HOUSE BILL 471
54th legislature - STATE OF NEW MEXICO - first session, 2019
INTRODUCED BY
Zachary J. Cook
AN ACT
RELATING TO REAL PROPERTY; ENACTING THE UNIFORM ENVIRONMENTAL COVENANTS ACT; PROVIDING FOR COVENANTS RESTRICTING USE OF REAL PROPERTY SUBJECT TO AN ENVIRONMENTAL RESPONSE PROJECT.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. [NEW MATERIAL] SHORT TITLE.--This act may be cited as the "Uniform Environmental Covenants Act".
SECTION 2. [NEW MATERIAL] DEFINITIONS.--As used in the Uniform Environmental Covenants Act:
A. "activity and use limitations" means restrictions or obligations created pursuant to the Uniform Environmental Covenants Act with respect to real property;
B. "agency" means the department of environment, the energy, minerals and natural resources department or any other state or federal agency that determines or approves the environmental response project pursuant to which the environmental covenant is created;
C. "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 environmental covenant that creates the common interest community;
D. "environmental covenant" means a servitude arising under an environmental response project that imposes activity and use limitations;
E. "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;
(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 a state voluntary cleanup program authorized in the Voluntary Remediation Act;
F. "holder" means the grantee of an environmental covenant as specified in Subsection A of Section 3 of the Uniform Environmental Covenants Act;
G. "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;
H. "record", when 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; and
I. "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.
SECTION 3. [NEW MATERIAL] NATURE OF RIGHTS--SUBORDINATION OF INTERESTS.--
A. Any person, including a person that owns an interest in real property, an 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 pursuant to the Uniform Environmental Covenants Act or pursuant to 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 environmental covenant, but signing the environmental covenant does not change obligations, rights or protections granted or imposed under law other than the Uniform Environmental Covenants Act, except as provided in the environmental 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 environmental covenant;
(2) the Uniform Environmental Covenants Act does not require a person who owns a prior interest to subordinate that interest to an environmental covenant or to agree to be bound by the environmental 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; and
(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.
SECTION 4. [NEW MATERIAL] CONTENTS OF ENVIRONMENTAL COVENANT.--
A. An environmental covenant shall:
(1) state that the instrument is an environmental covenant executed pursuant to the Uniform Environmental Covenants Act;
(2) contain a legally sufficient description of the real property subject to the environmental 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 every owner of the fee simple of the real property subject to the environmental 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:
(1) requirements for notice following transfer of a specified interest in, or concerning proposed changes in use of, applications for building permits or proposals for any site work affecting the contamination on the property subject to the environmental covenant;
(2) requirements for periodic reporting that describe compliance with the environmental covenant;
(3) rights of access to the property granted in connection with implementation or enforcement of the environmental 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 environmental covenant in addition to those contained in Sections 9 and 10 of the Uniform Environmental Covenants Act; and
(6) rights of the holder in addition to the holder's right to enforce the environmental covenant pursuant to Section 11 of the Uniform Environmental Covenants Act.
C. In addition to other conditions for the agency's 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 environmental covenant.
SECTION 5. [NEW MATERIAL] VALIDITY--EFFECT ON OTHER INSTRUMENTS.--
A. An environmental covenant that complies with the Uniform Environmental Covenants Act 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 in 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 July 1, 2019, 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. The Uniform Environmental Covenants Act does not apply in any other respect to such an instrument.
D. The Uniform Environmental Covenants Act 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 New Mexico.
SECTION 6. [NEW MATERIAL] RELATIONSHIP TO OTHER LAW.--
A. The Uniform Environmental Covenants Act does not authorize a use of real property that is otherwise prohibited by zoning, by a law other than the Uniform Environmental Covenants Act regulating use of real property or by a recorded instrument that has priority over the environmental covenant. An environmental covenant may prohibit or restrict a use of real property that is authorized by zoning or by a law other than the Uniform Environmental Covenants Act.
B. Nothing in the Uniform Environmental Covenants Act modifies, limits or otherwise affects any obligation under the Voluntary Remediation Act, the New Mexico Mining Act, the Surface Mining Act, the Oil and Gas Act, the Water Quality Act, the Ground Water Protection Act, the Hazardous Waste Act, the Solid Waste Act or any other law governing an environmental response project or any rule or regulation adopted under those laws.
C. Public notices, opportunities for public comments and opportunities to request a hearing in connection with an environmental response project shall identify whether an environmental covenant is proposed.
D. Nothing in the Uniform Environmental Covenants Act shall be construed to limit or otherwise affect the rights of any party to enforce a right of the party concerning the property subject to an environmental covenant or property affected by an environmental covenant.
E. Nothing in the Uniform Environmental Covenants Act shall be construed to limit or otherwise affect any obligation of a party to protect soil, surface water or ground water quality or to remediate contamination of soil, surface water or ground water.
SECTION 7. [NEW MATERIAL] 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 environmental covenant;
(2) each person holding a recorded interest in the real property subject to the environmental covenant;
(3) each person in possession of the real property subject to the environmental covenant;
(4) each municipality or other unit of local government in which real property subject to the environmental covenant is located; and
(5) any other person the agency requires.
B. The validity of an environmental covenant is not affected by failure to provide a copy of the environmental covenant as required under this section.
SECTION 8. [NEW MATERIAL] RECORDING.--
A. An environmental covenant and any amendment, assignment or termination of the environmental covenant or any subordination agreement contained in a separate record shall be recorded in every county in which any portion of the real property subject to the environmental covenant is located. For purposes of indexing, a holder shall be treated as a grantee.
B. Except as otherwise provided in Subsection C of Section 9 of the Uniform Environmental Covenants Act, an environmental covenant is subject to the laws of New Mexico governing recording and priority of interests in real property.
