§ 113-202. New and renewal leases for shellfish cultivation; termination of leases issued prior to January 1, 1966. - North Carolina Statutes

§ 113‑202.  New andrenewal leases for shellfish cultivation; termination of leases issued prior toJanuary 1, 1966.

(a)        To increase the useof suitable areas underlying coastal fishing waters for the production ofshellfish, the Secretary may grant shellfish cultivation leases to persons whoreside in North Carolina under the terms of this section when the Secretarydetermines, in accordance with his duty to conserve the marine and estuarineresources of the State, that the public interest will benefit from issuance ofthe lease. Suitable areas for the production of shellfish shall meet thefollowing minimum standards:

(1)        The area leased mustbe suitable for the cultivation and harvesting of shellfish in commercialquantities.

(2)        The area leased mustnot contain a natural shellfish bed.

(3)        Cultivation ofshellfish in the leased area will be compatible with lawful utilization by thepublic of other marine and estuarine resources. Other public uses which may beconsidered include, but are not limited to, navigation, fishing and recreation.

(4)        Cultivation ofshellfish in the leased area will not impinge upon the rights of riparianowners.

(5)        The area leased mustnot include an area designated for inclusion in the Department's ShellfishManagement Program.

(6)        The area leased mustnot include an area which the State Health Director has recommended be closedto shellfish harvest by reason of pollution.

(b)        The Secretary maydelete any part of an area proposed for lease or may condition a lease toprotect the public interest with respect to the factors enumerated insubsection (a) of this section. The Secretary may not grant a new lease in anarea heavily used for recreational purposes.

(c)        No person,including a corporate entity, or single family unit may acquire and hold bylease, lease renewal, or purchase more than 50 acres of public bottoms undershellfish cultivation leases. For purposes of this subsection, the number ofacres of leases held by a person includes acres held by a corporation in whichthe person holds an interest. The Marine Fisheries Commission may adopt rulesto require the submission of information necessary to ensure compliance withthis subsection.

(d)        Any person desiringto apply for a lease must make written application to the Secretary on formsprepared by the Department containing such information as deemed necessary todetermine the desirability of granting or not granting the lease requested.Except in the case of renewal leases, the application must be accompanied by amap or diagram made at the expense of the applicant, showing the area proposedto be leased.

(d1)      The map or diagrammust conform to standards prescribed by the Secretary concerning accuracy ofmap or diagram and the amount of detail that must be shown. If on the basis ofthe application information and map or diagram the Secretary deems thatgranting the lease would benefit the shellfish culture of North Carolina, theSecretary, in the case of initial lease applications, must order aninvestigation of the bottom proposed to be leased. The investigation is to bemade by the Secretary or his authorized agent to determine whether the areaproposed to be leased is consistent with the standards in subsection (a) ofthis section and any other applicable standards under this Article and therules of the Marine Fisheries Commission. In the event the Secretary finds theapplication inconsistent with the applicable standards, the Secretary shalldeny the application or propose that a conditional lease be issued that isconsistent with the applicable standards. In the event the Secretary authorizesamendment of the application, the applicant must furnish a new map or diagrammeeting requisite standards showing the area proposed to be leased under theamended application. At the time of making application for an initial lease,the applicant must pay a filing fee of two hundred dollars ($200.00).

(e)        The area of bottomapplied for in the case of an initial lease or amended initial lease must be ascompact as possible, taking into consideration the shape of the body of water,the consistency of the bottom, and the desirability of separating theboundaries of a leasehold by a sufficient distance from any known naturalshellfish bed to prevent the likelihood of disputes arising between the leaseholderand members of the public taking shellfish from the natural bed.

(f)         Within areasonable time after receipt of an application that complies with subsection(d), the Secretary shall notify the applicant of the intended action on thelease application. If the intended action is approval of the application assubmitted or approval with a modification to which the applicant agrees, theSecretary shall conduct a public hearing in the county where the proposedleasehold lies. The Secretary must publish at least two notices of theintention to lease in a newspaper of general circulation in the county in whichthe proposed leasehold lies. The first publication must precede the publichearing by more than 20 days; the second publication must follow the first byseven to 11 days. The notice of intention to lease must contain a sufficientdescription of the area of the proposed leasehold that its boundaries may beestablished with reasonable ease and certainty and must also contain the date,hour and place of the hearing.

