GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1991

H	1 

HOUSE BILL 541

Short Title:  Disclosure of Env. Limitations.	(Public)
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Sponsors: Representatives DeVane; N.J. Crawford and Privette.
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Referred to:  Environment.
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April 1, 1991

A BILL TO BE ENTITLED
AN ACT TO REQUIRE DISCLOSURE AND RECORDATION OF ENVIRONMENTAL LIMITATIONS AND LIABILITIES.
The General Assembly of North Carolina enacts:
Section 1.  Chapter 113A of the General Statutes is amended by adding a new Article to read:
"ARTICLE 16.
"Environmental Limitations Disclosure Act.
"§ 113A-230. Title.
This Article shall be known and may be cited as the North Carolina Environmental Limitations Disclosure Act of 1991.
"§ 113A-231. Purposes.
The purposes of this Article are to:
(1)	Require disclosure of environmental limitations and liabilities by recordation of the same in the office of the Register of Deeds in each county in the State;
(2)	Ensure that persons involved in real estate transactions are made aware of the existing environmental limitations and liabilities associated with the real property involved including past use and environmental status of the properties;
(3)	Require environmental agencies to determine which permits, registrations, and limitations issued by or filed by or with the agency should be disclosed by recordation; and
(4)	Provide a procedure for the disclosure of environmental limitations and liabilities by recordation.
"§ 113A-232. Definitions.
Unless a different meaning is required by the context, the following definitions shall apply throughout this Article:
(1)	'Agency' means every department, agency, institution, public authority, board, commission, bureau, division, council, member of the Council of State, or officer of the State, but does not include units of local government or their governing bodies, other municipal corporations or political subdivisions of the State, county or city boards of education, other local special-purpose public districts, units, or bodies of any kind, or private corporations created by act of the General Assembly, except in those instances where programs, projects, and actions of local governmental units or bodies are subject to review, approval, or licensing by State environmental agencies or create environmental limitations and liabilities required to be recorded by the State agency authorized to review, approve, or license the local governmental units or bodies.
(2)	'Department' means the Department of Environment, Health, and Natural Resources.
(3)	'Environmental agencies' means agencies of the Department of Environment, Health, and Natural Resources which administer programs intended to protect the environment, the North Carolina Pesticide Board, and local governmental units or bodies whose programs, projects, and actions are subject to review, approval, or licensing by agencies of the Department of Environment, Health, and Natural Resources.
(4)	'Environmental limitations and liabilities' means any permit or registration which:
a.	Authorizes the construction, development, operation, or use of facilities or sites that manufacture, process, use, handle, treat, store, or dispose of hazardous or toxic substances or hazardous wastes;
b.	Imposes continuing maintenance, operation, or and use conditions on any permitted activity at a facility or site that must be complied with after ownership of the facility or site is transferred to another owner;
c.	Limits or restricts protection of a facility from erosion or rebuilding of a facility damaged by erosion; or
d.	Is required to be recorded by G.S. 113-324(d).
(5)	'Facility' means all buildings, equipment, structures, and other stationary fixtures that are located on a single site.
(6)	'Permit' means any permit, license, certificate, notice of approval, or other evidence, by whatever name called, of a right or privilege to engage in any activity including the construction, development, operation, use, or maintenance of a facility or site.
(7)	'Person' means a natural person, individual, firm, partnership, association, institution, corporation, county, municipality, other political subdivision, governmental agencies, organization, society or other entity which may sue or be sued under a common name.
(8)	'Registration' means any instrument or form through which a person makes known to an environmental agency the location of a facility or site which has or may have environmental limitations and liabilities.
(9)	'Secretary' means the Secretary of the Department of Environment, Health, and Natural Resources.
"§ 113A-233. Powers and duties of environmental agencies.
(a)	Every environmental agency shall periodically review its regulatory programs, including those administered in whole or in part by local governmental units or bodies, to identify environmental limitations and liabilities which may arise from the operation of such programs, including those which may result from registrations with the environmental agency.  Environmental agencies shall review each new or modified regulatory program to determine if environmental limitations and liabilities will arise from the operation of new or modified regulatory programs.
(b)	Each environmental agency shall adopt rules requiring disclosure of environmental limitations and liabilities by recordation of appropriate disclosure documents in the office of the Register of Deeds of the county or counties where the affected property is located.  Rules shall be adopted in accordance with Chapter 150B of the General Statutes.
(c)	An environmental agency may determine that a specific environmental limitation or liability need not be recorded if the agency finds that recordation of such limitation or liability is not necessary or consistent with the purposes of this Article.  The agency shall report any such determination in writing to the Environmental Review Commission within 30 days of such determination.
"§ 113A-234. Duty to disclose.
(a)	Appropriate disclosure documents shall be filed in the office of the Register of Deeds in the county or counties where property affected by an environmental limitation or liability is located by the owner of the property, or in the name of the owner of the property by the person to whom a permit is issued or by whom a registration is made within 30 days of the issuance of the permit by, or registration with, the environmental agency.
