to closure of a solid or hazardous waste
management unit, if the closure is conducted with approval of an
agency;
new text end

new text begin (3) corrective actions or response to incidents under
chapter 18B, 18C, 18D, or 18E;
new text end

new text begin (4) corrective action under chapter 115C; or
new text end

new text begin (5) closure, contingency or corrective actions required
under regulations applicable to waste treatment, storage, or
disposal facilities or to above or below ground tanks.
new text end

new text begin Subd. 7. new text end

new text begin Holder. new text end

new text begin "Holder" means the grantee of an
environmental covenant as specified in section 114D.10,
paragraph (a).
new text end

new text begin Subd. 8. new text end

new text begin Person. new text end

new text begin "Person" means an individual,
corporation, business trust, estate, trust, partnership, limited
liability company, association, joint venture, public
corporation, government, governmental subdivision, agency, or
instrumentality, or any other legal or commercial entity.
new text end

new text begin Subd. 9. new text end

new text begin Record. new text end

new text begin "Record," used as a noun, means
information that is inscribed on a tangible medium or that is
stored in an electronic or other medium and is retrievable in
perceivable form.
new text end

new text begin Subd. 10. new text end

new text begin State. new text end

new text begin "State" means a state of the United
States, the District of Columbia, Puerto Rico, the United States
Virgin Islands, or any territory or insular possession subject
to the jurisdiction of the United States.
new text end

Sec. 3.

new text begin [114D.10] NATURE OF RIGHTS; SUBORDINATION OF
INTERESTS.
new text end

new text begin (a) Any person, including a person that owns an interest in
the real property, the agency, or a municipality or other unit
of local government, may be a holder. An environmental covenant
may identify more than one holder. The interest of a holder is
an interest in real property.
new text end

new text begin (b) A right of an agency under this chapter or under an
environmental covenant, other than a right as a holder, is not
an interest in real property.
new text end

new text begin (c) An agency is bound by any obligation it assumes in an
environmental covenant, but an agency does not assume
obligations merely by signing an environmental covenant. Any
other person that signs an environmental covenant is bound by
the obligations the person assumes in the covenant, but signing
the covenant does not change obligations, rights, or protections
granted or imposed under law other than this chapter except as
provided in the covenant.
new text end

new text begin (d) The following rules apply to interests in real property
in existence at the time an environmental covenant is created or
amended:
new text end

new text begin (1) an interest that has priority under other law is not
affected by an environmental covenant unless the person that
owns the interest subordinates that interest to the covenant;
new text end

new text begin (2) this chapter does not require a person that owns a
prior interest to subordinate that interest to an environmental
covenant or to agree to be bound by the covenant;
new text end

new text begin (3) a subordination agreement may be contained in an
environmental covenant covering real property or in a separate
record. If the environmental covenant covers commonly owned
property in a common interest community, the record may be
signed by any person authorized by the governing board of the
owners' association; and
new text end

new text begin (4) an agreement by a person to subordinate a prior
interest to an environmental covenant affects the priority of
that person's interest but does not by itself impose any
affirmative obligation on the person with respect to the
environmental covenant.
new text end

Sec. 4.

new text begin [114D.15] CONTENTS OF ENVIRONMENTAL COVENANT.
new text end

new text begin (a) An environmental covenant must:
new text end

new text begin (1) state that the instrument is an environmental covenant
executed pursuant to this chapter;
new text end

new text begin (2) contain a legally sufficient description of the real
property subject to the covenant;
new text end

new text begin (3) describe the activity and use limitations on the real
property;
new text end

new text begin (4) identify every holder;
new text end

new text begin (5) be signed by the agency, every holder, and, unless
waived by the agency, every owner of the fee simple of the real
property subject to the covenant; and
new text end

new text begin (6) identify the name and location of any administrative
record for the environmental response project reflected in the
environmental covenant.
new text end

new text begin (b) In addition to the information required by paragraph
(a), an environmental covenant may contain other information,
restrictions, and requirements agreed to by the persons who
signed it, including any:
new text end

new text begin (1) requirements for notice following transfer of a
specified interest in, or concerning proposed changes in use of,
applications for building permits for, or proposals for any site
work affecting the contamination on, the property subject to the
covenant;
new text end

