2006 Legislation
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SENATE BILL NO. 1255 – Uniform Environmental Covenants Act

SENATE BILL NO. 1255

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S1255................................................by JUDICIARY AND RULES
UNIFORM ENVIRONMENTAL COVENANTS ACT - Adds to existing law to provide for
the Uniform Environmental Covenants Act; to define terms; to set forth the
nature of rights and subordination of interests; to set forth requirements
for the contents of environmental covenants; to provide that qualifying
environmental covenants run with the land; to provide for the validity and
effect of environmental covenants; to provide for the relationship of
environmental covenants to other land use laws; to require notice and
recording; to set forth duration of covenants; to provide for amendment by
court action; to provide for amendment or termination by consent; to
provide for enforcement; to establish a registry; to require notice; to
provide for uniformity of application and construction; to provide for
relation to other acts; and to provide for severability.
                                                                        
01/16    Senate intro - 1st rdg - to printing
01/17    Rpt prt - to Jud
01/26    Rpt out - rec d/p - to 2nd rdg
01/27    2nd rdg - to 3rd rdg
01/31    3rd rdg - PASSED - 35-0-0
      AYES -- Andreason, Brandt, Broadsword, Bunderson, Burkett,
      Burtenshaw, Cameron, Coiner, Compton, Corder, Darrington, Davis,
      Fulcher, Gannon, Geddes, Goedde, Hill, Jorgenson, Kelly, Keough,
      Langhorst, Little, Lodge, Malepeai, Marley, McGee, McKenzie, Pearce,
      Richardson, Schroeder, Stegner, Stennett, Sweet, Werk, Williams
      NAYS -- None
      Absent and excused -- None
    Floor Sponsors - Davis & Kelly
    Title apvd - to House
01/31    House intro - 1st rdg - to Jud
02/03    Rpt out - Ref'd to Env
02/16    Rpt out - rec d/p - to 2nd rdg
02/17    2nd rdg - to 3rd rdg
02/22    3rd rdg - PASSED - 69-0-1
      AYES -- Anderson, Andrus, Barraclough, Barrett, Bastian, Bayer,
      Bedke, Bell, Bilbao, Black, Block, Boe, Bolz, Brackett, Bradford,
      Cannon, Chadderdon, Clark, Collins, Crow, Deal, Denney, Edmunson,
      Ellsworth, Eskridge, Field(18), Field(23), Garrett, Hart, Harwood,
      Henbest, Henderson, Jaquet, Kemp, Lake, LeFavour, Loertscher,
      Martinez, Mathews, McGeachin, McKague, Miller, Mitchell, Moyle,
      Nielsen, Nonini, Pasley-Stuart, Pence, Raybould, Ring, Ringo,
      Roberts, Rusche, Rydalch, Sali(Sali), Sayler, Schaefer, Shepherd(2),
      Shepherd(8), Shirley, Skippen, Smith(30), Smylie(Luker), Snodgrass,
      Stevenson, Trail, Wills, Wood, Mr. Speaker
      NAYS -- None
      Absent and excused -- Smith(24)
    Floor Sponsor - Bastian
    Title apvd - to Senate
02/23    To enrol
02/24    Rpt enrol - Pres signed
02/27    Sp signed
02/28    To Governor
03/02    Governor signed
         Session Law Chapter 15
         Effective: 07/01/06

Bill Text


                                                                        
                                                                        
  ]]]]              LEGISLATURE OF THE STATE OF IDAHO             ]]]]
 Fifty-eighth Legislature                   Second Regular Session - 2006
                                                                        
