1.1 	A bill for an act
1.2 	relating to environment; adopting the Uniform
1.3 	Environmental Covenants Act; amending Minnesota
1.4 	Statutes 2004, section 115B.17, subdivision 15;
1.5 	proposing coding for new law as Minnesota Statutes,
1.6 	chapter 114D.
1.7 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.8 	UNIFORM ENVIRONMENTAL COVENANTS ACT

1.9 	Section 1. [114D.01] SHORT TITLE.
1.10 	This chapter may be cited as the Uniform Environmental
1.11 	Covenants Act.

1.12 	Sec. 2. [114D.05] DEFINITIONS.
1.13 		Subdivision 1.Scope. For the purposes of this chapter,
1.14 	the definitions in this subdivision have the meanings given.
1.15 		Subd. 2.Activity and use limitations. "Activity and use
1.16 	limitations" means restrictions or obligations created under
1.17 	this chapter with respect to real property.
1.18 		Subd. 3.Agency. "Agency" means the Pollution Control
1.19 	Agency, Agriculture Department, or another state or federal
1.20 	agency that determines or approves the environmental response
1.21 	project pursuant to which the environmental covenant is created.
1.22 		Subd. 4.Common interest community. "Common interest
1.23 	community" means a condominium, cooperative, or other real
1.24 	property with respect to which a person, by virtue of the
1.25 	person's ownership of a parcel of real property, is obligated to
1.26 	pay property taxes or insurance premiums, for maintenance, or
2.1 	for improvement of other real property described in a recorded
2.2 	covenant that creates the common interest community.
2.3 		Subd. 5.Environmental covenant. "Environmental covenant"
2.4 	means a servitude arising under an environmental response
2.5 	project that imposes activity and use limitations.
2.6 		Subd. 6.Environmental response project. "Environmental
2.7 	response project" means a plan or work performed for
2.8 	environmental remediation of real property and conducted:
2.9 	(1) under a federal or state program governing
2.10 	environmental remediation of real property;
2.11 	(2) incident to closure of a solid or hazardous waste
2.12 	management unit, if the closure is conducted with approval of an
2.13 	agency;
2.14 	(3) corrective actions or response to incidents under
2.15 	chapter 18B, 18C, 18D, or 18E;
2.16 	(4) corrective action under chapter 115C; or 
2.17 	(5) closure, contingency or corrective actions required
2.18 	under regulations applicable to waste treatment, storage, or
2.19 	disposal facilities or to above or below ground tanks.
2.20 		Subd. 7.Holder. "Holder" means the grantee of an
2.21 	environmental covenant as specified in section 114D.10,
2.22 	paragraph (a).
2.23 		Subd. 8.Person. "Person" means an individual,
2.24 	corporation, business trust, estate, trust, partnership, limited
2.25 	liability company, association, joint venture, public
2.26 	corporation, government, governmental subdivision, agency, or
2.27 	instrumentality, or any other legal or commercial entity.
2.28 		Subd. 9.Record. "Record," used as a noun, means
2.29 	information that is inscribed on a tangible medium or that is
2.30 	stored in an electronic or other medium and is retrievable in
2.31 	perceivable form.
2.32 		Subd. 10.State. "State" means a state of the United
2.33 	States, the District of Columbia, Puerto Rico, the United States
2.34 	Virgin Islands, or any territory or insular possession subject
2.35 	to the jurisdiction of the United States.

