SB 406 Text

Senate Bill No. 406
(By Senators Dempsey and Unger)
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[Introduced February 28, 2005; referred to the Committee on Energy, Industry and Mining; and then to the
Committee on the Judiciary.]
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A BILL to amend of the Code of West Virginia, 1931, as amended, by adding thereto a new article, designated §22-22B-1, §22-22B-2, §22-22B-3, §22-22B-4, §22-22B- 5, §22-22B- 6, §22-22B- 7, §22- 22B- 8, §22-22B- 9, §22-22B-10, §22-22B-11, §22-22B-12, §22-22B- 13 and §22-22B-14 , all relating to the Uniform Environmental Covenants Act generally; defining certain terms; explaining rights and responsibilities of persons who sign environmental covenant; providing for subordination of interests; establishing requirements of environmental covenant; providing that environmental covenant runs with the land and is valid if meets requirements of act; setting forth effect of environmental covenant on other instruments; establishing relationship between environmental covenants and other land- use law; requiring environmental covenants be provided to certain persons; requiring environmental covenant amendments and terminations be recorded; providing environmental covenant is perpetual unless certain conditions met; authorizing amendment or termination by court or by consent; providing for enforcement of environmental covenant; providing for uniformity of application and construction of act; authorizing modification or application of certain parts of federal Electronic Signatures in Global and National Commerce Act; and providing for severability.

