SENATE BILL No. 201

February 14, 2007, Introduced by Senators PATTERSON and RICHARDVILLE and referred to the Committee on Judiciary.

A bill to amend 1994 PA 451, entitled

"Natural resources and environmental protection act,"

by amending sections 20120b and 21310a (MCL 324.20120b and

324.21310a), section 20120b as added by 1995 PA 71 and section

21310a as amended by 1996 PA 116, and by adding part 207.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

Sec. 20120b. (1) If a remedial action plan is selected or

approved by the department based on criteria for the residential

category provided for in section 20120a(1)(a), land use

restrictions or monitoring are not required once those standards

have been achieved by the remedial action.

(2) If a remedial action plan is selected or approved by the

department based on criteria in categories provided for in section

20120a(1)(b) to (e), a notice of approved environmental remediation

shall be recorded with the register of deeds for the county in

which the facility is located within 21 days after selection or

approval by the department of the remedial action, or within 21

days after completion of construction of the remedial action as

appropriate to the circumstances. A notice shall be filed pursuant

to this section only by the property owner or by another person who

has the express written permission of the property owner. The form

and content of the notice are subject to approval by the state. Any

restrictions contained in the notice shall be binding on the

owner's successors, assigns, and lessees, and shall run with the

land. A notice of environmental remediation recorded pursuant to

this subsection shall state which of the categories of land use

~~specified~~ provided for in section 20120a(1)(b) to ~~(d)~~ (e) are

consistent with the environmental conditions at the property to

which the notice applies, and that a change from that land use or

uses may necessitate further evaluation of potential risks to the

public health, safety, or welfare, or the environment. The notice

of approved environmental remediation shall include a survey and

property description that define the areas addressed by the

remedial action plan if land use or resource use restrictions apply

to less than the entire parcel or if different restrictions apply

to different areas of a parcel, and the scope of any land use or

resource use limitations. Additional requirements for financial

assurance, monitoring, or operation, and maintenance do not apply

if a remedial action complies with criteria provided for in section

20120a(1)(b) to (e), unless monitoring or operation and maintenance

are required to assure the compliance with criteria that apply

outside the boundary of the property that is the source of the

release.

(3) If a remedial action plan is selected or approved by the

department based on criteria provided for in section 20120a(1)(f)

to (j) or (2), provisions concerning subdivisions (a) through (e)

shall be stipulated in a legally enforceable agreement with the

department. If the department concurs with an analysis provided in

a remedial action plan that 1 or more of the requirements specified

in subdivisions (b) to (e) is not necessary to protect the public

health, safety, or welfare, or the environment and to assure the

effectiveness and integrity of the remedial action, that element

may be omitted from the agreement. If provisions for any of the

following, determined by the department to be applicable for a

facility, lapse or are not complied with as provided in the

agreement or remedial action plan, the department's approval of the

remedial action plan is void from the time of the lapse or

violation, unless the lapse or violation is corrected to the

satisfaction of the department:

(a) Land use or resource use restrictions.

(b) Monitoring.

(d) Permanent markers to describe restricted areas of the site

and the nature of any restrictions.

(e) Financial assurance, in a mechanism acceptable to the

department to pay for monitoring, operation and maintenance,

oversight, and other costs determined by the department to be

necessary to assure the effectiveness and integrity of the remedial

action.

(4) This subsection is subject to part 207, including, but not

limited to, section 20704(3). If a remedial action plan relies in

whole or in part on cleanup criteria approved pursuant to section

20120a(1)(f) to (j) or (2), land use or resource use restrictions

to assure the effectiveness and integrity of any containment,

exposure barrier, or other land use or resource use restrictions

necessary to assure the effectiveness and integrity of the remedy

shall be described in a restrictive covenant. The restrictive

covenant shall be recorded with the register of deeds for the

county in which the property is located within 21 days of the

department's selection or approval of the remedial action plan, or

within 21 days of the completion of construction of the containment

or barrier, as appropriate to the circumstances. The restrictive

covenant shall be filed by the property owner or with the express

written permission of the property owner. The restrictions shall

run with the land and be binding on the owner's successors,

assigns, and lessees. Such restrictions shall apply until the

department determines that hazardous substances that are controlled

by the barrier or contained no longer present an unacceptable risk

to the public health, safety, or welfare, or the environment as

defined by the cleanup criteria and exposure control requirements

set forth in the remedial action plan. The restrictive covenant

shall include a survey and property description that define the

areas addressed by the remedial action plan and the scope of any

land use or resource use limitations. The form and content of the

restrictive covenant are subject to approval by the department and

shall include provisions to accomplish all of the following:

