SB-0248, As Passed Senate, June 22, 2011

SUBSTITUTE FOR

SENATE BILL NO. 248

A bill to amend 1994 PA 451, entitled

"Natural resources and environmental protection act,"

by amending sections 503 and 2132 (MCL 324.503 and 324.2132),

section 503 as amended by 2004 PA 587 and section 2132 as amended

by 1998 PA 117.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

Sec. 503. (1) The department shall protect and conserve the

natural resources of this state; provide and develop facilities for

outdoor recreation; prevent the destruction of timber and other

forest growth by fire or otherwise; promote the reforesting of

forestlands belonging to the state; prevent and guard against the

pollution of lakes and streams within the state and enforce all

laws provided for that purpose with all authority granted by law;

and foster and encourage the protecting and propagation of game and

fish.

(2) The department has the power and jurisdiction over the

management, control, and disposition of all land under the public

domain, except for those lands under the public domain that are

managed by other state agencies to carry out their assigned duties

and responsibilities. On behalf of the people of ~~the~~ this state,

the department may accept gifts and grants of land and other

property and may buy, sell, exchange, or condemn land and other

property, for any of the purposes ~~contemplated by~~ of this part.

Before acquiring surface rights to land, the department shall

estimate payments in lieu of taxes on the land, and the change of

property tax revenue likely to be experienced by local units of

government as a result of the acquisition and shall post this

information on its website for at least 21 days.

(3) The department may accept funds, money, or grants for

development of salmon and steelhead trout fishing in this state

from the government of the United States, or any of its departments

or agencies, pursuant to the anadromous fish conservation act, 16

USC 757a to 757f, and may use this money in accordance with the

terms and provisions of that act. However, the acceptance and use

of federal funds does not commit state funds and does not place an

obligation upon the legislature to continue the purposes for which

the funds are made available.

(4) The department shall not acquire surface rights to land if

the department owns, or as a result of the acquisition will own,

the surface rights to more than 4,650,000 acres of land.

(5) For the purposes of subsection (4), the number of acres of

Senate Bill No. 248 as amended June 22, 2011

land in which the department owns surface rights does not include

any of the following:

(a) Land in which the department has a conservation easement.

(b) Land platted under the land division act, 1967 PA 288, MCL

560.101 to 560.293, <<or a predecessor act>> before the effective

date of the amendatory act

that added this subsection if acquired by the department before the

effective date of the amendatory act that added this subsection.

date of the amendatory act that added this subsection:

(i) Land with an area of not more than 80 acres, or a right-of-

way, for accessing other land owned by the department.

(ii) A trail. The land excluded under this subparagraph is

limited as follows:

(A) If the traveled portion of the trail is located within an

abandoned railroad right-of-way, the land excluded is limited to

the abandoned railroad right-of-way.

(B) If the traveled portion of the trail is located in a

utility easement, the land excluded is limited to the utility

easement.

excluded is limited to the traveled portion of the trail and

contiguous land. The area of the contiguous land shall not exceed

the product of 100 feet multiplied by the length of the trail in

feet.

(iii) Land that, on the effective date of the amendatory act

that added this subsection, was commercial forestland as defined in

section 51101.

(iv) Land acquired by the department by gift.

(v) Land acquired by the department through litigation.

(6) The department shall maintain a record of land as

described in subsection (5). The record shall include the location,

acreage, date of acquisition, and use of the land.

(7) The department shall post and maintain on its website all

of the following information:

(a) The number of acres of land, including land as described

in subsection (5), in which the department owns surface rights, in

total, and by program.

(b) The number of acres of land, excluding land as described

in subsection (5), in which the department owns surface rights, in

total, and by program.

(8) ~~(2)~~ The department may lease lands owned or controlled by

the department or may grant concessions on lands owned or

controlled by the department to any person for any purpose that the

department determines to be necessary to implement this part. In

granting a concession, the department shall provide that each

concession is awarded at least every 7 years based on extension,

renegotiation, or competitive bidding. However, if the department

determines that a concession requires a capital investment in which

reasonable financing or amortization necessitates a longer term,

the department may grant a concession for up to a 15-year term. A

concession granted under this subsection shall require, unless the

department authorizes otherwise, that all buildings and equipment

shall be removed at the end of the concession's term. Any lease

entered into under this subsection shall limit the purposes for

which the leased land is to be used and shall authorize the

department to terminate the lease upon a finding that the land is

being used for purposes other than those permitted in the lease.

Unless otherwise provided by law, money received from a lease or a

concession of tax reverted land shall be credited to the fund

providing financial support for the management of the leased land.

