HOUSE BILL No. 6564

November 10, 2010, Introduced by Rep. Scripps and referred to the Committee on Energy and Technology.

     A bill to amend 1994 PA 451, entitled

"Natural resources and environmental protection act,"

by amending section 30113 (MCL 324.30113), as amended by 2006 PA

496, and by adding section 32504b and part 324.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

     Sec. 30113. (1) The land and water management permit fee fund

is created within the state treasury.

     (2) The state treasurer may receive money or other assets from

any source for deposit into the fund. The state treasurer shall

direct the investment of the fund. The state treasurer shall credit

to the fund interest and earnings from fund investments. The state

treasurer shall annually present to the department an accounting of

the amount of money in the fund.

     (3) Money in the fund at the close of the fiscal year shall

remain in the fund and shall not lapse to the general fund.

     (4) The department shall expend money from the fund, upon

appropriation, only to implement this part and the following:

     (a) Sections 3104, 3107, and 3108.

     (b) Before October 1, 2004, section 12562 of the public health

code, 1978 PA 368, MCL 333.12562, or, on or after October 1, 2004,

part Part 33.

     (c) Part 303.

     (d) Part 315.

     (e) Part 323.

     (f) Part 324.

(g) (f) Part 325.

(h) (g) Part 339.

(i) (h) Part 353.

(j) (i) Section 117 of the land division act, 1967 PA 288, MCL

560.117.

     (5) The department shall annually report to the legislature

how money in the fund was expended during the previous fiscal year.

PART 324 OFFSHORE WIND ENERGY FACILITIES

     Sec. 32401. As used in this act:

     (a) "Abandoned property" means that term as defined in section

76101.

     (b) "Advisory council" means the offshore wind advisory

council created in section 32469.

     (c) "Aquatic environment" means the physical, chemical,

atmospheric, and biological components, conditions, and factors

that interactively determine the productivity, state, condition,

and quality of the aquatic ecosystem of the Great Lakes.

     (d) "Bottomlands" means lands in the Great Lakes lying below

and lakeward of the natural ordinary high-water mark.

     (e) "Categorical exclusion area" means an area identified by

the department under section 32415(1) or (2).

     (f) "Commercial activities" means site assessment activities,

construction of an offshore wind energy facility, commercial

operations, and decommissioning.

     (g) "Commercial operations" means all activities located on or

in unpatented bottomlands or above, on, in, or under waters of the

Great Lakes associated with the generation, storage, or

transmission of electricity or other energy product from an

existing offshore wind energy facility, for distribution, sale, or

other commercial use.

     (h) "Conditional area" means an area identified by the

department under section 32415(3) or (4).

     (i) "Construction and operations permit" means a permit for

construction of an offshore wind energy facility and commercial

operations required under section 32437.

     Sec. 32403. As used in this part:

     (a) "Decommissioning" means removal of structures authorized

under a construction and operations permit and restoration of

leased bottomlands and waters to their prelease condition.

"Decommission" has a corresponding meaning. Decommissioning does

not include the replacement of portions of an existing offshore

wind energy facility.

     (b) "Decommissioning permit" means a permit required under

section 32453.

     (c) "Department" means the department of natural resources and

environment.

     (d) "Electric service platform" means an offshore transformer

used to increase the voltage of electricity from a wind turbine.

     (e) "Export cable" means an offshore cable that transmits

electricity from an electric service platform to a transmission

line.

     (f) "Great Lakes" means Lake Superior, Lake Michigan, Lake

Huron, and Lake Erie and includes the connecting water, Lake St.

Clair, and the bays and harbors of any of these lakes.

     (g) "Grid cell" means an area bounded by lines of 1-minute

intervals of latitude and longitude.

     (h) "Gross revenue" means the total amount of money or other

consideration received by a lessee or an affiliated party, under

any agreement, settlement, or judgment, for the sale, use, or other

disposition of electricity or other energy product generated or

capable of being generated at the leased site.

     (i) "Interturbine cable" means an offshore cable that

transmits electricity from 1 or more wind turbines to an electric

service platform.

     Sec. 32405. As used in this act:

     (a) "Lease" means a conveyance from this state under section

32423 of a leasehold interest in unpatented bottomlands and waters

above unpatented bottomlands for purposes of commercial activities.

     (b) "Lessee" means the leaseholder, including a department-

approved assignee. When describing the conduct required of parties

engaged in activities at the leased site, lessee also includes the

operator and all persons authorized by the leaseholder or operator

to conduct activities at the leased site. When used in reference to

decommissioning, after the lease has terminated, lessee means the

former leaseholder and includes all persons authorized by the

former leaseholder to conduct decommissioning at the former leased

site.

     (c) "Local unit of government" means a county, township, city,

or village.

     (d) "MEDC" means the Michigan economic development

corporation, the public body corporate created under section 28 of

article VII of the state constitution of 1963 and the urban

cooperation act of 1967, 1967 (Ex Sess) PA 7, MCL 124.501 to

124.512, by a contractual interlocal agreement effective April 5,

1999, and subsequently amended, between local participating

economic development corporations formed under the economic

development corporations act, 1974 PA 338, MCL 125.1601 to

125.1636, and the Michigan strategic fund created under section 5

of the Michigan strategic fund act, 1984 PA 270, MCL 125.2005.

     (e) "Michigan state housing development authority" means the

public body created by section 21 of the state housing development

authority act of 1966, 1966 PA 346, MCL 125.1421.

     (f) "Mile" means a statute mile.

     (g) "MPSC" means the Michigan public service commission

created under section 1 of 1939 PA 3, MCL 460.1.

     Sec. 32407. As used in this part:

     (a) "Offshore wind energy facility" means any electrical

energy producing wind turbines connected to the electric power grid

by transmission lines and permanently or temporarily attached to

unpatented bottomlands, including any associated structures such as

support towers, permanently moored vessels, interturbine cables,

electric service platforms, and export cables, but not including

transmission lines. Any group of such installations that includes a

primary installation with 1 or more secondary installations is a

single offshore wind energy facility for purposes of this act

unless the department determines that the complexity of the

secondary installations justifies their classification as 1 or more

separate offshore wind energy facilities.

     (b) "Operator" means the legal entity having control or

management of activities at the leased site. The operator may be

the lessee or a contractor designated by the lessee under this

part.

     (c) "Person" means any individual, partnership, corporation,

association, governmental entity, or other legal entity.

     (d) "Regional planning commission" means the regional planning

commission or council of governments representing a state planning

and development region created by Executive Directive No. 1968-1,

as amended.

     (e) "Site assessment activities" means any of the following:

     (i) Activities that utilize structures and are conducted to

characterize a site for the development of an offshore wind energy

facility, such as limnological, meteorological, or geophysical

resource assessment surveys.

     (ii) Removal of structures authorized under a site assessment

permit and restoration of leased bottomlands and waters to their

prelease condition.

     (f) "Site assessment permit" means a permit for site

assessment activities required under section 32427(1).

     (g) "Structure" means any equipment or man-made structure

placed on, placed in, or secured to the bottomlands, other than a

temporarily moored vessel.

     (h) "Transmission line" means an onshore electrical line and

related equipment used to transfer electricity from an export cable

to the electric grid at system bulk supply voltage of 100 kilovolts

or more.

     (i) "Utility line" means any of the following not related to

the specific offshore wind energy facility in question:

     (i) A telecommunications line.

     (ii) An oil, gas, or other pipeline.

     (iii) An electric power line.

     (j) "Violation of this part" means a violation of this part or

a rule promulgated, a lease entered, a plan approved, a permit or

other approval granted, or an order issued under this part.

"Violate this part" has a corresponding meaning.

     Sec. 32409. (1) To minimize delay and duplication, while

addressing the unique management concerns of this state, the

department shall make reasonable efforts to coordinate leasing,

permitting, and other regulatory processes under this part with

applicable regulatory processes of Indian tribes, other state

agencies, including the MPSC, and other federal agencies, including

the federal aviation administration, the federal communications

commission, the United States coast guard, the United States

department of homeland security, and the United States army corps

of engineers. Coordination includes use of the same applications as

required by other state or federal agencies, use of information

from reports, analyses, environmental impact statements,

environmental assessments, and other documents as required by such

agencies, and holding hearings jointly with such agencies.

     (2) The department, advisory council, a regional planning

commission, or other entities may consolidate meetings, hearings,

and notices under this part relating to different parcels of

bottomlands if the requirements of this part are otherwise met.

     (3) The MEDC, in consultation with other relevant state

agencies, shall prepare and post on its website a checklist of

state leases, permits, and other agreements or approvals that are

required under state law for commercial activities. The checklist

shall designate the agency with jurisdiction over each agreement

and approval, information required to be submitted to the agency,

and a timeline for providing the information.