(g)        After considerationof the public comment received and any additional investigations the Secretaryorders to evaluate the comments, the Secretary shall notify the applicant inperson or by certified or registered mail of the decision on the leaseapplication. The Secretary shall also notify persons who submitted comments atthe public hearing and requested notice of the lease decision. An applicant whois dissatisfied with the Secretary's decision or another person aggrieved bythe decision may commence a contested case by filing a petition under G.S. 150B‑23within 20 days after receiving notice of the Secretary's decision. In the eventthe Secretary's decision is a modification to which the applicant agrees, thelease applicant must furnish an amended map or diagram before the lease can beissued by the Secretary. The Secretary shall make the final agency decision ina contested case.

(h)        Repealed by SessionLaws 1993, c. 466, s. 1.

(i)         After a leaseapplication is approved by the Secretary, the applicant shall submit to theSecretary a survey of the area approved for leasing and define the bounds ofthe area approved for leasing with markers in accordance with the rules of theCommission. The survey shall conform to standards prescribed by the Secretaryconcerning accuracy of survey and the amount of detail to be shown. When anacceptable survey is submitted, the boundaries are marked and all fees andrents due in advance are paid, the Secretary shall execute the lease on formsapproved by the Attorney General. The Secretary is authorized, with theapproval of the lessee, to amend an existing lease by reducing the area underlease or by combining contiguous leases without increasing the total arealeased.

(j)         Initial leasesbegin upon the issuance of the lease by the Secretary and expire at noon on thefirst day of July following the fifth anniversary of the granting of the lease.Renewal leases are issued for a period of five years from the time ofexpiration of the previous lease. At the time of making application for renewalof a lease, the applicant must pay a filing fee of one hundred dollars($100.00). The rental for initial leases is one dollar ($1.00) per acre for allleases entered into before July 1, 1965, and for all other leases until noon onthe first day of July following the first anniversary of the lease. Thereafter,for initial leases entered into after July 1, 1965, and from the beginning forrenewals of leases entered into after that date, the rental is ten dollars($10.00) per acre per year. Rental must be paid annually in advance prior tothe first day of April each year. Upon initial granting of a lease, the prorata amount for the portion of the year left until the first day of July mustbe paid in advance at the rate of one dollar ($1.00) per acre per year; then,on or before the first day of April next, the lessee must pay the rental forthe next full year.

(k)        Except asrestricted by this Subchapter, leaseholds granted under this section are to betreated as if they were real property and are subject to all laws relating totaxation, sale, devise, inheritance, gift, seizure and sale under execution orother legal process, and the like. Leases properly acknowledged and probatedare eligible for recordation in the same manner as instruments conveying anestate in real property. Within 30 days after transfer of beneficial ownershipof all or any portion of or interest in a leasehold to another, the new ownermust notify the Secretary of such fact. Such transfer is not valid until noticeis furnished the Secretary. In the event such transferee is a nonresident, theSecretary must initiate proceedings to terminate the lease.

(l)         Upon receipt ofnotice by the Secretary of any of the following occurrences, he must commenceaction to terminate the leasehold:

(1)        Failure to pay theannual rent in advance.

(2)        Failure to fileinformation required by the Secretary upon annual remittance of rental orfiling false information on the form required to accompany the annualremittance of rental.

(3)        Failure by new ownerto report a transfer of beneficial ownership of all or any portion of orinterest in the leasehold.

(4)        Failure to mark theboundaries in the leasehold and to keep them marked as required in the rules ofthe Marine Fisheries Commission.

(5)        Failure to utilizethe leasehold on a continuing basis for the commercial production of shellfish.

(6)        Transfer of all orpart of the beneficial ownership of a leasehold to a nonresident.

(7)        Substantial breachof compliance with the provisions of this Article or of rules of the MarineFisheries Commission governing use of the leasehold.

(8)        Failure to complywith the training requirements established by the Marine Fisheries Commissionpursuant to G.S. 113‑201(c).

(l1)       The MarineFisheries Commission is authorized to make rules defining commercial productionof shellfish, based upon the productive potential of particular areas climaticor biological conditions at particular areas or particular times, availabilityof seed shellfish, availability for purchase by lessees of shells or othermaterial to which oyster spat may attach, and the like. Commercial productionmay be defined in terms of planting effort made as well as in terms ofquantities of shellfish harvested. Provided, however, that if a lessee has madea diligent effort to effectively and efficiently manage his lease according toaccepted standards and practices in such management, and because of reasonsbeyond his control, such as acts of God, such lessee has not and cannot meetthe requirements set out by the Marine Fisheries Commission under theprovisions of this subsection, his leasehold shall not be terminated undersubdivision (5) of subsection (l) of this section.

