SENATE BILL No. 704

 

 

September 17, 2003, Introduced by Senators McMANUS, BRATER, KUIPERS, BARCIA, BIRKHOLZ and ALLEN and referred to the Committee on Natural Resources and Environmental Affairs.

 

 

        

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                 A bill to amend 1994 PA 451, entitled                                             

                                                                                

    "Natural resources and environmental protection act,"                       

                                                                                

    (MCL 324.101 to 324.90106) by amending the title of part 610 and            

                                                                                

    by adding a title for subchapter 1A of chapter 3 and adding part            

                                                                                

    611.                                                                        

                                                                                

                THE PEOPLE OF THE STATE OF MICHIGAN ENACT:                      

                                                                                

1                               CHAPTER 3                                       

                                                                                

2        SUBCHAPTER 1A:  UNIFICATION OR SEVERANCE OF SURFACE AND                

                                                                                

3                           SUBSURFACE RIGHTS                                   

                                                                                

4     PART 610  UNIFIED SURFACE AND SUBSURFACE OIL OR GAS OWNERSHIP             

                                                                                

5          UNIFICATION OF SURFACE RIGHTS AND OIL AND GAS RIGHTS                 

                                                                                

6   PART 611 NOTICE OF SEVERED SURFACE RIGHTS AND OIL AND GAS RIGHTS           

                                                                                

7       Sec. 61101.  (1) A person shall not sell or enter into an                   

                                                                                

8   agreement to sell a parcel of real property without first                   

                                                                                

9   furnishing the buyer with a notice in substantially the following           

                                                                                


                                                                                

1   form:                                                                       

                                                                                

2                          "NOTICE TO PURCHASER                                 

                                                                                

3              If there is a severed oil and gas interest in the                

4        land that you are purchasing or intend to purchase, or if              

5        there will be a severed interest in oil and gas upon                   

6        consummation of the purchase, the owner of the severed                 

7        interest in oil and gas may have express easements or                  

8        implied easements, or both, to enter upon and use the                  

9        surface of the land for purposes related to exploring for              

10       and producing the oil and gas.  If this is a matter that               

11       is significant to you, you should ascertain definitely                 

12       what are the severed oil and gas interests in the property             

13       and the scope of the surface rights belonging to the                   

14       owners of the severed oil and gas interests.  A severed                

15       oil and gas interest is one that is owned by a person                  

16       other than the person who owns the surface of the land.".              

                                                                                

17      (2) Notwithstanding any other provision of this act, the                    

                                                                                

18  notice required by this section need not be given in connection             

                                                                                

19  with the following transactions:                                            

                                                                                

20      (a) A transaction in which the value of the consideration is                

                                                                                

21  less than $100.00.                                                          

                                                                                

22      (b) A transaction in which the buyer is not acquiring the                   

                                                                                

23  surface interest in the real property.                                      

                                                                                

24      (c) A transaction in which the buyer is acquiring a severed                 

                                                                                

25  interest in oil and gas in the real property.                               

                                                                                

26      (d) A transaction in which there is no outstanding severed                  

                                                                                

27  oil and gas interest in any of the real property involved, and no           

                                                                                

28  severed oil and gas interest is being created in connection with            

                                                                                

29  the transaction.                                                            

                                                                                

30      (e) A transaction in which there is a severed oil and gas                   

                                                                                

31  interest in the real property involved, or a severed oil and gas            

                                                                                

32  interest is being created in connection with the transaction, but           

                                                                                

33  where the instrument by which the severed interest was created,             

                                                                                


                                                                                

1   or a subsequent written agreement which is valid and binding on             

                                                                                

2   the owner of the severed oil and gas interest, expressly provides           

                                                                                

3   that the owner of the severed interest may not enter upon or use            

                                                                                

4   the surface of the land for purposes relating to exploring for or           

                                                                                

5   producing oil and gas.                                                      

                                                                                

6       (f) A transaction, such as a mortgage, in which the real                    

                                                                                

7   property is conveyed as security for an obligation.                         

                                                                                

8       (3) For purposes of this section, the term "severed oil and                 

                                                                                

9   gas interest" does not include the interest of a lessee under an            

                                                                                

10  oil and gas lease.                                                          

                                                                                

11      (4) A person who violates this section is liable for a civil                

                                                                                

12  fine of $1,000.00.