DNR Letterhead

BILL ANALYSIS

BILL NUMBER:	Senate Bill 601 AS INTRODUCED
TOPIC:	Transfer of reversionary interest in previously conveyed state-owned land in Clearwater Township, Kalkaska County
SPONSOR:	Michelle McManus
CO-SPONSORS:	N/A
COMMITTEE:	Appropriations
Analysis Done:	June 21, 2007

POSITION

The Department of Natural Resources (DNR) does not own the property described in the bill, and is neither for nor against the proposal.

PROBLEM/BACKGROUND

In 1939, the Department was gifted a 20-acre parcel in the Township of Clearwater, Kalkaska County. On March 8, 1976, the Township entered into a 25-year lease agreement with the DNR. The parcel, located on Rapid River, was leased for recreational purposes. Act No. 138 of 2002 provided for the legislative transfer of the parcel for one dollar ($1.00). The transfer, dated April 26, 2002, was deeded exclusively for "public recreational boating and fishing access" purposes. This special use legislation included stipulation retaining a reverter interest in the State of Michigan that allowed the DNR to reenter and reposess the property upon termination of that use.

In 2005, the Township contacted the DNR to sell a portion of the land to an individual who had trespassed by building a deck on a portion of the land. Based on the stipulations of Act 138 of 2002, legislative action was required to authorize such a conveyance.

The DNR supports conveying the property to the Township. However, if the parcel is to be conveyed by the Township to the individual, the DNR recommends it be conveyed for fair market value. Otherwise, the result of the action is to convey land to a private individual without compensation when the land had been deeded for public purpose.

DESCRIPTION OF BILL

Senate Bill No. 601 would allow the conveyance of the right of reverter and the right of reentry by quitclaim deed to the Township of Clearwater, Kalkaska County. The rights requested are on a .24 acre of land for the consideration of $1.00. The bill authorizes the State Administrative Board to convey the interest in the land, however, the reverter rights are held by the DNR. The bill should be changed to authorize the DNR to convey the reversionary rights.

SUMMARY OF ARGUMENTS

Pro

The DNR supports resolving the trespass on Township property.

Con

The Township should purchase the parcel at fair market value in order to remove the reversionary interest. Private individuals should not be rewarded fro causing trespass onto public property that was conveyed to public recreational purposes. The DNR resolves trespasses on state land with private individuals by requiring them to vacate the land or pay the state fair market value for the land in trespass.

FISCAL/ECONOMIC IMPACT

Are there revenue or budgetary implications in the bill to the --

(a) Department

Budgetary:

The DNR will incur costs associated with processing the deed with the Office of the Attorney General, and spend valuable staff time.

Revenue:

None

Comments:

None

(b) State

Budgetary:

The Office of Attorney General will spend valuable staff time reviewing and preparing the deed.

Revenue:

The State would receive $1.00 to be deposited into the General Fund.

Comments:

None

(c) Local Government

Comments:

The Township would purchase the parcel for $1.00.

OTHER STATE DEPARTMENTS

The Department of Treasury would receive one dollar ($1.00).

ANY OTHER PERTINENT INFORMATION

This bill is also being introduced in the House as 4965 by Representative Howard Walker.

ADMINISTRATIVE RULES IMPACT

Rules can be promulgated to provide for administration of the act.

_______________________________

Rebecca A. Humphries

Director

_______________________________

Date

OLAF/PRD