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S.B. 153





Chief Sponsor: Lyle W. Hillyard

House Sponsor:

Fred R. Hunsaker
             7      LONG TITLE
             8      General Description:
             9          This bill enacts the Uniform Environmental Covenants Act.
             10      Highlighted Provisions:
             11          This bill:
             12          .    defines terms;
             13          .    identifies who may be a holder of an environmental covenant;
             14          .    defines the rights of a holder of an environmental covenant;
             15          .    outlines the required and optional elements of an environmental covenant;
             16          .    describes the effect of an environmental covenant on other interests and
             17      instruments;
             18          .    provides that the chapter does not authorize a use of real property prohibited by:
             19              .    a zoning law;
             20              .    other land use law; or
             21              .    a recorded instrument with priority over an environmental covenant;
             22          .    provides a notice requirement for an environmental covenant;
             23          .    provides for the recording of an environmental covenant;
             24          .    provides for determining the duration of an environmental covenant;
             25          .    provides for amendments to or termination of an environmental covenant;
             26          .    provides for civil enforcement of an environmental covenant;
             27          .    requires the Department of Environmental Quality to establish and maintain a

             28      registry containing all environmental covenants;
             29          .    includes provisions regarding interpretation of the chapter and its relation to certain
             30      federal laws; and
             31          .    contains a severability clause.
             32      Monies Appropriated in this Bill:
             33          None
             34      Other Special Clauses:
             35          None
             36      Utah Code Sections Affected:
             37      AMENDS:
             38          19-10-101, as enacted by Chapter 44, Laws of Utah 2003
             39      ENACTS:
             40          57-25-101, Utah Code Annotated 1953
             41          57-25-102, Utah Code Annotated 1953
             42          57-25-103, Utah Code Annotated 1953
             43          57-25-104, Utah Code Annotated 1953
             44          57-25-105, Utah Code Annotated 1953
             45          57-25-106, Utah Code Annotated 1953
             46          57-25-107, Utah Code Annotated 1953
             47          57-25-108, Utah Code Annotated 1953
             48          57-25-109, Utah Code Annotated 1953
             49          57-25-110, Utah Code Annotated 1953
             50          57-25-111, Utah Code Annotated 1953
             51          57-25-112, Utah Code Annotated 1953
             52          57-25-113, Utah Code Annotated 1953
             53          57-25-114, Utah Code Annotated 1953
             54          57-25-115, Utah Code Annotated 1953
             56      Be it enacted by the Legislature of the state of Utah:
             57          Section 1. Section 19-10-101 is amended to read:
             58           19-10-101. Title -- Scope.

             59          (1) This chapter is known as the "Environmental Institutional Control Act."
             60          (2) (a) This chapter applies to an environmental institutional control created before
             61      May 1, 2006.
             62          (b) Title 57, Chapter 25, Uniform Environmental Covenants Act, governs an
             63      environmental covenant created on or after May 1, 2006.
             64          Section 2. Section 57-25-101 is enacted to read:

             66          57-25-101. Title -- Scope.
             67          (1) This chapter is known as the "Uniform Environmental Covenants Act."
             68          (2) (a) This chapter applies to an environmental covenant created on or after May 1,
             69      2006.
             70          (b) Title 19, Chapter 10, Environmental Institutional Control Act, applies to an
             71      environmental covenant created before May 1, 2006.
             72          (3) For the purposes of this chapter and Title 19, Chapter 10, Environmental
             73      Institutional Control Act, an environmental institutional control, as defined in Section
             74      19-10-102 , is considered an environmental covenant.
             75          Section 3. Section 57-25-102 is enacted to read:
             76          57-25-102. Definitions.
             77          As used in this chapter:
             78          (1) "Activity and use limitations" means restrictions or obligations created under this
             79      chapter with respect to real property.
             80          (2) "Agency" means the Utah Department of Environmental Quality or other state or
             81      federal agency that determines or approves the environmental response project under which the
             82      environmental covenant is created.
             83          (3) "Common interest community" means a condominium, cooperative, or other real
             84      property with respect to which a person, by virtue of the person's ownership of a parcel of real
             85      property, is obligated to pay property taxes or insurance premiums, or for maintenance, or
             86      improvement of other real property described in a recorded covenant that creates the common
             87      interest community.
             88          (4) "Environmental covenant" means a servitude arising under an environmental
             89      response project that imposes activity and use limitations.

