(a) The agency may require any party to a proposed environmental covenant to:

(1) provide to the agency information regarding title to real property that will be subject to the covenant, as well as information regarding the interested parties and the interests they own,

(2) provide to the agency information regarding abutting real property and any other real property likely to be affected by the contamination remaining on the real property, and

(3) provide notice of the proposed covenant in a form and to persons satisfactory to the agency.

(b) An environmental covenant may require the owner, any interested party, and their successors and assigns, to notify promptly the agency, the holder, and the [insert name of state regulatory agency for environmental protection] if it is not the agency, of:

(1) an application to a local government for a building permit or authorization for a change in real property use; and

(2) a proposal to conduct new excavation, trenching, installation of wells, use of ground water, or to undertake other activity which the agency specifies.

(c) In addition to other rights described in Unless waived or modified by the agency in a particular case, after an environmental covenant or otherwise granted by law, the agency, the [insert name of state regulatory agency for environmental protection] if it is not the agency, and a holder may enter real property subject to the covenant at reasonable times and with reasonable advance notice for the purpose of determining compliance with the terms of the covenant.

(d) The agency may require each party to anis signed, the owner or other person designated by the agency shall give notice of the environmental covenant to incorporate the terms of the covenant into any lease, license, or other agreement signed by that party which grants a right with respect topromptly to the following persons:

(1) all interested parties in the real property subject to the covenant. The incorporation may be in full or by reference.;

(e) An environmental covenant is not invalid or otherwise affected merely because a person fails to comply with any of the requirements of this section or with the requirements of a regulation implementing this section.

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Subsection (a) authorizes the agency to require any party to an environmental covenant to furnish the agency with title information as well as the names and addresses of the holders of all interests of record. It also authorizes the agency to require information on abutting or other affected property. The subsection also authorizes the agency to require the owner to give notice of the proposal to create an environmental covenant to all parties it specifies. While this specification will be within the agency's discretion, notice to at least the following will normally be appropriate:

1. All2) all persons in possession of the real property subject to the covenant;

(3) all persons holding an interest of record in theabutting real property.

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3. All persons in possession of the real property.

4. All persons holding an interest of record in abutting real property and;

(4) all persons holding an interest of record in other real property likely to be affected by contamination remaining on the real property subject to the covenant.

5. The [insert name of state regulatory agency for environmental protection] if it is not the agency.

6. Any, as determined by the agency;

(5) any affected local government.

; and

(6) all persons liable for environmental remediation of the real property subject to the covenant as determined by the agency.

(b) Unless waived or modified by the agency in a particular case, each environmental covenant must require:

(1) a transferee to give notice to the agency, the holder, and the [insert name of state regulatory agency for environmental protection] of a transfer of any interest in the real property subject to the environmental covenant;

(2) the owner of real property subject to an environmental covenant, or another person identified in the covenant, to submit written reports at specified periods to the agency, the holder and the [insert name of state regulatory agency for environmental protection] describing the status of compliance with the covenant;

(3) rights of access to the property subject to the environmental covenant to be afforded to the agency and the [insert name of state agency for environmental protection], in addition to access authorized by law other than this [Act], and to the holder or any other persons specified in the covenant; and

(4) the owner to give notice to the agency, the holder, and the [insert name of state regulatory agency for environmental protection] of any:

(A) application to a local government for a building permit or authorization for a change in use of the real property; and

(B) proposal to conduct new excavation, trenching, installation of wells, or use of ground water, or to undertake additional activity specified in the environmental covenant.

(c) In addition to the requirements under subsection (b), each environmental covenant must contain whatever other information, restrictions, and requirements the agency determines to be necessary and appropriate.

(d) If notice is required under subsection (b)(4)(A) or (B) and the [insert name of state regulatory agency for environmental protection] determines that issuance of the building permit or approval of the new land use or other activity described in the notice will violate the covenant, the [insert name of state regulatory agency for environmental protection] shall so notify the applicant or the person proposing the use or activity.

(e) Unless waived or modified by the agency, the owner or other person designated by the agency shall provide to the agency:

(1) any information related to the title to the real property covered by the environmental covenant specified by the agency;

(2) the name and current mailing address of interested parties in the real property covered by the environmental covenant and the nature of the interest of each; and

(3) the name and current mailing address of the other parties specified in subsection (a).

(f) An environmental covenant is not invalid or otherwise affected merely because a person fails to comply with any of the requirements of this section.

Reporter's Notes

Subsection (a) mandates notice of a proposed environmental covenant unless the agency determines otherwise.

Subsection (b) authorizes the agency to requiremandates inclusion of a number of specific requirements in an environmental covenant unless the agency determines otherwise.