2.36 	Sec. 3. [114D.10] NATURE OF RIGHTS; SUBORDINATION OF
3.1 	INTERESTS.
3.2 	(a) Any person, including a person that owns an interest in
3.3 	the real property, the agency, or a municipality or other unit
3.4 	of local government, may be a holder.  An environmental covenant
3.5 	may identify more than one holder.  The interest of a holder is
3.6 	an interest in real property.
3.7 	(b) A right of an agency under this chapter or under an
3.8 	environmental covenant, other than a right as a holder, is not
3.9 	an interest in real property.
3.10 	(c) An agency is bound by any obligation it assumes in an
3.11 	environmental covenant, but an agency does not assume
3.12 	obligations merely by signing an environmental covenant.  Any
3.13 	other person that signs an environmental covenant is bound by
3.14 	the obligations the person assumes in the covenant, but signing
3.15 	the covenant does not change obligations, rights, or protections
3.16 	granted or imposed under law other than this chapter except as
3.17 	provided in the covenant.
3.18 	(d) The following rules apply to interests in real property
3.19 	in existence at the time an environmental covenant is created or
3.20 	amended:
3.21 	(1) an interest that has priority under other law is not
3.22 	affected by an environmental covenant unless the person that
3.23 	owns the interest subordinates that interest to the covenant;
3.24 	(2) this chapter does not require a person that owns a
3.25 	prior interest to subordinate that interest to an environmental
3.26 	covenant or to agree to be bound by the covenant;
3.27 	(3) a subordination agreement may be contained in an
3.28 	environmental covenant covering real property or in a separate
3.29 	record.  If the environmental covenant covers commonly owned
3.30 	property in a common interest community, the record may be
3.31 	signed by any person authorized by the governing board of the
3.32 	owners' association; and 
3.33 	(4) an agreement by a person to subordinate a prior
3.34 	interest to an environmental covenant affects the priority of
3.35 	that person's interest but does not by itself impose any
3.36 	affirmative obligation on the person with respect to the
4.1 	environmental covenant.

4.2 	Sec. 4. [114D.15] CONTENTS OF ENVIRONMENTAL COVENANT.
4.3 	(a) An environmental covenant must:
4.4 	(1) state that the instrument is an environmental covenant
4.5 	executed pursuant to this chapter;
4.6 	(2) contain a legally sufficient description of the real
4.7 	property subject to the covenant;
4.8 	(3) describe the activity and use limitations on the real
4.9 	property;
4.10 	(4) identify every holder;
4.11 	(5) be signed by the agency, every holder, and, unless
4.12 	waived by the agency, every owner of the fee simple of the real
4.13 	property subject to the covenant; and 
4.14 	(6) identify the name and location of any administrative
4.15 	record for the environmental response project reflected in the
4.16 	environmental covenant.
4.17 	(b) In addition to the information required by paragraph
4.18 	(a), an environmental covenant may contain other information,
4.19 	restrictions, and requirements agreed to by the persons who
4.20 	signed it, including any:
4.21 	(1) requirements for notice following transfer of a
4.22 	specified interest in, or concerning proposed changes in use of,
4.23 	applications for building permits for, or proposals for any site
4.24 	work affecting the contamination on, the property subject to the
4.25 	covenant;
4.26 	(2) requirements for periodic reporting describing
4.27 	compliance with the covenant;
4.28 	(3) rights of access to the property granted in connection
4.29 	with implementation or enforcement of the covenant;
4.30 	(4) a brief narrative description of the contamination and
4.31 	remedy, including the contaminants of concern, the pathways of
4.32 	exposure, limits on exposure, and the location and extent of the
4.33 	contamination;
4.34 	(5) limitation on amendment or termination of the covenant
4.35 	in addition to those contained in sections 114D.40 and 114D.45;
4.36 	and 
5.1 	(6) rights of the holder in addition to its right to
5.2 	enforce the covenant pursuant to section 114D.50.
5.3 	(c) In addition to other conditions for its approval of an
5.4 	environmental covenant, the agency may require those persons
5.5 	specified by the agency who have interests in the real property
5.6 	to sign the covenant.

