AN ACT GENERALLY AUTHORIZING ENVIRONMENTAL CONTROL EASEMENTS; ALLOWING THE ACQUISITION OF ENVIRONMENTAL CONTROL SITES; LIMITING THE CONVERSION OR DIVERSION OF ENVIRONMENTAL CONTROL SITES FROM THE PURPOSES SPECIFIED IN THE ENVIRONMENTAL CONTROL EASEMENT; RESTRICTING THE CONVEYANCE OR LEASE OF ENVIRONMENTAL CONTROL SITES; AUTHORIZING PUBLIC BODY POWERS IN CONNECTION WITH ENVIRONMENTAL CONTROL EASEMENTS; PROVIDING FOR THE CREATION AND APPROVAL OF ENVIRONMENTAL CONTROL EASEMENTS; SPECIFYING THE DURATION OF ENVIRONMENTAL CONTROL EASEMENTS; PROVIDING FOR PERMISSIBLE EASEMENTS; DESIGNATING GRANTEES OF ENVIRONMENTAL CONTROL EASEMENTS; PROVIDING FOR REPORTING REQUIREMENTS BY QUALIFIED PRIVATE ORGANIZATIONS; AUTHORIZING THE ASSIGNABILITY OF EASEMENTS; PROVIDING FOR COORDINATION WITH LOCAL PLANNING AUTHORITIES; REQUIRING THE RECORDING AND DESCRIPTION OF ENVIRONMENTAL CONTROL EASEMENTS; EXEMPTING CERTAIN INTEREST HELD BY A GRANTEE FROM PROPERTY TAXES; PROVIDING FOR EASEMENT ENFORCEMENT AND LIABILITY; AND PROVIDING AN EFFECTIVE DATE.

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

Section 1. Short title. [Sections 1 through 20] may be cited as the "Environmental Control Easement Act".

Section 2. Findings and purpose. (1) The legislature finds that:

(a) numerous sites throughout the state contain or may contain hazardous wastes or substances that may threaten the public health, safety, or welfare or the environment if certain uses are permitted on these sites or if certain activities are not performed on these sites;

(b) at some sites, protection of the public health, safety, or welfare or the environment may be enhanced by the application and enforcement of certain restrictions on the future use of the site or requirements for performance of certain activities;

(c) the creation of an enforceable easement mechanism for imposing restrictions on the use of a site and requiring performance of operations and maintenance activities may help protect the public health, safety, and welfare and the environment by:

(i) preventing or minimizing the exposure of the public to hazardous wastes or substances;

(ii) preventing the disturbance of important features of remediation work and remedial technologies employed at the site;

(iii) ensuring that the presence of hazardous wastes or substances and the features of remediation work and remedial technologies are properly considered in the future use or development of a site; or

(iv) requiring the performance of certain activities or the prohibition or limitation of certain activities, with respect to the site; and

(d) the expenditure of public funds for the acquisition or designation of interests and rights in real property to protect the public health, safety, and welfare and the environment is in the public's interest.

(2) It is the purpose of [sections 1 through 20] to authorize and enable federal public entities, other public bodies, and certain qualifying private organizations to provide for:

(a) the monitoring and protection of environmental control sites to ensure that those sites are not used for purposes that may threaten the public health, safety, or welfare or the environment;

(b) a process of reviewing the need for specialized construction, development, use, and safety measures if the owner or user of an environmental control site proposes a new use for which any contamination might present a risk to the public health, safety, or welfare or the environment; and

(c) a mechanism for prohibiting or limiting certain activities or requiring certain activities on an environmental control site to enhance protection of the public health, safety, or welfare or the environment.

Section 3. Definitions. As used in [sections 1 through 20], the following definitions apply:

(1) "Department" means the department of environmental quality provided for in 2-15-3501.

(2) "Environmental control easement" or "easement" means an easement created under [sections 1 through 20] that burdens an environmental control site, that runs with the land, and that is binding on the owner and subsequent owners, lessees, and other users of the land. The easement may require the relinquishment of some or all rights to use the land or its surface or subsurface or the water in, upon, or under the land to the extent provided in the instrument granting the easement.