Subsection (b)(1) concerns notice of a transfer of an interest in the real property subject to an environmental covenant. This notice will facilitate enforcement of the covenant. However, not all transfers of interests in the real property will implicate enforcement of the covenant and, for those that do not, the agency need not require notification. Similarly, subsection (b) also authorizes the agency to requireSubsection (b)(4) concerns a covenant's requirement of notice of an application for a building permit or, change of use of the real property subject to an environmental covenant. Here again, such a notice will facilitate enforcement of the covenant when it is required, although it may not be needed for every, or for other specified activities.

Where the [insert name of state regulatory agency for environmental protection] determines that a proposed building permit or land use, change. In both situations, the agency may specify when notice is required.

Subsection (d) authorizes the agency to require incorporation of the terms of of use of the real property, or other activity notified under subsection (b)(4) would violate the environmental covenant in any instrument granting an interest in the real property. Such incorporation should be required in most substantial conveyances to ensure effective enforcement of the covenant, although it will likely not be needed in all instruments.

[SECTION 7. RECORDING. Alternative A.

(a) An environmental covenant is effective only if the covenant, or a notice of the covenant that complies with the notice provisions specified in Section 13, is recorded in the land records for every [county] in which land subject to, subsection (c) requires that it so notify the applicant or person proposing the activity.

Subsection (e) authorizes the [insert name of state regulatory agency for environmental protection] to require specified information as a condition to signing the environmental covenant in located. A.

Alternative A.

[SECTION 8. RECORDING OF ENVIRONMENTAL COVENANT.

(a) Except as otherwise provided in section 9(b), an environmental covenant, or any modification or termination of a covenant is effective only if it, or a notice of it that complies with the notice provisions specified in Section 13, is recorded in the land records for every [county] in which land subject toan environmental covenant, is subject to the laws of this state governing recording and priority of interests in real property. A notice of the environmental covenant is located. This section shall not apply to the parties to the covenant, or, or any notice of modification or termination of it, or to other persons having actual notice of the covenant, or modification or termination of it.

an environmental covenant, that complies with Section 13 may be recorded in the land records in lieu of recording the entire environmental covenant, modification, or termination.

(b) The [insert name of state regulatory agency for environmental protection] shall [create and maintain a][maintain its currently existing] registry that contains all environmental covenants, and any modification or termination of those covenants, and any recorded notices of 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 a public record for purposes of [insert reference to State Freedom of Information Act].]

SECTION 7. RECORDING. Alternative B

AnAlternative B

[SECTION 8. RECORDING OF ENVIRONMENTAL COVENANT.

Except as otherwise provided in section 9(b), an environmental covenant, or any modification or termination of an environmental covenant, is effective only if the covenant, modification, or termination is recorded in the land records for each [county] in which land subject to the environmental covenant in located. This section does not apply to the parties to the covenant, modification or termination, or to other persons having actual notice of the covenant, modification or termination.subject to the laws of this state governing recording and priority of interests in real property.]

Reporter's Notes

Section 78 is offered in two versions. Alternative A is to be used in jurisdictions that will require creation or maintenance of aan existing registry of environmental covenants at the [insert name of state regulatory agency for environmental protection]. This alternative authorizes either the environmental covenant or a notice of the covenant to be recorded in the land records. Alternative B is to be used in jurisdictions that do not require creation of a registry of environmental covenants. In those jurisdictions, the environmental covenant should be recorded in the land records and this Act's provisions on notice in Sections 13 and 14Section13 should not be used.

Subsection (a) requires that either a notice ofprovides that environmental covenants are subject to existing state law on recording and priority of interests in real property. Either the environmental covenant or the complete covenant must be recorded in the land records to alert all interested parties to the existencea notice of the covenant may be recorded. While a standard form of the notice is not required, Official Form 1 is adopted with the text of this Act for use by those parties who wish to use it. Section 13 provides that use of this Form will comply with the Act's notice requirements.

Subsection (b) requires creation of a new registry, or maintenance of an existing registry of environmental covenants by the [insert name of state regulatory agency for environmental protection]. This registry may be combined with the new state registry of brownfield sites specified in the Small Business Liability Relief and Brownfields Revitalization Act §128(b)(1)(C), Pub. L. No. 107-118, ** Stat. ** (2002) (HR 2869, 107^th Cong. 1^st Session), although this [Uniform Environmental Covenants Act] calls for recording more extensive information.

The full environmental covenant must be recorded in the registry in the [insert name of state regulatory agency for environmental protection]. In addition, the agency may require recording of additional information about each covenant and the real property subject to it. The agency may choose to require a description of the issues presented by the residual contamination that give rise to an environmental covenant. The description will be much more accessible to non specialists, including local government and community interests, than the full covenant

. This description may, at a minimum, identify the constituents of concern that have been left in the real property, their location, the potential human and environmental exposure pathways and receptors for those chemicals, and the permissible exposure limits.