5.7 	Sec. 5. [114D.20] VALIDITY; EFFECT ON OTHER INSTRUMENTS.
5.8 	(a) An environmental covenant that complies with this
5.9 	chapter runs with the land.
5.10 	(b) An environmental covenant that is otherwise effective
5.11 	is valid and enforceable even if:
5.12 	(1) it is not appurtenant to an interest in real property;
5.13 	(2) it can be or has been assigned to a person other than
5.14 	the original holder;
5.15 	(3) it is not of a character that has been recognized
5.16 	traditionally at common law;
5.17 	(4) it imposes a negative burden;
5.18 	(5) it imposes an affirmative obligation on a person having
5.19 	an interest in the real property or on the holder;
5.20 	(6) the benefit or burden does not touch or concern real
5.21 	property;
5.22 	(7) there is no privity of estate or contract;
5.23 	(8) the holder dies, ceases to exist, resigns, or is
5.24 	replaced; or 
5.25 	(9) the owner of an interest subject to the environmental
5.26 	covenant and the holder are the same person.
5.27 	(c) An instrument that creates restrictions or obligations
5.28 	with respect to real property that would qualify as activity and
5.29 	use limitations except for the fact that the instrument was
5.30 	recorded before the effective date of this chapter is not
5.31 	invalid or unenforceable because of any of the limitations on
5.32 	enforcement of interest described in paragraph (b) or because it
5.33 	was identified as an easement, servitude, deed restriction, or
5.34 	other interest.  This chapter does not apply in any other
5.35 	respect to such an instrument.
5.36 	(d) This chapter does not invalidate or render
6.1 	unenforceable any interest, whether designated as an
6.2 	environmental covenant or other interest, that is otherwise
6.3 	enforceable under the law of this state.

6.4 	Sec. 6. [114D.25] RELATIONSHIP TO OTHER LAND USE LAW.
6.5 	This chapter does not authorize a use of real property that
6.6 	is otherwise prohibited by zoning, by law other than this
6.7 	chapter regulating use of real property, or by a recorded
6.8 	instrument that has priority over the environmental covenant.
6.9 	An environmental covenant may prohibit or restrict uses of real
6.10 	property which are authorized by zoning or by law other than
6.11 	this chapter.

6.12 	Sec. 7. [114D.30] NOTICE.
6.13 	(a) A copy of an environmental covenant must be provided by
6.14 	the persons and in the manner required by the agency to:
6.15 	(1) each person that signed the covenant;
6.16 	(2) each person holding a recorded interest in the real
6.17 	property subject to the covenant;
6.18 	(3) each person in possession of the real property subject
6.19 	to the covenant;
6.20 	(4) each municipality or other unit of local government in
6.21 	which real property subject to the covenant is located; and 
6.22 	(5) any other person the agency requires.
6.23 	(b) The validity of a covenant is not affected by failure
6.24 	to provide a copy of the covenant as required under this section.

6.25 	Sec. 8. [114D.35] RECORDING.
6.26 	(a) An environmental covenant and any amendment or
6.27 	termination of the covenant must be recorded in every county in
6.28 	which any portion of the real property subject to the covenant
6.29 	is located.  For purposes of indexing, a holder shall be treated
6.30 	as a grantee.
6.31 	(b) Except as otherwise provided in section 114D.40,
6.32 	paragraph (c), an environmental covenant is subject to the laws
6.33 	of this state governing recording and priority of interests in
6.34 	real property.

6.35 	Sec. 9. [114D.40] DURATION; AMENDMENT BY COURT ACTION.
6.36 	(a) An environmental covenant is perpetual unless it is:
7.1 	(1) by its terms limited to a specific duration or
7.2 	terminated by the occurrence of a specific event;
7.3 	(2) terminated by consent pursuant to section 114D.45;
7.4 	(3) terminated pursuant to paragraph (b);
7.5 	(4) terminated by foreclosure of an interest that has
7.6 	priority over the environmental covenant; or 
7.7 	(5) terminated or modified in an eminent domain proceeding,
7.8 	but only if:
7.9 	(i) the agency that signed the covenant is a party to the
7.10 	proceeding;
7.11 	(ii) all persons identified in section 114D.45, paragraphs
7.12 	(a) and (b), are given notice of the pendency of the proceeding;
7.13 	and 
7.14 	(iii) the court determines, after hearing, that the
7.15 	termination or modification will not adversely affect human
7.16 	health or the environment.
7.17 	(b) If the agency that signed an environmental covenant has
7.18 	determined that the intended benefits of the covenant can no
7.19 	longer be realized, a court, under the doctrine of changed
7.20 	circumstances, in an action in which all persons identified in
7.21 	section 114D.45, paragraphs (a) and (b), have been given notice,
7.22 	may terminate the covenant or reduce its burden on the real
7.23 	property subject to the covenant.  The agency's determination or
7.24 	its failure to make a determination upon request is subject to
7.25 	review pursuant to chapter 14.
7.26 	(c) Except as otherwise provided in paragraphs (a) and (b),
7.27 	an environmental covenant may not be extinguished, limited, or
7.28 	impaired through issuance of a tax deed, foreclosure of a tax
7.29 	lien, or application of the doctrine of adverse possession,
7.30 	prescription, abandonment, waiver, lack of enforcement, or
7.31 	acquiescence, or a similar doctrine.
7.32 	(d) An environmental covenant may not be extinguished,
7.33 	limited, or impaired by application of section 500.20 or 541.023.