     Sec. 32411. (1) Subject to section 32504b, a person shall not

conduct site assessment activities except as authorized by a lease

and a site assessment permit. A person shall remove site assessment

structures as required by the site assessment permit.

     (2) A person shall not construct or operate an offshore wind

energy facility or engage in commercial operations except as

authorized by a lease and a construction and operations permit.

     (3) A lessee shall remove offshore wind energy facility

structures when required under section 32453, and as required by a

decommissioning permit.

     (4) A permit under this part also serves as both of the

following:

     (a) A water quality certificate as required under section 401

of title IV of the federal water pollution control act, 33 USC

1341.

     (b) A coastal zone management consistency determination under

section 307 of the coastal zone management act of 1972, 16 USC

1456.

     (5) A person is not required to be a littoral landowner to

nominate a parcel for lease auction, participate in a lease

auction, enter a lease, or apply for a permit under this part.

Sec. 32413. (1) The department shall approve a parcel for

lease auction, enter a lease, or approve a site assessment,

construction and operations, or decommissioning permit application

if activities and structures authorized under the lease or permit

will satisfy all of the following requirements:

     (a) Provide for the protection of the public health, safety,

and welfare.

     (b) Not result in significant adverse effects on cultural

resources, natural resources, the environment, or the public trust

in the bottomlands and waters of the Great Lakes, and any adverse

effects will be mitigated to the extent reasonable and practicable.

     (c) Not interfere with activities or structures already

authorized under this part.

     (d) Meet any other applicable requirements of this part and

rules promulgated under this part, including, but not limited to,

financial assurance requirements under section 32449, if

applicable.

     (2) The department may modify a lease nomination or impose

reasonable terms and conditions in a lease or permit issued under

this part to ensure compliance with the requirements of subsection

(1) and other applicable provisions of this part or rules

promulgated under this part.

     Sec. 32415. (1) Not more than 90 days after the effective date

of this section, the department shall identify and map areas of the

Great Lakes that are not suitable for offshore wind energy

facilities because those areas are used or dedicated for use under

state or federal law for aids to navigation, buoyed navigation

channels, military operation areas, utility lines, or other

conflicting uses or are necessary to provide buffers for those uses

or for airports.

     (2) The department shall consult with the United States coast

guard, the United States department of defense, the federal

aviation administration, the department of military and veterans

affairs, and representatives of the telecommunications, oil, gas,

and electric transmission industries as applicable in making

determinations of categorical exclusion areas. At least once every

3 years, the department shall update the categorical exclusion

areas using the latest available information.

     (3) Not more than 90 days after the effective date of this

section, the department shall identify and map areas of the Great

Lakes that may be suitable for offshore wind energy facilities but

that include 1 or more potentially competing features or uses or

are necessary to provide buffers for such features or uses. The

following are among potentially competing features or uses for the

purposes of this subsection and associated buffer distances:

     (a) Zone of high biological productivity--3 miles.

     (b) Habitat necessary to the conservation of rare species of

wildlife, including element occurrences of state-listed endangered

or threatened species and critical habitat for federally listed

endangered or threatened species, other than plants--5 miles.

     (c) Location of globally or continentally significant

concentration of bird or bat species of conservation concern as

identified using nationally or internationally recognized criteria-

-5 miles.

     (d) Location of very high concentration of birds or bats on at

least a seasonal basis, including significant stopover location,

offshore waterfowl foraging area, documented migration or travel

corridor, nesting location of colonial birds, or flight route into

bat hibernacula--5 miles.

     (e) Recreational fish spawning site or refuge as documented by

state or federal authorities where fish spawning occurs for

sensitive species or species of recovery--1 mile.

     (f) Tribal and nontribal licensed fishing site based on

reported fish harvest locations--0.5 mile.

     (g) A facility or area specifically designated for the

disposal of contaminated dredged sediment--0.5 mile.

     (h) National park lakeshore as identified by the United States

department of the interior--13 miles.

     (i) State-recognized and mapped shipwreck site--0.5 mile.

     (j) State underwater preserve, including Thunder Bay national

marine sanctuary.

     (k) State-recognized underwater area of archeological

significance--0.5 mile.

     (l) Legal boundary with another state or province--0.5 mile,

unless the offshore wind energy facility is approved by the other

state or province.

     (m) Shipping lane through open water primarily used for

commercial shipping traffic and noted on the most recent nautical

chart issued by the national oceanic and atmospheric

administration, United States department of commerce--1 mile on

each side of the shipping lane.

     (4) At least once every 3 years, the department shall update

the conditional areas under subsection (3) using the latest

available information.

     (5) This part does not prohibit an export cable from being

located in a categorical exclusion area, in a conditional area, or

within a specified distance from shoreline.

     Sec. 32417. (1) The department shall award leases of parcels

of unpatented bottomlands for offshore wind energy facilities by

public auction. The department shall not select a parcel of

bottomlands for lease auction unless the parcel has been nominated

for lease. A parcel of bottomlands may be nominated for lease by 1

of the following:

     (a) The department, pursuant to subsection (4).

     (b) A private party, pursuant to subsection (5).

     (c) A county, pursuant to subsections (6) and (7).

     (2) The department shall establish 30-day time periods for the

submission of nominations. The first nomination period shall begin

not more than 180 days after the effective date of this section.

Subsequent nomination periods shall begin at times determined by

the department based on demand. Not less than 90 days before a

nomination period begins, the department shall send notice of the

nomination period by first-class mail to the county clerk of each

county with shoreline on the Great Lakes. The department shall also

post a notice of the nomination period on its website beginning not

less than 90 days before the nomination period begins. A notice

under this subsection shall specify the nomination period and set

forth nomination requirements and procedures.

     (3) A nomination by a private party or county shall be

submitted to the department, and a nomination by the department

shall be placed on file in the department, in writing on a form

developed by the department. A nomination shall include a detailed

description of the parcel based upon a grid cell map produced by

the department. A nomination by a private party or county shall be

accompanied by a nonrefundable fee of $0.25 per acre. If a

nomination by a private party or county is not complete, or is

submitted before the nomination period begins or after the

nomination period has ended, the department shall return the

nomination.

     (4) The department shall nominate parcels of bottomlands for

lease. A parcel that is in a categorical exclusion area or a

conditional area or is less than 6 miles from any Great Lakes

shoreline is not eligible to be nominated under this subsection.

(5) A private party that is qualified under section 32421 may

nominate a parcel of bottomlands for lease. A parcel that is in a

categorical exclusion area or is less than 6 miles from any

shoreline in this state is not eligible to be nominated for lease

under this subsection.

     (6) If all or part of a parcel of bottomlands is less than 6

miles from the shoreline of 1 or more counties in this state, the

parcel may be nominated for lease by a resolution approved by the

county board of commissioners of each such county. A parcel that is

in a categorical exclusion area or is less than 3 miles from any

Great Lakes shoreline is not eligible to be nominated for lease

under this subsection. Before adopting a resolution under this

subsection, the county board of commissioners shall submit the

proposed resolution to the county planning commission for its

recommendations. If the county does not have a planning commission,

the proposed resolution shall be referred to the regional planning

commission. The planning commission shall hold a public meeting on

the proposal. The planning commission shall publish notice of the

meeting in a newspaper of general circulation within the county not

less than 20 days before the meeting. Comments may be submitted at

the meeting or may be submitted to the planning commission in

writing or by electronic mail at any time not later than 15 days

after the meeting. The notice shall include or describe all of the

following:

     (a) The time, date, and place, and purpose of the meeting.

     (b) The opportunity to submit written comments to the planning

commission in writing or by electronic mail at any time not later

than 15 days after the date of the meeting, and the postal and

electronic mail address for submitting comments.

     (7) Not more than 60 days after receipt of the proposed

resolution, the planning commission shall submit to the county

board of commissioners its recommendations on the proposed

nomination in writing together with a summary of written comments

received during the time period specified in subsection (6)(b).

After receipt of the recommendations and comments of the planning

commission or expiration of the 60-day period, whichever occurs

first, the county board of commissioners may modify the proposed

resolution and shall conduct a public hearing on the proposed

resolution. After the public hearing, the county board of

commissioners may adopt the resolution nominating the parcel with

or without modifications. If the resolution is adopted, the county

clerk shall promptly submit a copy of the resolution to the

department.

     (8) Two or more planning commissions or 2 or more county

boards of commissioners may hold joint meetings or hearings under

subsection (6) or (7), respectively.