                                                                        
                                       IN THE SENATE
                                                                        
                                    SENATE BILL NO. 1255
                                                                        
                              BY JUDICIARY AND RULES COMMITTEE
                                                                        
  1                                        AN ACT
  2    RELATING TO THE UNIFORM ENVIRONMENTAL COVENANTS ACT; AMENDING TITLE 55,  IDAHO
  3        CODE,  BY  THE ADDITION OF A NEW CHAPTER 30, TITLE 55, IDAHO CODE, TO PRO-
  4        VIDE A SHORT TITLE, TO DEFINE TERMS, TO SET FORTH THE NATURE OF RIGHTS AND
  5        SUBORDINATION OF INTERESTS, TO SET FORTH REQUIREMENTS FOR THE CONTENTS  OF
  6        ENVIRONMENTAL  COVENANTS,  TO  PROVIDE THAT QUALIFYING ENVIRONMENTAL COVE-
  7        NANTS RUN WITH THE LAND, TO PROVIDE FOR VALIDITY AND EFFECT OF ENVIRONMEN-
  8        TAL COVENANTS, TO PROVIDE FOR THE RELATIONSHIP OF ENVIRONMENTAL  COVENANTS
  9        TO  OTHER  LAND  USE  LAWS,  TO REQUIRE NOTICE AND RECORDING, TO SET FORTH
 10        DURATION OF COVENANTS, TO PROVIDE FOR AMENDMENT BY COURT ACTION,  TO  PRO-
 11        VIDE  FOR AMENDMENT OR TERMINATION BY CONSENT, TO PROVIDE FOR ENFORCEMENT,
 12        TO ESTABLISH A REGISTRY AND TO REQUIRE NOTICE, TO PROVIDE  FOR  UNIFORMITY
 13        OF APPLICATION AND CONSTRUCTION, TO PROVIDE FOR RELATION TO THE ELECTRONIC
 14        SIGNATURES  IN  GLOBAL AND NATIONAL COMMERCE ACT AND TO PROVIDE FOR SEVER-
 15        ABILITY.
                                                                        
 16    Be It Enacted by the Legislature of the State of Idaho:
                                                                        
 17        SECTION 1.  That Title 55, Idaho Code, be, and the same is hereby  amended
 18    by  the addition thereto of a NEW CHAPTER, to be known and designated as Chap-
 19    ter 30, Title 55, Idaho Code, and to read as follows:
                                                                        
 20                                      CHAPTER 30
 21                         UNIFORM ENVIRONMENTAL COVENANTS ACT
                                                                        
 22        55-3001.  SHORT TITLE. This chapter shall be known and may be cited as the
 23    "Uniform Environmental Covenants Act."
                                                                        
 24        55-3002.  DEFINITIONS. As used in this chapter:
 25        (1)  "Activity and use limitations" means restrictions or obligations cre-
 26    ated under this chapter with respect to real property.
 27        (2)  "Agency" means the Idaho department of environmental quality  or  any
 28    other  state  or  federal agency that determines or approves the environmental
 29    response project pursuant to which the environmental covenant is created.
 30        (3)  "Common interest community"  means  a  condominium,  cooperative,  or
 31    other  real property with respect to which a person, by virtue of the person's
 32    ownership of a parcel of real property, is obligated to pay  property taxes or
 33    insurance premiums, or for maintenance, or improvement of other real  property
 34    described in a recorded covenant that creates the common interest community.
 35        (4)  "Environmental  covenant" means a servitude arising under an environ-
 36    mental response project that imposes activity and use limitations.
 37        (5)  "Environmental response project" means a plan or work  performed  for
 38    environmental remediation of real property and conducted:
 39        (a)  Under  a federal or state program governing environmental remediation
 40        of real property;
 41        (b)  Incident to closure of a solid or hazardous waste management unit, if
                                                                        
                                           2
                                                                        
  1        the closure is conducted with approval of an agency; or
  2        (c)  Under an authorized state voluntary cleanup program.
  3        (6)  "Holder" means the grantee of an environmental covenant as  specified
  4    in section 55-3003(1), Idaho Code.
  5        (7)  "Person"  means  an  individual, corporation, business trust, estate,
  6    trust, partnership, limited liability  company,  association,  joint  venture,
  7    public  corporation,  government, governmental subdivision, agency, or instru-
  8    mentality, or any other legal or commercial entity.
  9        (8)  "Record," used as a noun, means information that is  inscribed  on  a
 10    tangible  medium  or  that  is  stored in an electronic or other medium and is
 11    retrievable in perceivable form.
 12        (9)  "State" means a state of the United States, the District of Columbia,
 13    Puerto Rico, the United States Virgin Islands, or  any  territory  or  insular
 14    possession subject to the jurisdiction of the United States.
                                                                        