7.34 	Sec. 10. [114D.45] AMENDMENT OR TERMINATION BY CONSENT.
7.35 	(a) An environmental covenant may be amended or terminated
7.36 	by consent only if the amendment or termination is signed by:
8.1 	(1) the agency;
8.2 	(2) unless waived by the agency, the current owner of the
8.3 	fee simple of the real property subject to the covenant;
8.4 	(3) each person that originally signed the covenant, unless
8.5 	the person waived in a signed record the right to consent or a
8.6 	court finds that the person no longer exists or cannot be
8.7 	located or identified with the exercise of reasonable diligence;
8.8 	and 
8.9 	(4) except as otherwise provided in paragraph (d), clause
8.10 	(2), the holder.
8.11 	(b) If an interest in real property is subject to an
8.12 	environmental covenant, the interest is not affected by an
8.13 	amendment of the covenant unless the current owner of the
8.14 	interest consents to the amendment or has waived in a signed
8.15 	record the right to consent to amendments.
8.16 	(c) Except for an assignment undertaken pursuant to a
8.17 	governmental reorganization, assignment of an environmental
8.18 	covenant to a new holder is an amendment.
8.19 	(d) Except as otherwise provided in an environmental
8.20 	covenant:
8.21 	(1) a holder may not assign its interest without consent of
8.22 	the other parties;
8.23 	(2) a holder may be removed and replaced by agreement of
8.24 	the other parties specified in paragraph (a); and 
8.25 	(3) a court of competent jurisdiction may fill a vacancy in
8.26 	the position of holder.

8.27 	Sec. 11. [114D.50] ENFORCEMENT OF ENVIRONMENTAL
8.28 	COVENANT.
8.29 	(a) A civil action for injunctive or other equitable relief
8.30 	for violation of an environmental covenant may be maintained by:
8.31 	(1) a party to the covenant;
8.32 	(2) the agency;
8.33 	(3) any person to whom the covenant expressly grants power
8.34 	to enforce;
8.35 	(4) a person whose interest in the real property or whose
8.36 	collateral or liability may be affected by the alleged violation
9.1 	of the covenant; or 
9.2 	(5) a municipality or other unit of local government in
9.3 	which the real property subject to the covenant is located.
9.4 	(b) This chapter does not limit the regulatory authority of
9.5 	the agency under law other than this chapter with respect to an
9.6 	environmental response project.
9.7 	(c) A person is not responsible for or subject to liability
9.8 	for environmental remediation solely because it has the right to
9.9 	enforce an environmental covenant.