(a) Restrict activities at the facility that may interfere

with a remedial action, operation and maintenance, monitoring, or

other measures necessary to assure the effectiveness and integrity

of the remedial action.

(b) Restrict activities that may result in exposures above

levels established in the remedial action plan.

convey any interest in the facility 14 days prior to consummating

the conveyance. A conveyance of title, an easement, or other

interest in the property shall not be consummated by the property

owner without adequate and complete provision for compliance with

the terms and conditions of the agreement described in subsection

(3) and the prevention of releases and exposures described in

subdivision (b).

(d) Grant to the department the right to enter the property at

reasonable times for the purpose of determining and monitoring

compliance with the remedial action plan, including the right to

take samples, inspect the operation of the remedial action

measures, and inspect records.

(e) Allow the state to enforce the restriction set forth in

the covenant by legal action in a court of appropriate

jurisdiction.

(f) Describe generally the uses of the property that are

consistent with the categorical criteria and limitations approved

as part of a remedial action plan.

(5) If the department determines that exposure to hazardous

substances may be reliably restricted by an institutional control

in lieu of a restrictive covenant, and that imposition of land use

or resource use restrictions through restrictive covenants is

impractical, the department may approve of a remedial action plan

under section 20120a(1)(f) to (j) or (2) that relies on such

institutional control. Mechanisms that may be considered under this

subsection include, but are not limited to, an ordinance that

prohibits the use of groundwater or an aquifer in a manner and to a

degree that protects against unacceptable exposures as defined by

the cleanup criteria approved as part of the remedial action plan.

An ordinance that serves as an exposure control pursuant to this

subsection shall be published and maintained in the same manner as

zoning ordinances and shall include a requirement that the local

unit of government notify the department at least 30 days prior to

adopting a modification to the ordinance, or to the lapsing or

revocation of the ordinance.

(6) Selection or approval by the department of a remedial

action does not relieve a person who is liable under section 20126

of that person's responsibility to report and provide for response

activity to address a subsequent release or threat of release at

the facility.

(7) A remedial action shall not be considered approved by the

department unless a remedial action plan is submitted to the

department and the department approves the plan. Implementation by

any person of response activity without department approval does

not relieve that person of an obligation to undertake response

activity or limit the ability of the department to take action to

require response activity necessary to comply with this act by a

person who is liable under section 20126.

(8) A person shall not file a notice of approved environmental

remediation indicating approval or a determination of the

department unless the department has approved of the filing of the

notice.

(9) A person who implements a remedial action plan approved by

the department pursuant to subsections (2) to (5) shall provide

notice of the land use restrictions that are part of the remedial

action plan to the zoning authority for the local unit of

government in which the facility is located within 30 days of

approval of the plan.

(10) The state, with the approval of the state administrative

board, may place restrictive covenants related to land or resource

use on deeds of state owned property.

PART 207. Environmental Covenants

Sec. 20701. As used in this part:

(a) "Activity and use limitations" means restrictions or

obligations created under this part with respect to real property.

(b) "Agency" means the department of environmental quality or

any other state or federal agency that determines or approves the

environmental response project pursuant to which the environmental

covenant is created.

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.

(d) "Environmental covenant" or "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 as provided in either or both of the following:

(i) Under a federal or state program governing environmental

remediation of real property, including part 201.

(ii) Incident to closure of a landfill as defined in section

11103 or 11504, if the closure is conducted with approval of an

agency.

(f) "Holder" means the grantee of an environmental covenant as

specified in section 20702(1).

(g) "Person" means an individual, partnership, corporation,

association, governmental entity, or other legal entity.

(h) "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.

(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.