 15        55-3003.  NATURE  OF RIGHTS -- SUBORDINATION OF INTERESTS. (1) Any person,
 16    including a person that owns an interest in the real property, the agency,  or
 17    a municipality or other unit of local government, may be a holder. An environ-
 18    mental  covenant  may  identify  more  than  one (1) holder. The interest of a
 19    holder is an interest in real property.
 20        (2)  A right of an agency under this chapter  or  under  an  environmental
 21    covenant, other than a right as a holder, is not an interest in real property.
 22        (3)  An  agency  is bound by any obligation it assumes in an environmental
 23    covenant, but an agency does not assume obligations merely by signing an envi-
 24    ronmental covenant. Any other person that signs an environmental  covenant  is
 25    bound  by  the obligations the person assumes in the covenant, but signing the
 26    covenant does not  change  obligations,  rights,  or  protections  granted  or
 27    imposed under law other than this chapter except as provided in the covenant.
 28        (4)  The  following rules apply to interests in real property in existence
 29    at the time an environmental covenant is created or amended:
 30        (a)  An interest that has priority under other law is not affected  by  an
 31        environmental  covenant  unless the person that owns the interest subordi-
 32        nates that interest to the covenant.
 33        (b)  This chapter does not require a person that owns a prior interest  to
 34        subordinate  that  interest to an environmental covenant or to agree to be
 35        bound by the covenant.
 36        (c)  A subordination agreement may be contained in an environmental  cove-
 37        nant  covering real property or in a separate record. If the environmental
 38        covenant covers commonly owned property in a  common  interest  community,
 39        the  record  may be signed by any person authorized by the governing board
 40        of the owners' association.
 41        (d)  An agreement by a person to subordinate a prior interest to an  envi-
 42        ronmental covenant affects the priority of that person's interest but does
 43        not by itself impose any affirmative obligation on the person with respect
 44        to the environmental covenant.
                                                                        
 45        55-3004.  CONTENTS  OF  ENVIRONMENTAL COVENANT. (1) An environmental cove-
 46    nant must:
 47        (a)  State that the instrument is an environmental covenant executed  pur-
 48        suant to this chapter;
 49        (b)  Contain a legally sufficient description of the real property subject
 50        to the covenant;
 51        (c)  Describe the activity and use limitations on the real property;
 52        (d)  Identify every holder;
 53        (e)  Be  signed  by  the  agency,  every  holder, and unless waived by the
                                                                        
                                           3
                                                                        
  1        agency every owner of the fee simple of the real property subject  to  the
  2        covenant; and
  3        (f)  Identify  the  name and location of any administrative record for the
  4        environmental  response project reflected in the environmental covenant.
  5        (2)  In addition to the information required by  subsection  (1)  of  this
  6    section,  an  environmental  covenant  may contain other information, restric-
  7    tions, and requirements agreed to by the persons who signed it, including any:
  8        (a)  Requirements for notice following transfer of  a  specified  interest
  9        in,  or  concerning  proposed changes in use of, applications for building
 10        permits for, or proposals for any site work  affecting  the  contamination
 11        on, the property subject to the covenant;
 12        (b)  Requirements  for  periodic  reporting describing compliance with the
 13        covenant;
 14        (c)  Rights of access to the property granted in connection with implemen-
 15        tation or enforcement of the covenant;
 16        (d)  A brief  narrative  description  of  the  contamination  and  remedy,
 17        including the contaminants of concern, the pathways of exposure, limits on
 18        exposure, and the location and extent of the contamination;
 19        (e)  Limitation on amendment or termination of the covenant in addition to
 20        those contained in sections 55-3009 and 55-3010, Idaho Code; and
 21        (f)  Rights of the holder in addition to its right to enforce the covenant
 22        pursuant to section 55-3011, Idaho Code.
 23        (3)  In  addition to other conditions for its approval of an environmental
 24    covenant, the agency may require those persons specified  by  the  agency  who
 25    have interests in the real property to sign the covenant.
                                                                        