Creation or maintenance of a specialized registry should improve access to this information by the public, local governments, citizens groups, and environmental interests, as well as real property professionals.

This Section requires recording of the entire covenant, and any modification or termination, in the land records.]

SECTION 8. DURATIONsection provides that environmental covenants are subject to existing state law on recording and priority of interests in real property.]

SECTION 9. DURATION OF ENVIRONMENTAL COVENANT.

(a) An environmental covenant is perpetual unless limited by its terms to a specific duration or to the occurrence of a specific event, or terminated pursuant to Section 910.

(b) AExcept as othewise provided in Section 10(e), an environmental covenant may not be extinguished, limited, or impaired through issuance of a tax deed, foreclosure of a tax lien, adverse possession,or application of the doctrines of adverse possession, abandonment, waiver, lack of enforcement, or any similar common law doctrine, or the exercise of eminent domain.law.

(c) An environmental covenant may not be extinguished, limited, or impaired by application of [insert reference to state Marketable Title statute].

Reporter's Notes

Subsection (a) is needed to ensure that the environmental covenant's protectionsrestrictions continue as long as needed. Subsection (b) makes environmental covenants survive later tax foreclosure sales, and also survive potential common law and statutory impairments. These covenants seek to protect human health and the environment as part of the environmental response project, beyond reflecting the results of private bargaining between contracting private parties in specific private transactions. To do so, environmental covenants must survive impairments arising from these sources. However, this subsection does not restrict application of other environmental and administrative law to judicial supervision of agency conduct.

Where an environmental covenant applies to real property that wouldis otherwise be subject to one of the doctrines listed in Subsection (b) situations may arise in which the protections of the covenant are not needed in the particular circumstance. For example, the relevant transportation authority might need to place a bridge support on real property whererights gained by adverse possession would be limited by the environmental covenant precluded digging, and eminent domain would not be available to displace the environmental covenant. Similarly, adverse possession would not be available to perform its remedial function where, again for example,covenant's restrictions where a house had been inadvertently placed on real property subject to an environmental covenant that precluded residential use. In a cases such as these, modification of the covenant can be sought pursuant to Section 9 where the environmental covenant's protections are not needed. Seeking such a modification will ensure that appropriate consideration will be given to residual environmental risks.

The basic policy of this Act to ensure that environmental covenants survive impairment is consistent with the broad policy articulated in the Restatement of the Law of Property (Servitudes) Third, §7.9. In general, restrictions in an environmental covenant are state property law interests that are not extinguishable in bankruptcy.

SECTION 9. MODIFICATION OR TERMINATION.

(a) An environmental covenant may be modified or terminated by consent of:

(1) all the original parties to the covenant or their successors or assigns, other than an original party or a successor or assign that has waived the right to consent, except that consent is not required by a party whose interest will not be affected by the modification or termination; and

(2) each current owner or interested party whose interest will be affected by the modification or termination.

(b) A proposal to modify or terminate an environmental covenant must be accompanied by all information required by the agency.

(c) A party that proposes to modify or terminate an environmental covenant shall give notice of the proposal and the information required under subsection (b) to all parties whose consent is required for the modification or termination and to other persons as required by the agency.

(d) An environmental covenant may include provisions governing modification or termination of the covenant, but such a provision does not relieve any person of its obligations under this Act.

(e) For purposes of this [Act], assignment of an environmental covenant to a new holder is a modification, except for an assignment undertaken pursuant to a government reorganization.

Reporter's Notes

Where there is a change in either the current knowledge of remaining contamination or the current understanding of the environmental risks it presents, the environmental response project may be changed or new regulatory action may be taken. In either situation, modification of the environmental covenant to change its activity and use limitations or to terminate the covenant may be necessary. A substantial modification or termination will usually be pursuant to either a change in the underlying environmental response project that lead to creation of the covenant or a new regulatory action.

Subsection (b) authorizes the agency to require information to support a request for modification or termination. The agency may wish to require one or more of the following:

(1) New information showing that the risks posed by the residual contamination are less or greater than originally thought;

(2) Information demonstrating that the amount of residual contamination has diminished;

(3) Information demonstrating that one or more activity limitations or use restrictions is no longer necessary.

Under subsection (c) the party requesting modification or termination is required to give notice of the request to all parties whose consent is required and to other persons the agency requires. The agency may wish to consider whether the following parties have a sufficient interest in a particular proposal to make notice to them advisable:

(1) All affected local governments;

(2) The [insert name of state regulatory agency for environmental protection] if it is not the agency for this environmental response project;

(3) All persons holding an interest of record in the real property;

(4) All persons known to have an unrecorded interest in the real property;

(5) All affected persons in possession of the real property;

(6) All owners of, and all holders of other interests in, abutting real property and any other property likely to be affected by the proposed modification;

(7) All persons specifically designated to have enforcement powers in the covenant; and

(8) The public.