Sec. 20702. (1) Any person, including a person that owns an

interest in the real property subject to the environmental

covenant, the agency, or a municipality or other unit of local

government, may be a grantee of an environmental covenant. A

covenant may identify more than 1 holder. The interest of a holder

is an interest in real property.

(2) A right of an agency under this part or under an

environmental covenant, other than a right as a holder, is not an

interest in real property.

(3) An agency is bound by any obligation it assumes in an

environmental covenant, but an agency does not assume obligations

merely by signing a covenant. Any other person that signs a

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

part except as provided in the covenant.

(4) All of the following rules apply to interests in real

property in existence at the time an environmental covenant is

created or amended:

(a) An interest that has priority under other law is not

affected by a covenant unless the person that owns the interest

subordinates that interest to the covenant.

(b) This part does not require a person that owns a prior

interest to subordinate that interest to a covenant or to agree to

be bound by the covenant.

covering real property or in a separate record. If the 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.

(d) An agreement by a person to subordinate a prior interest

to a 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 covenant.

Sec. 20703. (1) An environmental covenant shall:

(a) State that the instrument is an environmental covenant

executed pursuant to part 207 of the natural resources and

environmental protection act, 1994 PA 451, MCL 324.20701 to

324.20713.

(b) Contain a legally sufficient description of the real

property subject to the covenant.

property.

(d) Identify every holder.

(e) 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.

(f) Identify the name and location of any administrative

record for the environmental response project reflected in the

covenant.

(2) In addition to the information required by subsection (1),

an environmental covenant may contain other information,

restrictions, and requirements agreed to by the persons that signed

it, including any of the following:

(a) 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.

(b) Requirements for periodic reporting describing compliance

with the covenant.

with implementation or enforcement of the covenant.

(d) 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.

(e) Limitations on amendment or termination of the covenant in

addition to those contained in sections 20708 and 20709.

(f) Rights of the holder in addition to its right to enforce

the covenant pursuant to section 20710.

(3) In addition to other conditions for the agency's approval

of a covenant, the agency may require those persons specified by

the agency that have interests in the real property to sign the

covenant.

Sec. 20704. (1) An environmental covenant that complies with

this part runs with the land.

(2) An environmental covenant that is otherwise effective is

valid and enforceable even if 1 or more of the following apply:

(a) It is not appurtenant to an interest in real property.

(b) It can be or has been assigned to a person other than the

original holder.

traditionally at common law.

(d) It imposes a negative burden.

(e) It imposes an affirmative obligation on a person having an

interest in the real property or on the holder.

(f) The benefit or burden does not touch or concern real

property.

(g) There is no privity of estate or contract.

(h) The holder dies, ceases to exist, resigns, or is replaced.

(i) The holder is an owner of an interest subject to the

covenant.

(3) 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 this part is not invalid or

unenforceable because it is subject to any of the limitations on

enforcement of interests described in subsection (2) or because it

was identified as an easement, servitude, deed restriction, or

other interest. This part does not apply in any other respect to

such an instrument.

(4) This part 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.

Sec. 20705. This part does not authorize a use of real

property that is otherwise prohibited by zoning, by law other than

this part regulating use of real property, or by a recorded

instrument that has priority over the environmental covenant. A

covenant may prohibit or restrict uses of real property that are

authorized by zoning or by law other than this part.

Sec. 20706. (1) A copy of an environmental covenant shall be

provided by the persons and in the manner required by the agency to

all of the following:

(a) Each person that signed the covenant.

(b) Each person holding a recorded interest in the real

property subject to the covenant.

the covenant.

(d) Each local unit of government in which real property

subject to the covenant is located.

(e) Any other person the agency requires.

(2) The validity of a covenant is not affected by failure to

provide a copy of the covenant as required under this section.

Sec. 20707. (1) An environmental covenant and any amendment or

termination of the covenant shall be recorded in each 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.

(2) Except as otherwise provided in section 20708(3), an

environmental covenant is subject to the laws of this state

governing recording and priority of interests in real property.

Sec. 20708. (1) An environmental covenant is perpetual unless

it is any of the following:

(a) By its terms limited to a specific duration or terminated

by the occurrence of a specific event.

