Uniform Environmental Covenants Act Brownfields Conference November 15, 2006 Boston, Massachusetts William R. Breetz

Uniform Environmental Covenants Act WHY WHAT WHEN WHERE HOW GOSSIP

Uniform Environmental Covenants Act Why UECA? Policies Spur Clean Up, Protect Human Health & Environment Encourage Economic Development (Jobs/Taxes) Primary Goal #1: Make certain that use restrictions and engineering controls are legally valid over time. Primary Goal #2: Tie into the real estate recording system for traditional purposes. (Priorities; “running with the land”; legal notice to 3d parties.)

Uniform Environmental Covenants Act Why UECA? ( cont’d. ) Other Goals Confirm Mechanics of an Environmental Covenant Provide “Real” Notice to the World Clarify the Amendment Process Clarify the Enforcement Process Resolve Related Legal Issues (Marketable Title, Dormant Minerals, Eminent Domain, Changed Circumstances, Tax Liens)

Uniform Environmental Covenants Act W H A T UECA Resolves Four Main Legal Problems 1.How to Create an Environmental Covenant 2.Makes the Covenant valid and permanent – “runs with the land” Who Cares about Reliability? PRPs New Lenders and Owners Communities Neighbors 3.Changing the Covenant 4.Enforcing the Covenant

Uniform Environmental Covenants Act W H A T N O T – No Clean-up Standards No Impact on State/Federal Facility Fight No Limits on Contents of Covenant = Flexibility No Impact on Prior Interests No Restriction on Agency’s Regulatory Power No Authority for Agency to Grant Releases No Class Action Authority

Uniform Environmental Covenants Act W H E N 2000 – 1 st Discussions 2001 – 1 st Drafting Committee – November – Finished Drafting, Approved by NCCUSL & ABA 2004 – 2005 – 10 State Adoptions 2006 – 6 More Jurisdictions 2007 – Expect More than 20 State Introductions If 10 Adoptions in 2007: ½ States in 4 Years

Uniform Environmental Covenants Act W H E R E Adoptions, 2004 – States & Territories Delaware, District of Columbia, Hawaii, Idaho Iowa, Kentucky, Maine, Maryland, Nebraska, Nevada, Oklahoma, Ohio, South Dakota, U.S. Virgin Islands, Utah, West Virginia Likely Introductions Next Year – 20 States Including Arizona, Mississippi, Montana, North Carolina, Oregon, Pennsylvania, Virginia, Washington, Others

Uniform Environmental Covenants Act

State Regulators Municipalities Lenders PRP’s Title Companies Developers Real Estate Lawyers Environmental Lawyers W H O The Advisors Federal Agencies (Defense, Energy, EPA)

Uniform Environmental Covenants Act American Bar Association Council of State Governments Caucus of Black Legislators American Bankers Association National Institutional Controls Coalition (ICMA, American Petroleum Institute, Holland & Knight LLP, US Navy, National Governors Association, National Brownfields Association, Environmental Bankers Association, Environmental Law Institute, Energy Communities Alliance) W H O (cont’d) Formal Supporters

Uniform Environmental Covenants Act Changing Definitions Expanding/Reducing the Scope of an “Environmental Response Project” Constraints of Who May Be a Holder Mandated Content of an Environmental Covenant “Belt & Suspenders” Amendments Termination & Amendment Procedures Who has Enforcement Power H O W to Enact UECA Accommodating Local Concerns Summary – Few Amendments, Not Much Substantive Change

Uniform Environmental Covenants Act GOSSIP Has Politics Slowed Enactments? Who Doesn’t Like UECA? Why? What Happened in Wisconsin ?

Uniform Environmental Covenants Act Wisconsin Rejects UECA -- “Too Complicated” A ‘REGULATORY SERVITUDE’ The New Statute Wisc. Stat. Ann. § (June 2006) “A person who owns or occupies property, including a [Brownfields] property or site, shall comply with limitations or conditions….imposed by [the regulator] without regard to when the person obtained or occupied the property. (unless someone else has that responsibility.)”

Uniform Environmental Covenants Act The Apparent Practice (Not in Statute) (1) Agency lists all Brownfield Sites on an accessible database with property address and coordinates; No Deed Restrictions, No Notice on Land Records. (2) PRPs get release when partial clean-up done. (3) PRP buys remediation insurance for State. (4) Subsequent owner liable for breach of regulation. (5) State liable for any changes of science, policy. Taking/Notice/Title Insurance/ Amendments Certainty/Enforcement/ Role For Other Stakeholders Issues