 26        55-3005.  VALIDITY  --  EFFECT  ON OTHER INSTRUMENTS. (1) An environmental
 27    covenant that complies with this chapter runs with the land.
 28        (2)  An environmental covenant that is otherwise effective  is  valid  and
 29    enforceable even if:
 30        (a)  It is not appurtenant to an interest in real property;
 31        (b)  It  can  be  or has been assigned to a person other than the original
 32        holder;
 33        (c)  It is not of a character that has been  recognized  traditionally  at
 34        common law;
 35        (d)  It imposes a negative burden;
 36        (e)  It  imposes  an affirmative obligation on a person having an interest
 37        in the real property or on the holder;
 38        (f)  The benefit or burden does not touch or concern real property;
 39        (g)  There is no privity of estate or contract;
 40        (h)  The holder dies, ceases to exist, resigns, or is replaced; or
 41        (i)  The owner of an interest subject to the  environmental  covenant  and
 42        the holder are the same person.
 43        (3)  An  instrument  that creates restrictions or obligations with respect
 44    to real property that would qualify as activity and use limitations except for
 45    the fact that the instrument was recorded before July 1, 2006, is not  invalid
 46    or unenforceable because of any of the limitations on enforcement of interests
 47    described in subsection (2) of this section or because it was identified as an
 48    easement,  servitude,  deed  restriction, or other interest. This chapter does
 49    not apply in any other respect to such an instrument.
 50        (4)  This chapter does not invalidate or render unenforceable  any  inter-
 51    est,  whether  designated as an environmental covenant or other interest, that
 52    is otherwise enforceable under the law of this state.
                                                                        
 53        55-3006.  RELATIONSHIP TO OTHER LAND USE LAW. This chapter  does  not  au-
                                                                        
                                           4
                                                                        
  1    thorize  a use of real property that is otherwise prohibited by zoning, by law
  2    other than this chapter regulating use of real  property,  or  by  a  recorded
  3    instrument that has priority over the environmental covenant. An environmental
  4    covenant  may  prohibit or restrict uses of real property which are authorized
  5    by zoning or by law other than this chapter.
                                                                        
  6        55-3007.  NOTICE. (1) A copy of an environmental covenant  shall  be  pro-
  7    vided by the persons and in the manner required by the agency to:
  8        (a)  Each person that signed the covenant;
  9        (b)  Each  person holding a recorded interest in the real property subject
 10        to the covenant;
 11        (c)  Each person in possession of the real property subject to  the  cove-
 12        nant;
 13        (d)  Each  municipality  or  other  unit of local government in which real
 14        property subject to the covenant is located; and
 15        (e)  Any other person the agency requires.
 16        (2)  The validity of a covenant is not affected by failure  to  provide  a
 17    copy of the covenant as required under this section.
                                                                        
 18        55-3008.  RECORDING.  (1)  An  environmental covenant and any amendment or
 19    termination of the covenant must be recorded in every county in which any por-
 20    tion of the real property subject to the covenant is located. For purposes  of
 21    indexing, a holder shall be treated as a grantee.
 22        (2)  Except  as  otherwise  provided in section 55-3009(3), Idaho Code, an
 23    environmental covenant is subject to the laws of this state governing  record-
 24    ing and priority of interests in real property.
                                                                        
