HB 1401-FN – AS INTRODUCED
HOUSE BILL 1401-FN
This bill adopts the uniform environmental covenants act.
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Explanation: Matter added to current law appears in bold italics.
Matter removed from current law appears [
in brackets and struckthrough.]
Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Eight
AN ACT adopting the uniform environmental covenants act.
Be it Enacted by the Senate and House of Representatives in General Court convened:
477-A:1 Definitions. In this chapter:
I. “Activity and use limitations” means restrictions or obligations created under this chapter with respect to real property.
II. “Agency” means the federal agency that determines or approves the environmental response project pursuant to which the environmental covenant is created.
III. “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, or for maintenance, or improvement of other real property described in a recorded covenant that creates the common interest community.
IV. “Department” means the department of environmental services.
V. “Environmental covenant” means a servitude arising under an environmental response project that imposes activity and use limitations.
VI. “Environmental response project” means a plan or work performed for environmental remediation of real property and conducted:
(a) Under a federal or state program governing environmental remediation of real property, including the brownfields program under RSA 147-F and hazardous waste cleanup under RSA 147-B.
(b) Incident to closure of a solid or hazardous waste management unit, if the closure is conducted with approval of an agency.
VII. “Holder” means the grantee of an environmental covenant as specified in RSA 477-A:2, I.
VIII. “Person” shall be as defined in RSA 21:9.
IX. “Record” 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.
X. “State” shall be as defined in RSA 21:4.
477-A:2 Nature of Rights; Subordination of Interests.
I. Any person, including a person that owns an interest in real property, the department, 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 shall be an interest in real property.
II. A right of an agency, under this chapter or under an environmental covenant, other than a right as a holder, shall not be an interest in real property.
III. The agency or department shall be bound by any obligation it assumes in an environmental covenant, but the agency or department shall not assume obligations merely by signing an environmental covenant. Any other person that signs an environmental covenant shall be bound by the obligations the person assumes in the covenant, but signing the covenant shall not change obligations, rights, or protections granted or imposed under law other than this chapter except as provided in the covenant.
IV. The following shall apply to interests in real property in existence at the time an environmental covenant is created or amended:
(a) An interest that has priority under other laws shall not be affected by an environmental covenant unless the person that owns the interest subordinates that interest to the covenant.
(b) No person that owns a prior interest shall be required to subordinate that interest shall be required to an environmental covenant or to agree to be bound by the covenant.
(c) 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.
(d) An agreement by a person to subordinate a prior interest to an environmental covenant affects the priority of that person’ s interest but shall not by itself impose any affirmative obligation on the person with respect to the environmental covenant.
477-A:3 Contents of Environmental Covenant.
I. An environmental covenant shall:
(a) State that the instrument is an environmental covenant executed pursuant to this chapter;
(b) Contain a legally sufficient description of the real property subject to the covenant;
(c) Describe the activity and use limitations on the real property;
(d) Identify every holder;
(e) Be signed by the agency or department, every holder, and unless waived by the agency or department, every owner of the fee simple of the real property subject to the covenant; and
(f) Identify the name and location of any administrative record for the environmental response project reflected in the environmental covenant.
II. In addition to the provisions of paragraph I, an environmental covenant may contain other information, restrictions, and requirements agreed to by the persons who signed it, including any:
(a) Requirements for notice following transfer of a specified interest in, 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;
(b) Requirements for periodic reporting describing compliance with the covenant;
(c) Rights of access to the property granted in connection with implementation or enforcement of the covenant;
(d) 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;
(e) Limitation on amendment or termination of the covenant in addition to those contained in RSA 477-A:8 and 477-A:9; and
(f) Rights of the holder in addition to its right to enforce the covenant pursuant to RSA 477-A:10.
III. In addition to other conditions for 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.
477-A:4 Validity; Effect on Other Instruments.