new text begin (2) requirements for periodic reporting describing
compliance with the covenant;
new text end

new text begin (3) rights of access to the property granted in connection
with implementation or enforcement of the covenant;
new text end

new text begin (4) a brief narrative description of the contamination and
remedy, including the contaminants of concern, the pathways of
exposure, limits on exposure, and the location and extent of the
contamination;
new text end

new text begin (5) limitation on amendment or termination of the covenant
in addition to those contained in sections 114D.40 and 114D.45;
and
new text end

new text begin (6) rights of the holder in addition to its right to
enforce the covenant pursuant to section 114D.50.
new text end

new text begin (c) In addition to other conditions for its approval of an
environmental covenant, the agency may require those persons
specified by the agency who have interests in the real property
to sign the covenant.
new text end

Sec. 5.

new text begin [114D.20] VALIDITY; EFFECT ON OTHER INSTRUMENTS.
new text end

new text begin (a) An environmental covenant that complies with this
chapter runs with the land.
new text end

new text begin (b) An environmental covenant that is otherwise effective
is valid and enforceable even if:
new text end

new text begin (1) it is not appurtenant to an interest in real property;
new text end

new text begin (2) it can be or has been assigned to a person other than
the original holder;
new text end

new text begin (3) it is not of a character that has been recognized
traditionally at common law;
new text end

new text begin (4) it imposes a negative burden;
new text end

new text begin (5) it imposes an affirmative obligation on a person having
an interest in the real property or on the holder;
new text end

new text begin (6) the benefit or burden does not touch or concern real
property;
new text end

new text begin (7) there is no privity of estate or contract;
new text end

new text begin (8) the holder dies, ceases to exist, resigns, or is
replaced; or
new text end

new text begin (9) the owner of an interest subject to the environmental
covenant and the holder are the same person.
new text end

new text begin (c) An instrument that creates restrictions or obligations
with respect to real property that would qualify as activity and
use limitations except for the fact that the instrument was
recorded before the effective date of this chapter is not
invalid or unenforceable because of any of the limitations on
enforcement of interest described in paragraph (b) or because it
was identified as an easement, servitude, deed restriction, or
other interest. This chapter does not apply in any other
respect to such an instrument.
new text end

new text begin (d) This chapter does not invalidate or render
unenforceable any interest, whether designated as an
environmental covenant or other interest, that is otherwise
enforceable under the law of this state.
new text end

Sec. 6.

new text begin [114D.25] RELATIONSHIP TO OTHER LAND USE LAW.
new text end

new text begin This chapter does not authorize a use of real property that
is otherwise prohibited by zoning, by law other than this
chapter regulating use of real property, or by a recorded
instrument that has priority over the environmental covenant.
An environmental covenant may prohibit or restrict uses of real
property which are authorized by zoning or by law other than
this chapter.
new text end

Sec. 7.

new text begin [114D.30] NOTICE.
new text end

new text begin (a) A copy of an environmental covenant must be provided by
the persons and in the manner required by the agency to:
new text end

new text begin (1) each person that signed the covenant;
new text end

new text begin (2) each person holding a recorded interest in the real
property subject to the covenant;
new text end

new text begin (3) each person in possession of the real property subject
to the covenant;
new text end

new text begin (4) each municipality or other unit of local government in
which real property subject to the covenant is located; and
new text end

new text begin (5) any other person the agency requires.
new text end

new text begin (b) The validity of a covenant is not affected by failure
to provide a copy of the covenant as required under this section.
new text end

Sec. 8.

new text begin [114D.35] RECORDING.
new text end

new text begin (a) An environmental covenant and any amendment or
termination of the covenant must be recorded in every county in
which any portion of the real property subject to the covenant
is located. For purposes of indexing, a holder shall be treated
as a grantee.
new text end

new text begin (b) Except as otherwise provided in section 114D.40,
paragraph (c), an environmental covenant is subject to the laws
of this state governing recording and priority of interests in
real property.
new text end

Sec. 9.