Subsection (d) contemplates that the environmental covenant may impose additional restrictions on modification or termination beyond those required by this Act. In some circumstances the owner or another party may have contingent residual liability for further cleanup of the real property subject to the environmental covenant and may seek further restrictions in the covenant to protect against this contingent liability.

SECTION 10. ENFORCEMENT.

(a) This [Act] does not limit the authority of the agency,[ the insert name of state regulatory agency for environmental protection,] or any other person to enforce an environmental response project under other law.

(b) The following persons may maintain a civil action for injunctive or other equitable relief against a person alleged to be in violation of an environmental covenant or the reporting requirements of subsection (d) of this Section:

(1) the agency and any other party to the covenant;

(2) the [insert name of state regulatory agency for environmental protection] if it is not the agency, or another state official authorized by state law to bring an action on behalf of the [insert name of state regulatory agency for environmental protection]; (3) a current or former owner or interested party whose interest in the real property may be affected by violation of the covenant, or that may be liable under the environmental response project;

(4) an affected local government;

(5) a person the environmental covenant expressly grants power to enforce;

[(c) In addition to the persons listed in subsection (b), any [person] [person aggrieved by an alleged breach of an environmental covenant] may maintain a civil action for injunctive or other equitable relief against a party alleged to be in violation of an environmental covenant or the reporting requirements of subsection (d) of this Section. In any such action the court may award costs of litigation, including reasonable attorney and expert witness fees, to the prevailing or substantially prevailing party whenever the court determines such an award is appropriate. If an action is to be brought by such person, the following rules apply:

(1) The person shall notify the agency, and the [insert name of state regulatory agency for environmental protection] if it is not the agency, that it intends to institute an action 120 days before commencing an action.

(2) The agency may bring an action to enforce the covenant.

(3) If the agency does not commence an action within 60 days after the notice was sent, the [insert name of state regulatory agency for environmental protection], if it is not the agency, may bring the action within the next 60 days.

(4) If either the agency or the [insert name of state regulatory agency for environmental protection] brings an action within the periods specified in paragraphs (2) and (3), the person giving the notice is precluded from bringing its own action so long as the agency or the [insert name of state regulatory agency for environmental protection] is diligently prosecuting enforcement of the covenant.]

(d) An owner of real property subject to an environmental covenant, or another person identified in the covenant, shall submit a written report to the agency each calendar year describing the status of compliance with the covenant. This requirement does not apply to an owner of detached, owner-occupied residential property.

[(e) The agency shall inspect the real property subject to an environmental covenant as often as necessary, and at least once every five years, to ensure compliance with the covenant.]

Reporter's Notes

Subsection (a) recognizes that in many situations the statutes authorizing an environmental response project will provide substantial authority for governmental enforcement of an environmental covenant.

Environmental law frequently authorizes third party enforcement of environmental statutes, regulations, and permits. Federal law authorizes citizen suits by "any person" against "any person alleged to be in violation" of any "regulation. . . requirement. . . or order" under CERCLA and RCRA remediation projects. 42 U.S.C.A. §§6972 (a) and 9659 (2001). Where the environmental covenant is part of an environmental response project undertaken pursuant to one of these statutes, it is presumably such a "requirement. . .or order" and should be enforceable by "any person." In addition, approximately 15 states authorize some form of citizen's suits, although the specific provisions are quite varied. Selmi & Manaster, State Environmental Laws §16.52 (Clark Boardman, 2002 Supp.). Where state law so authorizes, a citizen suit would be available to enforce an environmental covenant that is established pursuant to a state law authorized environmental response project. This Act can not limit existing federal law and does not limit existing state law authorizing that enforcement

[Subsection (c) offers two alternatives for citizen suit enforcement of all environmental covenants and the reporting requirements of subsection (d), in addition to citizen's suits authorized under existing law. Either alternative would apply to covenants established under state law in states that do not currently authorize such enforcement. Local citizen and environmental interests have both the opportunity and the motivation to observe compliance with use restrictions, and to some degree with activity limitations. Thus they will be well positioned to seek enforcement of violations and thereby offer greater assurance of effective implementation of the covenant. This section authorizes the court to award litigation costs, including attorney and expert witness fees, to a substantially prevailing party authorized by this subsection to bring a suit. This provision is based on analogous federal law authorizing citizen's suits. See, e.g., 42 U.S.C.A. §9659 (f).