I. An environmental covenant that complies with this chapter shall run with the land.
II. An environmental covenant that is otherwise effective shall be valid and enforceable even if:
(a) It is not appurtenant to an interest in real property;
(b) It can be or has been assigned to a person other than the original holder;
(c) It is not of a character that has been recognized traditionally at common law;
(d) It imposes a negative burden;
(e) It imposes an affirmative obligation on a person having an interest in the real property or on the holder;
(f) The benefit or burden does not touch or concern real property;
(g) There is no privity of estate or contract;
(h) The holder dies, ceases to exist, resigns, or is replaced; or
(i) The owner of an interest subject to the environmental covenant and the holder are the same person.
III. 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 shall not be invalid or unenforceable because of’ any of the limitations on enforcement of interests described in paragraph II or because it was identified as an easement, servitude, deed restriction, or other interest. This chapter shall not apply in any other respect to such an instrument.
IV. This chapter shall 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.
477-A:5 Relationship to Other Land-Use Law. This chapter shall 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.
I. A copy of an environmental covenant shall be provided by the persons and in the manner required by the agency to:
(a) Each person that signed the covenant;
(b) Each person holding a recorded interest in the real property subject to the covenant;
(c) Each person in possession of the real property subject to the covenant;
(d) Each municipality or other unit of local government in which real property subject to the covenant is located; and
(e) Any other person the agency requires.
II. The validity of a covenant shall not be affected by failure to provide a copy of the covenant as required under this section.
I. An environmental covenant and any amendment or termination of the covenant shall 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.
II. Except as otherwise provided in RSA 477-A:8, III, an environmental covenant shall be subject to the laws of this state governing recording and priority of interests in real property.
477-A:8 Duration; Amendment by Court Action.
I. An environmental covenant shall be perpetual unless it is:
(a) By its terms limited to a specific duration or terminated by the occurrence of a specific event;
(b) Terminated by consent pursuant to RSA 477-A:9;
(c) Terminated pursuant to paragraph II of this section;
(d) Terminated by foreclosure of an interest that has priority over the environmental covenant; or
(e) Terminated or modified in an eminent domain proceeding, but only if:
(1) The agency that signed the covenant is a party to the proceeding;
(2) All persons identified in RSA 477-A:9, I-II are given notice of the pendency of the proceeding; and
(3) The court determines, after hearing, that the termination or modification will not adversely affect human health or the environment.
II. If the agency or department 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 RSA 477-A:9, I and II 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 RSA 541.
III. Except as otherwise provided in paragraphs I and II, an environmental covenant shall 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.
IV. An environmental covenant shall not be extinguished, limited, or impaired by application of the doctrine of marketable title or the extinguishment of mineral rights in RSA 498:5-e.
477-A:9 Amendment or Termination by Consent.
I. An environmental covenant may be amended or terminated by consent only if the amendment or termination is signed by:
(a) The agency or the department;
(b) Unless waived by the agency or the department, the current owner of the fee simple of the real property subject to the covenant;
(c) 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
(d) The holder, except as otherwise provided in paragraph IV(b).
II. If an interest in real property is subject to an environmental covenant, the interest shall not be 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.
III. Except for an assignment undertaken pursuant to a governmental reorganization, assignment of an environmental covenant to a new holder shall be an amendment.
IV. Except as otherwise provided in an environmental covenant:
(a) A holder may not assign its interest without consent of the other parties;
(b) A holder may be removed and replaced by agreement of all the parties specified in paragraph I; and
(c) A court of competent jurisdiction may fill a vacancy in the position of holder.
477-A:10 Enforcement of Environmental Covenant.
I. A civil action for injunctive or other equitable relief for violation of an environmental covenant may be maintained by:
(a) A party to the covenant;
(b) The agency or the department;
(c) Any person to whom the covenant expressly grants power to enforce;
(d) A person whose interest in the real property or whose collateral or liability may be affected by the alleged violation of the covenant; or
(e) A municipality or other unit of local government in which the real property subject to the covenant is located.
II. This chapter shall not limit the regulatory authority of the agency or the department under law other than this chapter with respect to an environmental response project.
III. A person is not responsible for or subject to liability for environmental remediation solely because it has the right to enforce an environmental covenant.
477-A:11 Registry; Substitute Notice.
I. The department 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 department considers appropriate. The registry shall be a public record for purposes of RSA 91-A.
