HB 695

1
A bill to be entitled
2An act relating to the development of oil and gas
3resources; authorizing a land management agency to
4enter into a public-private partnership with a
5business entity to develop oil and gas resources on
6onshore state lands if the development yields near-
7term revenues for the state; providing that the
8financial, technical, and operational risk for the
9exploration, development, and production of oil and
10gas resources is the responsibility of the private
11business entity; requiring that a business entity
12seeking a public-private partnership contract submit a
13business proposal to the agency for review; specifying
14the information to be included in the business
15proposal; requiring that the geophysical data and the
16subsequent interpretation be made available to the
17agency for review but remain in the possession of the
18business entity; providing criteria for the agency to
19use in selecting the exploration proposal by a
20business entity; providing criteria for the public-
21private partnership contract; requiring a proposed
22public-private partnership contract to be approved by
23the Cabinet sitting as the Board of Trustees of the
24Internal Improvement Trust Fund; providing an
25effective date.
26
27     WHEREAS, the detection and development of oil and gas
28deposits on onshore lands owned by a board, department, or
29agency of the state may provide the opportunity to produce
30higher, near-term revenues to the state, and
31     WHEREAS, the monetary reward for discovering new reserves
32of oil and gas deposits may be significant, and
33     WHEREAS, the exploration for oil and gas deposits by three-
34dimensional, geophysical seismic methods and production, with
35its related infrastructure, involving directional drilling and
36horizontal drilling, although costly, is more thorough and
37provides more data than older methods of exploration and
38production in use over the past 50 years, NOW, THEREFORE,
39
40Be It Enacted by the Legislature of the State of Florida:
41
42     Section 1.  (1)  DUTIES; AUTHORITY.-Notwithstanding the
43provisions in chapter 253, Florida Statutes, if a land
44management agency determines that there is an opportunity to
45develop oil and gas resources on onshore lands owned by a board,
46department, or agency of this state to yield greater, near-term
47revenue returns for the state, the land management agency may
48participate with a business entity authorized to conduct
49business in the state in a public-private partnership contract.
50     (2)  PRIVATE-PARTNER RESPONSIBILITIES.-The financial,
51technical, and operational risk for the exploration,
52development, and production of oil and gas resources is the
53responsibility of the private business entity.
54     (3)  PROPOSAL SELECTION.-
55     (a)  A business entity seeking a public-private partnership
56contract shall submit a business proposal that describes the
57exploration for oil or gas resources and the development of
58state lands for those purposes. The business entity may nominate
59state land that is to be explored and developed under the
60public-private partnership contract. The proposal shall provide
61an estimate of the revenues that the project is expected to
62generate for the state.
63     (b)  The land management agency shall review the business
64proposal in a timely manner and in a manner that is consistent
65with contemporary industry practices. The geophysical seismic
66exploration shall be of a duration consistent with industry
67practices. The geophysical data acquired and the subsequent
68interpretation shall be made available to the land management
69agency or its representatives for review during the period
70provided for in paragraph (4)(a), but shall remain in the sole
71possession of the business entity until the business entity has
72selected the lease areas.
73     (c)  The land management agency shall select a private
74partner based on the business proposal. The land management
75agency's consideration must include, but need not be limited to,
76the technical quality of the exploration program proposed and
77the proposed timetable of geophysical and drilling activities
78which expedites the potential for generating revenues. If more
79than one entity submits a proposal for a public-private
80partnership for substantially the same area, the land management
81agency shall evaluate and select the single proposal that will
82provide the best value for the state.
83     (4)  PUBLIC-PRIVATE PARTNERSHIP CONTRACT.-The public-
84private partnership contract shall provide for:
85     (a)  A period of 3 years or longer during which the private
86partner may explore specified state lands by geophysical seismic
87methods for the feasibility of oil and gas resource development
88and production;
89     (b)  A selection process in which the private partner may
90select prospective parcels of state land for exploration and
91lease after the geophysical seismic testing;
92     (c)  A first right of refusal to lease a parcel of state
93land identified as a result of the geophysical seismic
94exploration for the development and production of oil or gas
95resources for a term of at least 5 years;
96     (d)  Negotiated royalty rates and a lease bonus; and
97     (e)  Confidentiality for a period of at least 10 years for
98the geophysical information, seismic interpretation, or
99geological information developed as a result of the geophysical
100seismic exploration by the business entity before the selection
101of lease areas.
102     (5)  APPROVAL OF CONTRACT.-The proposed public-private
103partnership contract must be approved by the Cabinet sitting as
104the Board of Trustees of the Internal Improvement Trust Fund in
105order to be legally binding on the State of Florida.
106     Section 2.  This act shall take effect July 1, 2012.


CODING: Words stricken are deletions; words underlined are additions.