May 2, 2017, Introduced by Reps. Pagan, Rabhi, Cochran, Peterson, Hertel, Green, Ellison, Lasinski, Hammoud, Geiss, Chang, Garrett, Hoadley, Sabo, Sneller, Sowerby, Gay-Dagnogo, Moss, Jones, Yanez, Neeley, Phelps, Schor, Wittenberg, Robinson, Santana, Liberati, LaGrand, Faris, Brinks and Zemke and referred to the Committee on Energy Policy.
A bill to amend 1929 PA 16, entitled
"An act to regulate the business of carrying or transporting,
buying, selling, or dealing in crude oil or petroleum or its
products, or certain substances consisting primarily of carbon
dioxide through pipe lines; to authorize the use of public highways
and the condemnation of private property; to regulate the purchase
and storage of crude oil or petroleum or certain substances
consisting primarily of carbon dioxide; to provide for the control
and regulation of all corporations, associations, and persons
engaged in such business, by the Michigan public service
commission; to define the powers and duties of the commission in
relation thereto; and to prescribe penalties,"
by amending the title and sections 1, 2, 2a, 2b, 3, and 4 (MCL
483.1, 483.2, 483.2a, 483.2b, 483.3, and 483.4), the title and
sections 1, 3, and 4 as amended by 2014 PA 85, section 2 as amended
by 2014 PA 84, section 2a as amended by 2014 PA 83, and section 2b
as added by 1997 PA 125, and by adding sections 3a, 3b, and 3c.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
TITLE
An act to regulate the business of carrying or transporting,
buying, selling, or dealing in crude oil or petroleum or its
products, or certain substances consisting primarily of carbon
dioxide
through pipe lines; pipelines;
to authorize the use of
public highways and the condemnation of private property; to
regulate the purchase and storage of crude oil or petroleum or
certain substances consisting primarily of carbon dioxide; to
provide for the control and regulation of all corporations,
associations, and persons engaged in such business, by the Michigan
public service commission; to define the powers and duties of the
commission in relation thereto; to impose a fee; and to prescribe
penalties.
Sec. 1. (1) As used in this act:
(a) "Carbon dioxide substance" means a gaseous or liquid
substance, consisting primarily of carbon dioxide, that will be put
in storage or that has been or will be used to produce hydrocarbons
in a secondary or enhanced recovery operation.
(b) "Commission" means the Michigan public service commission.
(c) "Person" means an individual, partnership, corporation,
association, governmental entity, or other legal entity.
(d) "Pipeline" means a pipeline used or to be used to
transport any of the following:
(i) Crude oil or petroleum.
(ii) Any of the products of crude oil or petroleum.
(iii) Carbon dioxide substances.
(2)
A person exercising or claiming the right to carry Except
as authorized by this act, a person shall not do any of the
following:
(a) Carry or transport crude oil or petroleum, or any of the
products
thereof, or carbon dioxide substances, by or through pipe
line
or lines, for hire, compensation or otherwise, or exercising
or
claiming the right to a
pipeline; engage in the business of
piping, transporting, or storing crude oil or petroleum, or any of
the
products thereof, or carbon dioxide substances; , or engaging
engage in the business of buying, selling, or dealing in crude oil
or petroleum, or any of the products thereof, or carbon dioxide.
substances
within this state, does not have or possess the right to
conduct
or engage in the business or operations, in whole or in
part,
or have or possess the right to locate,
(b)
Locate, maintain, or operate the
necessary pipe lines,
pipelines, fixtures, and equipment belonging to, or used in
connection
with that a business or
operation described in
subdivision (a) on, over, along, across, through, in or under any
present
or future highway, or part thereof.
, or elsewhere, within
this
state, or have or possess
(c) Exercise the right of eminent domain, or any other right,
concerning
the a business or operations, in whole or in part,
except
as authorized by and subject to this act.operation described
in subdivision (a).
(3) Subsection (2) does not apply to a right that exists on
March 27, 1929 and is valid, vested, and incapable of revocation by
any law of this state or of the United States.
Sec.
2. (1) A person described in section 1 is granted the
right
to may condemn property by eminent domain and the use
of the
highways
in this state to acquire for
necessary rights-of-way for
any of the following purposes:
(a) To transport crude oil or petroleum, or any of the
products thereof, or carbon dioxide substances.
