Bill Text: MI HB4512 | 2015-2016 | 98th Legislature | Introduced

---

Bill Title: Natural resources; gas and oil; requirement for siting, construction, and operation of pipelines; regulate. Amends title & secs. 1, 2, 2a, 2b, 3 & 4 of 1929 PA 16 (MCL 483.1 et seq.) & adds secs. 3a, 3b & 3c. TIE BAR WITH: HB 4511'15, HB 4513'15

Spectrum: Partisan Bill (Democrat 9-0)

Status: (Introduced - Dead) 2015-04-28 - Printed Bill Filed 04/24/2015 [HB4512 Detail]

Download: Michigan-2015-HB4512-Introduced.html

---

 

 

 

 

 

 

 

 

 

 

 

 

 

 

HOUSE BILL No. 4512

 

April 23, 2015, Introduced by Reps. Irwin, Singh, Geiss, Plawecki, Darany, Robinson, Dillon, Hoadley and Hovey-Wright and referred to the Committee on Natural Resources.

 

     A bill to amend 1929 PA 16, entitled

 

"An act to regulate the business of carrying or transporting,

buying, selling, or dealing in crude oil or petroleum or its

products, or certain substances consisting primarily of carbon

dioxide through pipe lines; to authorize the use of public highways

and the condemnation of private property; to regulate the purchase

and storage of crude oil or petroleum or certain substances

consisting primarily of carbon dioxide; to provide for the control

and regulation of all corporations, associations, and persons

engaged in such business, by the Michigan public service

commission; to define the powers and duties of the commission in

relation thereto; and to prescribe penalties,"

 

by amending the title and sections 1, 2, 2a, 2b, 3, and 4 (MCL

 

483.1, 483.2, 483.2a, 483.2b, 483.3, and 483.4), the title and

 

sections 1, 3, and 4 as amended by 2014 PA 85, section 2 as amended

 

by 2014 PA 84, section 2a as amended by 2014 PA 83, and section 2b

 

as added by 1997 PA 125, and by adding sections 3a, 3b, and 3c.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

TITLE

 

     An act to regulate the business of carrying or transporting,

buying, selling, or dealing in crude oil or petroleum or its

 

products, or certain substances consisting primarily of carbon

 

dioxide through pipe lines; pipelines; to authorize the use of

 

public highways and the condemnation of private property; to

 

regulate the purchase and storage of crude oil or petroleum or

 

certain substances consisting primarily of carbon dioxide; to

 

provide for the control and regulation of all corporations,

 

associations, and persons engaged in such business, by the Michigan

 

public service commission; to define the powers and duties of the

 

commission in relation thereto; to impose a fee; and to prescribe

 

penalties.

 

     Sec. 1. (1) As used in this act:

 

     (a) "Carbon dioxide substance" means a gaseous or liquid

 

substance, consisting primarily of carbon dioxide, that will be put

 

in storage or that has been or will be used to produce hydrocarbons

 

in a secondary or enhanced recovery operation.

 

     (b) "Commission" means the Michigan public service commission.

 

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

 

association, governmental entity, or other legal entity.

 

     (d) "Pipeline" means a pipeline used or to be used to

 

transport any of the following:

 

     (i) Crude oil or petroleum.

 

     (ii) Any of the products of crude oil or petroleum.

 

     (iii) Carbon dioxide substances.

 

     (2) A person exercising or claiming the right to carry Except

 

as authorized by this act, a person does not have the right to do

 

any of the following, in whole or in part:

 

     (a) Carry or transport crude oil or petroleum, or any of the

 

products thereof, or carbon dioxide substances, by or through pipe

 

line or lines, pipeline, for hire, or compensation, or otherwise,

 

or exercising or claiming the right to engage in the business of

 

piping, transporting, or storing crude oil or petroleum, or any of

 

the products thereof, or carbon dioxide substances, or engaging

 

engage in the business of buying, selling, or dealing in crude oil

 

or petroleum, or any of the products thereof, or carbon dioxide

 

substances within this state. , does not have or possess the right

 

to conduct or engage in the business or operations, in whole or in

 

part, or have or possess the right to locate,

 

     (b) Locate, maintain, or operate the necessary pipe lines,

 

pipelines, fixtures, and equipment belonging to, or used in

 

connection with that a business or operations under subdivision (a)

 

on, over, along, across, through, in or under any present or future

 

highway, or part thereof, or elsewhere, within this state. , or

 

have or possess

 

     (c) Exercise the right of eminent domain, or any other right,

 

concerning the business or operations , in whole or in part, except

 

as authorized by and subject to this act.under subdivision (a).

 

     (3) Subsection (2) does not apply to a right that exists on

 

March 27, 1929 and is valid, vested, and incapable of revocation by

 

any law of this state or of the United States.