     Sec. 32419. (1) Not more than 45 days after the close of the

period under section 32417 during which a parcel is nominated for

lease auction, the department shall hold a public hearing on the

nomination and the terms and conditions of a lease. The hearing

shall be held in the county nearest to the nominated parcel. The

department shall publish a notice of the hearing and a comment

period in a newspaper of general circulation in that county and

send notice by first-class mail to the clerk of each local unit of

government with any Great Lakes shoreline less than 12 miles of the

nominated parcel not less than 30 days before the hearing. The

department shall also post a notice of the hearing and comment

period on its website beginning not less than 30 days before the

hearing. The last day of the comment period is 15 days after the

hearing. Comments shall be submitted in writing or by electronic

mail, except that comments at the hearing may be submitted orally.

     (2) A notice under subsection (1) shall include or describe

all of the following:

     (a) The time, date, and place, and purpose of the hearing.

     (b) The opportunity to submit comments to the department in

writing or by electronic mail at any time not more than 15 days

after the date of the hearing, and the postal and electronic mail

address for submitting comments.

     (c) Standard lease terms and conditions, including, but not

limited to, those described in section 32425(a) to (e).

     (d) Specific lease terms as described in section 32425(f).

     (e) Lease auction details, including all of the following:

     (i) Application and bidding procedures and instructions.

     (ii) Minimum bid.

     (3) Not more than 45 days after the public hearing under

subsection (1), the department shall submit to the chairperson of

the advisory council a copy of the nomination, a copy or transcript

of each public comment received under subsection (1), a summary of

the comments, and the department's responses to the comments. Not

more than 45 days after the department submits this information to

the chairperson of the advisory council, the advisory council shall

review the information and submit to the department recommendations

regarding approval, modification, or rejection of the nomination

and the terms and conditions of a lease.

     (4) The department shall prepare a summary of the department's

responses to the advisory council's recommendations. After the

summary is prepared and not more than 45 days after receipt of the

advisory council's recommendations, the department shall approve or

disapprove a nominated parcel for auction. The department shall

approve the parcel if the requirements of section 32413 are met.

The department may approve the parcel with modifications necessary

to meet such requirements.

     Sec. 32421. (1) The department shall award leases by oral

auction to the qualified bidder making the highest bid.

     (2) After approval of a nominated parcel to be auctioned for

lease, the department shall publish a public notice of the lease

auction in a newspaper of general circulation in the county nearest

the parcel not less than 45 days before the scheduled auction. The

department shall also post a notice of the auction on its website

beginning not less than 45 days before the auction. The notices

under this subsection shall include or describe all of the

following:

     (a) The information listed in section 32419(2)(c) to (e).

     (b) Procedures for awarding a lease and handling unsuccessful

applications or bids.

     (c) The official department lease form to be used or a

reference to that form.

     (3) Only 1 designated individual may bid on behalf of a

participant in a lease auction.

     (4) To qualify as a participant in a lease auction or a lessee

under this part, a person shall meet all of the following

requirements:

     (a) Demonstrate technical and financial capability to

construct, operate, maintain, and remove projects for which the

person is requesting authorization. Documentation may include the

following:

     (i) Descriptions of international or domestic experience with

renewable energy projects or other types of electric energy

projects.

     (ii) Information establishing the ability to raise capital

sufficient to carry out terms and conditions described in section

32429(8).

     (iii) Other relevant information required by the department.

     (b) Demonstrate the ability to obtain and maintain financial

assurance and liability insurance under section 32449.

     (c) Unless the person is an individual, submit evidence

acceptable to the department that all of the following requirements

are met:

     (i) The person is authorized to conduct business under the laws

of this state.

     (ii) The person is authorized to hold a lease under its

partnership agreement, articles of incorporation, or other

organizational documents.

     (iii) An individual bidding for a lease or signing a lease,

assignment, or permit under this part on behalf of the person is

authorized to bind the person when conducting business with this

state.

     (5) Information required under subsection (4) must be received

by the department at least 30 days before the lease auction. The

department shall assign a unique code to each prospective lease

auction participant upon acceptance of the information and shall

acknowledge the sufficiency of the submittal in writing.

     (6) A lease or permit under this part shall cover only 1

offshore wind energy facility.

     Sec. 32423. (1) A successful lease auction participant shall

pay the full amount bid at the conclusion of the auction. The

amount bid shall be paid in cash or by cashier's check, certified

check, or money order payable to the state of Michigan. The

department shall forward the payment to the state treasurer for

deposit in the land and water management permit fee fund. If a

successful lease auction participant fails to timely pay the total

amount due under this subsection, the person forfeits the lease

rights successfully bid upon.

     (2) If the department accepts a bid, the department shall

prepare and obtain state administrative board approval of the

lease. The department shall then send the successful lease auction

participant 3 copies of the approved unexecuted lease.

     (3) Not more than 21 days after the successful lease auction

participant receives the unexecuted lease copies, the lease auction

participant shall execute the copies and file them with the

department along with a certificate of insurance and evidence of

financial assurance as described under section 32449.

     (4) The lease auction participant shall forfeit the amount bid

and the right, subject to subsection (8), to enter the lease if the

participant fails to comply with the requirements of subsection

(3), applicable lease auction or lease execution rules, or terms

set forth in the lease auction notice under section 32419. In the

event of forfeiture under this subsection, the department shall

proceed under section 32421 to hold another lease auction for the

subject parcel, and the person subject to the forfeiture is not

eligible to participate in the new auction for that parcel.

     (5) The department may extend the time period under subsection

(3) if the department determines that the lease auction participant

has demonstrated sufficient cause for the delay.

     (6) Subject to subsection (4), upon receipt of the items

required under subsection (3), the department shall execute the

lease and send the lessee 1 fully executed copy.

     (7) Not more than 45 days after the lessee receives the fully

executed lease copy under subsection (6), the lessee shall pay the

first year's rent as provided in section 32447.

     (8) The department may withdraw a parcel for which the

department has held a lease auction before the successful lease

auction participant and the department execute the lease. If the

department exercises this right, the department shall refund the

amount bid, without interest, and provide the successful lease

auction participant with a written explanation for the withdrawal.

     Sec. 32425. A lease shall provide for at least all of the

following:

     (a) The lease is for commercial activities.

     (b) The lessee shall not conduct site assessment activities

under the lease except pursuant to the terms of a site assessment

permit.

     (c) The lessee shall not construct or operate an offshore wind

energy facility under the lease except pursuant to the terms of a

construction and operations permit.

     (d) The term of the lease is 30 years, subject to extension

under section 32463 and provisions of this part providing for

suspension or early termination of the lease.

     (e) Rent and royalty payments pursuant to section 32447.

     (f) A detailed description of the parcel based upon a grid

cell map produced by the department.

     (g) Site-specific lease stipulations.

     (h) Such other terms, conditions, and requirements as the

department determines to be just and equitable and in conformance

with the requirements of section 32413.

     Sec. 32427. (1) A person shall not conduct site assessment

activities except pursuant to the terms of a permit issued by the

department. To obtain a site assessment permit, a lessee shall

submit an application to the department on a form provided by the

department. The application shall be accompanied by a nonrefundable

fee of $5,000.00.

     (2) If the lessee requests a preapplication meeting with the

department, the department shall meet with the lessee or its

representatives to review proposed site assessment activities or a

proposed site assessment permit application.

     (3) Before submitting a site assessment permit application, a

lessee shall hold at least 1 public meeting to provide information

and receive public comment on the proposed application. The meeting

shall be held at the expense of the applicant, in the county

nearest to the leased site. Comments may be submitted at the

meeting or may be submitted to the lessee in writing or by

electronic mail at any time through 30 days after the meeting. The

lessee shall publish a notice of the meeting and comment period in

a newspaper of general circulation in that county not less than 20

days before the meeting. The lessee shall also post a notice of the

meeting and comment period on its website, if any, beginning not

less than 20 days before the meeting. The notices shall also

include or describe all of the following:

     (a) The purpose of the comment period.

     (b) The opportunity to submit comments to the applicant in

writing or electronically at any time through the expiration of the

comment period and the postal and electronic mail address for

submitting comments.

     (4) A site assessment permit application shall be submitted

not more than 180 days after the department executes the lease. If

the lessee fails to timely submit for a site assessment permit

application, the lease is terminated, and the rent payment for the

first year of the lease shall not be refunded.

     (5) A site assessment permit application shall include all of

the following:

     (a) A summary of public comments received under subsection (3)

and the lessee's responses to those comments.

     (b) Baseline physical characterization surveys, or plans for

such surveys, such as geological and geophysical surveys or hazard

surveys, to identify bottom type (such as mud, sand, silt, bedrock,

or rock outcroppings), potential sediment transport, appropriate

sediment testing and disposal, as necessary, or other relevant

physical characteristics in the proposed location of any structure

proposed for site assessment purposes.