new text begin [114D.40] DURATION; AMENDMENT BY COURT ACTION.
new text end

new text begin (a) An environmental covenant is perpetual unless it is:
new text end

new text begin (1) by its terms limited to a specific duration or
terminated by the occurrence of a specific event;
new text end

new text begin (2) terminated by consent pursuant to section 114D.45;
new text end

new text begin (3) terminated pursuant to paragraph (b);
new text end

new text begin (4) terminated by foreclosure of an interest that has
priority over the environmental covenant; or
new text end

new text begin (5) terminated or modified in an eminent domain proceeding,
but only if:
new text end

new text begin (i) the agency that signed the covenant is a party to the
proceeding;
new text end

new text begin (ii) all persons identified in section 114D.45, paragraphs
(a) and (b), are given notice of the pendency of the proceeding;
and
new text end

new text begin (iii) the court determines, after hearing, that the
termination or modification will not adversely affect human
health or the environment.
new text end

new text begin (b) If the agency that signed an environmental covenant has
determined that the intended benefits of the covenant can no
longer be realized, a court, under the doctrine of changed
circumstances, in an action in which all persons identified in
section 114D.45, paragraphs (a) and (b), have been given notice,
may terminate the covenant or reduce its burden on the real
property subject to the covenant. The agency's determination or
its failure to make a determination upon request is subject to
review pursuant to chapter 14.
new text end

new text begin (c) Except as otherwise provided in paragraphs (a) and (b),
an environmental covenant may not be extinguished, limited, or
impaired through issuance of a tax deed, foreclosure of a tax
lien, or application of the doctrine of adverse possession,
prescription, abandonment, waiver, lack of enforcement, or
acquiescence, or a similar doctrine.
new text end

new text begin (d) An environmental covenant may not be extinguished,
limited, or impaired by application of section 500.20 or 541.023.
new text end

Sec. 10.

new text begin [114D.45] AMENDMENT OR TERMINATION BY CONSENT.
new text end

new text begin (a) An environmental covenant may be amended or terminated
by consent only if the amendment or termination is signed by:
new text end

new text begin (1) the agency;
new text end

new text begin (2) unless waived by the agency, the current owner of the
fee simple of the real property subject to the covenant;
new text end

new text begin (3) each person that originally signed the covenant, unless
the person waived in a signed record the right to consent or a
court finds that the person no longer exists or cannot be
located or identified with the exercise of reasonable diligence;
and
new text end

new text begin (4) except as otherwise provided in paragraph (d), clause
(2), the holder.
new text end

new text begin (b) If an interest in real property is subject to an
environmental covenant, the interest is not affected by an
amendment of the covenant unless the current owner of the
interest consents to the amendment or has waived in a signed
record the right to consent to amendments.
new text end

new text begin (c) Except for an assignment undertaken pursuant to a
governmental reorganization, assignment of an environmental
covenant to a new holder is an amendment.
new text end

new text begin (d) Except as otherwise provided in an environmental
covenant:
new text end

new text begin (1) a holder may not assign its interest without consent of
the other parties;
new text end

new text begin (2) a holder may be removed and replaced by agreement of
the other parties specified in paragraph (a); and
new text end

new text begin (3) a court of competent jurisdiction may fill a vacancy in
the position of holder.
new text end

Sec. 11.

new text begin [114D.50] ENFORCEMENT OF ENVIRONMENTAL
COVENANT.
new text end

new text begin (a) A civil action for injunctive or other equitable relief
for violation of an environmental covenant may be maintained by:
new text end

new text begin (1) a party to the covenant;
new text end

new text begin (2) the agency;
new text end

new text begin (3) any person to whom the covenant expressly grants power
to enforce;
new text end

new text begin (4) a person whose interest in the real property or whose
collateral or liability may be affected by the alleged violation
of the covenant; or
new text end

new text begin (5) a municipality or other unit of local government in
which the real property subject to the covenant is located.
new text end

new text begin (b) This chapter does not limit the regulatory authority of
the agency under law other than this chapter with respect to an
environmental response project.
new text end

new text begin (c) A person is not responsible for or subject to liability
for environmental remediation solely because it has the right to
enforce an environmental covenant.
new text end

Sec. 12.