(b) To locate, lay, construct, maintain, and operate pipelines
for the purposes of subdivision (a).
(2) Condemnation proceedings under subsection (1) shall be
conducted as provided in the uniform condemnation procedures act,
1980 PA 87, MCL 213.51 to 213.75.
Sec.
2a. (1) As used in this section and section 2b,
"pipeline"
means a pipeline used or to be used to transport crude
oil
or petroleum or carbon dioxide substances.
(1) (2)
A person who that is
conducting survey work for a
proposed pipeline under this act shall notify all affected property
owners in writing before a survey crew enters the owner's property.
(2) (3)
Any offer to a landowner for an
easement for the
purpose of locating, laying, constructing, maintaining, and
operating pipelines on agricultural property shall include all of
the following information:
(a) The anticipated physical impact of pipeline construction
on the landowner's property.
(b) Written assurance that any agricultural drainage tile that
is damaged or removed during the construction or repair of a
pipeline will be repaired or replaced to preconstruction working
condition. As used in this subdivision, "drainage tile" includes
any surface or subsurface system by which the movement of water is
redirected.
(c) Written assurance that topsoil that is disturbed by
construction or repair of a pipeline is properly separated and
replaced. As used in this subdivision, "topsoil" means surface soil
that is presumed to be fertile as distinguished from subsoil.
(d) The method by which property will be appraised.
(e)
For property used to produce crops prior to before
construction of a pipeline, an estimate of the value of the loss of
the productivity based on the historic yield of the site before
construction
of a pipeline. The For the
purposes of this
subdivision, the agricultural property owner shall provide the
owner or operator of pipeline with historic crop yield values upon
request.
(f) That payment will be made for all damages incurred after
construction of the pipeline because of the pipeline owner's or
operator's entry upon the property to exercise easement rights,
except that the owner or operator of the pipeline may maintain a
clear right-of-way without further compensating the landowner.
(g) That the landowner has rights under the uniform
condemnation procedures act, 1980 PA 87, MCL 213.51 to 213.75, and
a copy of that act.
Sec. 2b. (1) Beginning on the effective date of the amendatory
act that added this subsection, the commission shall ensure that
the siting of a pipeline is not likely to adversely impact public
health, safety, or welfare or the environment.
(2) A person that intends to construct a pipeline in this
state shall submit a construction permit application to the
commission containing the information required by the commission.
(3) The commission shall approve a construction permit under
this section if the commission determines all of the following:
(a) The pipeline will be constructed in compliance with this
act and the rules promulgated under this act.
(b) The operation of the pipeline in the location proposed in
the application is not likely to adversely impact public health,
safety, or welfare or to the environment.
(4)
A person constructing or repairing a pipeline company
shall make a good-faith effort to minimize the physical impact and
economic
damage that result from the construction and or repair
of
a pipeline.
Sec.
3. (1) Subject to subsection (2), the The commission is
granted
the power to may control, investigate, and regulate a
person doing any of the following:
(a) Exercising or claiming the right to carry or transport
crude oil or petroleum, or any of the products thereof, or carbon
dioxide
substances, by or through pipe line or lines, for hire,
compensation,
or otherwise a pipeline
located within this state.
(b) Exercising or claiming the right to engage in the business
of piping, transporting, or storing crude oil or petroleum, or any
of the products thereof, or carbon dioxide substances within this
state.
(c) Engaging in the business of buying, selling, or dealing in
crude oil or petroleum, or any of the products thereof, or carbon
dioxide substances within this state.
(2)
Producers or refiners of crude oil or petroleum or carbon
dioxide
substances or operators of private trunk or gathering lines
or
other methods of conveying those products, are not subject to
this
act if the nature and extent of their business is private and
no
public interest is involved in the conduct of the business.
(2) A person shall not operate a pipeline in this state unless
the person is in possession of an operating permit issued by the
commission.
(3) To obtain an operating permit from the commission, a
person shall submit to the commission an application containing the
information required by the commission.
(4) The commission shall approve an operating permit
application under this section if the commission determines all of
the following:
(a) The pipeline will be operated in compliance with this act
and the rules promulgated under this act.
(b) The pipeline will be operated in compliance with the
natural resources and environmental protection act, 1994 PA 451,
MCL 324.101 to 324.90106.