SECTION 9. [NEW MATERIAL] 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 of the Uniform Environmental Covenants Act;
(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 environmental covenant is a party to the proceeding;
(b) all persons identified in Subsections A and B of Section 10 of the Uniform Environmental Covenants Act 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 environmental 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 of Section 10 of the Uniform Environmental Covenants Act have been given notice, may terminate the environmental covenant or reduce its burden on the real property subject to the environmental covenant. The agency's determination or its failure to make a determination upon request is subject to review pursuant to law other than the Uniform Environmental Covenants Act.
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, application of the doctrine of adverse possession, prescription, abandonment, waiver, lack of enforcement, acquiescence or a similar doctrine, or Section 45-2-901 NMSA 1978 or Sections 45-2-908 through 45-2-914 NMSA 1978.
SECTION 10. [NEW MATERIAL] 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) the current owner of the fee simple of the real property subject to the environmental covenant, unless waived by the agency;
(3) each person that originally signed the environmental 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) the holder, except as otherwise provided in Paragraph (2) of Subsection D of this section.
B. If an interest in real property is subject to an environmental covenant, the interest is not affected by an amendment of the environmental 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, an 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 the holder's 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
(3) a court of competent jurisdiction may fill a vacancy in the position of holder.
SECTION 11. [NEW MATERIAL] 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 environmental covenant;
(2) the agency or, if it is not the agency, the department of environment;
(3) any person to whom the environmental covenant expressly grants power to enforce or any other person authorized to enforce the environmental covenant;
(4) a person whose interest in the real property or whose collateral or liability may be affected by the alleged violation of the environmental covenant; or
(5) a municipality or other unit of local government in which the real property subject to the environmental covenant is located.
B. The Uniform Environmental Covenants Act does not limit the regulatory authority of the agency or other governmental agency under law other that the Uniform Environmental Covenants Act 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.
SECTION 12. [NEW MATERIAL] REGISTRY--SUBSTITUTE NOTICE.--
A. The department of environment shall establish and maintain a registry that contains all environmental covenants and any amendment to or termination of any of those covenants. The registry may also contain any other information concerning environmental covenants and the real property subject to them which the department of environment considers appropriate. The registry is a public record for purposes of the Inspection of Public Records Act.
B. After an environmental covenant or an amendment or termination of a covenant is filed in the registry established pursuant to Subsection A of this section, a notice of the covenant, amendment or termination that complies with this section may be recorded in the land records in lieu of recording the entire covenant. Any such notice must contain:
(1) a legally sufficient description and any available street address of the real property subject to the covenant;
(2) the name and address of the owner of the fee simple interest in the real property, the agency and the holder if other than the agency;
(3) a statement that the covenant, amendment or termination is available in a registry at the department of environment, which discloses the method of electronic access; and
(4) a statement that the notice is notification of an environmental covenant executed pursuant to the Uniform Environmental Covenants Act.
C. A statement in substantially the following form, executed with the same formalities as a deed, satisfies the requirements of Subsection B of this section:
"1. This notice is filed in the land records of the [political subdivision of [insert the name of jurisdiction in which the real property is located]] pursuant to Section 12 of the Uniform Environmental Covenants Act.
2. This notice and the covenant, amendment or termination to which it refers may impose significant obligation with respect to the property described below.
3. A legal description of the property is attached as Exhibit A to this notice. The address of the property that is subject to the environmental covenant is [insert address of property] [not available].
4. The name and address of the owner of the fee simple interest in the real property on the date of this notice is [insert name of current owner of the property and the owner's current address as shown on the tax records of the jurisdiction in which the property is located].
5. The environmental covenant, amendment or termination was signed by [insert name and address of the agency].
6. The environmental covenant, amendment or termination was filed in the registry on [insert date of filing].
7. The full text of the covenant, amendment 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 Department of Environment at [insert address and room of building in which the registry is maintained]. The covenant, amendment or termination may be found electronically at [insert web address for the covenant]."
SECTION 13. [NEW MATERIAL] REGULATIONS.--The department of environment shall adopt and promulgate regulations necessary to implement the provisions of the Uniform Environmental Covenants Act. Such regulations shall include a schedule of fees for environmental covenants, not exceeding the reasonable cost of administering the registry created pursuant to the Uniform Environmental Covenants Act. Fees collected pursuant to this section shall be deposited in the water quality management fund.
SECTION 14. [NEW MATERIAL] UNIFORMITY OF APPLICATION AND CONSTRUCTION.--In applying and construing the Uniform Environmental Covenants Act, consideration shall be given to the need to promote uniformity of the law with respect to its subject matter in states that enact it.
SECTION 15. [NEW MATERIAL] RELATION TO ELECTRONIC SIGNATURES IN GLOBAL AND NATIONAL COMMERCE ACT.--The Uniform Environmental Covenants Act modifies, limits or supersedes the federal Electronic Signatures in Global and National Commerce Act but does not modify, limit or supersede 15 USCA Section 7001(c) or authorize electronic delivery of any of the notices described in 15 USCA Section 7003(b).
SECTION 16. [NEW MATERIAL] SAVING CLAUSE.--The Uniform Environmental Covenants Act does not affect an action commenced, a proceeding brought or a right accrued before July 1, 2019.
SECTION 17. APPLICABILITY.--The provisions of the Uniform Environmental Covenants Act apply to environmental covenants arising on or after July 1, 2019. The provisions of the Uniform Environmental Covenants Act shall not apply to lands held in trust by the state pursuant to the act of congress of June 20, 1910, entitled "An act to enable the people of New Mexico to form a constitution and state government and be admitted into the union on an equal footing with the original states".
SECTION 18. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2019.
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