 25        55-3009.  DURATION -- AMENDMENT BY COURT ACTION. (1) An environmental cov-
 26    enant is perpetual unless it is:
 27        (a)  By  its  terms  limited  to  a specific duration or terminated by the
 28        occurrence of a specific event;
 29        (b)  Terminated by consent pursuant to section 55-3010, Idaho Code;
 30        (c)  Terminated pursuant to subsection (2) of this section;
 31        (d)  Terminated by foreclosure of an interest that has priority  over  the
 32        environmental covenant; or
 33        (e)  Terminated or modified in an eminent domain proceeding, but only if:
 34             (i)   The  agency that signed the covenant is a party to the proceed-
 35             ing;
 36             (ii)  All persons identified in section  55-3010(1)  and  (2),  Idaho
 37             Code, are given notice of the pendency of the proceeding; and
 38             (iii) The  court  determines,  after hearing, that the termination or
 39             modification will not adversely affect human health or  the  environ-
 40             ment.
 41        (2)  If  the  agency  that signed an environmental covenant has determined
 42    that the intended benefits of the covenant can no longer be realized, a court,
 43    under the doctrine of changed circumstances, in an action in which all persons
 44    identified in section 55-3010(1) and (2), Idaho Code, have been given  notice,
 45    may  terminate  the covenant or reduce its burden on the real property subject
 46    to the covenant. The agency's determination or its failure to make a  determi-
 47    nation  upon request is subject to review pursuant to the Idaho administrative
 48    procedure act, chapter 52, title 67, Idaho Code.
 49        (3)  Except as otherwise provided in subsections (1) and (2) of this  sec-
 50    tion,  an environmental covenant may not be extinguished, limited, or impaired
 51    through issuance of a tax deed, foreclosure of a tax lien, or  application  of
 52    the doctrine of adverse possession, prescription, abandonment, waiver, lack of
                                                                        
                                           5
                                                                        
  1    enforcement, or acquiescence, or a similar doctrine.
                                                                        
  2        55-3010.  AMENDMENT  OR TERMINATION BY CONSENT. (1) An environmental cove-
  3    nant may be amended or terminated by consent only if the amendment or termina-
  4    tion is signed by:
  5        (a)  The agency;
  6        (b)  Unless waived by the agency, the current owner of the fee  simple  of
  7        the real property subject to the covenant;
  8        (c)  Each  person  that  originally signed the covenant, unless the person
  9        waived in a signed record the right to consent or a court finds  that  the
 10        person  no longer exists or cannot be located or identified with the exer-
 11        cise of reasonable diligence; and
 12        (d)  Except as otherwise provided in subsection (4)(b)  of  this  section,
 13        the holder.
 14        (2)  If  an interest in real property is subject to an environmental cove-
 15    nant, the interest is not affected by an amendment of the covenant unless  the
 16    current  owner  of  the  interest consents to the amendment or has waived in a
 17    signed record the right to consent to amendments.
 18        (3)  Except for an assignment undertaken pursuant to a governmental  reor-
 19    ganization,  assignment  of  an  environmental  covenant to a new holder is an
 20    amendment.
 21        (4)  Except as otherwise provided in an environmental covenant:
 22        (a)  A holder may not assign its interest without  consent  of  the  other
 23        parties;
 24        (b)  A  holder  may be removed and replaced by agreement of the other par-
 25        ties specified in subsection (1) of this section; and
 26        (c)  A court of competent jurisdiction may fill a vacancy in the  position
 27        of holder.
                                                                        
 28        55-3011.  ENFORCEMENT  OF  ENVIRONMENTAL  COVENANT. (1) A civil action for
 29    injunctive or other equitable relief for violation of an  environmental  cove-
 30    nant may be maintained by:
 31        (a)  A party to the covenant;
 32        (b)  The agency or, if it is not the agency, the Idaho department of envi-
 33        ronmental quality;
 34        (c)  Any person to whom the covenant expressly grants power to enforce;
 35        (d)  A  person  whose interest in the real property or whose collateral or
 36        liability may be affected by the alleged violation of the covenant; or
 37        (e)  A municipality or other unit of local government in  which  the  real
 38        property subject to the covenant is located.
 39        (2)  This chapter does not limit the regulatory authority of the agency or
 40    the  Idaho department of environmental quality under law other than this chap-
 41    ter with respect to an environmental response project.
 42        (3)  A person is not responsible for or subject to liability for  environ-
 43    mental remediation solely because it has the right to enforce an environmental
 44    covenant.
                                                                        
 45        55-3012.  REGISTRY -- SUBSTITUTE NOTICE. (1) The Idaho department of envi-
 46    ronmental  quality  shall  establish and maintain a registry that contains all
 47    environmental covenants and any amendment or termination of  those  covenants.
 48    The  registry  may also contain any other information concerning environmental
 49    covenants and the real property subject to them which the department of  envi-
 50    ronmental quality considers appropriate. The registry is a public record.
 51        (2)  After  an  environmental covenant or an amendment or termination of a
 52    covenant  is filed in the registry established and maintained pursuant to sub-
                                                                        