     (c) Baseline biological surveys, or plans for such surveys,

such as fish and wildlife monitoring studies, using radar, side-

scan sonar, sub-bottom profiler, magnetometer, or other means as

required by the department to characterize biological resources,

including, but not limited to, bat and bird use, threatened and

endangered species and associated habitat, benthic communities, and

vegetation, at the leased site in general and specifically in the

proposed location of any structure proposed for site assessment

purposes.

     (d) Baseline archaeological surveys, or plans for such

surveys, using side-scan sonar, sub-bottom profiler, magnetometer,

or other means as required by the department to identify cultural,

historical, and archaeological sites, including abandoned property

at the leased site in general and specifically in the proposed

location of any structure proposed for site assessment purposes.

     (e) The surface location, such as global positioning system

coordinates, of each human-made object currently located on the

bottomlands and each structure proposed to be located on the

bottomlands during site assessment and the estimated water depth at

that location.

     (f) General structural and project design, fabrication, and

installation information for each type of structure associated with

site assessment activities and the location of each such structure

on the most recent nautical chart issued by the national oceanic

and atmospheric administration, United States department of

commerce or grid cell map produced by the department.

     (g) Site assessment activities and objectives, and a proposed

schedule of site assessment activities from start to completion.

     (h) Competing use surveys that identify the current uses in

the vicinity of the proposed structures associated with site

assessment activities and the location of the uses. Such uses may

include, but are not limited to, commercial, treaty, and

recreational fishing, water intakes or outfalls, utility lines,

military uses, shipping lanes, ferry routes, recreational boating

courses, designated refuges, bottomland preserves, and special

management areas.

     (i) Environmental protection features or measures the lessee

will use during site assessment activities.

     (j) A plan to remove site assessment structures and restore

leased bottomlands and waters to their prelease condition. A

removal plan shall be prepared by a licensed professional engineer

and provide for all of the following:

     (i) An implementation schedule for all removal and restoration

activities.

     (ii) Removal of the structures permitted under this part from

all bottomlands and waters. However, a site assessment permit may

authorize a structure that has a continuing beneficial use to

remain in place following site assessment activities.

     (iii) Minimizing bottomland disturbances and suspended sediments

during removal of structures.

     (iv) As necessary, appropriate sediment testing and disposal.

     (v) Monitoring the effects of removal on the aquatic

environment both during and subsequent to removal.

     (vi) An estimate of the total removal cost, without regard to

salvage value of the structures, and the net removal cost after

deducting salvage value.

     (k) A safety plan to protect the public from events such as

electrocution; collisions of aircraft or vessels with construction

equipment or permitted structures; entanglement of fishing gear,

anchors, dredging equipment, or other underwater devices with such

equipment or structures; or such equipment or structures becoming

unmoored or detached. The safety plan shall include a plan to mark

construction equipment and permitted structures with fog signals,

low-intensity navigation lights, hazard-marking lights, or other

aids to navigation and by painting, consistent with federal

aviation administration and United States coast guard guidelines

and requirements. To the extent compatible with the other goals of

this subdivision, a marking plan shall minimize adverse effects on

wildlife, and adverse visual effects, including, but not limited

to, sky glow and glare.

     (l) An emergency prevention, monitoring, and response plan that

includes all of the following:

     (i) Procedures the lessee will take during an emergency,

including, but not limited to, immediate shutdown and containment

and cleanup of any spills.

     (ii) A protocol for coordination with and reporting an

emergency to local, state, and federal agencies.

     (iii) A schedule for annual testing of emergency equipment.

     (m) A description of the measures the lessee will use to avoid

or minimize adverse effects on cultural or archaeological sites or

the environment, including incidental take of fish or wildlife,

before site assessment activities are conducted, and a description

of how any such adverse effects from site assessment activities

will be mitigated. Protection of cultural and archaeological sites

shall be evaluated using applicable criteria for national

significance, in accordance with regulations promulgated by the

United States secretary of the interior pursuant to section

101(a)(2) of the national historic preservation act, 16 USC

470a(a)(2).

     (n) Any other deployment protocols.

     (o) A listing of all other state, federal, and local permits

and approvals required for the structures and activities that are

the subject of the application indicating whether each such permit

or approval has been applied for or obtained.

     (p) The name, postal address, electronic mail address, and

telephone number of an authorized representative of the lessee.

     (q) A designation of the operator, if applicable.

     (r) Identification of consultants and consultant contact

information.

     (s) Evidence of financial assurance and a certificate of

liability insurance as required under section 32449.

     (t) A listing of all documents referenced in the application.

     (u) Other relevant information required by the department.

     Sec. 32429. (1) Effective 45 days after the state receives an

application for a site assessment permit, the application shall be

considered to be administratively complete unless the department

proceeds as provided under subsection (2).

     (2) If, before the expiration of the 45-day period under

subsection (1), the department notifies the applicant that the

application is not administratively complete, specifying the

information necessary to make the application administratively

complete, or notifies the applicant that a fee required to

accompany the application has not been paid, specifying the amount

due, the running of the 45-day period under subsection (1) is

tolled until the applicant submits to the department the specified

information or fee amount due. The notice shall be given in writing

or by electronic mail. After receipt of an administratively

complete site assessment permit application, the department may, in

writing, request the applicant to submit specific additional

information that the department determines is necessary to complete

the review process.

     (3) The applicant shall pay the fee requested under subsection

(2) or provide additional information that is the subject of a

notification or request under subsection (2) not more than 45 days

after receiving the request. If the applicant shows sufficient

cause for needing additional time to provide the information, the

department may extend the period to provide the information for an

additional 30 days. If the applicant fails to timely provide the

information or pay the fee, the department shall disapprove the

application and notify the applicant in writing of the reasons for

disapproval. If the application is disapproved, the lease is

terminated and any lease payment shall not be refunded.

     (4) If the site assessment permit application is

administratively complete, the fee has been paid, and any

additional information requested under subsection (2) has been

timely provided, the department shall receive comment on the

application. Comments shall be submitted to the department in

writing or by electronic mail. The department shall publish notice

of the comment period in a newspaper of general circulation in the

county nearest to the lease site and send notice by first-class

mail to the clerk of each local unit of government with any Great

Lakes shoreline not more than 12 miles from the leased site at

least 30 days before the expiration of the comment period. The

department shall also post a notice of the comment period on its

website beginning at least 30 days before the expiration of the

comment period. The notices shall include or describe all of the

following:

     (a) The purpose of the comment period.

     (b) The opportunity to submit comments to the department in

writing or by electronic mail at any time through the expiration of

the comment period and the postal and electronic mail address for

submitting comments.

     (5) After the comment period expires, the department shall

prepare a summary of the comments received and the department's

responses to the comments.

     (6) Subject to subsection (3), not more than 150 days after

the date the site assessment permit application is received and

administratively complete, the department shall approve or

disapprove the application. The department shall approve the

application if it meets the requirements of section 32413. The

department may approve the application with modifications necessary

to meet such requirements.

     (7) If the department disapproves the site assessment permit

application, other than for reasons set forth in subsection (3),

the department shall notify the applicant in writing of the reasons

for the disapproval. The applicant may submit revisions to the

permit application, in writing, not more than 60 days after notice

is received. The department may extend the period to submit

revisions if the applicant submits to the department information

demonstrating sufficient cause for needing additional time. If the

applicant fails to timely submit the necessary revisions, the lease

is terminated.

     (8) If the department approves a site assessment permit

application, the department shall notify the applicant in writing

and issue a permit that incorporates the terms and conditions under

which site assessment activities shall be conducted. The terms and

conditions shall include at least all of the following:

     (a) Requirements to ensure that the permittee uses

commercially reasonable available technology, best management

practices, and properly trained personnel for permitted activities.

     (b) Plans and requirements to collect information described in

section 32427(5) not already included in the site assessment permit

application.

     (9) A site assessment permit expires upon the earlier of the

following:

     (a) Issuance of a construction and operations permit.

     (b) Termination of the lease.

     Sec. 32431. If the department issues a site assessment permit,

the lessee shall do all of the following:

     (a) Notify the department in writing not more than 30 days

after completing installation of permitted structures.

     (b) Prepare and submit to the department a report on November

1 of each year that summarizes the activities authorized by the

permit, the results of those activities, and any incidents that

occurred at the leased site during the year period ending the

preceding September 30. The report shall also identify and describe

any mitigation measures and monitoring methods and their

effectiveness. If mitigation measures or monitoring methods were

not effective, the lessee shall include recommendations for new

mitigation measures or monitoring methods, modifying site

assessment activities or structures, or commencing removal of

structures and restoration of leased bottomlands and waters to

their prelease condition.

