Mich. Admin. Code R. 299.4054 – Department approval of lease; lessee performance bond; signing and return of lease copies; effect of federal and state laws and rules on lease; required information.

(1) Department approval is required before any lease is granted. The department reserves the right to deny all lease requests and shall state the reasons for denial.
(2) Any lease issued must include all state-owned surface descriptions within the development plan as approved by the department.
(3) Before a lease is executed, the proposed lessee shall file a performance bond acceptable to the lessor. The department shall specify the amount of the performance bond, the maximum acreage covered, and when and how the bond may be drawn upon.
(4) The department shall provide 1 copy of each lease instrument to the proposed lessee for signature. Unless otherwise agreed to in writing by the lessor, the proposed lessee shall return the lease instrument(s), properly executed, with a proper performance bond and payment, within 30 days from the date the lease instrument was sent by the department.
(5) If the proposed lessee is unable to return the lease forms, payment, and performance bond within the time specified, the lessor may, upon request of the proposed lessee, authorize additional time if the lessor determines that the delay is not the fault of the proposed lessee. Failure of the proposed lessee to comply within time limits authorized must result in forfeiture of the entire bonus payment.
(6) The department shall return the original of the fully executed lease to the lessee and retain a copy.
(7) Operations on any state-owned land must not begin until a fully executed lease has been received by the lessee.
(8) All leases are subject to all applicable federal and state laws and administrative rules. Administrative rules promulgated after the approval of a lease shall not operate to affect the primary term of the lease, the rental rate, or the acreage included in the lease, unless agreed to by both parties.
(9) The department may require a lease applicant to submit the following information, as applicable:
1. (a) If an individual, proof of attainment of legal age.
2. (b) If a co-partnership, a copy of the “Certificate of Co-partnership” or “Certificate of Persons Conducting Business Under Assumed Name” approved by the county clerk in the county where the leased lands are located.
3. (c) If a corporation or other legal entity, documentation that demonstrates a corporation's or legal entity’s qualifications to do business in the state of Michigan.

History: 1990 AACS; 2018 AACS.