Be it enacted by the Legislature of West Virginia:
That the code of West Virginia, 1931, as amended, be amended by adding thereto a new article, designated §22-22B-1, §22-22B-2, §22-22B-3, §22-22B-4, §22-22B- 5, §22-22B- 6, §22-22B- 7, §22-22B- 8, §22-22B- 9, §22-22B-10, §22-22B-11, §22-22B-12, §22-22B-13 and §22- 22B-14 , all to read as follows:
ARTICLE 22B. UNIFORM ENVIRONMENTAL COVENANTS ACT.
§22-22B-1. Short title.
This article may be cited as the Uniform Environmental Covenants Act.
§22-22B-2. Definitions.
As used in this article and insofar as they are not in conflict with article twenty-two of this chapter, the following terms shall mean:
(1) "Activity and use limitations" means restrictions or obligations created under this article with respect to real property.
(2) "Agency" means the Department of Environmental Protection or any federal agency that determines or approves the environmental response project pursuant to which the environmental covenant is created.
(3) "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.
(4) "Environmental covenant" means a servitude arising under an environmental response project that imposes activity and use limitations.
(5) "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 article twenty-two of this chapter;
(B) Incident to closure of a solid or hazardous waste management unit, if the closure is conducted with approval of an agency; or
(C) Under a state voluntary clean-up program authorized in article twenty-two of this chapter.
(6) "Holder" means the grantee of an environmental covenant as specified in subsection (a), section three of this article.
(7) "Person" means an individual, corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture, public corporation, government, governmental subdivision, agency or instrumentality or any other legal or commercial entity.
(8) "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.
(9) "State" means a state of the United States, the District of Columbia, Puerto Rico, the United States Virgin Islands or any territory or insular possession subject to the jurisdiction of the United States.
§22-22B-3. Nature of rights; subordination of interests.
(a) Any person, including a person that owns an interest in the real property, the agency, or a municipality or other unit of local government, may be a holder. An environmental covenant may identify more than one holder. The interest of a holder is an interest in real property.
(b) A right of an agency under this article or under an environmental covenant, other than a right as a holder, is not an interest in real property.
(c) An agency is bound by any obligation it assumes in an environmental covenant, but an agency does not assume obligations merely by signing an environmental covenant. Any other person that signs an environmental covenant is bound by the obligations the person assumes in the covenant, but signing the covenant does not change obligations, rights or protections granted or imposed under law other than this article except as provided in the covenant.
(d) The following rules apply to interests in real property in existence at the time an environmental covenant is created or amended:
(1) An interest that has priority under other law is not affected by an environmental covenant unless the person that owns the interest subordinates that interest to the covenant.
(2) This article does not require a person that owns a prior interest to subordinate that interest to an environmental covenant or to agree to be bound by the covenant.
(3) A subordination agreement may be contained in an environmental covenant covering real property or in a separate record. If the environmental covenant covers commonly owned property in a common interest community, the record may be signed by any person authorized by the governing board of the owners' association.
(4) An agreement by a person to subordinate a prior interest to an environmental covenant affects the priority of that person's interest but does not by itself impose any affirmative obligation on the person with respect to the environmental covenant.
§22-22B-4. Contents of environmental covenant.
(a) An environmental covenant must:
(1) State that the instrument is an environmental covenant executed pursuant to this article;
(2) Contain a legally sufficient description of the real property subject to the covenant;
(3) Describe the activity and use limitations on the real property;
(4) Identify every holder;
(5) Be signed by the agency, every holder, and unless waived by the agency every owner of the fee simple of the real property subject to the covenant; and
(6) Identify the name and location of any administrative record for the environmental response project reflected in the environmental covenant.
(b) In addition to the information required by subsection (a) of this section, an environmental covenant may contain other information, restrictions and requirements agreed to by the persons who signed it, including any:
(1) Requirements for notice following transfer of a specified interest in, or concerning proposed changes in use of, applications for building permits for, or proposals for any site work affecting the contamination on, the property subject to the covenant;
(2) Requirements for periodic reporting describing compliance with the covenant;
(3) Rights of access to the property granted in connection with implementation or enforcement of the covenant;
(4) A brief narrative description of the contamination and remedy, including the contaminants of concern, the pathways of exposure, limits on exposure and the location and extent of the contamination;
(5) Limitation on amendment or termination of the covenant in addition to those contained in sections nine and ten of this article; and
(6) Rights of the holder in addition to its right to enforce the covenant pursuant to section eleven of this article.
(c) In addition to other conditions for its approval of an environmental covenant, the agency may require those persons specified by the agency who have interests in the real property to sign the covenant.
§22-22B-5. Validity; effect on other instruments.
(a) An environmental covenant that complies with this article runs with the land.
(b) An environmental covenant that is otherwise effective is valid and enforceable even if:
(1) It is not appurtenant to an interest in real property;
(2) It can be or has been assigned to a person other than the original holder;
(3) It is not of a character that has been recognized traditionally at common law;
(4) It imposes a negative burden;
(5) It imposes an affirmative obligation on a person having an interest in the real property or on the holder;
(6) The benefit or burden does not touch or concern real property;
(7) There is no privity of estate or contract;
(8) The holder dies, ceases to exist, resigns or is replaced; or
(9) The owner of an interest subject to the environmental covenant and the holder are the same person.
(c) An instrument that creates restrictions or obligations with respect to real property that would qualify as activity and use limitations except for the fact that the instrument was recorded before the effective date of the enactment of this article during the regular session of the Legislature in two thousand five is not invalid or unenforceable because of any of the limitations on enforcement of interests described in subsection (b) of this section or because it was identified as an easement, servitude, deed restriction or other interest. This article does not apply in any other respect to such an instrument.
