SENATE BILL NO. 1226 June 25, 1998, Introduced by Senators SCHUETTE, STILLE, BENNETT, NORTH, GOUGEON, STEIL and KOIVISTO and referred to the Committee on Economic Development, International Trade and Regulatory Affairs. A bill to amend 1994 PA 451, entitled "Natural resources and environmental protection act," by amending section 502 (MCL 324.502), as amended by 1998 PA 114, and by adding section 61505a; and to repeal acts and parts of acts. THE PEOPLE OF THE STATE OF MICHIGAN ENACT: 1 Sec. 502. (1) The commission may promulgate rules, not 2 inconsistent with law, governing its organization and procedure. 3 The department may promulgate and enforce reasonable rules con- 4 cerning the use and occupancy of lands and property under its 5 control in accordance with section 504; may provide and develop 6 facilities for outdoor recreation; may conduct investigations it 7 considers necessary for the proper administration of this part; 8 may remove and dispose of forest products as required for the 9 protection, reforestation, and proper development and 04470'97 *** JCB 2 1 conservation of the lands and property under control of the 2 department; and may require the payment of a fee as provided by 3 law for a daily permit or other authorization that allows the 4 person to hunt and take waterfowl on a public hunting area man- 5 aged and developed for waterfowl. 6 (2) Except as provided in subsection (3), the department may 7 enter into contracts for the taking of coal, oil, gas, and other 8 mineral products from state owned lands, upon a royalty basis or 9 upon another basis, and upon the terms the department considers 10 just and equitable subject to section 502a. This contract power 11 includes authorization to enter into contracts for the storage of 12 gas or other mineral products in or upon state owned lands, if 13 the consent of the state agency having jurisdiction and control 14 of the state owned land is first obtained. A contract permitted 15 under this section for the taking of coal, oil, gas, or metallic 16 mineral products, or for the storage of gas or other mineral pro- 17 ducts, is not valid unless the contract is approved by the state 18 administrative board. Money received from a contract for the 19 storage of gas or other mineral products in or upon state lands 20 shall be transmitted to the state treasurer for deposit in the 21 general fund of the state to be used for the purpose of defraying 22 the expenses incurred in the administration of this act and other 23 purposes provided by law. Other money received from a contract 24 permitted under this subsection, except money received from lands 25 acquired with money from the game and fish protection fund cre- 26 ated in section 43553 shall be transmitted to the state treasurer 27 for deposit in the Michigan natural resources trust fund created 04470'97 *** 3 1 in section 35 of article IX of the state constitution of 1963. 2 However, the money received from the payment of service charges 3 by a person using areas managed for waterfowl shall be credited 4 to the game and fish protection fund and used only for the pur- 5 poses provided by law. Money received from bonuses, rentals, 6 delayed rentals, royalties, and the direct sale of resources, 7 including forest resources, from lands acquired with money from 8 the game and fish protection fund shall be credited to the game 9 and fish protection trust fund created in section 43702, except 10 as otherwise provided by law. 11 (3)TheSUBJECT TO SECTION 61505A, THE department shall 12 not enter into a contract that permits drilling operations for 13 the taking of oil or gas from the lake bottomlands of the Great 14 Lakes or connecting or connected bays, harbors, or waterways, 15 unlessall drilling operations originate fromTHE SURFACE loca- 16 tions OF ALL OIL OR GAS WELLS WILL BE above and NOT LESS THAN 17 1,500 FEET inland of the ordinary high-water mark.TheSUBJECT 18 TO SECTION 61505A, THE department shall not enter into a contract 19 for exploration of the lake bottomlands of the Great Lakes or 20 connecting or connected bays, harbors, or waterways that permits 21 drilling operations unlessall drilling operations originate22fromTHE SURFACE locations OF ALL OIL OR GAS WELLS WILL BE above 23 and NOT LESS THAN 1,500 FEET inland of the ordinary high-water 24 mark. PRIOR TO LEASING OIL AND GAS RIGHTS UNDER THE GREAT LAKES 25 OR THEIR CONNECTING WATERWAYS, THE DEPARTMENT SHALL PROVIDE 26 NOTICE OF THE PROPOSED LEASE AND SHALL PROVIDE AN OPPORTUNITY FOR 27 PUBLIC COMMENT ON THE PROPOSED LEASE. 04470'97 *** 4 1 (4) This section does not permit a contract for the taking 2 of gravel, sand, coal, oil, gas, or other metallic mineral pro- 3 ducts that does not comply with applicable local ordinances and 4 state law. 5 (5) THE REQUIREMENT PROVIDED IN SUBSECTION (3) OF SURFACE 6 LOCATIONS OF OIL OR GAS WELLS BEING ABOVE AND NOT LESS THAN 1,500 7 FEET INLAND OF THE ORDINARY HIGH-WATER MARK APPLIES ONLY UNTIL 10 8 YEARS AFTER THE EFFECTIVE DATE OF THE 1998 AMENDATORY ACT THAT 9 ADDED THIS SUBSECTION. 10 (6) AS USED IN THIS SECTION: 11 (A) "CONNECTING WATERWAY" HAS THE MEANING PROVIDED IN 12 SECTION 32301. 13 (B) "ORDINARY HIGH-WATER MARK" HAS THE MEANING PROVIDED IN 14 SECTION 32502. 15 SEC. 61505A. (1) EXCEPT AS PROVIDED IN SUBSECTION (2), THE 16 SUPERVISOR OR THE DEPARTMENT SHALL NOT ISSUE A PERMIT TO DRILL 17 AND OPERATE AN OIL OR GAS WELL THAT EXTENDS UNDER THE GREAT LAKES 18 OR THEIR CONNECTING WATERWAYS UNLESS THE SURFACE LOCATION OF THE 19 WELL AND THE PRODUCTION FACILITIES WILL BE ABOVE AND NOT LESS 20 THAN 1,500 FEET INLAND OF THE ORDINARY HIGH-WATER MARK OF THE 21 GREAT LAKES AND THEIR CONNECTING WATERWAYS. 22 (2) THE SUPERVISOR MAY ISSUE A PERMIT TO DRILL AND OPERATE 23 AN OIL OR GAS WELL THAT EXTENDS UNDER THE GREAT LAKES OR THEIR 24 CONNECTING WATERWAYS FOR WHICH THE PROPOSED SURFACE LOCATION OF 25 THE WELL OR THE PRODUCTION FACILITIES OR BOTH WILL BE LESS THAN 26 1,500 FEET BUT MORE THAN 500 FEET INLAND OF THE ORDINARY 27 HIGH-WATER MARK OF THE GREAT LAKES AND THEIR CONNECTING WATERWAYS 04470'97 *** 5 1 IF THE SUPERVISOR DETERMINES, AFTER A PUBLIC HEARING, THAT THE 2 PROPOSED SURFACE LOCATION IS BETTER THAN THE AVAILABLE ALTERNA- 3 TIVE LOCATIONS TO PROTECT ENVIRONMENTAL VALUES AND PUBLIC HEALTH 4 AND SAFETY. 5 (3) AS USED IN THIS SECTION: 6 (A) "CONNECTING WATERWAY" HAS THE MEANING PROVIDED IN 7 SECTION 32301. 8 (B) "ORDINARY HIGH-WATER MARK" HAS THE MEANING PROVIDED IN 9 SECTION 32502. 10 Enacting section 1. Section 61505a of the natural resources 11 and environmental protection act, 1994 PA 451, MCL 324.61505a, is 12 repealed upon the expiration of 10 years after its effective 13 date. 04470'97 *** Final page. JCB