HB2382

Report Title:

Environmental contamination; clean-up

Description:

Provides for "environmental covenants" for contaminated property to assure long-term compliance with requirements needed to protect the public and environment when complete removal of contaminants is not feasible, practical, or necessary.

HOUSE OF REPRESENTATIVES	H.B. NO.	2382
TWENTY-THIRD LEGISLATURE, 2006
STATE OF HAWAII

A BILL FOR AN ACT

RELATING TO THE UNIFORM ENVIRONMENTAL COVENANTS ACT.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. The Hawaii Revised Statutes is amended by adding a new chapter to be appropriately designated and to read as follows:

"CHAPTER

UNIFORM ENVIRONMENTAL COVENANTS ACT (MODIFIED)

§ -1 Short title. This chapter may be cited as the Uniform Environmental Covenants Act.

§ -2 Definitions. In this chapter:

"Activity or use limitations, or both" means restrictions or obligations created under this chapter with respect to real property.

"Agency" means the department of health or any other state or federal agency that determines or approves the environmental response project pursuant to which the environmental covenant is created.

"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.

"Department" means the department of health.

"Director" means the director of the department of health.

"Environmental covenant" means a servitude arising under an environmental response project that imposes activity and use limitations.

"Environmental response project" means a plan or work performed for environmental remediation of real property and conducted:

(1) Under a federal or state program governing environmental remediation of real property, including, but not limited to, chapter 128D; or

(2) Incident to closure of a solid or hazardous waste management unit, if the closure is conducted with approval of an agency; or

(3) Under the State voluntary response program authorized in part II of chapter 128D.

"Holder" means a grantee of an environmental covenant as specified in section –3(a) who, by virtue of the covenant, holds an interest in the real property subject to the covenant, and who accepts certain rights and obligations as stated in the covenant. A covenant must include at least one holder to be effective under this chapter.

"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.

"Record", used as a noun, 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.

"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.

§ -3 Nature of rights; subordination of interests. (a) Any person, including a person who 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 chapter 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 chapter 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 chapter 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.

§ -4 Contents of environmental covenant. (a) An environmental covenant must:

(1) State that the instrument is an environmental covenant executed pursuant to this chapter;

(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), 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 -9 and -10; and

(6) Rights of the holder in addition to its right to enforce the covenant pursuant to section -11.

(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.

§ -5 Validity; effect on other instruments. (a) An environmental covenant that complies with this chapter 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 or use limitations except for the fact that the instrument was recorded before the effective date of this chapter is not invalid or unenforceable because of any of the limitations on enforcement of interests described in subsection (b) or because it was identified as an easement, servitude, deed restriction, or other interest. This chapter does not apply in any other respect to such an instrument.

(d) This chapter 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.

§ -6 Relationship to other land use law. This chapter does not authorize a use of real property that is otherwise prohibited by zoning, by law other than this chapter regulating use of real property, or by a recorded instrument that has priority over the environmental covenant. An environmental covenant may prohibit or restrict uses of real property that are authorized by zoning or by law other than this chapter.

§ -7 Notice. (a) A copy of an environmental covenant shall be provided by the person(s) 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.

§ -8 Recording. (a) An environmental covenant and any amendment or termination of the covenant must be recorded by the grantor of the covenant with the bureau of conveyances. For purposes of indexing, a holder shall be treated as a grantee.

(b) Except as otherwise provided in section -9(c), an environmental covenant is subject to the laws of this State governing recording and priority of interests in real property.

(c) A copy of the final recorded covenant, any amendment made to the covenant, any termination documentation, and documentation of any other matters related to the covenant shall be provided to the department of health.

§ -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 -10;

(3) Terminated pursuant to subsection (b);

(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 section -10(a) and (b) 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 section -10(a) and (b) 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 chapter 91.

(c) Except as otherwise provided in subsections (a) and (b), 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.

§ -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 subsection (d)(2), 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; and

(2) A holder may be removed and replaced by agreement of the other parties specified in subsection (a).

(e) A court of competent jurisdiction may fill a vacancy in the position of a holder.

§ -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 department or any other agency specified in the covenant;

(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 county in which the real property subject to the covenant is located.

(b) This chapter does not limit the regulatory authority of the department or any agency under law other than this chapter 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.

§ -11.1 Administrative Enforcement. (a) In addition to the enforcement provided for in section -11, if the director determines that any person has violated or is violating any term or condition of an environmental covenant issued pursuant to this chapter, the director may do one or more of the following:

(1) Issue an order assessing an administrative penalty for any past or current violation under section -11.3; or

(2) Require compliance immediately or within a specified time.

