Question about building a new house

[Dan Alva]

Hello everyone. When building a new home my town requires the dwelling have 40 feet in front 40 in the back and 15 on each side. 

My question is, there is a 40 foot easement going through the property on the south side, Diagram here http://screencast.com/t/x87Oi4ZO Does the house need to sit 40 feet from the black property line? Or 40 feet from the red easement line?

The driveway itself is not actually 40 feet wide, more like 10 feet wide.

Appreciate any input. I will of course ask a local engineer to confirm. I am just curious what you guys think they will say.