(a) An environmental covenant is required if the department makes a remedial decision as part of an environmental response project and that environmental response project results in

(1) residual contamination remaining in the environment in concentrations that are safe for some, but not all, uses; or

(2) an engineered feature or structure that requires monitoring, maintenance, or operation, or that will not function as intended if disturbed.

(b) An environmental covenant may be held by one or more holders. A holder may own an interest in the real property subject to an environmental covenant. The interest of a holder is an interest in real property.

(c) A right of the department under AS 46.04.300 - 46.04.390 or under an environmental covenant, other than a right as a holder, is not an interest in real property.

(d) The department is bound by any obligation it specifically assumes in an environmental covenant, but the department does not assume obligations merely by signing an environmental covenant. A person other than the department 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 under AS 46.04.300 - 46.04.390 unless otherwise provided in the environmental covenant.

(e) The following 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) AS 46.04.300 - 46.04.390 do not require a person that owns a prior interest to subordinate that interest to an environmental covenant or to agree to be bound by the environmental covenant;

(3) an environmental covenant may contain a subordination agreement, or a subordination agreement may be contained in a separate record;

(4) the department may decide not to sign an environmental covenant unless each person holding an interest in the land or any part of the land, including each mortgagee, lessee, lienor, and encumbrancer, irrevocably subordinates the interest to the environmental covenant; the department may waive the requirement in this paragraph;

(5) 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;

(6) 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.