II. After an environmental covenant or an amendment or termination of a covenant is filed in the registry established pursuant to paragraph I, 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 shall contain:
(a) A legally sufficient description and any available street address of the real property subject to the covenant;
(b) The name and address of the owner of the fee simple interest in the real property, the agency, and the holder if other than the agency;
(c) A statement that the covenant, amendment, or termination is available in a registry at the department, which discloses the method of any electronic access; and
(d) A statement that the notice is notification of an environmental covenant executed pursuant to this chapter.
III. A statement in substantially the following form, executed with the same formalities as a deed in this state, shall satisfy the requirements of paragraph II:
“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 RSA 477-A:11.
2. This notice and the covenant, amendment, or termination to which it refers may impose significant obligations with respect to the property described below.
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].
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].
5. The environmental covenant, amendment, or termination was signed by [insert name and address of the agency].
6. The environmental covenant, amendment, or termination was filed in the registry on [insert date of filing].,
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 [insert name of state regulatory agency for environmental protection] at [insert address and room of building in which the registry is maintained]. [The covenant, amendment, or termination may be found electronically at [insert web address for covenant]].”
477-A:12 Uniformity of Application and Construction. In applying and construing this uniform act, consideration shall be given to the need to promote uniformity of the law with respect to its subject matter among states that enact it.
477-A:13 Relation to Electronic Signatures in Global and National Commerce Act. This chapter modifies, limits, or supersedes the federal Electronic Signatures in Global and National Commerce Act (15 U.S.C. section 7001 et seq.) but does not modify, limit, or supersede section 101 of that Act (15 U.S.C. section 7001(a)) or authorize electronic delivery of any of the notices described in section 103 of that Act (15 U.S.C. section 7003(b)).
477-A:14 Severability. If any provision of this chapter or its application to any person or circumstance is held invalid, the invalidity, shall not affect other provisions or applications of this chapter which can be given effect without the invalid provision or application, and to this end the provisions of this chapter are severable.
2 Effective Date. This act shall take effect 60 days after its passage.
HB 1401-FN - FISCAL NOTE
AN ACT adopting the uniform environmental covenants act.
The Judicial Branch and the Department of Environmental Services state this bill may increase state expenditures by an indeterminable amount in FY 2009 and each year thereafter. There will be no fiscal impact on county and local expenditures or state, county, and local revenue.
The Judicial Branch and the Department of Environmental Services state this bill adopts the uniform environmental covenants act. The Judicial Branch has identified several proceedings that may increase costs. These proceedings may include court cases construing environmental covenants that may be drafted pursuant to the uniform act, the modification of environmental covenants through eminent domain proceedings, the court terminating a covenant or reducing its burden on the property under the doctrine of changed circumstances, allowing the court to fill a vacancy in the position of holder of the covenant, and the appeal process contained in RSA 541 that allows for an appeal directly from an administrative agency to the Supreme Court.
The Branch indicates all the proceedings in the bill, except for the administrative appeal to the Supreme Court, would be handled by the Superior Court. Using the judicial needs assessment study, most of the proceedings would be categorized as complex equity cases. The weighted caseload for complex equity cases is 230 minutes of judicial time and 355 minutes of clerical time. Assuming an effective date of July 1, 2008, in FY 2009, judicial time is $1.5708 per minute and clerical time is $0.3662 per minute. This rate increases in FY 2010 to $1.6195 per minute for judicial time and $0.3775 per minute for clerical time. The cost of a complex equity case in FY 2009 is $491.28 ((230 judicial minutes * $1.5708) + (355 clerical minutes * $0.3662)) and in FY 2010 and each year thereafter is $506.50 ((230 judicial minutes * $1.6195) + (355 clerical minutes * $0.3775)). The Branch estimates if this bill resulted in 21 additional cases to the Superior Court, the fiscal impact would exceed $10,000 annually. This does not consider the cost of any appeals. The Branch states one appeal could exceed $10,000.
The Department of Environmental Services states it already addresses some aspects of this bill, such as activity and use restrictions in the cleanup of petroleum and hazardous waste sites, using federal funding. The Department indicates any additional fiscal impact should be minimal. However, the Department states there may be legal ramifications associated with this bill that may increase state expenditures.