The first alternative authorizes suit by any person, mirroring the provisions of federal law discussed above. The second alternative is more limited, authorizing suit by any person aggrieved by the alleged breach of the environmental covenant. "Person (or party) aggrieved" is used in both federal and state administrative law. The federal courts, and some state courts, apply a two part test in determining who is a "person aggrieved", asking first if the person has suffered an injury in fact, and second, if the person is arguably within the zone of interests sought to be protected by the statute. See, e.g., National Credit Union Administration v. First Nat'l Bank and Trust Co., 522 U.S. 479 (1998). The Model State Administrative Procedure Act, §5-106(a)(5) uses a three part analysis: (i) has the agency action prejudiced the person, (ii) was the agency required to consider the person's interests in taking the challenged action, and (iii)will a judgment in favor of the person substantially eliminate or redress the harm.

Subsection (c) also establishes enforcement priority for such citizen suits. The agency has the first opportunity. If the [insert name of state regulatory agency for environmental protection] is not the agency which approved the environmental covenant, it has the second opportunity. If either of these brings an action within its specified 60 day time period, that precludes a citizen suit to enforce the covenant so long as the action is being diligently prosecuted. This provision is based on the citizen's suit provisions common in many federal environmental regulatory statutes.]

The five year reporting period of subsection (e) mirrors the review requirements for an environmental cleanup remedy that does not provide for unrestricted use under the federal superfund program

SECTION 11. COORDINATION BY LOCAL GOVERNMENT.

(a) The agency shall send a copy of an environmental covenant and any modification or termination thereof to the affected local government at the time the covenant, modification or termination is recorded.

[(b) The agency may evaluate whether an application for a building permit or new land use on real property subject to an environmental covenant is consistent with the covenant. If the agency determines that issuance of the building permit or approval of the new land use will violate the covenant, the agency shall so notify the affected local government. The agency's determination is binding on the affected local government.]

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Effective implementation of environmental covenants will require cooperation between the agency and the affected local government which has jurisdiction over building permits and local land use decisions. Section 5 of this Act provides that an environmental covenant cannot authorize a land use that is prohibited by local law, and that an environmental covenant may restrict a land use that is authorized by local law. In subsection (a) this Section requires the agency to notify all affected local governments of the creation, modification or termination of an environmental covenant. Section 6 (b) authorizes an environmental covenant to require notice of applications for building permits or land use changes to be given to the agency. In this way, both the affected local government and the agency will have the information needed to coordinate their efforts and each avoid action which conflicts with action by the other.

[Where the agency determines that a building permit or land use change will violate the covenant, subsection (b) provides that the agency's determination will be binding. Of course, the agency's determination remains subject to available judicial review under applicable state or federal administrative law.]

SECTION 12. MARKETABLE TITLE.

An environmental covenant may not be extinguished, limited, or impaired by application of [insert reference to state Marketable Title statute][if notice of the existence of the covenant is provided to interested persons by any of the following means:

(1)visible evidence of the existence of the covenant located on any part of the real property subject to the covenant in the form of a sign, monument or other physical facility;

(2) a map showing the location of the real property subject to the covenant that is publicly displayed in the office of the custodian of the land records of the affected local government or in the registry maintained by the [insert name of state regulatory agency for environmental protection];

(3) the land recording system maintained by the custodian of the land records of the affected local government, or by the State, indexes all real property transactions on a universal parcel numbering system rather than on a system based on grantors and grantees;

(4) the land recording system in which the environmental covenant is recorded, [or the registry created pursuant to Section 7(b) of this [Act]] is accessible by electronic means as of the effective date of this [Act]; or

(5) [insert other means by which interested persons may secure actual knowledge of the existence of older environmental covenants.]]

Reporter's Notes

This States which do not have a Marketable Record Title Act will not need subsection (c). States which do have a Marketable Record Title Act may choose to put this exception in that statute rather than in this Act.

The exception to the state Marketable Record Title statute in subsection (c) is analogous to exceptions commonly made for conservation and preservation servitudes. Restatement of the Law of Property Third (Servitudes) § 7.16 (5) (1998). It is based on the public importance of ensuring continued enforcement of environmental covenants to protect human health and the environment, as well as the relatively low cost of extending title searches to the registry of environmental covenants to be kept by the [insert name of state regulatory agency for environmental protection] under Section 7(c) of this Act.

[ In jurisdictions which index instruments in the land records by grantor and grantee names, there is concern that environmental covenants that are older than the statutory period specified in the Marketable Title Act, typically either 40 or 60 years, may be difficult to find even in the new registry, and, as a result, may be excluded from coverage under title insurance policies. Thus, five means of giving notice of the environmental covenant are specified. Where notice is given by one of these means, the Marketable Title Act will not extinguish or impair the environmental covenant. With environmental covenants created pursuant to the Act, this problem will arise only after the statutory period of the Marketable Title Act.]

b) of this Act.

If there is any question whether a specific environmental covenant is exempt from the requirements of the Marketable Title Act, the agency should comply with that Act by re-recording the covenant within the Marketable Title Act's specified statutory period. This will insure that the covenant is not extinguished under the Marketable Title Act.

[SECTION 13. NOTICE.