     (c) If submerged abandoned property is discovered by the

lessee while conducting site assessment activities, comply with

part 761. In addition, the lessee shall immediately suspend bottom-

disturbing activities within 1,000 feet of the abandoned property

and, not more than 72 hours after the discovery, report the

abandoned property to the department and the Michigan state housing

development authority. Not more than 60 days after receiving the

report or, if waters are not navigable because of winter

conditions, not more than 60 days after waters become navigable,

the department either shall commence an investigation into the

nature and extent of the abandoned property or shall direct the

lessee to conduct the investigation at the lessee's cost in a

manner prescribed by the department and subject to the department's

supervision. Based on the results of the investigation, the

department shall promptly determine whether the abandoned property

meets criteria for national significance, in accordance with

regulations promulgated by the United States secretary of the

interior pursuant to section 101(a)(2) of the national historic

preservation act, 16 USC 470a(a)(2). The lessee shall not resume

the suspended site assessment activities before the department's

determination is made. The department shall submit the results of

the investigation and the department's determination to the

Michigan state housing development authority. The lessee shall keep

the location of the abandoned property confidential until released

to the public by the department. The department may suspend the

running of the term of the lease during the suspension of site

assessment activities under this subdivision.

     (d) Not more than 60 days after removal of a structure, submit

a written report to the department that includes both of the

following:

     (i) A summary of the removal activities, including the date

they were completed.

     (ii) A description of any mitigation measures.

     Sec. 32433. A lessee may request the department to amend the

lessee's site assessment permit. The request shall be submitted in

writing and shall describe in detail the amendments requested. The

request shall be accompanied by a nonrefundable fee of $500.00. The

request shall be processed in the same manner and is subject to the

same requirements as an application for a site assessment permit

except that the department may waive the public notice requirements

for minor amendments.

     Sec. 32435. (1) A person shall not construct or operate an

offshore wind energy facility unless the person has obtained all

necessary easements for the offshore wind energy facility.

     (2) A lessee shall apply for a utility easement pursuant to

subpart 9 of part 21 for an export cable located outside of the

leased site.

     (3) Easement revenue shall be deposited as provided in section

32447.

     Sec. 32437. (1) A person shall not construct or operate an

offshore wind energy facility except pursuant to the terms of a

construction and operations permit. To obtain a construction and

operations permit, a lessee shall submit an application to the

department on a form provided by the department. The application

shall be accompanied by a nonrefundable fee of $10,000.00.

     (2) If the lessee requests a preapplication meeting with the

department, the department shall meet with the lessee or its

representatives to review a proposed offshore wind energy facility

or a proposed construction and operations permit application.

     (3) An application for a construction and operations permit

shall be submitted not more than 4 years after the issuance of the

site assessment permit. The department shall grant one 1-year

extension of the deadline to submit an application for a

construction and operations permit if the lessee submits a written

request for the extension that demonstrates in detail that

substantial progress has been made to complete site assessment

including substantial progress on the installation of monitoring

equipment or substantial progress on the completion of studies

required under section 32427. If the lessee fails to timely submit

an application for a construction and operations permit, the lease

is terminated, and the rent payment for the current year of the

lease shall not be refunded.

     (4) A construction and operations permit application shall

include all of the following, utilizing relevant data collected

from site assessment activities and other sources:

     (a) Scaled drawings that include all of the following

elements:

     (i) A cross-sectional and plan view drawing of the entire

project area prepared by a professional land surveyor or

professional engineer. The drawing shall show, with global

positioning system coordinates, the proposed surface location of

all proposed offshore wind energy facility structures, including,

but not limited to, meteorological towers, wind turbine towers,

generating facilities, interturbine cables, electric service

platforms, and export cables, and the estimated water depth at that

location.

     (ii) A plan, to scale, that shows the outside limits of the

permit and leased site, and the location of all proposed above-

water offshore wind energy facility structures in relation to the

adjacent shoreline and nearby local units of government, parks,

roads, other existing or proposed permitted offshore wind energy

facilities, and other physical features.

     (b) A narrative description of the proposed objectives,

activities, and methods and plan for proposed construction and

operation, including plans for any phased development, and schedule

of construction activity showing significant milestones leading to

the commencement of commercial operations.

     (c) Structural and project design, fabrication, and

installation information for each type of structure proposed to be

permitted and the location of each such structure on the most

recent nautical chart issued by the national oceanic and

atmospheric administration, United States department of commerce or

grid cell map produced by the department.

     (d) A report, prepared following consultation with the

department, based on the information and data collected in the site

assessment permit studies that describes all of the following:

     (i) The location and types of competing uses.

     (ii) The aquatic environment, including benthic communities, in

the waters and on the bottomlands in, on, or over which the

applicant proposes to locate any structure, and immediately

adjacent areas.

     (iii) The cultural, historical, and archaeological sites within

the project area.

     (iv) The results of all baseline biological surveys conducted

under section 32427(5)(c).

     (e) A fish and wildlife protection plan that contains, at a

minimum, all of the following:

     (i) A detailed description of the methods and equipment that

will be used for monitoring fish and wildlife behavior and activity

in the vicinity of the project.

     (ii) A detailed description of how the fish and wildlife

monitoring data will be analyzed and provided to the department in

electronic format, with specific criteria by which to evaluate

adverse effects.

     (iii) A detailed implementation schedule, including the

frequency and timing of data recovery, maintenance of the

monitoring equipment, and quarterly reporting to the department.

     (iv) A detailed monitoring schedule that considers lake

conditions, seasonal variations in the presence of species, and

other pertinent biological factors.

     (v) Provisions for identifying and implementing remedial

measures if monitoring identifies any adverse effects on fish or

wildlife.

     (f) A description of the measures the lessee took, or will

take, to satisfy the conditions of any lease stipulations related

to the proposed activities.

     (g) A detailed description of the methods and equipment that

will be used to monitor ambient noise levels, electromagnetic

fields and noise associated with offshore wind energy facility

construction and subsequent operations, and the effectiveness of

any devices that are proposed to avoid and minimize the potential

for adverse effects from noise or electromagnetic fields, if any.

     (h) A pollution prevention plan for lubricants and other

chemical products used in the offshore wind energy facility,

including all of the following:

     (i) An analysis of the use of nontoxic alternatives.

     (ii) A list of chemical products to be used.

     (iii) The quantity to be used or stored on location.

     (iv) The treatment, discharge, or disposal methods to be used.

     (v) The name and location of the onshore waste receiving,

treatment, or disposal facility.

     (vi) How these chemical products will be brought on-site.

     (vii) The number of transfers of the chemical products that may

take place.

     (viii) The quantity of chemical products that will be

transferred each time.

     (i) A description of any vessels, aircraft, or other vehicles

the lessee will use to support the activities and an estimate of

the frequency and duration of vehicle traffic.

     (j) A decommissioning plan that meets the requirements of a

removal plan under section 32427(5)(j).

     (k) Information described in section 32427(5)(k) to (u).

     Sec. 32439. (1) A construction and operations permit

application shall be processed in the same manner and is subject to

the same requirements as provided for a site assessment permit

application under section 32429(1), (2), (3), (6), and (7).

     (2) Before determining whether to approve or disapprove a

construction and operations permit application, the department

shall hold a public hearing on the application. The hearing shall

be held in the county nearest to the parcel for which the permit is

sought. The department shall publish a notice of the hearing and

comment period in a newspaper of general circulation in that county

and send notice by first-class mail to the clerk of each local unit

of government with any Great Lakes shoreline not more than 12 miles

from the leased site not less than 30 days before the hearing. The

department shall also post a notice of the hearing and comment

period on its website beginning not less than 30 days before the

hearing. The last day of the comment period is 15 days after the

hearing. Comments shall be submitted in writing or by electronic

mail, except that comments at the hearing may be submitted orally.

     (3) A notice under subsection (2) shall include or describe

all of the following:

     (a) The time, date, place, and purpose of the hearing.

     (b) The opportunity to submit comments to the department in

writing or by electronic mail at any time not more than 15 days

after the hearing, and the postal and electronic mail address for

submitting comments.

     (4) After the comment period expires, the department shall

prepare a summary of the comments received and the department's

responses to the comments.

     (5) Not more than 45 days after the public hearing under

subsection (2), the department shall submit to the chairperson of

the advisory council a copy of the construction and operations

permit application, a copy or transcript of each public comment

received under subsection (2), and a summary of the comments and

the department's responses to the comments. Not more than 45 days

after the department submits this information to the chairperson of

the advisory council, the advisory council shall review the

information and submit to the department recommendations regarding

approval or disapproval of the construction and operations permit

application and the terms and conditions of a permit.

     (6) The department shall prepare a summary of the department's

responses to the advisory council's recommendations.

     (7) If the department approves a construction and operations

permit application, the department shall notify the applicant in

writing and issue a permit that incorporates the terms and

conditions under which the offshore wind energy facility is to be

constructed and operated. The terms and conditions shall include,

but not be limited to, all of the following:

     (a) The requirements of sections 32429(8)(a) and 32445(1).

