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

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

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

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

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

(5)  Each lease shall require that the lessee executea bond conditioned upon the substantial performance of the activities describedin the lease.  The amount of the bond so executed shall be appropriate to thesize, scale, and risk of the activity for which the lease is granted, and shallbe sufficient to protect the public interest in the removal of all structuresand, in the case of mariculture activities, all marine plants or animalscultivated, as well as to restore or remediate the water and state submergedlands to the satisfaction of the department in and upon the leased state marinewaters, if the lease is forfeited for nonperformance or the board requires theremoval or eradication of marine plants or animals pursuant to paragraph (11);

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

(7)  Each lease for mariculture shall specify that themarine plants or animals described in the lease to be cultivated and containedwithin the leased area are the exclusive harvest of the lessee; provided thatany marine plant or animal which escapes from the leased area and is notclearly identifiable as the property of the lessee, shall become commonproperty and may be taken or caught by any person, subject to the fishing lawsof the State, without violating the rights of the lessee;

(8)  Each lease for mariculture shall specify that:

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

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

(C)  If action must be taken by the departmentto eradicate escaped marine plants or animals, all costs of eradication shallbe borne by the lessee; provided that the costs borne by the lessee shall be nogreater than the amount of the bond required under paragraph (5);

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

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

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

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

(C)  All limitations upon the use by the publicof an ocean area under lease shall be clearly posted by the lessee pursuant tospecifications established by the board;

(11)  Leases shall specify that if the chairpersonfinds or has reasonable cause to believe that an activity conducted by thelessee in or upon the area described in the lease is causing an immediatedanger to human or marine life or the environment of the state marine waters,the chairperson may direct a temporary or permanent suspension of commercial orresearch activities in the affected area.  The chairperson shall then notifythe board.  The board shall immediately order the lessee or lessees affected bysuch notice to show cause why their activities should not be terminated, or whyany structures, cultivated marine plants or animals, or equipment should not beremoved from state marine waters.  The board shall proceed to hold a publichearing and issue its order with respect to such hearing within a reasonableperiod.  In its order following such hearing, the board may direct a temporaryor permanent suspension of commercial or research activities in the affectedarea, removal of equipment or cultivated marine plants or animals, or suchother measures as shall be deemed necessary for protection of human or marinelife and environment of state marine waters, including forfeiture to anddestruction by the State of any marine plant or animal species;

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

(13)  Each lease shall specify that the lease may berevoked by the board for violation of any lease provision.  The board shalldeliver a written notice of the breach or default of any lease agreement byregistered or certified mail to the party in default and to each holder ofrecord having any security interest in the state marine waters covered by orsubject to the lease, making demand upon the party to cure or remedy the breachor default within sixty days from the date of receipt of the notice.  Uponfailure of the party to cure or remedy the breach or default within sixty daysfrom the date of receipt of the notice, or within such additional period theboard may allow for good cause, the board may revoke the lease; and

(14)  Each lease shall contain a statement describingthe degree of exclusivity or access to the site by the public that will bebased on an analysis of the user listing and descriptions provided in theapplication, and comments made by the public and in consideration of, but notlimited to the following:  compatibility of the operation with existing uses,perceived liability to the lessee and the public, and perceived risk to thelessee's investment.

(b)  The chairperson or chairperson'sauthorized agents shall have the authority to enter and inspect any and allareas leased by the board for the purpose of determining compliance with theterms and provisions of any such lease. [L 1986, c 91, pt of §1; am L 1999, c176, §§7, 11; am L 2002, c 203, §1]