(b) Terminated by consent pursuant to section 20709.

(d) Terminated by foreclosure of an interest that has priority

over the environmental covenant.

(e) Terminated or modified in an eminent domain proceeding,

but only if:

(i) The agency that signed the environmental covenant is a

party to the proceeding.

(ii) All persons identified in section 20709(1) and (2) are

given notice of the pendency of the proceeding.

(iii) The court determines, after hearing, that the termination

or modification will not adversely affect human health or the

environment.

(2) 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 20709(1)

and (2) 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 in a

contested case hearing pursuant to the administrative procedures

act of 1969, 1969 PA 306, MCL 24.201 to 24.328.

(3) Except as otherwise provided in subsections (1) and (2),

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.

(4) An environmental covenant may not be extinguished,

limited, or impaired by application of 1945 PA 200, MCL 565.101 to

565.109, or 1963 PA 42, MCL 554.291 to 554.294.

Sec. 20709. (1) An environmental covenant may be amended or

terminated by consent only if the amendment or termination is

signed by all of the following:

(a) The agency.

(b) Unless waived by the agency, the current owner of the fee

simple of the real property subject to the covenant.

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.

(d) Except as otherwise provided in subsection (4)(b), the

holder.

(2) 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.

(3) Except for an assignment undertaken pursuant to a

governmental reorganization, assignment of an environmental

covenant to a new holder is an amendment.

(4) Except as otherwise provided in an environmental covenant,

all of the following apply:

(a) A holder may not assign its interest without consent of

the other parties.

(b) A holder may be removed and replaced by agreement of the

other parties specified in subsection (1).

the position of holder.

Sec. 20710. (1) A civil action for injunctive or other

equitable relief for violation of an environmental covenant may be

maintained by any of the following:

(a) A party to the covenant.

(b) The agency or, if it is not the agency, the department of

environmental quality.

enforce.

(d) A person whose interest in the real property or whose

collateral or liability may be affected by the alleged violation of

the covenant.

(e) A local unit of government in which the real property

subject to the covenant is located.

(2) This part does not limit the regulatory authority of the

agency or the department of environmental quality under law other

than this part with respect to an environmental response project.

(3) A person is not responsible for or subject to liability

for environmental remediation solely because the person has the

right to enforce an environmental covenant.

Sec. 20711. (1) The department of environmental quality 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 covenants and the

real property subject to them that the department of environmental

quality considers appropriate.

(2) After an environmental covenant or an amendment or

termination of an environmental covenant is filed in the registry

established pursuant to subsection (1), a notice of the covenant,

amendment, or termination that complies with this section may be

recorded in the office of the register of deeds in lieu of

recording the entire covenant. Any such notice shall contain all of

the following:

(a) A legally sufficient description and any available street

address of the real property subject to the covenant.

(b) 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.

termination is available in a registry at the department of

environmental quality and that discloses the method of any

electronic access.

(d) A statement that the notice is notification of an

environmental covenant executed pursuant to part 207 of the natural

resources and environmental protection act, 1994 PA 451, MCL

324.20701 to 324.20713.

(3) A statement in substantially the following form, executed

with the same formalities as a deed in this state, satisfies the

requirements of subsection (2):

"1. This notice is recorded with the register of deeds of

[insert name of county in which the real property is located]

pursuant to section 20711 of the natural resources and

environmental protection act, 1994 PA 451, MCL 324.20711.

2. This notice and the environmental covenant, amendment, or

termination to which it refers may impose significant obligations

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 on [insert date of filing] in the registry maintained for

that purpose by the department of environmental quality at [insert

address and room of building in which the registry is maintained].

7. The full text of the environmental covenant, amendment, or

termination and any other information required by the agency is on

file in the registry and available for inspection and copying. [The

covenant, amendment, or termination may be found electronically at

[insert web address for covenant].]"

Sec. 20712. In applying and construing this part,

consideration shall be given to the need to promote uniformity of

the law with respect to its subject matter among states that enact

the uniform law represented by this part.

Sec. 20713. This part modifies, limits, or supersedes the

electronic signatures in global and national commerce act, 15 USC

7001 to 7031, but does not modify, limit, or supersede 15 USC

7001(a).