     (b) The wind turbine rotor sweep height of an offshore wind

energy facility shall be not less than 75 feet above the water

surface.

     (c) Where traversing shoreline, export cables shall be buried

under the shoreline.

     (d) A construction schedule consistent with section 32445.

     (8) A construction and operations permit expires upon the

earlier of the following:

     (a) Issuance of a decommissioning permit.

     (b) Termination of the lease.

     Sec. 32441. If the department issues a construction and

operations permit, the lessee shall do all of the following:

     (a) Commence construction by the date given in the

construction schedule included as a part of the construction and

operations permit, unless the department approves a deviation from

the schedule.

     (b) Not more than 30 days after completion of installation

activities approved in the construction and operations permit,

notify the department in writing of the date of completion.

     (c) Prepare and submit to the department by November 1 of each

year both of the following:

     (i) A report as described in section 32431(b).

     (ii) An update of the emergency plan described in section 32427

(5)(l).

     (d) If submerged cultural resources are discovered while

conducting construction and operations activities, proceed as

provided in section 32431(c).

     (e) Not more than 5 business days after commercial operations

cease without an approved suspension, notify the department in

writing. If commercial operations cease for an indefinite period

longer than 6 months, the department, after providing the permittee

an opportunity for a contested case hearing under the

administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to

24.328, may cancel the lease and the lessee shall initiate the

decommissioning process, as set forth in this part.

     (f) Initiate the decommissioning process as required in this

part upon completion of the commercial operations as authorized in

the construction and operations permit.

     Sec. 32443. A lessee may request the department to amend the

lessee's construction and operations permit. The request shall be

submitted in writing and shall describe in detail the amendments

requested. The request shall be accompanied by a nonrefundable fee

of $500.00. The request shall be processed in the same manner and

is subject to the same requirements as an application for a

construction and operations permit except that the department may

waive the public notice requirements for minor amendments.

     Sec. 32445. (1) The lessee shall commence the work authorized

in the construction and operations permit not more than 2 years

after issuance of the permit and begin commercial operations not

more than 4 years after the issuance of the permit.

     (2) The department shall amend the construction and operations

permit to provide not more than one 1-year extension of the

deadline to commence work and not more than two 1-year extensions

of the deadline to begin commercial operations. In addition to

meeting the requirements of section 32443, to qualify for an

extension under this subsection, the lessee shall submit to the

department detailed information demonstrating that substantial

progress has been made.

     (3) If the lessee fails to meet the requirements of subsection

(1), subject to any extension under subsection (2), the department

shall terminate the lease.

     Sec. 32447. (1) Subject to section 32463, the rent for a lease

shall be $3.00 per acre per year for the entire leased site unless

otherwise provided in the lease. The rent shall be adjusted by the

state treasurer in years ending in "0" or "5". The rent adjustment

shall be directly proportional to changes in the consumer price

index of the United States department of labor, bureau of labor

statistics, and other economic indicators.

     (2) A lessee shall pay the annual rent not more than 45 days

after the lease is issued and then by each subsequent anniversary

of the issuance of the lease. A lessee shall continue to make rent

payments until decommissioning has been completed pursuant to the

terms of the decommissioning permit and approved by the department.

     (3) All application fees, nomination fees, bid amounts, rent,

and easement revenue received under this part shall be forwarded to

the state treasurer for deposit into the land and water management

permit fee fund created under section 30113. Upon appropriation,

the department shall expend money deposited in the land and water

management permit fee fund pursuant to this section to implement

this part, including updating, as new information becomes

available, the Great Lakes resource mapping system developed in

conjunction with the September 1, 2009 "Report of the Great Lakes

Wind Council" issued pursuant to Executive Order No. 2009-1.

     (4) Not more than 10 days after the commencement or

termination of commercial operations, the lessee shall notify the

MPSC in writing of the date of commencement or termination. The

MPSC shall promptly forward a copy of the notice to the department.

     (5) A lessee shall make annual royalty payments of 3% of gross

revenue from electricity or other energy product generated or

produced by the offshore wind energy facility during the preceding

year. Not more than 15 days after each anniversary of the

commencement of commercial operations, the lessee shall file with

the MPSC documentation the MPSC considers necessary to make a

determination of royalties owed for the 1-year period preceding the

anniversary date. The MPSC shall determine and notify the lessee

and department of the amount of royalties due. The lessee shall pay

the royalties to the department not more than 15 days after the

lessee receives the notice from the MPSC.

     (6) Past due royalty and annual rental payments shall bear

interest at the rate determined and applied by the department of

treasury from the due date until the date of payment.

     (7) The offshore wind energy trust fund is created within the

state treasury. Royalty payments under subsection (5) shall be

deposited in the fund. The state treasurer may receive money or

other assets from any source for deposit into the fund. The state

treasurer shall direct the investment of the fund. The state

treasurer shall credit to the fund interest and earnings from fund

investments. Money in the fund at the close of the fiscal year

shall remain in the fund and shall not lapse to the general fund.

     (8) The department shall be the administrator of the Great

Lakes wind energy trust fund for auditing purposes. Money from the

fund shall be expended, upon appropriation, only for 1 or more of

the following purposes:

     (a) Not less than 70% of the money appropriated shall be

expended to protect and manage bottomlands, enhance and restore

Great Lakes aquatic environment and nearshore habitat, and manage

submerged cultural resources. Preference in expenditure of revenue

under this subdivision shall be given to activities located not

more than 30 miles from the shoreline of a county with shoreline

nearest to any particular offshore wind energy facility.

     (b) Not less than 23% of the money appropriated shall be

deposited in the energy efficiency and renewable energy revolving

loan fund created in section 2 of 2009 PA 242, MCL 460.912, or

appropriated to the department of energy, labor, and economic

growth for grants issued in conformity with the energy efficiency

and conservation block grant program created under the energy

independence and securitization act of 2007, Public Law 110-140.

     (c) Not more than 7% of the money appropriated shall be

appropriated to the MPSC and expended for fulfilling its

responsibilities under this section or deposited in the land and

water management permit fee fund to be expended, upon

appropriation, as provided in subsection (3).

     (9) For the fiscal year ending September 30, 2011, there is

appropriated to the department $200,000.00 to hire 2.0 full-time

equated positions to implement this part.

     Sec. 32449. (1) A lessee shall maintain financial assurance

and a policy of general liability insurance from the commencement

of the term of the lease until termination of the lease as provided

in section 32465, removal of any permitted structures, and

restoration of leased bottomlands and waters to their prelease

condition as approved by the department.

     (2) Financial assurance under subsection (1) shall be in an

amount the department determines to be reasonably necessary to

ensure the performance of all of the following:

     (a) The terms and conditions in the lease.

     (b) Decommissioning.

     (c) Necessary environmental protection measures, including

potential remediation of any contamination of the air, water, or

bottomlands.

     (3) The financial assurance shall consist of a performance

bond, escrow, cash, or other equivalent security, or any

combination thereof, covering 100% of the total required amount.

The amount of financial assurance to cover potential liabilities,

such as remediation for possible contamination, as opposed to

estimated actual liabilities, need not exceed 1% of the cost of the

facility. Every 3 years, or more often if the department considers

it necessary, a lessee shall adjust the amount of financial

assurance so the amount remains consistent with subsection (2). In

making this determination, the department shall consider the

consumer price index of the United States department of labor,

bureau of labor statistics, and other economic indicators, the

scope, scale, and location of activities, the stage of the offshore

energy facility project, and other relevant factors.

     (4) If the department demonstrates to the holder of financial

assurance that the lessee has violated the requirements of this

part, the holder of the financial assurance shall release the

amount of the funds that the department determines is necessary to

remedy the noncompliance.

     (5) The general liability insurance policy under subsection

(1) shall cover bodily injury, property damage, and environmental

damage arising from activities under this part in an amount

considered reasonable by the department given the scope, scale, and

location of the activities. The amount of liability insurance need

not exceed 1% of the cost of the offshore wind energy facility.

     (6) If a lessee fails to provide or maintain financial

assurance or general liability insurance under this section, the

department may order the lessee to immediately suspend commercial

activities.

     Sec. 32451. A lessee shall not assign, in whole or part, a

lease or a permit provided for under this part except upon approval

of the department. To obtain department approval of an assignment,

a lessee shall submit an application to the department on a form

provided by the department. A processing fee of $500.00 shall

accompany the application. The department shall approve the

assignment if the assignee meets all the requirements of this part.

The assignor is liable for all obligations that accrued on the

lease or assigned portion thereof before the department approves an

assignment. The assignee is liable for all obligations that accrue

on the lease or assigned portion thereof after the department

approves the assignment.