 

     Sec. 2. (1) A person described in section 1 is granted the

 

right to may condemn property by eminent domain and the use of the

 

highways in this state to acquire necessary rights-of-way for any

 

of the following purposes:

 

     (a) To transport crude oil or petroleum, or any of the

 

products thereof, or carbon dioxide substances.

 

     (b) To locate, lay, construct, maintain, and operate pipelines

 

for the purposes of subdivision (a).

 

     (2) Condemnation proceedings under subsection (1) shall be

 

conducted as provided in the uniform condemnation procedures act,

 

1980 PA 87, MCL 213.51 to 213.75.

 

     Sec. 2a. (1) As used in this section and section 2b,

 

"pipeline" means a pipeline used or to be used to transport crude

 

oil or petroleum or carbon dioxide substances.

 

     (1) (2) A person who that is conducting survey work for a

 

proposed pipeline under this act shall notify all affected property

 

owners in writing before a survey crew enters the owner's property.

 

     (2) (3) Any offer to a landowner for an easement for the

 

purpose of locating, laying, constructing, maintaining, and

 

operating pipelines on agricultural property shall include all of

 

the following information:

 

     (a) The anticipated physical impact of pipeline construction

 

on the landowner's property.

 

     (b) Written assurance that any agricultural drainage tile that

 

is damaged or removed during the construction or repair of a

 

pipeline will be repaired or replaced to preconstruction working

 

condition. As used in this subdivision, "drainage tile" includes

 

any surface or subsurface system by which the movement of water is

 

redirected.

 

     (c) Written assurance that topsoil that is disturbed by

 

construction or repair of a pipeline is properly separated and

 

replaced. As used in this subdivision, "topsoil" means surface soil

 

that is presumed to be fertile as distinguished from subsoil.

 

     (d) The method by which property will be appraised.

 

     (e) For property used to produce crops prior to before

 

construction of a pipeline, an estimate of the value of the loss of

 

the productivity based on the historic yield of the site before

 

construction of a pipeline. The For the purposes of this

 

subdivision, the agricultural property owner shall provide the

 

pipeline company with historic crop yield values upon request.

 

     (f) That payment will be made for all damages incurred after

 

construction of the pipeline because of the pipeline owner's or

 

operator's entry upon the property to exercise easement rights,

 

except that the owner or operator of the pipeline may maintain a

 

clear right-of-way without further compensating the landowner.

 

     (g) That the landowner has rights under the uniform

 

condemnation procedures act, 1980 PA 87, MCL 213.51 to 213.75, and

 

a copy of that act.

 

     Sec. 2b. (1) Beginning on the effective date of the amendatory

 

act that added this subsection, the commission shall ensure that

 

the siting of a pipeline in this state is not likely to adversely

 

impact public health, safety, or welfare or the environment.

 

     (2) A person that intends to construct a pipeline in this

 

state shall submit a construction permit application to the

 

commission containing the information required by the commission.

 

     (3) The commission shall approve a construction permit under

 

this section if the commission determines all of the following:

 

     (a) The pipeline will be constructed in compliance with this

 

act and the rules promulgated under this act.

 

     (b) The operation of the pipeline in the location proposed in

 

the application will not pose a threat to public health, safety, or

 

welfare or to the environment.

 

     (4) A pipeline company shall make a good-faith effort to

 

minimize the physical impact and economic damage that result from

 

the construction and repair of a pipeline.

 

     Sec. 3. (1) Subject to subsection (2), the The commission is

 

granted the power to control, investigate, and regulate a person

 

doing any of the following:

 

     (a) Exercising or claiming the right to carry or transport

 

crude oil or petroleum, or any of the products thereof, or carbon

 

dioxide substances, by or through pipe line or lines, pipeline, for

 

hire, or compensation, or otherwise, within this state.

 

     (b) Exercising or claiming the right to engage in the business

 

of piping, transporting, or storing crude oil or petroleum, or any

 

of the products thereof, or carbon dioxide substances within this

 

state.

 

     (c) Engaging in the business of buying, selling, or dealing in

 

crude oil or petroleum, or any of the products thereof, or carbon

 

dioxide substances within this state.

 

     (2) Producers or refiners of crude oil or petroleum or carbon

 

dioxide substances or operators of private trunk or gathering lines

 

or other methods of conveying those products, are not subject to

 

this act if the nature and extent of their business is private and

 

no public interest is involved in the conduct of the business.

 

     (2) A person shall not operate a pipeline in this state unless

 

the person is in possession of an operating permit issued by the

 

commission.

 

     (3) To obtain an operating permit from the commission, a

 

person shall submit to the commission an application containing the

 

information required by the commission.

 

     (4) The commission shall approve an operating permit

 

application under this section if the commission determines all of

 

the following:

 

     (a) The pipeline will be operated in compliance with this act

 

and the rules promulgated under this act.