             90          (5) "Environmental response project" means a plan, risk assessment, or work
             91      performed for environmental remediation of real property or surface and groundwater on or
             92      beneath the real property and conducted:
             93          (a) under a federal or state program governing environmental remediation of real
             94      property, including under Title 19, Environmental Quality Code;
             95          (b) incident to closure of a solid or hazardous waste management unit, if the closure is
             96      conducted with approval of an agency; or
             97          (c) under the state voluntary clean-up program authorized in Title 19, Chapter 8,
             98      Voluntary Cleanup Program.
             99          (6) "Holder" means the grantee of an environmental covenant as specified in
             100      Subsection 57-25-103 (1).
             101          (7) "Jurisdiction" means a state of the United States, the District of Columbia, Puerto
             102      Rico, the United States Virgin Islands, or any territory or insular possession subject to the
             103      jurisdiction of the United States.
             104          (8) "Record," used as a noun, means information that is inscribed on a tangible medium
             105      or that is stored in an electronic or other medium and is retrievable in perceivable form.
             106          Section 4. Section 57-25-103 is enacted to read:
             107          57-25-103. Nature of rights -- Subordination of interests.
             108          (1) (a) Any person, including a person that owns an interest in the real property, the
             109      agency, or a municipality or other unit of local government, may be a holder.
             110          (b) An environmental covenant may identify more than one holder.
             111          (c) The interest of a holder is an interest in real property.
             112          (2) A right of an agency under this chapter or under an environmental covenant, other
             113      than a right as a holder, is not an interest in real property.
             114          (3) (a) An agency is bound by any obligation it affirmatively assumes in an
             115      environmental covenant, but an agency does not assume obligations merely by signing an
             116      environmental covenant.
             117          (b) Any other person that signs an environmental covenant is bound by the obligations
             118      the person assumes in the covenant, but signing the covenant does not change obligations,
             119      rights, or protections granted or imposed under law other than this chapter except as provided
             120      in the covenant.

             121          (4) The following requirements apply to interests in real property in existence at the
             122      time an environmental covenant is created or amended:
             123          (a) An interest that has priority under other law is not affected by an environmental
             124      covenant unless the person that owns the interest subordinates that interest to the covenant.
             125          (b) This chapter does not require a person that owns a prior interest to subordinate that
             126      interest to an environmental covenant or to agree to be bound by the covenant.
             127          (c) (i) A subordination agreement may be contained in an environmental covenant
             128      covering real property or in a separate record.
             129          (ii) If the environmental covenant covers commonly owned property in a common
             130      interest community, the record may be signed by any person authorized by the governing board
             131      of the owners' association.
             132          (d) An agreement by a person to subordinate a prior interest to an environmental
             133      covenant affects the priority of that person's interest but does not by itself impose any
             134      affirmative obligation on the person with respect to the environmental covenant.
             135          Section 5. Section 57-25-104 is enacted to read:
             136          57-25-104. Contents of environmental covenant.
             137          (1) An environmental covenant must:
             138          (a) state that the instrument is an environmental covenant executed under this chapter;
             139          (b) contain a legally sufficient description of the real property subject to the covenant;
             140          (c) describe the activity and use limitations on the real property;
             141          (d) identify every holder;
             142          (e) be signed by the agency, every holder, and unless waived by the agency, every
             143      owner of the fee simple of the real property subject to the covenant; and
             144          (f) identify the name and location of any administrative record for the environmental
             145      response project reflected in the environmental covenant.
             146          (2) In addition to the information required by Subsection (1), an environmental
             147      covenant may contain other information, restrictions, and requirements agreed to by the
             148      persons who signed it, including any:
             149          (a) requirements for notice following transfer of a specified interest in, or concerning
             150      proposed changes in use of, applications for building permits for, or proposals for any site work
             151      affecting the contamination on, the property subject to the covenant;