     Sec. 32453. (1) A person shall not conduct decommissioning

except pursuant to the terms of a decommissioning permit issued by

the department. To obtain a decommissioning permit, a lessee shall

submit an application to the department on a form provided by the

department. The application shall be accompanied by a nonrefundable

fee of $5,000.00.

     (2) If the lessee requests a preapplication meeting with the

department, the department shall meet with the lessee or its

representatives to review the proposed decommissioning or

decommissioning permit application.

     (3) An application for a decommissioning permit shall be

submitted by the earlier of the following dates:

     (a) 180 days before the termination of all other commercial

activities.

     (b) 90 days after cancellation, relinquishment, or other

termination of the lease.

     (4) The decommissioning permit application shall include all

of the following:

     (a) An updated decommissioning plan, as described in section

32437, that reflects state-of-the-art methods for decommissioning

and removal at the time those activities are to commence.

     (b) Information described in section 32427(5)(k) to (u).

     Sec. 32455. (1) A decommissioning permit application shall be

processed in the same manner and is subject to the same

requirements as provided for a site assessment permit application

under section 32429(1), (2), (3), (6), and (7) and a construction

and operations permit application under section 32439(2), (3), and

(4).

     (2) If the department approves a decommissioning permit

application, the department shall notify the applicant in writing

and issue a permit that incorporates the terms and conditions under

which the decommissioning is to be conducted.

     (3) A decommissioning permit may authorize a structure that

has a continuing beneficial use to remain in place following

termination of a lease.

     Sec. 32457. (1) Not more than 60 days after the department

approves an application for a decommissioning permit, the lessee

shall begin decommissioning pursuant to the permit. The lessee

shall complete decommissioning not more than 3 years after the

issuance of a decommissioning permit.

     (2) In conducting decommissioning, the lessee shall comply

with section 32431(c) and (d).

     Sec. 32459. A lessee may request the department to amend the

lessee's decommissioning permit. The request shall be submitted in

writing and shall describe in detail the amendments requested. The

request shall be accompanied by a nonrefundable fee of $500.00. The

request shall be processed in the same manner and is subject to the

same requirements as an application for a decommissioning permit

except that the department may waive the public notice requirements

for minor amendments.

     Sec. 32461. (1) Not more frequently than every 5 years, the

department may review the leased site to consider whether it is

larger than needed to fully develop and operate the offshore wind

energy facility in a manner consistent with this part. The

department shall notify the lessee in writing if the department

proposes to reduce the area of the leased site. The notice shall

describe the area proposed to be excluded from the leased site and

provide the reasons for the proposal.

     (2) Not later than 45 days after the department submits its

notice under subsection (1), the lessee may submit to the

department in writing a statement of reasons that the lessee needs

to retain the area in question to fully develop and operate the

offshore wind energy facility in a manner consistent with this

part.

     (3) Not more than 90 days after the department submits its

notice under subsection (1), the department shall determine whether

to reduce the leased site, and shall notify the lessee of its

decision in writing. If the department determines to reduce the

leased site, the notice shall include the department's responses to

any statement submitted by the lessee under subsection (2). If the

leased site is reduced, rent under the lease shall be reduced

proportionately.

     Sec. 32463. (1) If requested by the lessee in writing after

commencement of commercial operations, the department may extend

the term of a lease for 10 or more years. An extension shall not

exceed the original lease term unless a longer term is agreed to by

the department and lessee. More than 1 extension may be granted.

     (2) A request for a lease extension shall be submitted to the

department not later than 2 years before the termination date of

the lease. The department shall receive comment on the request. The

comment process is subject to the same requirements as set forth in

section 32429(4) and (5). Not later than 1 year before the

termination date of the lease, the department shall approve or

disapprove the request or approve the request with modifications.

The department shall notify the lessee in writing of the

department's approval or disapproval of the request. If the

department disapproves the request, the department shall notify the

lessee in writing of the reasons for disapproval.

     (3) The department may revise rents and operating terms of the

lease at the time of extension as a condition of the extension.

     (4) For the period the department considers a lessee's request

for extension, the lessee shall continue to make all payments in

accordance with the original terms and conditions of the lease.

     Sec. 32465. (1) The lease terminates on whichever of the

following occurs first:

     (a) Failure to timely submit an application for a site

assessment permit under section 32427(4) or a construction and

operations permit under section 32437(3).

     (b) Failure to timely provide information necessary to make an

application administratively complete or other additional

information requested by the department in connection with a site

assessment permit application as provided in section 32429(2) or a

construction and operations permit application under sections

32429(2) and 32439(1).

     (c) Disapproval of a site assessment permit application and

failure to timely submit necessary revisions under section 32429(7)

or disapproval of a construction and operations permit application

and failure to timely submit necessary revisions under sections

32429(7) and 32439(1).

     (d) The expiration of the applicable term of the lease,

subject to any extension under section 32463.

     (e) Cancellation of the lease in an enforcement action under

section 32479.

     (f) Completion of decommissioning pursuant to the terms of a

decommissioning permit and approval of the decommissioning by the

department.

     (g) Relinquishment of the lease under section 32467.

     (2) If a lease terminates, the lessee shall do all of the

following:

     (a) Upon termination, make all payments due, including any

accrued rentals. The lessee shall make the payments promptly upon

termination of a lease as described under subsection (1)(a) to (f).

Section 32467 governs payments in the event of relinquishment of a

lease as described in subsection (1)(g).

     (b) Not more than 180 days after termination, perform

outstanding obligations under the lease. This subdivision does not

apply to decommissioning obligations.

     Sec. 32467. (1) A lessee may not relinquish the lease or a

portion of the leased site except as approved by the department. To

obtain approval for relinquishment, the lessee shall submit an

application with the department on a form provided by the

department. The application shall be accompanied by a nonrefundable

fee of $500.00.

     (2) Effective 30 days after the department receives an

application for relinquishment, the application shall be considered

to be administratively complete unless the department proceeds as

provided under subsection (3).

     (3) If, before the expiration of the 30-day period under

subsection (1), the department notifies the applicant that the

application is not administratively complete, specifying the

information necessary to make the application administratively

complete, the running of the 30-day period under subsection (1) is

tolled until the applicant submits to the department the specified

information or fee amount due. The notice shall be given in writing

or by electronic mail.

     (4) Subject to subsection (5), the department shall approve or

disapprove the relinquishment application not more than 30 days

after receipt of an administratively complete application.

     (5) A relinquishment takes effect on the date the department

approves the lessee's application. The department shall not approve

the relinquishment of the leased site, or a portion of the leased

site, unless the lessee has made all payments due, including any

accrued rentals, or a proportional part thereof.

     Sec. 32469. (1) The offshore wind energy advisory council is

created within the department.

     (2) The advisory council shall consist of the following

members:

     (a) The director of the department of energy, labor, and

economic growth or his or her designee.

     (b) The director of the department of natural resources and

environment or his or her designee.

     (c) The director of the department of transportation or his or

her designee.

     (d) The president of the Michigan strategic fund, or his or

her designee.

     (e) The chairperson of the MPSC or his or her designee.

     (f) The director of the office of the Great Lakes or his or

her designee.

     (g) One other individual who is a resident of this state and

an owner of Great Lakes littoral property in this state, appointed

by the governor.

     (h) The following members appointed by the senate majority

leader, who shall be residents of this state:

     (i) One individual representing a statewide environmental

organization.

     (ii) One individual representing the tourism industry.

     (iii) One individual representing the commercial shipping

industry.

     (iv) One individual representing the charter fishing industry.

     (v) One individual representing electric utilities.

     (vi) One individual who is an owner of Great Lakes littoral

property in this state.

     (i) The following members appointed by the speaker of the

house of representatives, who shall be residents of this state:

     (i) One individual representing electric utilities.

     (ii) One individual representing independent electric

transmission companies.

     (iii) One individual representing the wind energy development

industry.

     (iv) One individual representing Native American tribal

governments.

     (v) One individual representing local government officials.

     (vi) One individual who is an owner of Great Lakes littoral

property in this state.

     (3) The members first appointed to the advisory council shall

be appointed not more than 30 days after the effective date of this

section.

     (4) Members of the advisory council, other than ex officio

members, shall serve for terms of 3 years or until a successor is

appointed, whichever is later, except that the members first

appointed under subsection (2)(g), (h)(i) and (ii), and (i)(i) and (ii)

shall serve for 1 year, and the members first appointed under

subsection (2)(h)(iii) and (iv) and (i)(iii) and (iv) shall serve for 2

years.

     (5) If a vacancy occurs on the advisory council, the vacancy

shall be filled for the unexpired term in the same manner as the

original appointment was made.