 

     (b) The pipeline will be operated in compliance with the

 

natural resources and environmental protection act, 1994 PA 451,

 

MCL 324.101 to 324.90106.

 

     (c) The operation of the pipeline will not pose a threat to

 

public health, safety, or welfare or to the environment.

 

     Sec. 3a. (1) A person that owns or operates a pipeline in this

 

state shall post at each parcel of property in which the pipeline

 

is located contact information for notifying the department of

 

environmental quality of a release from the pipeline.

 

     (2) As used in this section, "release" means that term as it

 

is defined in section 20101 of the natural resources and

 

environmental protection act, 1994 PA 451, MCL 324.20101.

 

     Sec. 3b. A person that owns or operates a pipeline in this

 

state shall do both of the following:

 

     (a) Provide to the commission and the department of

 

environmental quality copies of any inspection reports required to

 

be filed with the United States Department of Transportation

 

Pipeline and Hazardous Materials Safety Administration.

 

     (b) If the federal government issues to the person a warning

 

or citation related to the operation of the pipeline, immediately

 

notify the commission and the department of environmental quality

 

and provide a copy of the warning or citation to the commission and

 

the department of environmental quality.

 

     Sec. 3c. (1) The owner or operator of a pipeline located in

 

whole or in part in this state is subject to an annual pipeline

 

impact fee in an amount provided by rule for each mile or portion

 

of a mile of pipeline. The commission shall promulgate rules to

 

implement this subsection and shall annually assess the owner or

 

operator for the pipeline impact fee. The owner or operator of a

 

pipeline shall pay the pipeline impact fee in the manner prescribed

 

by the commission.

 

     (2) Upon receipt of a pipeline impact fee under this section,

 

the commission shall distribute the pipeline impact fee as follows:

 

     (a) Fifty percent of each pipeline impact fee that is

 

collected on a pipeline shall be distributed to the county within

 

which the pipeline is located. If the pipeline is located in more

 

than 1 county, 50% of the pipeline impact fee shall be distributed

 

to those counties, prorated based on the number of miles of the

 

pipeline located in each county. A county shall use revenue

 

distributed under this subdivision only to perform its duties under

 

both of the following:

 

     (i) The emergency management act, 1976 PA 390, MCL 30.401 to

 

30.421.

 

     (ii) The fire prevention code, 1941 PA 207, MCL 29.1 to 29.33.

 

     (b) Fifty percent of each pipeline impact fee collected shall

 

be forwarded to the state treasurer to be deposited into the

 

general fund, where it is available for use in implementing the

 

state's responsibilities under both of the following:

 

     (i) The emergency management act, 1976 PA 390, MCL 30.401 to

 

30.421.

 

     (ii) The fire prevention code, 1941 PA 207, MCL 29.1 to 29.33.

 

     Sec. 4. A person claiming or exercising the right to carry or

 

transport crude oil or petroleum, or any of the products thereof,

 

or carbon dioxide substances, by pipe line or pipe lines, pipeline,

 

for hire, or compensation, or otherwise, in this state, as owner,

 

lessee, or licensee, or by virtue of any other right or claim, or

 

engaging in the business of purchasing or storing crude oil or

 

petroleum, or products thereof, or carbon dioxide substances is a

 

common purchaser thereof. The person shall purchase all the crude

 

oil or petroleum, or products thereof, or carbon dioxide substances

 

in the vicinity of, or which may be reasonably reached by its pipe

 

lines, pipelines, or gathering branches, without discrimination in

 

favor of any producer or other person as against another, and shall

 

fully perform all the duties of a common purchaser. However, if the

 

person is unable to perform the duties of a common purchaser or is

 

legally excused from purchasing, transporting, or storing all of

 

the crude oil or petroleum, or products thereof, or carbon dioxide

 

substances produced in the vicinity, then it shall purchase,

 

transport, or store crude oil or petroleum, or products thereof, or

 

carbon dioxide substances from each producer or other person

 

ratably, in proportion to the average daily production. A common

 

purchaser shall not discriminate in price or amount for like grades

 

of crude oil or petroleum, or products thereof, or carbon dioxide

 

substances or facilities as between producers or other persons. If

 

a common purchaser is also a producer, it shall not discriminate in

 

favor of its own production, or storage, or any production or

 

storage in which it is interested directly or indirectly in whole

 

or in part, and shall treat its own production and storage like

 

that of any other producer or other person.

 

     Enacting section 1. This amendatory act does not take effect

 

unless all of the following bills of the 98th Legislature are

 

enacted into law:

 

     (a) Senate Bill No.____ or House Bill No. 4511 (request no.

 

01285'15).

 

     (b) Senate Bill No.____ or House Bill No. 4513 (request no.

 

01330'15).