Florida Senate - 2012                             CS for SB 1158
       By the Committee on Communications, Energy, and Public
       Utilities; and Senator Evers
       579-03306-12                                          20121158c1
    1                        A bill to be entitled                      
    2         An act relating to the development of oil and gas
    3         resources; authorizing a land management agency to
    4         enter into a public-private partnership with a
    5         business entity to develop oil and gas resources upon
    6         onshore state lands if the development yields near
    7         term revenues for the state; providing that the
    8         financial, technical, and operational risk for the
    9         exploration, development, and production of oil and
   10         gas resources is the responsibility of the private
   11         business entity; requiring that a business entity
   12         seeking a public-private partnership contract submit a
   13         business proposal to the agency for review; specifying
   14         the information to be included in the business
   15         proposal; providing criteria for the agency to use in
   16         selecting the exploration proposal by a business
   17         entity; requiring that the geophysical data and the
   18         subsequent interpretation be made available to the
   19         agency or its representative for review but remain in
   20         the possession of the business entity; providing
   21         criteria for the public-private partnership contract;
   22         requiring a proposed public-private partnership
   23         contract to be approved by the Governor and Cabinet
   24         sitting as the Board of Trustees of the Internal
   25         Improvement Trust Fund; providing an effective date.
   27         WHEREAS, the exploration and development of oil and gas
   28  deposits under onshore lands owned by a board, department, or
   29  agency of the state may provide the opportunity to produce
   30  higher, near-term revenues to the state, and
   31         WHEREAS, the monetary reward for discovering new reserves
   32  of oil and gas deposits may be significant, and
   33         WHEREAS, the exploration for oil and gas deposits via
   34  modern three-dimensional, geophysical seismic methods and
   35  production, with its technological improvements, including
   36  directional and horizontal drilling, although costly, is more
   37  efficient and yields better results than older methods of
   38  exploration and production employed during the past 50 years,
   41  Be It Enacted by the Legislature of the State of Florida:
   43         Section 1. (1) DUTIES; AUTHORITY.—Notwithstanding the
   44  provisions in chapter 253, Florida Statutes, if a land
   45  management agency determines that there is an opportunity to
   46  develop oil and gas resources under onshore lands owned by a
   47  board, department, or agency of this state to yield greater,
   48  near-term revenue returns for the state, the land management
   49  agency may participate with a business entity authorized to
   50  conduct business in the state in a public-private partnership
   51  contract.
   52         (2) PRIVATE-PARTNER RESPONSIBILITIES.—The financial,
   53  technical, and operational risk for the exploration,
   54  development, and production of oil and gas resources is the
   55  responsibility of the private business entity.
   56         (3) PROPOSAL SELECTION.—
   57         (a) A business entity seeking a public-private partnership
   58  contract shall submit a business proposal that describes the
   59  exploration for oil or gas resources and the development of
   60  state lands for those purposes. The business entity may nominate
   61  state land that is to be explored and developed under the
   62  public-private partnership contract. The proposal shall provide
   63  an estimate of the revenues that the project is expected to
   64  generate for the state. The proposal for upland state lands must
   65  be consistent with approved land management plans approved
   66  pursuant to s. 253.034, Florida Statutes.
   67         (b) The land management agency shall review the business
   68  proposal in a timely manner and in a manner that is consistent
   69  with contemporary industry practices. The geophysical seismic
   70  exploration, drilling, and production activities proposed shall
   71  be of a duration consistent with industry practices.
   72         (c) The land management agency shall select a private
   73  partner based on the business proposal. The land management
   74  agency’s consideration must include, but need not be limited to,
   75  the technical quality of the exploration program proposed and
   76  the proposed timetable of geophysical and drilling activities
   77  which expedites the potential for generating revenues. If more
   78  than one entity submits a proposal for a public-private
   79  partnership for substantially the same area, the land management
   80  agency shall evaluate and select the single proposal that will
   81  provide the best value for the state.
   82         (d) The geophysical data acquired and the subsequent
   83  interpretation shall be made available to the land management
   84  agency or its representatives for review during the period
   85  provided in paragraph (4)(a), but shall remain in the sole
   86  possession of the business entity until the business entity has
   87  selected the lease areas.
   88         (4) PUBLIC-PRIVATE PARTNERSHIP CONTRACT.—The public-private
   89  partnership contract shall provide for:
   90         (a) A period of 3 years or longer during which the private
   91  partner may explore specified state lands by geophysical seismic
   92  methods for the feasibility of oil and gas resource development
   93  and production;
   94         (b) A selection process after geophysical operations are
   95  concluded in which the private partner may select and lease
   96  prospective parcels of state land for the purpose of exploration
   97  and production;
   98         (c) The leasing of state lands identified as a result of
   99  the geophysical seismic operations, which shall be for a term of
  100  at least 5 years; and
  101         (d) Negotiated royalty rates and a lease bonus.
  102         (5) APPROVAL OF CONTRACT.—The proposed public-private
  103  partnership contract must be approved by the Governor and
  104  Cabinet sitting as the Board of Trustees of the Internal
  105  Improvement Trust Fund in order to be legally binding on the
  106  State of Florida.
  107         Section 2. This act shall take effect upon becoming a law.