     (6) A member of the advisory council other than an ex officio

member may be removed from the advisory council, by the officer who

appointed that member, for incompetence, dereliction of duty,

malfeasance, misfeasance, or nonfeasance in office, or any other

good cause.

     (7) The first meeting of the advisory council shall be called

by the director of the department or his or her designee. At the

first meeting, the advisory council shall elect from among its

members a chairperson and other officers as it considers

appropriate. After the first meeting, the advisory council shall

meet at least quarterly, or more frequently at the call of the

chairperson or if requested by 3 or more members.

     (8) A majority of the members of the advisory council

constitute a quorum for the transaction of business at a meeting of

the advisory council. A majority of the members present and serving

are required for official action of the advisory council.

     (9) The business that the advisory council may perform shall

be conducted at a public meeting of the advisory council held in

compliance with the open meetings act, 1976 PA 267, MCL 15.261 to

15.275.

     (10) A writing prepared, owned, used, in the possession of, or

retained by the advisory council in the performance of an official

function is subject to the freedom of information act, 1976 PA 442,

MCL 15.231 to 15.246.

     (11) Members of the advisory council shall serve without

compensation. However, members of the advisory council may be

reimbursed for their actual and necessary expenses incurred in the

performance of their official duties as members of the advisory

council.

     Sec. 32471. (1) Except as provided in subsection (2),

information obtained by the department under this part is a public

record as provided in the freedom of information act, 1976 PA 442,

MCL 15.231 to 15.246.

     (2) A person regulated under this part may designate a record,

permit application, other information, or a portion of a record,

permit application, or other information obtained by the department

from that person under this part as being only for the confidential

use of the department. The department shall promptly notify the

regulated person of a request for public records under section 5 of

the freedom of information act, 1976 PA 442, MCL 15.235, the scope

of which includes information designated by that person as

confidential and of the date the request was received by the

department. The person regulated under this part has until 30 days

after the receipt of the request by the department to demonstrate

to the department that the information designated as confidential

should not be disclosed because the information is a trade secret

or secret process or is production, commercial, or financial

information the disclosure of which would jeopardize the

competitive position of the person from whom the information was

obtained and make available information not otherwise publicly

available. The department shall decide whether to grant or deny the

request not later than 35 days after the request was received. The

department shall grant the request for the information unless the

person regulated under this part makes a satisfactory demonstration

to the department that the information should not be disclosed. If

the department decides to grant a request, the information

requested shall not be released until 3 days have elapsed after the

decision is made.

     (3) If the department denies the request because the

information should not be disclosed, the department shall

reconsider the basis for the denial if that information is

subsequently requested and at least 3 years have elapsed since the

department last considered the basis for a denial of a request for

that information.

     (4) The department may release any information obtained under

this part, including a record, permit application, or other

information considered confidential pursuant to subsection (2), to

the United States environmental protection agency.

     Sec. 32473. The department may promulgate rules necessary to

implement this part pursuant to the administrative procedures act

of 1969, 1969 PA 306, MCL 24.201 to 24.328.

     Sec. 32475. (1) A person aggrieved by a decision of the

department on a person's qualifications to participate in a lease

auction or on an application for a lease or permit under this part

may request a hearing under chapter 4 of the administrative

procedures act of 1969, 1969 PA 306, MCL 24.271 to 24.287.

     (2) A determination, action, or inaction by the department

following the hearing is subject to judicial review as provided in

sections 103 to 106 of the administrative procedures act of 1969,

1969 PA 306, MCL 24.303 to 24.306.

     (3) A determination issued by the MPSC issued under this part

is subject to review as provided under section 26 of 1909 PA 300,

MCL 462.26.

     Sec. 32477. (1) Subject to subsection (2), a party is not

liable for any failure or delay in performance under a permit or

lease, other than for delay in the payment of money due and payable

under this part, to the extent the failure or delay is proximately

caused by causes that are beyond that party's reasonable control

and that occur without the party's fault or negligence, such as

failure of a supplier, subcontractor, and carrier or other party to

substantially meet its performance obligations.

     (2) Subsection (1) does not apply unless the party claiming

nonliability gives the other party written notice, with full

details, promptly following the occurrence of the cause relied

upon. The deadline for a performance obligation shall be extended

for a period equal to the time lost due to any delay so caused.

     (3) An extension of a deadline for a performance obligation

under this section is in addition to any extension of the deadline

otherwise authorized under this part.

     Sec. 32479. (1) If a lessee violates this part, the department

may issue a violation notice to the lessee at the lessee's last

known address.

     (2) A violation notice under subsection (1) shall identify the

violation and specify how and by what date the violation shall be

corrected.

     (3) If a lessee under this part fails to take the actions

specified by the department in a violation notice by the time

specified, the department may assess an administrative fine of not

more than $10,000.00 per day for each violation of this part and

for each day that the violation continues.

     (4) If the department determines that a violation of this part

poses an imminent threat of serious or irreparable damage to the

environment or natural resources, public health or safety, or

private or public property, including, but not limited to, sites,

structures, or objects of cultural, historical, or archaeological

significance, the department may issue an order directing the

lessee to take immediate remedial action pursuant to section 32483

to alleviate threats and to abate the violation. The order may

direct the lessee to cease operations at the leased site until the

department determines that the violation has been resolved.

     (5) An order to cease operations under subsection (4) shall

set forth what measures the lessee is required to take, including

submission of reports to the department, to receive approval to

resume activities on the lease. The lessee shall cease activities

as specified in the order. The department may authorize certain

activities to continue during the period of the order to cease

operations.

     (6) An order to cease operations remains in effect for the

period specified in the order or as otherwise specified by the

department. If the department determines that the circumstances

giving rise to the order cannot be resolved within a reasonable

time period, the department may cancel the lease.

     (7) An order to cease operations does not extend the term of

the lease. The lessee shall continue to make all required payments

on the lease during the period the order is in effect.

     (8) If the department determines that there has been a

significant, unanticipated adverse effect on the environment,

natural resources, or public health or safety, the department shall

order the lessee to take remedial action that the department

considers necessary to address the adverse effect.

     Sec. 32481. If after providing an opportunity for an

evidentiary hearing under the administrative procedures act of

1969, 1969 PA 306, MCL 24.201 to 24.328, the department determines

that the lessee has failed to comply with a removal plan under

section 32427 approved in a site assessment permit, with a

decommissioning permit, or with the requirements of section

32465(2)(b), both of the following apply:

     (a) The department may take such measures as it considers

necessary to initiate and fully implement the removal plan or

decommissioning plan or perform outstanding obligations under the

lease by drawing on the financial assurance maintained under

section 32447.

     (b) The lessee remains liable for removal and decommissioning

costs and responsible for accidents or damages that might result

from such failure.

     Sec. 32483. (1) The department may request the department of

attorney general to commence a civil action in Ingham county to

restrain or correct a violation of this part. The court may issue

an order requiring compliance with this part including restoration

of the area affected by the violation. A person who violates an

order of the court issued under this subsection is subject to a

civil fine of not more than $10,000.00 for each day of violation.

     (2) In a civil action commenced under subsection (1), the

circuit court may, in addition to any other relief granted, assess

a civil fine of not more than $10,000.00 per day for each violation

of this part and for each day that the violation continues.

     Sec. 32485. (1) A person who does any of the following is

guilty of a misdemeanor punishable by a fine of not more than

$10,000.00 per day for each day of violation:

     (a) Discovers abandoned property and, knowing that the

property is abandoned property, fails to suspend bottom-disturbing

activities or report the abandoned property as required by section

32431.

     (b) Knowingly makes a false statement, representation, or

certification in an application for a lease or permit or in a

report required by a lease or permit.

     (c) Knowingly renders inaccurate any monitoring device or

method required to be maintained by a lease or permit.

     (2) A person who commits a violation described in this section

a second or subsequent time is guilty of a felony punishable by a

fine of not more than $25,000.00 for each day of violation or by

imprisonment for not more than 2 years, or by both.

     Sec. 32504b. (1) The department may enter into a deed, lease,

or agreement with or issue a permit to an approved organization

pertaining to lands described in section 32502 for placement and

use of 1 or more of the following structures:

     (a) Structures to research offshore wind energy development.

     (b) Environmental monitoring buoys.

     (c) Mooring buoys at shipwreck sites.

     (2) All studies, information, and other data collected using

structures under subsection (1) shall be made available by the

approved organization to any person upon request.

     (3) Part 324 does not apply to activities or structures

authorized under this section. Activities and structures otherwise

regulated by part 324 are not subject to this part.

     (4) As used in this section, "approved organization" means a

lawful nonprofit entity as approved by the department, a local unit

of government, a federal or state agency, or an institution of

higher education in this state. Notwithstanding any other provision

of this part, for the purposes of this section, an approved

organization is not required to be a littoral or riparian

landowner.