             152          (b) requirements for periodic reporting describing compliance with the covenant;
             153          (c) rights of access to the property granted in connection with implementation or
             154      enforcement of the covenant;
             155          (d) a brief narrative description of the contamination and remedy, including:
             156          (i) the contaminants of concern;
             157          (ii) the pathways of exposure;
             158          (iii) limits on exposure; and
             159          (iv) the location and extent of the contamination;
             160          (e) limitation on amendment or termination of the covenant in addition to those
             161      contained in Sections 57-25-109 and 57-25-110 ; and
             162          (f) rights of the holder in addition to its right to enforce the covenant under Section
             163      57-25-111 .
             164          (3) In addition to other conditions for its approval of an environmental covenant, the
             165      agency may require those persons specified by the agency who have interests in the real
             166      property to sign the covenant.
             167          Section 6. Section 57-25-105 is enacted to read:
             168          57-25-105. Validity -- Effect on other instruments.
             169          (1) An environmental covenant that complies with this chapter runs with the land.
             170          (2) An environmental covenant that is otherwise effective is valid and enforceable even
             171      if:
             172          (a) it is not appurtenant to an interest in real property;
             173          (b) it can be or has been assigned to a person other than the original holder;
             174          (c) it is not of a character that has been recognized traditionally at common law;
             175          (d) it imposes a negative burden;
             176          (e) it imposes an affirmative obligation on a person having an interest in the real
             177      property or on the holder;
             178          (f) the benefit or burden does not touch or concern real property;
             179          (g) there is no privity of estate or contract;
             180          (h) the holder dies, ceases to exist, resigns, or is replaced; or
             181          (i) the owner of an interest subject to the environmental covenant and the holder are the
             182      same person.

             183          (3) (a) An instrument that creates restrictions or obligations with respect to real
             184      property that would qualify as activity and use limitations except for the fact that the
             185      instrument was recorded before the effective date of this chapter is not invalid or unenforceable
             186      because of any of the limitations on enforcement of interests described in Subsection (2) or
             187      because it was identified as an easement, servitude, deed restriction, or other interest.
             188          (b) This chapter does not apply in any other respect to an instrument covered under
             189      Subsection (3)(a).
             190          (4) This chapter does not invalidate or render unenforceable any interest, whether
             191      designated as an environmental covenant or other interest, that is otherwise enforceable under
             192      Utah law.
             193          Section 7. Section 57-25-106 is enacted to read:
             194          57-25-106. Relationship to other land use law.
             195          (1) This chapter does not authorize a use of real property that is otherwise prohibited
             196      by:
             197          (a) a zoning law;
             198          (b) law other than this chapter regulating use of real property; or
             199          (c) a recorded instrument that has priority over the environmental covenant.
             200          (2) An environmental covenant may prohibit or restrict uses of real property that are
             201      authorized by zoning or by law other than this chapter.
             202          Section 8. Section 57-25-107 is enacted to read:
             203          57-25-107. Notice.
             204          (1) A copy of an environmental covenant shall be provided by the persons and in the
             205      manner required by the agency to:
             206          (a) each person that signed the covenant;
             207          (b) each person holding a recorded interest in the real property subject to the covenant;
             208          (c) each person in possession of the real property subject to the covenant;
             209          (d) each municipality or other unit of local government in which real property subject
             210      to the covenant is located; and
             211          (e) any other person that the agency requires.
             212          (2) The validity of a covenant is not affected by failure to provide a copy of the
             213      covenant as required under this section.