(d) This article does not invalidate or render unenforceable any interest, whether designated as an environmental covenant or other interest, that is otherwise enforceable under the law of this state.
§22-22B-6. Relationship to other land-use law.
This article does not authorize a use of real property that is otherwise prohibited by zoning, by law other than this article 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 article.
§22-22B-7. Notice.
(a) A copy of an environmental covenant shall be provided by the persons and in the manner required by the agency to:
(1) Each person that signed the covenant;
(2) Each person holding a recorded interest in the real property subject to the covenant;
(3) Each person in possession of the real property subject to the covenant;
(4) Each municipality or other unit of local government in which real property subject to the covenant is located; and
(5) Any other person the agency requires.
(b) The validity of a covenant is not affected by failure to provide a copy of the covenant as required under this section.
§22-22B-8. Recording.
(a) An environmental covenant and any amendment or termination of the covenant must be recorded in every county in which any portion of the real property subject to the covenant is located. For purposes of indexing, a holder shall be treated as a grantee.
(b) Except as otherwise provided in subsection (c), section nine of this article, an environmental covenant is subject to the laws of this state governing recording and priority of interests in real property.
§22-22B-9. Duration; amendment by court action.
(a) An environmental covenant is perpetual unless it is:
(1) By its terms limited to a specific duration or terminated by the occurrence of a specific event;
(2) Terminated by consent pursuant to section ten of this article;
(3) Terminated pursuant to subsection (b) of this section;
(4) Terminated by foreclosure of an interest that has priority over the environmental covenant; or
(5) Terminated or modified in an eminent domain proceeding, but only if:
(A) The agency that signed the covenant is a party to the proceeding;
(B) All persons identified in subsections (a) and (b), section ten of this article are given notice of the pendency of the proceeding; and
(C) The court determines, after hearing, that the termination or modification will not adversely affect human health or the environment.
(b) If the agency that signed an environmental covenant has determined that the intended benefits of the covenant can no longer be realized, a court, under the doctrine of changed circumstances, in an action in which all persons identified in subsections (a) and (b), section ten of this article 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 article five, chapter twenty-nine-a of this code.
(c) Except as otherwise provided in subsections (a) and (b) of this section, an environmental covenant may not be extinguished, limited or impaired through issuance of a tax deed, foreclosure of a tax lien, or application of the doctrine of adverse possession, prescription, abandonment, waiver, lack of enforcement, or acquiescence, or a similar doctrine.
(d) An environmental covenant may not be extinguished, limited, or impaired except as authorized by this article.
§22-22B-10. Amendment or termination by consent.
(a) An environmental covenant may be amended or terminated by consent only if the amendment or termination is signed by:
(1) The agency;
(2) Unless waived by the agency, the current owner of the fee simple of the real property subject to the covenant;
(3) Each person that originally signed the covenant, unless the person waived in a signed record the right to consent or a court finds that the person no longer exists or cannot be located or identified with the exercise of reasonable diligence; and
(4) Except as otherwise provided in subdivision (2), subsection (d) of this section, the holder.
(b) If an interest in real property is subject to an environmental covenant, the interest is not affected by an amendment of the covenant unless the current owner of the interest consents to the amendment or has waived in a signed record the right to consent to amendments.
(c) Except for an assignment undertaken pursuant to a governmental reorganization, assignment of an environmental covenant to a new holder is an amendment.
(d) Except as otherwise provided in an environmental covenant:
(1) A holder may not assign its interest without consent of the other parties;
(2) A holder may be removed and replaced by agreement of the other parties specified in subsection (a) of this section; and
(e) A court of competent jurisdiction may fill a vacancy in the position of holder.
§22-22B-11. Enforcement of environmental covenant.
(a) A civil action for injunctive or other equitable relief for violation of an environmental covenant may be maintained by:
(1) A party to the covenant;
(2) The agency or, if it is not the agency, the Department of Environmental Protection;
(3) Any person to whom the covenant expressly grants power to enforce;
(4) A person whose interest in the real property or whose collateral or liability may be affected by the alleged violation of the covenant; or
(5) A municipality or other unit of local government in which the real property subject to the covenant is located.
(b) This article does not limit the regulatory authority of the agency or the Department of Environmental Protection under law other than this article with respect to an environmental response project.
(c) A person is not responsible for or subject to liability for environmental remediation solely because it has the right to enforce an environmental covenant.
§22-22B-12. Uniformity of application and construction.
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.

§22-22B-13. Relation to Electronic Signatures in Global and National Commerce Act.

This article 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 said Act (15 U.S.C. Section 7001(a)) or authorize electronic delivery of any of the notices described in Section 103 of said Act (15 U. S. C. Section 7003(b)).
§22-22B-14. Severability.
If any provision of this article or its application to any person or circumstance is held invalid, the invalidity does not affect other provisions or applications of this article which can be given effect without the invalid provision or application, and to this end the provisions of this article are severable.
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(NOTE: The purpose of this bill is to enhance existing risk- based voluntary remediation of contaminated industrial sites and encourage their re-use by offering a clear and objective process for creating, modifying or terminating environmental covenants and for recording these actions in instruments which will be reflected in the title abstract of the property.

Article 22B is new; therefore, strike-throughs and underscoring have been omitted.

This bill has been recommended for passage this session by the Joint Commission on Interstate Cooperation.)

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JUDICIARY COMMITTEE AMENDMENT

On page six, section four, line twelve, after the word "signed" by inserting the words "and notarized".

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