Florida Senate - 2016                        COMMITTEE AMENDMENT
       Bill No. PCS (508372) for CS for SB 318
                              LEGISLATIVE ACTION                        
                    Senate             .             House              
                  Comm: FAV            .                                
                  03/01/2016           .                                

       The Committee on Appropriations (Simmons) recommended the
    1         Senate Amendment (with title amendment)
    3         Delete everything after the enacting clause
    4  and insert:
    5         Section 1. Section 377.06, Florida Statutes, is amended to
    6  read:
    7         377.06 Public policy of state concerning natural resources
    8  of oil and gas; preemption.—
    9         (1) It is hereby declared the public policy of this state
   10  to conserve and control the natural resources of oil and gas in
   11  this state, and the products made from oil and gas in this
   12  state; to prevent waste of natural resources; to provide for the
   13  protection and adjustment of the correlative rights of the
   14  owners of the land in which the natural resources lie, of the
   15  owners and producers of oil and gas resources and the products
   16  made from oil and gas, and of others interested in these
   17  resources and products; and to safeguard the health, property,
   18  and public welfare of the residents of this state and other
   19  interested persons and for all purposes indicated by the
   20  provisions in this section.
   21         (2)Further, It is the public policy of this state declared
   22  that underground storage of natural gas is in the public
   23  interest because underground storage promotes conservation of
   24  natural gas,; makes gas more readily available to the domestic,
   25  commercial, and industrial consumers of this state,; and allows
   26  the accumulation of large quantities of gas in reserve for
   27  orderly withdrawal during emergencies or periods of peak demand.
   28  It is not the intention of this section to limit, restrict, or
   29  modify in any way the provisions of this law.
   30         (3)The Legislature declares that all matters relating to
   31  the regulation of the exploration, development, production,
   32  processing, storage, and transportation of oil and gas are
   33  preempted to the state, to the exclusion of all existing and
   34  future ordinances or regulations relating thereto adopted by any
   35  county, municipality, or other political subdivision of the
   36  state. All such ordinances or regulations are hereby declared
   37  void as a matter of law, including those that impose a
   38  moratorium or effect a ban on one or more of these activities. A
   39  county or municipality may, however, adopt and enforce zoning or
   40  land use requirements which affect the use of property for the
   41  exploration, development, production, processing, storage or
   42  transportation of oil and gas, with the exception of geophysical
   43  operations pursuant to s. 377.2424(3), so long as such zoning or
   44  land use requirements would not impose a moratorium on,
   45  effectively prohibit, or inordinately burden one or more of
   46  these activities on a subject property.
   47         Section 2. Section 377.19, Florida Statutes, is amended to
   48  read:
   49         377.19 Definitions.—As used in ss. 377.06, 377.07, and
   50  377.10-377.45 377.10-377.40, the term:
   51         (1) “Completion date” means the day, month, and year that a
   52  new productive well, a previously shut-in well, or a temporarily
   53  abandoned well is completed, repaired, or recompleted and the
   54  operator begins producing oil or gas in commercial quantities.
   55         (2) “Department” means the Department of Environmental
   56  Protection.
   57         (3) “Division” means the Division of Water Resource
   58  Management of the Department of Environmental Protection.
   59         (4) “Field” means the general area that is underlaid, or
   60  appears to be underlaid, by at least one pool. The term includes
   61  the underground reservoir, or reservoirs, containing oil or gas,
   62  or both. The terms “field” and “pool” mean the same thing if
   63  only one underground reservoir is involved; however, the term
   64  “field,” unlike the term “pool,” may relate to two or more
   65  pools.
   66         (5) “Gas” means all natural gas, including casinghead gas,
   67  and all other hydrocarbons not defined as oil in subsection (16)
   68  (15).
   69         (6) “Fracturing well stimulation” means all stages of a
   70  well intervention performed by injecting fluids into a rock
   71  formation at high pressure that exceeds the fracture gradient of
   72  the rock formation in order to propagate fractures in such
   73  formation to increase production at an oil or gas well by
   74  improving the flow of hydrocarbons from the formation into the
   75  wellbore. The term also means any other well intervention,
   76  whether or not at high pressure, whose purpose or effect is to
   77  fracture such formation to increase production of an oil or gas
   78  well by improving the flow of hydrocarbons from the formation
   79  into the wellbore, but does not include conventional workover
   80  procedures that may incidentally fracture the formation in close
   81  proximity to the wellbore, such as those normal procedures used
   82  for cleaning the wellbore.