(3) "Environmental control site" or "site" means any site, including the surface and subsurface of the land and the surface and subsurface resources in, upon, or under the land, including, without limitation, minerals and water that may contain hazardous wastes or substances or that may require remediation, reclamation, or restoration pursuant to federal, state, or local law or regulation.

(4) "Federal public entity" means the United States of America, the United States environmental protection agency, or any other federal government agency or authority and its successors or assigns.

(5) "Governmental order" means a consent decree, judgment, decision, order, agreement, or other requirement authorized or imposed by or under any federal or state law affecting an environmental control site.

(6) "Hazardous wastes or substances" means those hazardous or toxic substances, wastes, materials, pollutants, or contaminants that are subject to regulation by federal, state, or local environmental protection laws or that are defined pursuant to 75-10-403, 75-10-602, and 75-10-702.

(7) "Public body" means the state, counties, cities, towns, and other municipalities.

(8) "Qualified private organization" means a private organization:

(a) competent to own interests in real property;

(b) that qualifies and holds a general tax exemption under the federal Internal Revenue Code, 26 U.S.C. 501(c); and

(c) whose organizational purposes are designed to further the purposes of [sections 1 through 20].

Section 4. Acquisition of interests in environmental control sites. A public body may acquire by grant, title to, interests in, or rights in environmental control sites, including environmental control easements.

Section 5. Conversion or diversion of environmental control sites. An environmental control site in which an environmental control easement has been granted pursuant to [sections 1 through 20] may not be converted or diverted from purposes specified in the easement instrument or released from any restriction, limitation, or requirement specified in the easement instrument unless the conversion, diversion, or release is:

(1) protective of the public health, safety, and welfare and the environment as determined by the department or the U.S. environmental protection agency that initially approved the easement;

(2) permitted by the criteria for modification or termination imposed at the time of the creation of the easement; and

(3) approved in writing by the easement holder and any other person named in the easement instrument from whom approval is required.

Section 6. Conveyance or lease of environmental control sites. (1) A grantee of an environmental control easement acquired under [sections 1 through 20] may not convey or assign any of the easement rights that the grantee has acquired except to a federal public entity, a public body, or a qualified private organization authorized to hold environmental control easements under [section 11].

(2) A grantee of a conveyance pursuant to subsection (1) shall assume the responsibility for enforcing the environmental control easement as specified in the easement instrument and in [section 18].

Section 7. Public body powers. In connection with environmental control sites acquired or designated as environmental control easements for the purposes of [sections 1 through 20], a public body may provide, arrange, or contract for the monitoring of the environmental control sites as necessary to ensure that the environmental control sites are being used only for the purposes permitted by the terms of the environmental control easement and are not being used in a manner that is prohibited or restricted by the terms of the environmental control easement.

Section 8. Creation and approval of environmental control easements. (1) An environmental control easement may be created under [sections 1 through 20] only if the department or the United States environmental protection agency has approved the creation of an environmental control easement at an environmental control site to protect public health, safety, or welfare or the environment.

(2) An owner or an authorized representative of the owner of an environmental control site may apply for approval of a proposed environmental control easement to the department or the United States environmental protection agency.

(3) An owner or an authorized representative of the owner of an environmental control site that applies to the department for approval shall complete an environmental control easement application developed by the department.

(4) Upon receiving a completed application and following public notice, the department shall allow for a 30-day public comment period. Notice of the public comment period shall be published in a newspaper of general circulation in the area of the proposed environmental control easement.

(5) Following the 30-day public comment period, the department shall promptly review the application and either approve the application or provide the applicant with a written statement of the reasons for the department's disapproval.

(6) If the application is disapproved for reasons that may be addressed by modification of the easement instrument or by changes to the proposed transaction, the applicant, in consultation with the department, may modify the proposed environmental control easement or the proposed transaction in a manner necessary to obtain department approval and resubmit the application for the department's approval.

(7) The department's approval must be evidenced by execution of the instrument creating the environmental control easement, the execution of a written statement evidencing the approval in recordable form, or any other method that reasonably substantiates the required approval.

