Michigan Administrative Code
Department - Natural Resources
Forest Resource Division
Nonmetallic Minerals Leased on State Lands
Section R. 299.4024 - Offer at public lease auction; procedure

(1) Nonmetallic mineral lease rights may be offered at public lease auction.

(2) The director shall stipulate the terms and conditions under which the nonmetallic mineral lease rights may be offered for lease auction.

(3) Any qualified party may make a bid on any nonmetallic mineral rights offered for lease unless the bidding party has an outstanding balance owed to the department or is on the hold action list.

(4) For open oral lease auctions, the full amount of the bonus and the first years rental or the minimum royalty, as applicable, shall be paid to the department on the same day when the lease rights are bid. For sealed bid lease auctions, successful bidders shall pay the full amount of the bonus and the first years rental or the minimum royalty, as applicable, within 10 business days from the date the department notifies the successful bidder. Bidders who have an established credit rating with the department through prior leasing activity, or units of government, may pay the total amount due by cash, certified check, personal check, or company check. Bidders may also establish a credit rating with the department by filing 3 acceptable credit references with the department, 1 of which shall be from a bank. Bidders who do not have an established credit rating with the department shall pay the entire amount due by cash or certified check.

(5) Failure of the successful bidder to pay the total bonus and the first years rental or the minimum royalty, as applicable, by the close of open oral lease auctions or within 10 business days from the date the successful bidder is notified by the department for sealed bid lease auctions may result in the forfeiture of the lease rights to the lands involved and may result in the bidder being placed on the hold action list. Placement on the hold action list may bar the bidder from any further leases, assignments, easements, extensions, or other discretionary approvals requested of the department. Lands on which lease rights have been forfeited may be offered to the back-up bidder at the departments sole discretion.

(6) The department may reject any bid or stop the auction of any offered lease rights at any time in the departments sole discretion.