             214          Section 9. Section 57-25-108 is enacted to read:
             215          57-25-108. Recording.
             216          (1) (a) An environmental covenant and any amendment or termination of the covenant
             217      must be recorded in every county in which any portion of the real property subject to the
             218      covenant is located.
             219          (b) For purposes of indexing, a holder shall be treated as a grantee.
             220          (2) Except as otherwise provided in Subsection 57-25-109 (3), an environmental
             221      covenant is subject to Utah laws governing recording and priority of interests in real property.
             222          Section 10. Section 57-25-109 is enacted to read:
             223          57-25-109. Duration -- Amendment by court action.
             224          (1) An environmental covenant is perpetual unless it is:
             225          (a) (i) limited to a specific duration by its terms; or
             226          (ii) terminated by the occurrence of a specific event;
             227          (b) terminated by consent under Section 57-25-110 ;
             228          (c) terminated under Subsection (2);
             229          (d) terminated by foreclosure of an interest that has priority over the environmental
             230      covenant; or
             231          (e) terminated or modified in an eminent domain proceeding, but only if:
             232          (i) the agency that signed the covenant is a party to the proceeding;
             233          (ii) all persons identified in Subsections 57-25-110 (1) and (2) are given notice of the
             234      pendency of the proceeding; and
             235          (iii) the court determines, after hearing, that the termination or modification will not
             236      adversely affect human health or the environment.
             237          (2) (a) If the agency that signed an environmental covenant has determined that the
             238      intended benefits of the covenant can no longer be realized, a court, under the doctrine of
             239      changed circumstances, in an action in which all persons identified in Subsections
             240      57-25-110 (1) and (2) have been given notice, may terminate the covenant or reduce its burden
             241      on the real property subject to the covenant.
             242          (b) The Department of Environmental Quality's determination under Subsection (2)(a)
             243      or its failure to make a determination upon request is subject to review under Title 63, Chapter
             244      46b, Administrative Procedures Act.

             245          (c) A federal agency's determination under Subsection (2)(a) or its failure to make a
             246      determination upon request is subject to review under applicable federal law.
             247          (3) Except as otherwise provided in Subsections (1) and (2), an environmental
             248      covenant may not be extinguished, limited, or impaired through issuance of a tax deed,
             249      foreclosure of a tax lien, or application of the doctrine of adverse possession, prescription,
             250      abandonment, waiver, lack of enforcement, or acquiescence, or a similar doctrine.
             251          (4) An environmental covenant may not be extinguished, limited, or impaired by
             252      application of Title 57, Chapter 9, Marketable Record Title.
             253          Section 11. Section 57-25-110 is enacted to read:
             254          57-25-110. Amendment or termination by consent.
             255          (1) An environmental covenant may be amended or terminated by consent only if the
             256      amendment or termination is signed by:
             257          (a) the agency;
             258          (b) unless waived by the agency, the current owner of the fee simple of the real
             259      property subject to the covenant;
             260          (c) each person that originally signed the covenant, unless the person waived in a
             261      signed record the right to consent or a court finds that the person no longer exists or cannot be
             262      located or identified with the exercise of reasonable diligence; and
             263          (d) except as otherwise provided in Subsection (4)(b), the holder.
             264          (2) If an interest in real property is subject to an environmental covenant, the interest is
             265      not affected by an amendment of the covenant unless the current owner of the interest consents
             266      to the amendment or has waived in a signed record the right to consent to amendments.
             267          (3) Except for an assignment undertaken under a governmental reorganization,
             268      assignment of an environmental covenant to a new holder is an amendment.
             269          (4) Except as otherwise provided in an environmental covenant:
             270          (a) a holder may not assign its interest without consent of the other parties; and
             271          (b) a holder may be removed and replaced by agreement of the other parties specified
             272      in Subsection (1).
             273          (5) A court of competent jurisdiction may fill a vacancy in the position of holder.
             274          Section 12. Section 57-25-111 is enacted to read:
             275          57-25-111. Enforcement of environmental covenant.