Section 9. Duration of environmental control easements. An environmental control easement may be granted either in perpetuity or for a term of years. An environmental control easement may not be approved for a term of years unless it includes provisions that ensure that public health, safety, and welfare and the environment are protected beyond the expiration of the easement.

Section 10. Permissible easements. (1) An environmental control easement under [sections 1 through 20] may prohibit or limit the following activities or uses:

(a) constructing or placing of buildings, camping trailers, housetrailers, mobile homes, roads, or other structures on or above the ground;

(b) dumping or placing of soil, debris, or other wastes or substances as landfill or dumping or placing of trash, waste, or unsightly or offensive materials;

(c) removing or destroying trees, shrubs, or other vegetation or planting or allowing growth of specific types of vegetation, such as crops for human or animal consumption or undesirable vegetation;

(d) excavating, dredging, or removing of gravel, soil, rock, or other materials or substances;

(e) using the surface of the land in a particular manner, such as for agricultural, residential, commercial, or industrial uses;

(f) subdividing the land, as described in 76-3-103, 76-3-104, and 76-3-202;

(g) disturbing soil caps, soil surfaces, berms, drainage structures, or other structures or other activities that may cause erosion or migration of hazardous wastes or substances at or from the environmental control site;

(h) drilling or using water wells for potable or nonpotable purposes;

(i) other activities or uses detrimental to or interfering with the remediation or cleanup of the environmental control site or detrimental to the preservation of remedial structures, measures, or technologies employed at the environmental control site; and

(j) other activities or uses that may result in a risk or threat to the public health, safety, or welfare or the environment.

(2) An environmental control easement under [sections 1 through 20] may include or require the following:

(a) maintenance of environmental control site remedial structures or other remedial measures, such as soil surfaces, soil caps, berms, fences, or drainage improvements;

(b) rights in the holder of the easement or others for continuing access to the site as necessary to implement, operate, maintain, and monitor remedial work and technologies, including operation and maintenance, and to ensure implementation and enforcement of the requirements, restrictions, and limitations specified in the easement instrument;

(c) prompt notification to the holder of the easement or others of transfers of all or any portion of an environmental control site or interest in the site or of any proposed changes in land use at the site;

(d) compliance with all requirements of any applicable governmental order;

(e) arrangements for indemnification or for reimbursement of any costs and expenses of the easement holder or others or other methods of allocating costs and expenses for remedial actions, operations and maintenance, or other activities on the environmental control site or with respect to the site;

(f) other obligations that any federal public entity or other public body having jurisdiction over the property determines are necessary to implement, ensure noninterference with, or ensure the protection of remedial work performed under a governmental order; or

(g) other obligations that are necessary or advisable to reduce or eliminate risks or threats to the public health, safety, or welfare or the environment at environmental control sites.

Section 11. Environmental control easement conveyances. (1) The designated grantee of an environmental control easement granted under [sections 1 through 20] is one or more of the following entities:

(a) a federal public entity;

(b) the state of Montana, acting by and through the department or any other state agency;

(c) any other public body having jurisdiction over the environmental control site; or

(d) a qualified private organization.

(2) A grantee's acceptance of the easement interest and related obligations must be evidenced by the grantee's execution of the instrument creating the environmental control easement.

(3) Prior to or contemporaneously with the conveyance of an environmental control easement to a designated grantee, the environmental control site owner shall:

(a) obtain documents demonstrating that every person or entity holding an interest in the environmental control site or any part of the site, including without limitation each mortgagee, lienholder, lessee, and encumbrancer, irrevocably subordinates the entity's interest to the environmental control easement;

(b) record the documents required under subsection (3)(a) in the appropriate county; and

(c) submit those documents required under subsection (3)(a) to the designated grantee.

(4) An environmental control easement may not be separated from the land and survives foreclosure of a mortgage, lien, or other encumbrance, as well as tax sales and the issuance of a tax deed.

