§190D-23 Lease provisions. (a) Leases issued by the board shall be drawn up in accordance with the following requirements, in addition to any other requirements determined by the board:

(1) Each lease shall specify the term of the lease and the nature of the exclusive use of the area being granted;

(2) Each lease shall specify the marine activities or other resources which may be cultivated, produced, harvested, removed, or used pursuant to the lease;

(3) Each lease shall specify an annual rent set by the board for the leased area. The basic rental charged in a commercial lease may be supplemented by royalty payments. No royalty shall be charged in a noncommercial lease;

(4) Leases may specify that failure of the lessee to perform substantially the activities for which the lease was granted shall constitute grounds for revocation of the lease and forfeiture to the State of all structures and, in the case of mariculture activities, all plants or animals cultivated, in and upon the leased area;

(5) Each lease shall require that the lessee execute a bond conditioned upon the substantial performance of the activities described in the lease. The amount of the bond so executed shall be appropriate to the size, scale, and risk of the activity for which the lease is granted, and shall be sufficient to protect the public interest in the removal of all structures and, in the case of mariculture activities, all marine plants or animals cultivated, as well as to restore or remediate the water and state submerged lands to the satisfaction of the department in and upon the leased state marine waters, if the lease is forfeited for nonperformance or the board requires the removal or eradication of marine plants or animals pursuant to paragraph (11);

(6) Each lease shall specify that if a lessee abandons a leased area, the board may order the removal or sale at public auction of all improvements, assets, marine plants or animals, and equipment remaining in and upon the leased area, and shall transmit to the state general fund the entire amount received from any public auction and any proceeds received from the lessee's performance bond. Alternatively, the board may permit the use of the improvements, assets, marine plants or animals, and equipment for purposes which benefit the general public;

(7) Each lease for mariculture shall specify that the marine plants or animals described in the lease to be cultivated and contained within the leased area are the exclusive harvest of the lessee; provided that any marine plant or animal which escapes from the leased area and is not clearly identifiable as the property of the lessee, shall become common property and may be taken or caught by any person, subject to the fishing laws of the State, without violating the rights of the lessee;

(8) Each lease for mariculture shall specify that:

(A) The lessee is responsible for the removal of any cultivated marine plants or animals found outside the leased area but within state marine waters if removal is required to protect the environment or public health and safety, and removal is demanded by the board;

(B) The lessee is solely responsible for all costs of removal of such marine plants or animals; and

(C) If action must be taken by the department to eradicate escaped marine plants or animals, all costs of eradication shall be borne by the lessee; provided that the costs borne by the lessee shall be no greater than the amount of the bond required under paragraph (5);

(9) Leases may specify that the lessee shall construct and maintain gates, openings, or lanes at reasonable distances from one another throughout a leased area which includes surface waters and in which any type of enclosure is an obstacle to free navigation, unless public transit in or through the enclosed waters will cause undue interference with the operation being conducted by the lessee within the leased area;

(10) Leases may require, where necessary, that:

(A) All lessees mark off the areas under lease by appropriate ranges, monuments, stakes, buoys, fences, or any other devices placed so that they do not interfere unnecessarily with navigation and other traditional uses of the water surface;

(B) All lessees identify the area under lease and the names of the lessees on signs appropriately placed pursuant to specifications established by the board; and

(C) All limitations upon the use by the public of an ocean area under lease shall be clearly posted by the lessee pursuant to specifications established by the board;

(11) Leases shall specify that if the chairperson finds or has reasonable cause to believe that an activity conducted by the lessee in or upon the area described in the lease is causing an immediate danger to human or marine life or the environment of the state marine waters, the chairperson may direct a temporary or permanent suspension of commercial or research activities in the affected area. The chairperson shall then notify the board. The board shall immediately order the lessee or lessees affected by such notice to show cause why their activities should not be terminated, or why any structures, cultivated marine plants or animals, or equipment should not be removed from state marine waters. The board shall proceed to hold a public hearing and issue its order with respect to such hearing within a reasonable period. In its order following such hearing, the board may direct a temporary or permanent suspension of commercial or research activities in the affected area, removal of equipment or cultivated marine plants or animals, or such other measures as shall be deemed necessary for protection of human or marine life and environment of state marine waters, including forfeiture to and destruction by the State of any marine plant or animal species;

(12) Each lease shall specify that the lease may be assigned in whole or in part, or amended, only if the board determines that such assignment or amendment is in the public interest and meets the provisions of this chapter and consents to the assignments. The board may consent to the mortgage of a lease pursuant to section 171-22;

(13) Each lease shall specify that the lease may be revoked by the board for violation of any lease provision. The board shall deliver a written notice of the breach or default of any lease agreement by registered or certified mail to the party in default and to each holder of record having any security interest in the state marine waters covered by or subject to the lease, making demand upon the party to cure or remedy the breach or default within sixty days from the date of receipt of the notice. Upon failure of the party to cure or remedy the breach or default within sixty days from the date of receipt of the notice, or within such additional period the board may allow for good cause, the board may revoke the lease; and

(14) Each lease shall contain a statement describing the degree of exclusivity or access to the site by the public that will be based on an analysis of the user listing and descriptions provided in the application, and comments made by the public and in consideration of, but not limited to the following: compatibility of the operation with existing uses, perceived liability to the lessee and the public, and perceived risk to the lessee's investment.

(b) The chairperson or chairperson's authorized agents shall have the authority to enter and inspect any and all areas leased by the board for the purpose of determining compliance with the terms and provisions of any such lease. [L 1986, c 91, pt of §1; am L 1999, c 176, §§7, 11; am L 2002, c 203, §1]