                                           6
                                                                        
  1    section (1) of this section, a notice of the covenant, amendment, or  termina-
  2    tion  that  complies  with this section may be recorded in the land records in
  3    lieu of recording the entire covenant. Any such notice must contain:
  4        (a)  A legally sufficient description and any available street address  of
  5        the real property subject to the covenant;
  6        (b)  The  name  and address of the owner of the fee simple interest in the
  7        real property, the agency, and the holder if other than the agency;
  8        (c)  A statement that the covenant, amendment, or termination is available
  9        in a registry at the department of environmental quality, which  discloses
 10        the method of any electronic access; and
 11        (d)  A statement that the notice is notification of an environmental cove-
 12        nant executed pursuant to this chapter.
 13        (3)  A  statement  in  substantially the following form, executed with the
 14    same formalities as a deed in this state, satisfies the requirements  of  sub-
 15    section (2) of this section:
 16        "1.  This  notice  is filed in the land records of the (political subdivi-
 17        sion) of (insert name of  jurisdiction  in  which  the  real  property  is
 18        located) pursuant to section 55-3012, Idaho Code.
 19        2.  This  notice  and  the  covenant, amendment or termination to which it
 20        refers may impose significant obligations with  respect  to  the  property
 21        described below.
 22        3.  A  legal  description of the property is attached as Exhibit A to this
 23        notice. The address of the property that is subject to  the  environmental
 24        covenant is (insert address of property) (not available).
 25        4.  The  name  and  address of the owner of the fee simple interest in the
 26        real property on the date of this notice is (insert name of current  owner
 27        of  the  property  and  the  owner's  current  address as shown on the tax
 28        records of the jurisdiction in which the property is located).
 29        5.  The environmental covenant, amendment or  termination  was  signed  by
 30        (insert name and address of the agency).
 31        6.  The  environmental covenant, amendment or termination was filed in the
 32        registry on (insert date of filing).
 33        7.  The full text of the covenant, amendment or termination and any  other
 34        information required by the agency is on file and available for inspection
 35        and  copying  in  the  registry  maintained  for that purpose by the Idaho
 36        department of environmental quality.".
                                                                        
 37        55-3013.  UNIFORMITY OF APPLICATION AND CONSTRUCTION. In applying and con-
 38    struing this uniform act, consideration must be given to the need  to  promote
 39    uniformity  of  the  law  with respect to its subject matter among states that
 40    enact it.
                                                                        
 41        55-3014.  RELATION TO ELECTRONIC SIGNATURES IN GLOBAL  AND  NATIONAL  COM-
 42    MERCE ACT. This chapter modifies, limits, or supersedes the federal electronic
 43    signatures  in  global  and  national  commerce act (15 U.S.C. section 7001 et
 44    seq.) but does not modify, limit, or supersede section 101  of  that  act  (15
 45    U.S.C. section 7001(a)) or authorize electronic delivery of any of the notices
 46    described in section 103 of that act (15 U.S.C. section 7003(b)).
                                                                        
 47        55-3015.  SEVERABILITY. The provisions of this chapter are hereby declared
 48    to  be  severable  and  if any provision of this chapter or the application of
 49    such provision to any person or circumstance is declared invalid for any  rea-
 50    son,  such declaration shall not affect the validity of the remaining portions
 51    of this chapter.

Statement of Purpose / Fiscal Impact



                       STATEMENT OF PURPOSE

                            RS 15325C1

The Uniform Environmental Covenants Act deals with the future use
of contaminated real estate or brownfields.  The act provides
clear rules for a perpetual real estate interest - an
environmental covenant - to regulate the use of brownfields when
real estate is transferred from one owner to another.


                           FISCAL NOTE

There will be no impact on the state's general fund.






Contact
Name: Senator Bart Davis 
Phone: 208-332-1305
Dale G. Higer
Phone: 208-345-1432



STATEMENT OF PURPOSE/FISCAL NOTE                        S 1255