Section 12. Qualified private organizations. If the grantee or holder of an environmental control easement is a qualified private organization, then the organization has the following additional obligations:

(1) The organization shall provide to the state or federal agency that approved the environmental control easement pursuant to [section 8] an annual report on or before April 30 of each year providing a description of actions taken to monitor the environmental control site, the status of compliance with the environmental control easement, and any other information that the state or federal agency may require relating to compliance with the provisions of the environmental control easement.

(2) Within 15 days following the discovery of any material violation of the environmental control easement, the organization shall provide to the state or federal agency that approved the environmental control easement pursuant to [section 8] a written report setting forth the nature of the violation, the remedies that the grantee intends to undertake to correct the violation, and any other information that the state or federal agency may request.

(3) The organization shall notify, in writing, the state or federal agency that approved the environmental control easement pursuant to [section 8] of the organization's dissolution, the cessation of operations, or the occurrence of any other event that renders the organization incapable of performing its obligations under the terms of the environmental control easement.

Section 13. Assignability of easements. For the purpose of [sections 1 through 20], an environmental control easement is assignable unless the instrument of conveyance or ownership expressly provides otherwise. An assignee must be qualified under the terms of [sections 1 through 20] to hold an environmental control easement. If an assignment is made in violation of the provisions of this section or in violation of the express terms of the instrument creating the easement, the assignment is void and the environmental control easement interests and obligations remain with the assignor.

Section 14. Coordination with local planning authority. (1) In order to minimize conflict with local comprehensive planning, the entity acquiring the environmental control easement shall provide a copy of the easement to the appropriate local planning authority for the county within which the land lies prior to or concurrently with recording.

(2) The requirement in subsection (1) to provide a copy of the environmental control easement to the local planning authority is only for the purposes of informing the authority of the easement.

(3) The failure to provide the environmental control easement to the local planning authority, as required in subsection (1), does not invalidate the easement.

Section 15. Recording and description of easement. (1) An environmental control easement must be recorded in the county where the property is located so as to effect the title in the manner of other conveyances of interest in the property and must describe the property subject to that easement by an adequate legal description or by reference to a recorded plat showing the property's boundaries.

(2) The county clerk and recorder shall, upon recording, place a copy of the environmental control easement in a separate file within the office of the county clerk and recorder and shall mail a copy of the easement to the department.

Section 16. Taxation of property subject to easement. (1) The value of the interest held by a federal public entity, a public body, or a qualifying private organization is exempt from property taxation.

(2) Expiration of an environmental control easement granted for a term of years may not result in a reassessment of the land for property tax purposes if the easement is renewed and the granting instrument reflecting the renewed easement is executed and properly filed not later than 15 days after the date of expiration.

Section 17. Easements to run with land. Notwithstanding 70-17-202 and 70-17-203(1) and (2), for the purposes of [sections 1 through 20], an environmental control easement runs with the land, whether or not this fact is stipulated in the instrument creating the easement, and the easement binds the owner of the land and all successors and assigns.

Section 18. Easement enforcement. (1) Environmental control easements may be enforced by injunction, specific performance, other proceedings in equity or at law, or any other means specified in the instrument creating the easement. In addition to any right specified in the easement instrument, representatives of the holder of the environmental control easement are entitled to enter the land in a reasonable manner and at reasonable times to ensure compliance with the terms and conditions of the easement and to implement, operate, maintain, and monitor all remedial work and technologies.

(2) An environmental control easement is not unenforceable because of a lack of privity of estate or contract or a lack of benefit to particular land, because the easement is not an appurtenant easement, or because the easement is an easement in gross.

(3) An environmental control easement is enforceable against the owner of the fee and any persons or entities holding or claiming an interest in the property regardless of whether the interest is equal to or less than the whole fee estate.

(4) A delay or failure to enforce in any specific instance any violation of an environmental control easement does not preclude or waive the right to enforce against that violation or any other breach.

(5) The easement holder may waive, in a writing executed by the easement holder, any single violation of the terms of the environmental control easement without waiving any other prior or subsequent violation whether of the same or different nature. The easement holder may remedy a violation without waiving the violation remedied and is entitled to recover from the environmental control site owner all costs, including but not limited to direct and indirect costs of remedying the violation and costs of any other remedies provided by law or in the easement instrument.