Money received from a lease of all other land shall be credited to

the fund from which the land was purchased. However, money received

from program-related leases on these lands shall be credited to the

fund providing financial support for the management of the leased

lands. For land managed by the forest management division of the

department, that fund is either the forest development fund

established pursuant to ~~part 505~~ section 50507 or the forest

recreation account of the Michigan conservation and recreation

legacy fund provided for in section 2005. For land managed by the

wildlife or fisheries division of the department, that fund is the

game and fish protection account of the Michigan conservation and

recreation legacy fund provided for in section 2010.

(9) ~~(3)~~ When the department sells land, the deed by which the

land is conveyed may reserve all mineral, coal, oil, and gas rights

to the state only when the land is in production or is leased or

permitted for production, or when the department determines that

the land has unusual or sensitive environmental features or that it

is in the best interest of this state to reserve those rights as

determined by commission policy. However, the department shall not

reserve the rights to sand, gravel, clay, or other nonmetallic

minerals. When the department sells land that contains subsurface

rights, the department shall include a deed restriction that

restricts the subsurface rights from being severed from the surface

rights in the future. If the landowner severs the subsurface rights

from the surface rights, the subsurface rights revert to this

state. The deed may reserve to the state the right of ingress and

egress over and across land along watercourses and streams.

Whenever an exchange of land is made, either with the United States

government, a corporation, or an individual, for the purpose of

consolidating the state forest reserves, the department may issue

deeds without reserving to the state the mineral, coal, oil, and

gas rights and the rights of ingress and egress. The department may

sell the limestone, sand, gravel, or other nonmetallic minerals.

However, the department shall not sell a mineral or nonmetallic

mineral right if the sale would violate part 353, part 637, or any

other provision of law. The department may sell all reserved

mineral, coal, oil, and gas rights to such lands upon terms and

conditions as the department considers proper and may sell oil and

gas rights as provided in part 610. The owner of such lands as

shown by the records shall be given priority in case the department

authorizes any sale of such lands, and, unless the landowner waives

such rights, the department shall not sell such rights to any other

person. For the purpose of this section, mineral rights do not

include rights to sand, gravel, clay, or other nonmetallic

minerals.

(10) ~~(4)~~ The department may enter into contracts for the sale

of the economic share of royalty interests it holds in hydrocarbons

produced from devonian or antrim shale qualifying for the

nonconventional fuel credit contained in section 29 of the internal

revenue code of 1986, 26 USC 29. However, in entering into these

contracts, the department shall assure that revenues to the natural

resources trust fund under these contracts are not less than the

revenues the natural resources trust fund would have received if

the contracts were not entered into. The sale of the economic share

of royalty interests under this subsection may occur under

contractual terms and conditions considered appropriate by the

department and as approved by the state administrative board. Funds

received from the sale of the economic share of royalty interests

under this subsection shall be transmitted to the state treasurer

for deposit in the state treasury as follows:

(a) Net proceeds allocable to the nonconventional fuel credit

contained in section 29 of the internal revenue code of 1986, 26

USC 29, under this subsection shall be credited to the

environmental protection fund created in section 503a.

(b) Proceeds related to the production of oil or gas from

devonian or antrim shale shall be credited to the natural resources

trust fund or other applicable fund as provided by law.

(11) ~~(5)~~ As used in subsection ~~(4)~~ (10):

(a) "Natural resources trust fund" means the Michigan natural

resources trust fund established in section 35 of article IX of the

state constitution of 1963 and provided for in section 1902.

(b) "Net proceeds" means the total receipts received from the

sale of royalty interests under subsection ~~(4)~~ (10) less costs

related to the sale. Costs may include, but are not limited to,

legal, financial advisory, geological or reserve studies, and

Senate Bill No. 248 as amended June 22, 2011

accounting services.

(12) ~~(6)~~ As used in this section:

(a) "Concession" means an agreement between the department and

a person under terms and conditions as specified by the department

to provide services or recreational opportunities for public use.

(b) "Lease" means a conveyance by the department to a person

of a portion of the state's interest in land under specific terms

and for valuable consideration, thereby granting to the lessee the

possession of that portion conveyed during the period stipulated.

Sec. 2132. (1) The department may sell surplus land at a price

of not less than its fair market value as determined by an

appraisal <<OR OTHER METHOD OF VALUATION>>. However, if the department

offers tax reverted land for

sale and the land is not sold within 9 months, the department shall

offer the land for sale at a public auction and sell the property

to the qualified bidder making the highest bid that represents a

reasonable price for the property as determined by the department,

notwithstanding the fair market value of the property.

(2) The sale of surplus land shall be conducted by the

department through 1 of the following methods:

(a) A sealed or oral bid public auction sale.

(b) A negotiated sale.

(3) ~~The~~ Subject to subsection (1), the sale of surplus land

through a sealed or oral bid public auction sale shall be to the

highest bidder. ~~A bid shall not be accepted for less than the fair~~

~~market value of the surplus land as determined by an appraisal.~~

(4) A notice of the sale of surplus land shall be given as

provided in section 2133.