             276          (1) A civil action for injunctive or other equitable relief for violation of an
             277      environmental covenant may be maintained by:
             278          (a) a party to the covenant;
             279          (b) the agency;
             280          (c) any person to whom the covenant expressly grants power to enforce;
             281          (d) a person whose interest in the real property or whose collateral or liability may be
             282      affected by the alleged violation of the covenant; or
             283          (e) a municipality or other unit of local government in which the real property subject
             284      to the covenant is located.
             285          (2) This chapter does not limit the regulatory authority of the agency under law other
             286      than this chapter with respect to an environmental response project.
             287          (3) A person is not responsible for or subject to liability for environmental remediation
             288      solely because the person has the right to enforce an environmental covenant.
             289          (4) In addition to Subsection (1), an agency may recover its costs for actions which, in
             290      its discretion, it may take to enforce or protect the environmental covenant.
             291          Section 13. Section 57-25-112 is enacted to read:
             292          57-25-112. Registry -- Substitute notice.
             293          (1) (a) The agency shall establish and maintain a registry that contains all
             294      environmental covenants and any amendment or termination of those covenants.
             295          (b) The registry described in Subsection (1)(a) may also contain any other information
             296      concerning environmental covenants and the real property subject to them that the agency
             297      considers appropriate.
             298          (c) The registry described in Subsection (1)(a) is a public record for purposes of Title
             299      63, Chapter 2, Government Records Access and Management Act.
             300          (2) (a) After an environmental covenant or an amendment or termination of a covenant
             301      is filed in the registry established under Subsection (1), a notice of the covenant, amendment,
             302      or termination that complies with this section may be recorded in the land records in lieu of
             303      recording the entire covenant.
             304          (b) A notice under Subsection (2)(a) must contain:
             305          (i) a legally sufficient description and any available street address of the real property
             306      subject to the covenant;

             307          (ii) the name and address of the owner of the fee simple interest in the real property,
             308      the agency, and the holder if other than the agency;
             309          (iii) a statement that:
             310          (A) the covenant, amendment, or termination is available in a registry at the agency;
             311      and
             312          (B) discloses the method of any electronic access to the covenant, amendment, or
             313      termination; and
             314          (iv) a statement that the notice is notification of an environmental covenant executed
             315      under this chapter.
             316          (3) A statement in substantially the following form, executed with the same formalities
             317      as a deed in Utah, satisfies the requirements of Subsection (2):
             318          "1. This notice is filed in the land records of the county of [insert name of jurisdiction
             319      in which the real property is located] under Section 57-25-112 .
             320          2. This notice and the covenant, amendment, or termination to which it refers may
             321      impose significant obligations with respect to the property described below.
             322          3. A legal description of the property is attached as Exhibit A to this notice. The address
             323      of the property that is subject to the environmental covenant is [insert address of property].
             324          4. The name and address of the owner of the fee simple interest in the real property on
             325      the date of this notice is [insert name of current owner of the property and the owner's current
             326      address as shown on the tax records of the jurisdiction in which the property is located].
             327          5. The environmental covenant, amendment, or termination was signed by [insert name
             328      and address of the agency].
             329          6. The environmental covenant, amendment, or termination was filed in the registry on
             330      [insert date of filing].
             331          7. The full text of the covenant, amendment, or termination and any other information
             332      required by the agency is on file and available for inspection and copying in the registry
             333      maintained for that purpose by the Department of Environmental Quality.”
             334          Section 14. Section 57-25-113 is enacted to read:
             335          57-25-113. Uniformity of application and construction.
             336          In applying and construing this chapter, consideration must be given to the need to
             337      promote uniformity of the law with respect to its subject matter among jurisdictions that enact

             338      it.
             339          Section 15. Section 57-25-114 is enacted to read:
             340          57-25-114. Relation to electronic signatures in global and national commerce act.
             341          This chapter modifies, limits, or supersedes the federal Electronic Signatures in Global
             342      and National Commerce Act, 15 U.S.C. Section 7001 et seq., but does not modify, limit, or
             343      supersede Section 101 of that Act, 15 U.S.C. Section 7001(a), or authorize electronic delivery
             344      of any of the notices described in Section 103 of that Act, 15 U.S.C. Section 7003(b).
             345          Section 16. Section 57-25-115 is enacted to read:
             346          57-25-115. Severability.
             347          If any provision of this chapter or its application to any person or circumstance is held
             348      invalid, the invalidity does not affect other provisions or applications of this chapter that can be
             349      given effect without the invalid provision or application, and to this end the provisions of this
             350      chapter are severable.

Legislative Review Note
    as of 1-16-06 1:10 PM

Based on a limited legal review, this legislation has not been determined to have a high
probability of being held unconstitutional.

Office of Legislative Research and General Counsel

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