(b) Any order issued under this chapter shall become final, unless not later than twenty days after the order is served, the person or persons named therein request in writing a hearing before the director. Any penalty imposed under this chapter shall become due and payable twenty days after the notice of penalty is served unless the person or persons named therein request in writing a hearing before the director. Whenever a hearing is requested on any penalty imposed under this chapter, the penalty shall become due and payable only upon completion of all review proceedings and the issuance of a final order confirming the penalty in whole or in part. Upon request for a hearing, the director shall require that the alleged violator or violators appear before the director for a hearing at a time and place specified in the notice and answer the charges complained of.

(c) Any hearing conducted under this section shall be conducted as a contested case under chapter 91. If after a hearing held pursuant to this section, the director finds that a violation or violations have occurred, the director shall affirm or modify any penalties imposed or shall modify or affirm the order previously issued or issue an appropriate order or orders for the prevention, abatement, or control of the violation involved, or for the taking of such other corrective action or remedial action as may be appropriate. If, after a hearing on an order or penalty contained in a notice, the director finds that no violation has occurred or is occurring, the director shall rescind the order or penalty. Any order issued after a hearing may prescribe the date or dates by which the violation or violations shall cease and may prescribe timetables for necessary action in preventing, abating, or controlling the violation or disposals.

(d) If the amount of any penalty is not paid to the department within thirty days after it becomes due and payable, the director may institute a civil action in the name of the State to collect the administrative penalty, which shall be a government realization.

In any proceeding to collect the administrative penalty imposed, the director need only show that:

(1) Notice was given;

(2) A hearing was held or the time granted for requesting a hearing expired without a request for a hearing;

(3) The administrative penalty was imposed; and

(4) The penalty remains unpaid.

(e) In connection with any hearing held pursuant to this section, the director shall have the power to subpoena the attendance of witnesses and the production of evidence on behalf of all parties.

§ -11.2 Penalties. (a) Any person who violates any term or condition of an environmental covenant issued pursuant to this chapter is subject to administrative or civil judicial penalties of not more than $25,000 for each separate offense. Each day of each violation, including the failure to act after being ordered to take such action, shall constitute a separate offense. Any action taken in court to impose or collect the penalty provided for in this subsection shall be considered a civil action.

(b) Any person who denies, obstructs, or hampers the entrance or inspection by any duly authorized representative of the director, or fails to provide relevant information requested by the director or the director′s representative is subject to administrative or civil judicial penalties of not more than $10,000 for each separate offense. Each day of each violation shall constitute a separate offense. Any action taken in court to impose or collect the penalty provided for in this subsection shall be considered a civil action.

§ -11.3 Administrative penalties. (a) In addition to any other administrative or judicial remedy provided by this chapter, the director is authorized to impose by order the penalties specified in sections -11.1(a) and (b) and –11.2.

(b) Factors to be considered in imposing an administrative penalty include:

(1) The nature and history of the violation and of any prior violations;

(2) The economic benefit, if any, resulting from the violation;

(3) The opportunity, difficulty, and history of corrective action;

(4) Good faith efforts to comply; and

(5) Any other matters that justice may require.

(c) It is presumed that the violator′s economic and financial conditions allow payment of the penalty, and the burden of proof to the contrary shall be on the violator.

§ -11.4 Enforcement by state and county authorities. All state and county health authorities and police officers shall enforce orders of the department.

§ -11.5 Inspection of premises. The director, in accordance with law, may enter and inspect any facility, building, or place to investigate an actual or suspected violation and to make reasonable tests in connection therewith. No confidential information secured pursuant to this section by any official or employee of the department within the scope and course of the official′s or employee′s employment in the prevention, control, or abatement of pollution shall be disclosed by the official or employee except as it relates directly to pollution and then, only in connection with the official′s or employee′s official duties and within the scope and course of the official’s or employee′s employment.

§ -12 Registry. The department shall establish a registry that contains all environmental covenants and any amendment or termination of those covenants. The registry may also contain any other information concerning environmental covenants and the real property subject to them which the department considers appropriate. The registry is a public record for purposes of chapter 92F.

§ -13 Relation to electronic signatures in Global and National Commerce Act. This chapter modifies, limits, or supersedes the federal Electronic Signatures in Global and National Commerce Act (15 U.S.C. section 7001 et seq.) but does not modify, limit, or supersede section 101 of that Act (15 U.S.C. section 7001 (a)) or authorize electronic delivery of any of the notices described in section 103 of that Act (15 U.S.C. section 7003(b)).″

SECTION 2. There are established such positions as necessary to implement the provisions of this chapter. These positions shall be appointed by the director without regard to chapters 76 and 77. These positions shall be included in any benefit program generally applicable to the officers and employees of the State.

SECTION 3. This Act shall take effect upon its approval.

INTRODUCED BY:	_____________________________
	BY REQUEST