(b)	The person filing the disclosure document shall notify the appropriate environmental agency in writing of the book and page number assigned to the disclosure document by the Register of Deeds.  Notification shall be made within 10 days of recordation in the office of the Register of Deeds.
(c)	If the person responsible for filing a disclosure document sells, leases, conveys, or transfers the property before the disclosure document is recorded, a copy of the disclosure document required to be filed by this Article shall be provided to the transferee, or his attorney, at least three days before the deed or other instrument conveying any interest described above is executed.
(d)	Disclosure documents shall be filed in accordance with permit conditions or rules adopted by environmental agencies and for the following permits, registrations, or leases:
(1)	Permits issued pursuant to G.S. 74-50;
(2)	Leases entered into under G.S. 113-202.1;
(3)	Permits for development of property bordering on the Atlantic Ocean and its inlets or which include use and maintenance conditions issued pursuant to G.S. 113A-118;
(4)	Permits issued pursuant to G.S. 130A-294;
(5)	Notices recorded pursuant to G.S. 130A-310.8;
(6)	Permits issued pursuant to G.S. 143-215.1;
(7)	Registrations under G.S. 143-215.94T;
(8)	Permits issued pursuant to G.S. 143-215.108; and
(9)	Permits issued by environmental agencies which include use and maintenance conditions to control stormwater runoff.
"§ 113A-235. Disclosure documents.
(a)	Each disclosure document shall include, at a minimum:
(1)	A legal description of the site that would be sufficient as a description in an instrument of conveyance and shall identify the location and dimensions of the facility or site features constituting an environmental limitation and liability with respect to permanently surveyed benchmarks;
(2)	Any requirement of the environmental agency which creates or limits a liability or potential liability for a subsequent owner;
(3)	Information identifying the permit or registration including the issuing agency, permit, or registration number, and the name of the permit holder; and
(4)	Names of the property owners.
(b)	The disclosure document shall include a map or plat which meets the requirements of G.S. 47-30 when a map or plat is required as a part of a permit application, when a site map or plat is required in connection with registration with the environmental agency, when a map is required to be included in the disclosure document by a rule adopted by the environmental agency, or when a map or plat is required to be included in the disclosure document by another provision of law.
(c)	The Register of Deeds shall record the disclosure document and index it in the grantor index under the names of the owners of the property.
(d)	The Secretary shall cancel a disclosure document upon request whenever the environmental limitations and liabilities no longer affect use of the facility or site.  The Secretary shall transmit a statement that a disclosure document has been cancelled  to the Register of Deeds of every county where the disclosure document is recorded together with a request that the disclosure document be cancelled of record.  The Secretary's request shall include  a statement that the environmental limitations and liabilities no longer affect the facility or site.  The Secretary's statement shall include the names of the owners of the property as shown in the disclosure document and shall reference the book and page where the disclosure document is recorded.  The Register of Deeds shall record the Secretary's statement in the deed books and index it in the grantor index in the name of the owner of the property as shown in the disclosure document and on the grantee index in the name of the 'Secretary of Environment, Health, and Natural Resources.'  The Register of Deeds shall make a marginal entry on the disclosure document showing the date of cancellation and the book and page where the Secretary's statement is recorded, and the Registrar shall sign the entry.  If a marginal entry is impracticable because of the method used to record maps and plats, the Register of Deeds is not required to make a marginal entry.
(e)	When the disclosure document is required by the North Carolina Pesticide Board, its chairman is substituted for the Secretary in this section.
(f)	The requirements of this section supplement any other disclosure requirements under federal or State law.
"§ 113A-236.  Enforcement.
(a)	Any person who knowingly or willfully fails to file a disclosure document or who knowingly makes a false statement, representation, or certification in any disclosure document required to be filed under this Article shall be guilty of a misdemeanor.
(b)	An environmental agency may revoke or modify a permit for failure to file a disclosure document in accordance with this Article.  An environmental agency which proposes to modify or revoke a permit under this subsection shall follow the notice requirements and other procedures generally applicable to modification or revocation of permits of that type.
(c)	In addition to any other right to revoke an offer or cancel a sale or contract, failure of the transferor to comply with the provisions of this Article is grounds for voiding the sale, lease or transfer of the facility or any real property associated with the facility by the transferee and entitles the transferee to recover damages from the transferor."
Sec. 2.  The review by environmental agencies of regulatory programs to identify environmental limitations and liabilities required by G.S. 113A-233(a), as enacted by Section 1 of this act, shall begin upon ratification of this act.  Every environmental agency to which this act applies shall complete the initial review of environmental regulatory programs within one year after the ratification of this act.  Environmental agencies shall adopt all rules necessary to the implementation of this act prior to 1 July 1992.
Sec. 3.  Section 1 of this act becomes effective 1 July 1992.  Sections 2 and 3 of this act are effective upon ratification.