(a) To be effective, a notice10. MODIFICATION OR TERMINATION OF ENVIRONMENTAL COVENANT.

(a) An environmental covenant may be modified or terminated by consent of:

(1) the agency;

(2) unless consent was waived, the current owner and any former owner who signed the covenant; and

(3) a party that originally signed the covenant and has a contingent future liability under the environmental response project.

(b) A modification may not change a holder's rights or obligations under an environmental covenant unless the holder consents to the change.

(c) A proposal to modify or terminate an environmental covenant must be accompanied by all information required by the agency.

(d) A party that proposes to modify or terminate an environmental covenant shall give notice of the proposal and provide the information required under subsection (c) to all parties whose consent is required for the modification or termination and to other persons as required by the agency.

(e) An environmental covenant may be modified or extinguished by the exercise of eminent domain or by application of the doctrine of changed circumstances only with the approval of the agency after notice and opportunity for hearing.

(f) An environmental covenant may include an additional limitation on modification or termination of the covenant if the limitation does not conflict with the requirements of this [Act].

(g) Except for an assignment undertaken pursuant to a government reorganization, assignment of an environmental covenant must contain the following information:

(1) a legally sufficient descriptionto a new holder is a modification.

Reporter's Notes

Where there is a change in either the current knowledge of remaining contamination or the current understanding of the environmental risks it presents, the environmental response project may be changed or new regulatory action may be taken. In either situation, modification of the environmental covenant to change its activity and use limitations or to terminate the covenant may be necessary. A substantial modification or termination will usually be pursuant to either a change in the underlying environmental response project that lead to creation of the covenant or a new regulatory action.

Subsection (a) specifies the parties which must consent to the modification. Subsection (a)(3) reaches a party which originally signed the covenant even though it was not an owner of the real property. Such parties might typically be ones which were liable for some or all of the environmental remediation specified in the environmental response project. This provision is intended to apply to successors in interest to the party which originally signed the covenant where the successor continues to be subject to the contingent liability under the environmental response project.

Subsection (c) authorizes the agency to require information to support a request for modification or termination. The agency may wish to require one or more of the following:

(1) New information showing that the risks posed by the residual contamination are less or greater than originally thought;

(2) Information demonstrating that the amount of residual contamination has diminished;

(3) Information demonstrating that one or more activity limitations or use restrictions is no longer necessary.

Under subsection (d) the party requesting modification or termination is required to give notice of the request to all parties whose consent is required and to other persons the agency requires. The agency may wish to consider whether the following parties have a sufficient interest in a particular proposal to make notice to them advisable:

(1) All affected local governments;

(2) The [insert name of state regulatory agency for environmental protection] if it is not the agency for this environmental response project;

(3) All persons holding an interest of record in the real property;

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2. (4) All persons known to have an unrecorded interest in the real property.;

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(5) All affected persons in possession of the real property,;

(6) All owners of, and all holders of other interests in, abutting real property and any other property likely to be affected by the proposed modification;

(7) All persons specifically designated to have enforcement powers in the covenant; and

(8) The public.

Subsection (e) provides that the agency's approval is required to modify or terminate an environmental covenant by either an exercise of eminent domain or a judicial application of the doctrine of changed circumstances. An exercise of eminent domain or a judicial application of the doctrine of changed circumstances may result in a change of use for real estate. Requiring the agency's approval for either of these to modify or terminate the covenant will ensure that the agency will determine whether the covenant's activity and use limitations or other restrictions are needed to protect public health and the environment. The Subsection's requirement of notice and opportunity for a hearing anticipates that the process for the Agency's grant or denial of approval will be in a contested administrative or judicial case.

Subsection (f) contemplates that the environmental covenant may impose additional restrictions on modification or termination beyond those required by this Act. In some circumstances the owner or another party may have contingent residual liability for further cleanup of the real property subject to the environmental covenant and may seek further restrictions in the covenant to protect against this contingent liability.

SECTION 11. ENFORCEMENT OF ENVIRONMENTAL COVENANT.

(a) Any of the following persons may maintain a civil action for injunctive or other equitable relief for violations of an environmental covenant:

(1) the agency and any other party to the covenant;

(2) if it is not the agency, the [insert name of state regulatory agency for environmental protection] (3) a current or former owner or interested party whose interest in the real property may be affected by violation of the covenant, or that may be liable under the environmental response project;

(4) an affected local government;

(5) a person authorized to enforce the environmental covenant by law other than this [Act]; and

(6) any person named as a holder in the environmental covenant; and

(7) any other person to which the environmental covenant expressly grants power to enforce.

(b) This [Act] does not limit the authority of the agency, or any other person to enforce an environmental response project under law other than this [Act].

