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. 26 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, 39 NOW, THEREFORE, 40 41 Be It Enacted by the Legislature of the State of Florida: 42 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.