Sec. 21310a. (1) If the corrective action activities at a site

result in a final remedy that relies on tier I commercial or

industrial criteria, institutional controls shall be implemented as

provided in this subsection. A notice of corrective action shall be

recorded with the register of deeds for the county in which the

site is located prior to submittal of a closure report under

section 21312a. A notice shall be filed under this subsection only

by the property owner or with the express written permission of the

property owner. The form and content of the notice shall be subject

to approval by the department. A notice of corrective action

recorded under this subsection shall state the land use that was

the basis of the corrective action selected by a consultant

retained by the owner or operator. The notice shall state that if

there is a proposed change in the land use at any time in the

future, that change may necessitate further evaluation of potential

risks to the public health, safety, and welfare and to the

environment and that the department shall be contacted regarding

any proposed change in the land use. Additional requirements for

financial assurance, monitoring, or operation and maintenance shall

not apply if contamination levels do not exceed the levels

established in the tier I evaluation.

(2) This subsection is subject to part 207, including, but not

limited to, section 20704(3). If corrective action activities at a

site rely on institutional controls other than as provided in

subsection (1), the institutional controls shall be implemented as

provided in this subsection. The restrictive covenant shall be

recorded with the register of deeds for the county in which the

property is located within 30 days from submittal of the final

assessment report pursuant to section 21311a, unless otherwise

agreed to by the department. The restrictive covenant shall be

filed only by the property owner or with the express written

permission of the property owner. The restrictions shall run with

the land and be binding on the owner's successors, assigns, and

lessees. The restrictions shall apply until the department

determines that regulated substances no longer present an

unacceptable risk to the public health, safety, or welfare or to

the environment. The restrictive covenant shall include a survey

and property description ~~which~~ that define the areas addressed by

the corrective action plan and the scope of any land use or

resource use limitations. The form and content of the restrictive

covenant are subject to approval by the department and shall

include provisions to accomplish all of the following:

(a) Restrict activities at the site that may interfere with

corrective action, operation and maintenance, monitoring, or other

measures necessary to assure the effectiveness and integrity of the

corrective action.

(b) Restrict activities that may result in exposure to

regulated substances above levels established in the corrective

action plan.

interest in the property from being consummated by the property

owner without adequate and complete provision for compliance with

the corrective action plan and prevention of exposure ~~to regulated~~

~~substances~~ described in subdivision (b).

(d) Grant to the department and its designated representatives

the right to enter the property at reasonable times for the purpose

of determining and monitoring compliance with the corrective action

plan, including but not limited to the right to take samples,

inspect the operation of the corrective action measures, and

inspect records.

(e) Allow the state to enforce restrictions set forth in the

covenant by legal action in a court of appropriate jurisdiction.

(f) Describe generally the uses of the property that are

consistent with the corrective action plan.

(3) If a consultant retained by the owner or operator

determines that exposure to regulated substances may be reliably

restricted by a means other than a restrictive covenant and that

imposition of land use or resource use restrictions through

restrictive covenants is impractical, the consultant may select a

corrective action plan that relies on alternative mechanisms.

Mechanisms that may be considered under this subsection include,

but are not limited to, an ordinance that prohibits the use of

groundwater in a manner and to a degree that protects against

unacceptable exposure to a regulated substance as defined by the

cleanup criteria identified in the corrective action plan. An

ordinance ~~that serves as an exposure control~~ under this subsection

shall include both of the following:

(a) A requirement that the local unit of government notify the

department 30 days before adopting a modification to the ordinance

or the lapsing or revocation of the ordinance.

(b) A requirement that the ordinance be filed with the

(4) Notwithstanding subsections (1), (2), and (3), if a

mechanism other than a notice of corrective action, ~~an ordinance,~~

or a restrictive covenant, or an ordinance is requested by a

consultant retained by an owner or operator and the department

determines that the alternative mechanism is appropriate, the

department may approve of the alternate mechanism.

(5) A person who implements corrective action activities shall

provide notice of the land use restrictions that are part of the

corrective action plan to the local unit of government in which the

site is located within 30 days of submittal of the corrective

action plan, unless otherwise approved by the department.