SENATE BILL NO. 381

June 19, 2019, Introduced by Senator MCBROOM and referred to the Committee on Appropriations.

A bill to authorize the department of technology, management, and budget to convey state-owned property in Baraga County; to prescribe conditions for the conveyance; to provide for powers and duties of state departments, agencies, and officers in regard to the property; and to provide for disposition of revenue derived from the conveyance.

the people of the state of michigan enact:

Sec. 1. As used in this act:

(a) "Fair market value" means the highest estimated price that the property will bring if offered for sale on the open market, allowing a reasonable time to find a purchaser who would buy with knowledge of the property's possible uses.

(b) "Net revenue" means the proceeds from the sale of the property less reimbursement for any costs to the department of technology, management, and budget associated with the sale, including, but not limited to, administrative costs, including employee wages, salaries, and benefits; costs of reports and studies and other materials necessary to the preparation of sale; environmental remediation; legal fees; and any litigation costs related to the conveyance.

Sec. 2. (1) The department of technology, management, and budget, on behalf of this state, may convey by quitclaim deed all or portions of real property owned by this state that is under the jurisdiction of the department of military and veterans affairs.

(2) The real property that may be conveyed under this act is described as follows:

Property located in the Village of Baraga, Baraga County, Michigan, described as the North 700 feet of Government Lot 3, Section 33, T51N, R33W, lying between the D.S.S. & A. Railroad and US 41-A.

(3) The description of the property in subsection (2) is approximate and, for purposes of a conveyance under this act, may be adjusted as the department of technology, management, and budget or the department of attorney general considers necessary because of a survey or another legal description.

(4) The department of technology, management, and budget shall not convey property under this act unless the conveyance and the terms of the conveyance have been approved by the state administrative board.

Sec. 3. (1) The department of technology, management, and budget may take the necessary steps to convey real property described in section 2 using either of the following means:

(a) A publicly disclosed, competitive method of sale, selected to realize the fair market value to this state, as determined by the department of technology, management, and budget.

(b) Selling the property for less than fair market value to the highest bidder if a publicly disclosed, competitive method of sale as provided in subdivision (a) has been unsuccessful in bringing an offer to purchase the property for fair market value after being held open for 6 months or longer.

(2) If real property is to be sold for fair market value under this section, the fair market value must be determined by an independent fee appraisal prepared for the department of technology, management, and budget, or by an appraiser who is an employee or contractor of this state.

Sec. 4. (1) A deed authorized by this act must be approved as to legal form by the department of attorney general.

(2) Real property conveyed under this act includes all surplus, salvage, and personal property or equipment remaining on the property on the date of the conveyance.

(3) This state shall not reserve oil, gas, or mineral rights to property conveyed under this act. However, the conveyance authorized under this act must provide that, if the grantee or any successor develops any oil, gas, or minerals found on, within, or under the conveyed property, the grantee or any successor must pay this state 1/2 of the gross revenue generated from the development of the oil, gas, or minerals. A payment under this subsection must be deposited in the general fund.

(4) A conveyance under this act must reserve to this state all aboriginal antiquities, including mounds, earthworks, forts, burial and village sites, mines, or other relics lying on, within, or under the property, with power to this state and all others acting under its authority to enter the property for any purpose related to exploring, excavating, and taking away the aboriginal antiquities.

(5) If property conveyed under this act was used by this state as a historical monument, memorial, burial ground, park, or protected wildlife habitat area, the grantee or any successor shall maintain and protect the property for that purpose in perpetuity in accordance with applicable law.

(6) If property conveyed under this act is used in a manner that violates any of the restrictions imposed under subsection (3), (4), or (5), this state may reenter and take the property, terminating the grantee's or any successor's estate in the property. An action to regain possession of the property may be brought and maintained by the attorney general on behalf of this state.

(7) If this state reenters and repossesses property under subsection (6), this state is not liable to reimburse any person for any improvements made on the property or to compensate any person for any part of an unfulfilled contract or license issued to provide goods or services on or for the property.

Sec. 5. (1) The department of military and veterans affairs is responsible for all expenses of maintaining the property to be conveyed under this act until the time of conveyance.

(2) The department of technology, management, and budget may require a grantee of property conveyed under this act to record the instrument of conveyance with the appropriate register of deeds and provide the department of technology, management, and budget with a recorded copy of the recorded instrument.

(3) The department of technology, management, and budget shall deposit the net revenue received from the sale of property under this section in the state treasury. The state treasurer shall credit the money deposited to the general fund.