HOUSE BILL No. 4162 February 3, 1999, Introduced by Rep. Callahan and referred to the Committee on Conservation and Outdoor Recreation. A bill to amend 1994 PA 451, entitled "Natural resources and environmental protection act," by amending section 503 (MCL 324.503), as amended by 1998 PA 117. THE PEOPLE OF THE STATE OF MICHIGAN ENACT: 1 Sec. 503. (1) The department shallprotectDO ALL OF THE 2 FOLLOWING: 3 (A) PROTECT and conserve the natural resources of this 4 state.; provide5 (B) PROVIDE and develop facilities for outdoor recreation. 6; prevent7 (C) PREVENT the destruction of timber and other forest 8 growth by fire or otherwise.; promote9 (D) PROMOTE the reforesting of forest lands belonging to the 10 state.; prevent00654'99 JCB 2 1 (E) PREVENT and guard against the pollution of lakes and 2 streams within the state and enforce all laws provided for that 3 purpose with all authority granted by law.; and foster4 (F) FOSTER and encourage the protecting and propagation of 5 game and fish. 6 (2) The department has the power and jurisdiction over the 7 management, control, and disposition of all land under the public 8 domain, except for those lands under the public domain that are 9 managed by other state agencies to carry out their assigned 10 duties and responsibilities. HOWEVER, THE DEPARTMENT OF ENVIRON- 11 MENTAL QUALITY HAS EXCLUSIVE JURISDICTION OVER STATE LANDS IN 12 WHICH THE STATE HOLDS MINERAL RIGHTS WITH RESPECT TO THE EXPLORA- 13 TION AND PRODUCTION OF OIL OR GAS. On behalf of the people of the 14 state, the department may accept gifts and grants of land and 15 other property and may buy, sell, exchange, or condemn land and 16 other property, for any of the purposes contemplated by this 17 part. The department may accept funds, money, or grants for 18 development of salmon and steelhead trout fishing in this state 19 from the government of the United States, or any of its depart- 20 ments or agencies, pursuant to the anadromous fish conservation 21 act, Public Law 89-304, 16 U.S.C. 757a to757g757f, and may 22 use this money in accordance with the terms and provisions of 23 that act. However, the acceptance and use of federal funds does 24 not commit state funds and does not place an obligation upon the 25 legislature to continue the purposes for which the funds are made 26 available. 00654'99 3 1 (3)(2)The department may lease lands owned or controlled 2 by it that have been designated for use for recreational 3 purposes, but only to responsible legal units, within this state, 4 of national or state recognized groups devoted principally to 5 development of character and citizenship training and physical 6 fitness of youth, the financial support of which is by voluntary 7 public subscriptions or contributions, and the property of which 8 is exempt from taxation under the laws of this state. The 9 department may lease land in the Porcupine Mountain state park to 10 third parties for purposes as it considers desirable. Any lease 11 entered into under this subsection shall limit the purposes for 12 which the leased land is to be used and shall authorize the 13 department to terminate the lease upon a finding that the land is 14 being used for purposes other than those permitted in the lease. 15 (4)(3)When the department sells land, the deed by which 16 the land is conveyed may reserve all mineral, coal, oil, and gas 17 rights to the state only when the land is in production or is 18 leased or permitted for production, or when the department deter- 19 mines that the land has unusual or sensitive environmental fea- 20 tures or that it is in the best interest of this state to reserve 21 those rights as determined by commission policy. However, the 22 department shall not reserve the rights to sand, gravel, clay, or 23 other nonmetallic minerals. When the department sells land that 24 contains subsurface rights, the department shall include a deed 25 restriction that restricts the subsurface rights from being 26 severed from the surface rights in the future. If the landowner 27 severs the subsurface rights from the surface rights, the 00654'99 4 1 subsurface rights revert to this state. The deed may reserve to 2 the state the right of ingress and egress over and across land 3 along watercourses and streams. Whenever an exchange of land is 4 made, either with the United States government, a corporation, or 5 an individual, for the purpose of consolidating the state forest 6 reserves, the department may issue deeds without reserving to the 7 state the mineral, coal, oil, and gas rights and the rights of 8 ingress and egress. The department may sell the limestone, sand, 9 gravel, or other nonmetallic minerals. However, the department 10 shall not sell a mineral or nonmetallic mineral right if the sale 11 would violate part 353 or part 637 or any other provision of 12 law. The department may sell all reserved mineral, coal, oil, 13 and gas rights to such lands upon terms and conditions as the 14 department considers proper and may sell oil and gas rights as 15 provided in part 610. The owner of such lands as shown by the 16 records shall be given priority in case the department authorizes 17 any sale of such lands, and, unless the landowner waives such 18 rights, the department shall not sell such rights to any other 19 person. For the purpose of this section, mineral rights do not 20 include rights to sand, gravel, clay, or other nonmetallic 21 minerals. 22 (5)(4)The department may enter into contracts for the 23 sale of the economic share of royalty interests it holds in 24 hydrocarbons produced from devonian or antrim shale qualifying 25 for the nonconventional fuel credit contained in section 29 of 26 the internal revenue code of 1986., 26 U.S.C. 29.However, in 27 entering into these contracts, the department shall assure that 00654'99 5 1 revenues to the natural resources trust fund under these 2 contracts are not less than the revenues the natural resources 3 trust fund would have received if the contracts were not entered 4 into. The sale of the economic share of royalty interests under 5 this subsection may occur under contractual terms and conditions 6 considered appropriate by the department and as approved by the 7 state administrative board. Funds received from the sale of the 8 economic share of royalty interests under this subsection shall 9 be transmitted to the state treasurer for deposit in the state 10 treasury as follows: 11 (a) Net proceeds allocable to the nonconventional fuel 12 credit contained in section 29 of the internal revenue code of 13 1986,26 U.S.C. 29,under this subsection shall be credited to 14 the environmental protection fund created in section 503a. 15 (b) Proceeds related to the production of oil or gas from 16 devonian or antrim shale shall be credited to the natural 17 resources trust fund or other applicable fund as provided by 18 law. 19 (6)(5)As used in subsection(4)(5): 20 (a) "Natural resources trust fund" means the Michigan natu- 21 ral resources trust fund established in section 35 of article IX 22 of the state constitution of 1963 and provided for in 23 section 1902. 24 (b) "Net proceeds" means the total receipts received from 25 the sale of royalty interests under subsection(4)(5) less 26 costs related to the sale. Costs may include, but are not 00654'99 6 1 limited to, legal, financial advisory, geological or reserve 2 studies, and accounting services. 00654'99 Final page. JCB