(m)       In the event theleaseholder takes steps within 30 days to remedy the situation upon which thenotice of intention to terminate was based and the Secretary is satisfied thatcontinuation of the lease is in the best interests of the shellfish culture ofthe State, the Secretary may discontinue termination procedures. Where there isno discontinuance of termination procedures, the leaseholder may initiate acontested case by filing a petition under G.S. 150B‑23 within 30 days ofreceipt of notice of intention to terminate. The Secretary shall make the finalagency decision of all lease terminations. Where the leaseholder does notinitiate a contested case, or the Secretary's final decision upholdstermination, the Secretary must send a final letter of termination to theleaseholder. The final letter of termination may not be mailed sooner than 30days after receipt by the leaseholder of the Secretary's notice of intention toterminate, or of the Secretary's final agency decision, as appropriate. Thelease is terminated effective at midnight on the day the final notice oftermination is served on the leaseholder. The final notice of termination maynot be issued pending hearing of a contested case initiated by the leaseholder.

Service of any notice requiredin this subsection may be accomplished by certified mail, return receiptrequested; personal service by any law‑enforcement officer; or upon thefailure of these two methods, publication. Service by publication shall beaccomplished by publishing such notices in a newspaper of general circulationwithin the county where the lease is located for at least once a week for threesuccessive weeks. The format for notice by publication shall be approved by theAttorney General.

(n)        Upon finaltermination of any leasehold, the bottom in question is thrown open to thepublic for use in accordance with laws and rules governing use of publicgrounds generally. Within 30 days of final termination of the leasehold, theformer leaseholder shall remove all abandoned markers denominating the area ofthe leasehold as a private bottom. The State may, after 10 days' notice to theowner of the abandoned markers thereof, remove the abandoned structure and havethe area cleaned up. The cost of such removal and cleanup shall be payable bythe owner of the abandoned markers and the State may bring suit to recover thecosts thereof.

(o)        Every year betweenJanuary 1 and February 15 the Secretary must mail to all leaseholders a noticeof the annual rental due and include forms designed by him for determining theamount of shellfish or shells planted on the leasehold during the precedingcalendar year, and the amount of harvest gathered. Such forms may contain otherpertinent questions relating to the utilization of the leasehold in the bestinterests of the shellfish culture of the State, and must be executed andreturned by the leaseholder with the payment of his rental. Any leaseholder orhis agent executing such forms for him who knowingly makes a false statement onsuch forms is guilty of a Class 1 misdemeanor.

(p)        All leases andrenewal leases granted after the effective date of this Article are madesubject to this Article and to reasonable amendment of governing statutes,rules of the Marine Fisheries Commission, and requirements imposed by theSecretary or his agents in regulating the use of the leasehold or in processingapplications of rentals. This includes such statutory increase in rentals asmay be necessitated by changing conditions and refusal to renew lease afterexpiration, in the discretion of the Secretary. No increase in rentals, however,may be given retroactive effect.

The General Assembly declaresit to be contrary to public policy to the oyster and clam bottoms which wereleased prior to January 1, 1966, and which are not being used to produceoysters and clams in commercial quantities to continue to be held by privateindividuals, thus depriving the public of a resource which belongs to all thepeople of the State. Therefore, when the Secretary determines, after due noticeto the lessee, and after opportunity for the lessee to be heard, that oystersor clams are not being produced in commercial quantities, due to the lessee'sfailure to make diligent effort to produce oysters and clams in commercialquantities, the Secretary may decline to renew, at the end of the current term,any oyster or clam bottom lease which was executed prior to January 1, 1966.The lessee may appeal the denial of the Secretary to renew the lease byinitiating a contested case pursuant to G.S. 150B‑23. In such contestedcases, the burden of proof, by the greater weight of the evidence, shall be onthe lessee.

(q)        Repealed by SessionLaws 1983, c. 621, s. 16.  (1893, c. 287, s. 1; Rev., s. 2371; 1909, c. 871, ss.1‑9; 1919, c. 333, s. 6; C.S., ss. 1902‑1911; Ex. Sess. 1921, c.46, s. 1; 1933, c. 346; 1953, cc. 842, 1139; 1963, c. 1260, ss. 1‑3;1965, c. 957, s. 2; 1967, c. 24, s. 16; c. 88; c. 876, s. 1; 1971, c. 447;1973, c. 476, s. 128; c. 1262, ss. 28, 86; 1983, c. 601, ss. 1‑3; c. 621,ss. 4‑16; 1985, c. 275, ss. 1‑3; 1987, c. 641, s. 16; c. 773, s.11; c. 827, s. 98; 1989, c. 423, s. 2; c. 727, s. 99; 1991 (Reg. Sess., 1992),c. 788, s. 2; 1993, c. 466, s. 1; c. 539, s. 840; 1994, Ex. Sess., c. 24, s.14(c); 2004‑150, ss. 2, 3, 4; 2009‑433, ss. 4, 5.)