9.10 	Sec. 12. [114D.55] REGISTRY; SUBSTITUTE NOTICE.
9.11 	(a) The secretary of state shall establish and maintain a
9.12 	registry that contains all environmental covenants and any
9.13 	amendment or termination of those covenants.  The registry may
9.14 	also contain any other information concerning environmental
9.15 	covenants and the real property subject to them which the agency
9.16 	considers appropriate.  The registry is public data for purposes
9.17 	of chapter 13.
9.18 	(b) After an environmental covenant or an amendment or
9.19 	termination of a covenant is filed in the registry established
9.20 	pursuant to paragraph (a), a notice of the covenant, amendment,
9.21 	or termination that complies with this section may be recorded
9.22 	in the land records in lieu of recording the entire covenant.
9.23 	Any such notice must contain:
9.24 	(1) a legally sufficient description and any available
9.25 	street address of the real property subject to the covenant;
9.26 	(2) the name and address of the owner of the fee simple
9.27 	interest in the real property, agency, and holder if other than
9.28 	the agency;
9.29 	(3) a statement that the covenant, amendment, or
9.30 	termination is available in a registry at the secretary of
9.31 	state, which discloses the method of any electronic access; and 
9.32 	(4) a statement that the notice is notification of an
9.33 	environmental covenant executed pursuant to this chapter.
9.34 	(c) A statement in substantially the following form,
9.35 	executed with the same formalities as a deed in this state,
9.36 	satisfies the requirements of paragraph (b):
10.1 	"1.  This notice is filed in the land records of the
10.2 	[political subdivision] of [insert name of jurisdiction in which
10.3 	the real property is located] pursuant to Minnesota Statutes,
10.4 	section 114D.55.
10.5 	2.  This notice and the covenant, amendment, or termination
10.6 	to which it refers may impose significant obligations with
10.7 	respect to the property described below.
10.8 	3.  A legal description of the property is attached as
10.9 	Exhibit A to this notice.  The address of the property that is
10.10 	subject to the environmental covenant is [insert address of
10.11 	property] [not available].
10.12 	4.  The name and address of the owner of the fee simple
10.13 	interest in the real property on the date of this notice is
10.14 	[insert name of current owner of the property and the owner's
10.15 	current address as shown on the tax records of the jurisdiction
10.16 	in which the property is located].
10.17 	5.  The environmental covenant, amendment, or termination
10.18 	was signed by the Pollution Control Agency, 520 Lafayette Road,
10.19 	St. Paul, MN.
10.20 	6.  The environmental covenant, amendment, or termination
10.21 	was filed in the registry on [insert date of filing].
10.22 	7.  The full text of the covenant, amendment, or
10.23 	termination and any other information required by the agency is
10.24 	on file and available for inspection and copying in the registry
10.25 	maintained for that purpose by the secretary of state at 100
10.26 	Rev. Dr. Martin Luther King Jr. Boulevard, St. Paul, MN 55155.
10.27 	[The covenant, amendment, or termination may be found
10.28 	electronically at [insert web address for covenant].]" 

10.29 	Sec. 13. [114D.60] UNIFORMITY OF APPLICATION AND
10.30 	CONSTRUCTION.
10.31 	In applying and construing this chapter, consideration must
10.32 	be given to the need to promote uniformity of the law with
10.33 	respect to its subject matter among states that enact it.

10.34 	Sec. 14. [114D.65] RELATION TO ELECTRONIC SIGNATURES IN
10.35 	GLOBAL AND NATIONAL COMMERCE ACT.
10.36 	This chapter modifies, limits, or supersedes the federal
11.1 	Electronic Signatures in Global and National Commerce Act,
11.2 	United States Code, title 15, section 7001 et seq., but does not
11.3 	modify, limit, or supersede section 101 of that act, United
11.4 	States Code, title 15, section 7001(a), or authorize electronic
11.5 	delivery of any of the notices described in section 103 of that
11.6 	act, United States Code, title 15, section 7003(b).

11.7 	Sec. 15. Minnesota Statutes 2004, section 115B.17,
11.8 	subdivision 15, is amended to read:
11.9 		Subd. 15.Acquisition of property.  The agency may
11.10 	acquire, by purchase or donation, an interest interests in real
11.11 	property, including easements, restrictive environmental 
11.12 	covenants under chapter 114D, and leases, that the agency
11.13 	determines is are necessary for response action. The validity
11.14 	and duration of a restrictive covenant or nonpossessory easement
11.15 	acquired under this subdivision shall be determined in the same
11.16 	manner as the validity and duration of a conservation easement
11.17 	under chapter 84C, unless the duration is otherwise provided in
11.18 	the agreement.The agency may acquire an easement by
11.19 	condemnation only if the agency is unable, after reasonable
11.20 	efforts, to acquire an interest in real property by purchase or
11.21 	donation.  The provisions of chapter 117 govern condemnation
11.22 	proceedings by the agency under this subdivision.  A donation of
11.23 	an interest in real property to the agency is not effective
11.24 	until the agency executes a certificate of acceptance.  The
11.25 	state is not liable under this chapter solely as a result of
11.26 	acquiring an interest in real property under this subdivision.