(6) A claim or cause of action arising out of or relating to a violation of a term or provision of an environmental control easement must be filed in a court of appropriate jurisdiction within 10 years from the date upon which the party alleging violation of the easement had actual knowledge of the violation.

Section 19. Who may enforce easement. (1) The owner of any real property designated as a benefited property in the instrument creating the environmental control easement or the occupant of the benefited real property may maintain an action for enforcement of the easement.

(2) A public body or a qualified private organization holding an environmental control easement shall enforce the provisions of the easement.

(3) A person or entity specifically named as a beneficiary in the instrument creating the environmental control easement may enforce the provisions of the easement to the extent provided in the instrument.

Section 20. Liability. (1) The creation and approval of an environmental control easement do not waive or release any statutory liability or other obligation of a person for hazardous wastes or substances at an environmental control site. A federal public entity or public body may enforce any applicable law or obligation without regard to any allocation of liability in an easement instrument and without regard to exhaustion of remedies against any party to an easement instrument.

(2) An owner of a site to which the environmental control easement applies and any lessee or licensee of the land are liable for any violation of the provisions of the easement and are liable for abating the violation and for all damages, costs, and attorney fees arising from or attributable to the violation.

(3) Notwithstanding any other provision of law, the holder or other named beneficiary of an environmental control easement or other person enforcing the easement is not liable for hazardous wastes or substances at the environmental control site or for the release of a hazardous or deleterious substance from a facility at the site based upon its ownership of the easement or based upon its maintenance, monitoring, enforcement, or other actions with respect to the easement.

Section 21. Codification instruction. [Sections 1 through 20] are intended to be codified as an integral part of Title 76, and the provisions of Title 76 apply to [sections 1 through 20].

Section 22. Effective date. [This act] is effective July 1, 1999.

- END -

I hereby certify that the within bill,

SB 0462, originated in the Senate.

Secretary of the Senate

President of the Senate

Signed this	day

of	, .

Speaker of the House

Signed this	day

of	, .

SENATE BILL NO. 462

INTRODUCED BY L. GROSFIELD, W. CRISMORE, V. COCCHIARELLA, R. DALE, B. MCCARTHY,

K. OHS, C. YOUNKIN

AN ACT GENERALLY AUTHORIZING ENVIRONMENTAL CONTROL EASEMENTS; ALLOWING THE ACQUISITION OF ENVIRONMENTAL CONTROL SITES; LIMITING THE CONVERSION OR DIVERSION OF ENVIRONMENTAL CONTROL SITES FROM THE PURPOSES SPECIFIED IN THE ENVIRONMENTAL CONTROL EASEMENT; RESTRICTING THE CONVEYANCE OR LEASE OF ENVIRONMENTAL CONTROL SITES; AUTHORIZING PUBLIC BODY POWERS IN CONNECTION WITH ENVIRONMENTAL CONTROL EASEMENTS; PROVIDING FOR THE CREATION AND APPROVAL OF ENVIRONMENTAL CONTROL EASEMENTS; SPECIFYING THE DURATION OF ENVIRONMENTAL CONTROL EASEMENTS; PROVIDING FOR PERMISSIBLE EASEMENTS; DESIGNATING GRANTEES OF ENVIRONMENTAL CONTROL EASEMENTS; PROVIDING FOR REPORTING REQUIREMENTS BY QUALIFIED PRIVATE ORGANIZATIONS; AUTHORIZING THE ASSIGNABILITY OF EASEMENTS; PROVIDING FOR COORDINATION WITH LOCAL PLANNING AUTHORITIES; REQUIRING THE RECORDING AND DESCRIPTION OF ENVIRONMENTAL CONTROL EASEMENTS; EXEMPTING CERTAIN INTEREST HELD BY A GRANTEE FROM PROPERTY TAXES; PROVIDING FOR EASEMENT ENFORCEMENT AND LIABILITY; AND PROVIDING AN EFFECTIVE DATE.