(c) The operation of the pipeline will not pose a threat to
public health, safety, or welfare or to the environment.
Sec. 3a. (1) A person that owns or operates a pipeline in this
state shall post at each parcel of property in which the pipeline
is located contact information for notifying the department of
environmental quality of a release from the pipeline.
(2) As used in this section, "release" means that term as it
is defined in section 20101 of the natural resources and
environmental protection act, 1994 PA 451, MCL 324.20101.
Sec. 3b. A person that owns or operates a pipeline in this
state shall do both of the following:
(a) Provide to the commission and the department of
environmental quality copies of any inspection reports required to
be filed with the United States Department of Transportation
Pipeline and Hazardous Materials Safety Administration.
(b) If the federal government issues to the person a warning
or citation related to the operation of the pipeline, immediately
notify the commission and the department of environmental quality
and provide a copy of the warning or citation to the commission and
the department of environmental quality.
Sec. 3c. (1) The owner or operator of a pipeline located in
this state is subject to an annual pipeline impact fee in an amount
provided by rule for each mile or portion of a mile of pipeline.
The commission shall promulgate rules to implement this subsection
and shall annually assess the owner or operator of a pipeline for
the pipeline impact fee. The owner or operator of a pipeline shall
pay the pipeline impact fee in the manner prescribed by the
commission.
(2) Upon receipt of a pipeline impact fee under this section,
the commission shall distribute the pipeline impact fee as follows:
(a) Fifty percent of each pipeline impact fee that is
collected on a pipeline shall be distributed to the county within
which the pipeline is located. If the pipeline is located in more
than 1 county, 50% of the pipeline impact fee shall be distributed
to those counties, prorated based on the number of miles of the
pipeline located in each county. A county shall use revenue
distributed under this subdivision only to perform its duties under
both of the following:
(i) The emergency management act, 1976 PA 390, MCL 30.401 to
30.421.
(ii) The fire prevention code, 1941 PA 207, MCL 29.1 to 29.33.
(b) Fifty percent of each pipeline impact fee collected shall
be forwarded to the state treasurer to be deposited into the
general fund, for use in implementing the state's responsibilities
under both of the following:
(i) The emergency management act, 1976 PA 390, MCL 30.401 to
30.421.
(ii) The fire prevention code, 1941 PA 207, MCL 29.1 to 29.33.
Sec. 4. A person claiming or exercising the right to carry or
transport crude oil or petroleum, or any of the products thereof,
or
carbon dioxide substances, by pipe line or pipe lines, for hire,
compensation,
or otherwise, pipeline in this state, as owner,
lessee, or licensee, or by virtue of any other right or claim, or
engaging in the business of purchasing or storing crude oil or
petroleum, or products thereof, or carbon dioxide substances is a
common purchaser thereof. The person shall purchase all the crude
oil or petroleum, or products thereof, or carbon dioxide substances
in
the vicinity of, or which may be reasonably reached by its pipe
lines,
pipelines, or gathering branches, without discrimination in
favor of any producer or other person as against another, and shall
fully perform all the duties of a common purchaser. However, if the
person is unable to perform the duties of a common purchaser or is
legally excused from purchasing, transporting, or storing all of
the crude oil or petroleum, or products thereof, or carbon dioxide
substances produced in the vicinity, then it shall purchase,
transport, or store crude oil or petroleum, or products thereof, or
carbon dioxide substances from each producer or other person
ratably, in proportion to the average daily production. A common
purchaser shall not discriminate in price or amount for like grades
of crude oil or petroleum, or products thereof, or carbon dioxide
substances or facilities as between producers or other persons. If
a
common purchaser is also a producer, it the common purchaser
shall not discriminate in favor of its own production, or storage,
or any production or storage in which it is interested directly or
indirectly in whole or in part, and shall treat its own production
and storage like that of any other producer or other person.
Enacting section 1. This amendatory act does not take effect
unless all of the following bills of the 99th Legislature are
enacted into law:
(a) Senate Bill No.____ or House Bill No. 4570 (request no.
02069'17).
(b) Senate Bill No.____ or House Bill No. 4572 (request no.
02439'17).
(c) Senate Bill No.____ or House Bill No.____ (request no.
02442'17).