(c) The rights of an agency or other governmental body named in an environmental covenant to enforce the covenant are based on the agency's or governmental authority's regulatory power and are not an interest in the real property subject to an environmental covenant, unless the agency or other governmental body determine otherwise at the time of creation of the covenant or the covenant otherwise provides.

(d) The enforcement rights of a holder or other nongovernmental person to which the environmental covenant expressly grants power to enforce an environmental covenant are not an owner's interest in the real property subject to an environmental covenant. Whether other rights granted to or exercised by a holder with respect to the real property subject to an environmental covenant constitute an owner's interest in the real property is not governed by this [Act].

(e) A party is not subject to liability solely as a result of having the right to enforce an environmental covenant.

(f) The agency shall inspect the real property subject to an environmental covenant as often as necessary, and at least once every [five] years, to ensure compliance with the covenant.

Reporter's Notes Subsection (a) specifies which persons may bring an action to enforce an environmental covenant.

Subsection (b) recognizes that in many situations the statutes authorizing an environmental response project will provide substantial authority for governmental enforcement of an environmental covenant.

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Subsections (fc) provides that a holder'sand (d) specify when the right to enforce an environmental covenant is not an interest in real property. ThisThese provision iss are included for two reasons. First, some environmental enforcement agencies are not authorized to own an interest in real property and this provision will enable those agencies to serve as a holderhave enforcement rights under the Act.

Second, the nature of the holder's or other person's interest in the real property may influence whether its rights and duties with respect to the real property are likely to lead to potential liability for future environmental remediation, should such remediation become necessary. Under CERCLA an "owner" is liable for remediation costs, 42 U.S.C.A. 9607(a)(1). Unfortunately, the definition of "owner" in the statute is circular and unhelpful in evaluating whether a holder is potentially liable under it. 42 U.S.C.A. 9601(20).

In general, a holder 'sthe right to enforce the covenant should be considered comparable to the rights covered in an easement and, thus, should not lead to CERCLA liability. The two cases that have considered this question have found that the parties which held the easements were not CERCLA "owners". Long Beach Unified School District v. Dorothy B. Godwin California Living Trust, 32 F.3d 1364 (9^th Cir. 1994); Grand Trunk R.R. v. Acme Belt Recoating, 859 F. Supp. 1125 (W.D.MI, 1994). In each case, the court reasoned that the circular definition of owner meant that the term's most common meaning would prevail. The common law's distinction between an easement holder and the property owner was then applied to find the easement holder not to be an "owner" for purposes of this statute.

Where the holder or another person has more extensive rights, a careful analysis will be required. The cases typically emphasize that parties who exercise the degree of control over a site equivalent to the control typically exercised by an owner of the site will be held liable as an "owner". Under this approach, for example, lessees have been held liable as owners when their control over the site approximated that which an owner would have. See, e.g., Delaney v. Town of Carmel, 55 F. Supp. 2d 237 (S.D.N.Y. 1999); U.S. v. A & N Cleaners and Launderers, 788 F. Supp. 1317 (S.D.N.Y. 1990); U.S. v. S.C. Dept. of Health and Env. Control, 653 F. Supp. 984 (D.C.S.C. 1984.)

CERCLA liability also extends to an "operator" of the site (42 U.S.C.A. 9607(a)(1)), and the case law interpreting this definition emphasizes that a party is liable as an operator if it has a high degree of control over the operating decisions and day to day management at the site. A holder will, in general, have only control authority over the site related to effective enforcement of the environmental covenant and does not typically need more extensive day to day control. A holder should be given more extensive control over the site only after careful consideration of the potential CERCLA liability.

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SECTION 12. COPIES TO LOCAL GOVERNMENT.

The owner or other party designated by the agency shall send a copy of an environmental covenant and any modification or termination of the covenant to the affected local government within [ ] days after the covenant, modification, or termination is signed.

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Effective implementation of environmental covenants will require cooperation between the agency and the affected local government which has jurisdiction over building permits and local land use decisions. Section 6 of this Act provides that an environmental covenant cannot authorize a land use that is prohibited by local law, and that an environmental covenant may restrict a land use that is authorized by local law. This Section requires the agency to notify all affected local governments of the creation, modification or termination of an environmental covenant.

SECTION 13. NOTICE OF ENVIRONMENTAL COVENANT.

(a) A notice of an environmental covenant, and a notice of modification or termination of an environmental covenant, must contain:

(1) a legally sufficient description and any available street address of the real property;

(2) the name and address of:

(A) the owner of the real property;

(B) the agency and the holder, if other than the agency; and

(C) any other person identified in the covenant that, modification, or termination which is specifically authorized to enforce the covenant;

(3) a statement that:

(A) the covenant, modification, or termination imposes significant restrictions and obligations with regard to permissible activities on and uses of the real property; and

(B) the restrictions and obligations [are likely to] affect all persons having an interest in the real property.