new text begin [114D.55] REGISTRY; SUBSTITUTE NOTICE.
new text end

new text begin (a) The secretary of state shall establish and maintain a
registry that contains all environmental covenants and any
amendment or termination of those covenants. The registry may
also contain any other information concerning environmental
covenants and the real property subject to them which the agency
considers appropriate. The registry is public data for purposes
of chapter 13.
new text end

new text begin (b) After an environmental covenant or an amendment or
termination of a covenant is filed in the registry established
pursuant to paragraph (a), a notice of the covenant, amendment,
or termination that complies with this section may be recorded
in the land records in lieu of recording the entire covenant.
Any such notice must contain:
new text end

new text begin (1) a legally sufficient description and any available
street address of the real property subject to the covenant;
new text end

new text begin (2) the name and address of the owner of the fee simple
interest in the real property, agency, and holder if other than
the agency;
new text end

new text begin (3) a statement that the covenant, amendment, or
termination is available in a registry at the secretary of
state, which discloses the method of any electronic access; and
new text end

new text begin (4) a statement that the notice is notification of an
environmental covenant executed pursuant to this chapter.
new text end

new text begin (c) A statement in substantially the following form,
executed with the same formalities as a deed in this state,
satisfies the requirements of paragraph (b):
new text end

new text begin "1. This notice is filed in the land records of the
[political subdivision] of [insert name of jurisdiction in which
the real property is located] pursuant to Minnesota Statutes,
section 114D.55.
new text end

new text begin 2. This notice and the covenant, amendment, or termination
to which it refers may impose significant obligations with
respect to the property described below.
new text end

new text begin 3. A legal description of the property is attached as
Exhibit A to this notice. The address of the property that is
subject to the environmental covenant is [insert address of
property] [not available].
new text end

new text begin 4. The name and address of the owner of the fee simple
interest in the real property on the date of this notice is
[insert name of current owner of the property and the owner's
current address as shown on the tax records of the jurisdiction
in which the property is located].
new text end

new text begin 5. The environmental covenant, amendment, or termination
was signed by the Pollution Control Agency, 520 Lafayette Road,
St. Paul, MN.
new text end

new text begin 6. The environmental covenant, amendment, or termination
was filed in the registry on [insert date of filing].
new text end

new text begin 7. The full text of the covenant, amendment, or
termination and any other information required by the agency is
on file and available for inspection and copying in the registry
maintained for that purpose by the secretary of state at 100
Rev. Dr. Martin Luther King Jr. Boulevard, St. Paul, MN 55155.
[The covenant, amendment, or termination may be found
electronically at [insert web address for covenant].]"
new text end

Sec. 13.

new text begin [114D.60] UNIFORMITY OF APPLICATION AND
CONSTRUCTION.
new text end

new text begin In applying and construing this chapter, consideration must
be given to the need to promote uniformity of the law with
respect to its subject matter among states that enact it.
new text end

Sec. 14.

new text begin [114D.65] RELATION TO ELECTRONIC SIGNATURES IN
GLOBAL AND NATIONAL COMMERCE ACT.
new text end

new text begin This chapter modifies, limits, or supersedes the federal
Electronic Signatures in Global and National Commerce Act,
United States Code, title 15, section 7001 et seq., but does not
modify, limit, or supersede section 101 of that act, United
States Code, title 15, section 7001(a), or authorize electronic
delivery of any of the notices described in section 103 of that
act, United States Code, title 15, section 7003(b).
new text end

Sec. 15.

Minnesota Statutes 2004, section 115B.17,
subdivision 15, is amended to read:

Subd. 15.

Acquisition of property.

The agency may
acquire, by purchase or donation, deleted text begin an interest deleted text end new text begin interests new text end in real
property, including easements, deleted text begin restrictive deleted text end new text begin environmental
new text end covenants new text begin under chapter 114D new text end , and leases, that the agency
determines deleted text begin is deleted text end new text begin are new text end necessary for response action. deleted text begin The validity
and duration of a restrictive covenant or nonpossessory easement
acquired under this subdivision shall be determined in the same
manner as the validity and duration of a conservation easement
under chapter 84C, unless the duration is otherwise provided in
the agreement. deleted text end The agency may acquire an easement by
condemnation only if the agency is unable, after reasonable
efforts, to acquire an interest in real property by purchase or
donation. The provisions of chapter 117 govern condemnation
proceedings by the agency under this subdivision. A donation of
an interest in real property to the agency is not effective
until the agency executes a certificate of acceptance. The
state is not liable under this chapter solely as a result of
acquiring an interest in real property under this subdivision.