(4) a statement that the following areenvironmental covenant, modification, or termination as executed is available in a registry at the [insert name and address of state regulatory agency for environmental protection] , disclosing the method of any electronic access:

(A) the environmental covenant as executed; and

(B) any other information required by the Agency; and

(5) a statement that the Nnotice is filed pursuant to this [Act].

(b) A notice is sufficient if it is in the form of Official Form set forth in Section 14. (b) A statement in substantially the following form, executed with the same formalities as a deed in this state, satisfies the requirements of this Section:

• This notice is filed on the land records of the [political subdivision] of [insert name of jurisdiction in which the real property is located] pursuant to Sections 7 and 13 of the Uniform Environmental Covenants [Act]. The [Act] has been codified in this State at [insert statutory reference].



• This notice and the covenant, modification, or termination to which it refers impose significant legal restrictions and obligations with respect to the future use of and activities on the property described below.



• A legally sufficient description of the property is attached as Exhibit A to this notice. The address, if available, of the property that is subject to the environmental covenant is [insert address of property].



• The owner of the real property on the date of this notice is [insert name of current legal owner of the property]. The address of the owner is [insert the owner's current address as shown on the tax records of the jurisdiction in which the property is located].



• The other parties to the covenant, modification, or termination and their addresses are:

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• [insert name and address of the agency and [the state regulatory agency for environmental protection] if it is not the agency ];



• [Insert names and addresses of all other parties to the covenant]; and



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[Insert names and addresses of any parties authorized to enforce the covenant].

• The environmental covenant, modification, or termination regarding the real property was signed by all the parties on [insert date on which the last party signed the covenant, modification, or termination]. The covenant, modification, or termination becomes effective for all purposes on the date this notice is recorded in the land records of all jurisdictions in which the property is located. This notice remains effective for all purposes until a release of the covenant is signed by the then owner of the property and by the agency and recorded.



• The full text of the covenant, modification, 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, modification, or termination may be found electronically at [insert web address for covenant]].

Reporter's Notes

A description of the property under subsection (a)(1) may include identification by latitude/longitude coordinates.

This section and the following one should be used only by states that require creation of a registry of environmental covenants pursuant to Section 7(b) of this Act. The notice specified in this Section may be recorded in the land records in lieu of recording the environmental covenant. However, such a notice should only be authorized if the registry is established and the environmental covenant is recorded there. Where there is no separate registry, then the environmental covenant should be recorded in the land records and this notice should not be used.]

[SECTION 14. OFFICIAL FORM : NOTICE OF ENVIRONMENTAL COVENANT.

A statement in substantially the following form, executed with the same formalities as a deed in this State, satisfies the requirements of Section 13.

OFFICIAL FORM : NOTICE OF ENVIRONMENTAL COVENANT

1. This notice is filed on the land records of the [city/town/county] of [insert name of jurisdiction in which the real property is located] pursuant to Sections 7 and 13 of the Uniform Environmental Covenants [Act]. The [Act] has been codified in this State at [insert statutory reference].

2. This notice and the covenant to which it refers impose significant legal restrictions and obligations with respect to the future use of and activities on the property described below. Those restrictions and obligations are likely to affect all persons having an interest in that property.

3. A legally sufficient description of the property is attached as Exhibit A to this notice. The address, if available, of the property which is subject to the environmental covenant is [insert address of property].

4. The owner of the real property on the date of this notice is [insert name of current legal owner of the Property]. The address of the owner is [insert the owner's current address as shown on the tax records of the jurisdiction in which the Property is located].

5. The other parties to the covenant and their addresses are:

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[Insert names and addresses of any third party beneficiaries].

6. The environmental covenant regarding the real property was signed by all the parties on [insert date on which the last party signed the covenant]. The covenant becomes effective for all purposes on the date this notice is recorded on the land records of all jurisdictions in which the property is located. This notice remains effective for all purposes until a release of this notice is signed by the then owner of the property and by the agency and recorded.

7. The full text of the covenant 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 may be found electronically at [insert web address for Covenant]].

Dated at ________, ________ this ____ day of ________, ________.

Witness as to Owner NAME OF OWNER

______________________________ ______________________________

By

______________________________

Witness as to Agency NAME OF AGENCY

______________________________ ______________________________

By

______________________________

Witness as to Other Parties NAME OF OTHER PARTIES

______________________________ ______________________________

By

______________________________

ACKNOWLEDGMENTS

[INSERT STANDARD FORM OF ACKNOWLEDGMENT IN STATE]

[ATTACH PROPERTY DESCRIPTION AS EXHIBIT A]]

In applying and construing this Uniform Act, consideration must be given to the need to promote uniformity of the law with respect to its subject matter among States that enact it.

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SECTION 186. RELATION TO ELECTRONIC SIGNATURES IN GLOBAL AND NATIONAL COMMERCE ACT.