   83         (7)(6) “Horizontal well” means a well completed with the
   84  wellbore in a horizontal or nearly horizontal orientation within
   85  10 degrees of horizontal within the producing formation.
   86         (8)(7) “Illegal gas” means gas that has been produced
   87  within the state from any well or wells in excess of the amount
   88  allowed by any rule, regulation, or order of the division, as
   89  distinguished from gas produced within the State of Florida from
   90  a well not producing in excess of the amount so allowed, which
   91  is “legal gas.”
   92         (9)(8) “Illegal oil” means oil that has been produced
   93  within the state from any well or wells in excess of the amount
   94  allowed by rule, regulation, or order of the division, as
   95  distinguished from oil produced within the state from a well not
   96  producing in excess of the amount so allowed, which is “legal
   97  oil.”
   98         (10)(9) “Illegal product” means a product of oil or gas,
   99  any part of which was processed or derived, in whole or in part,
  100  from illegal gas or illegal oil or from any product thereof, as
  101  distinguished from “legal product,” which is a product processed
  102  or derived to no extent from illegal oil or illegal gas.
  103         (11)(10) “Lateral storage reservoir boundary” means the
  104  projection up to the land surface of the maximum horizontal
  105  extent of the gas volume contained in a natural gas storage
  106  reservoir.
  107         (12)(11) “Native gas” means gas that occurs naturally
  108  within this state and does not include gas produced outside the
  109  state, transported to this state, and injected into a permitted
  110  natural gas storage facility.
  111         (13)(12) “Natural gas storage facility” means an
  112  underground reservoir from which oil or gas has previously been
  113  produced and which is used or to be used for the underground
  114  storage of natural gas, and any surface or subsurface structure,
  115  or infrastructure, except wells. The term also includes a right
  116  or appurtenance necessary or useful in the operation of the
  117  facility for the underground storage of natural gas, including
  118  any necessary or reasonable reservoir protective area as
  119  designated for the purpose of ensuring the safe operation of the
  120  storage of natural gas or protecting the natural gas storage
  121  facility from pollution, invasion, escape, or migration of gas,
  122  or any subsequent extension thereof. The term does not mean a
  123  transmission, distribution, or gathering pipeline or system that
  124  is not used primarily as integral piping for a natural gas
  125  storage facility.
  126         (14)(13) “Natural gas storage reservoir” means a pool or
  127  field from which gas or oil has previously been produced and
  128  which is suitable for or capable of being made suitable for the
  129  injection, storage, and recovery of gas, as identified in a
  130  permit application submitted to the department under s.
  131  377.2407.
  132         (15)(14) “New field well” means an oil or gas well
  133  completed after July 1, 1997, in a new field as designated by
  134  the Department of Environmental Protection.
  135         (16)(15) “Oil” means crude petroleum oil and other
  136  hydrocarbons, regardless of gravity, which are produced at the
  137  well in liquid form by ordinary production methods, and which
  138  are not the result of condensation of gas after it leaves the
  139  reservoir.
  140         (17)(16) “Oil and gas” has the same meaning as the term
  141  “oil or gas.”
  142         (18)(17) “Oil and gas administrator” means the State
  143  Geologist.
  144         (19)(18) “Operator” means the entity who that:
  145         (a) Has the right to drill and to produce a well; or
  146         (b) As part of a natural gas storage facility, injects, or
  147  is engaged in the work of preparing to inject, gas into a
  148  natural gas storage reservoir; or stores gas in, or removes gas
  149  from, a natural gas storage reservoir.
  150         (20)(19) “Owner” means the person who has the right to
  151  drill into and to produce from any pool and to appropriate the
  152  production for the person or for the person and another, or
  153  others.
  154         (21)(20) “Person” means a natural person, corporation,
  155  association, partnership, receiver, trustee, guardian, executor,
  156  administrator, fiduciary, or representative of any kind.
  157         (22)(21) “Pool” means an underground reservoir containing
  158  or appearing to contain a common accumulation of oil or gas or
  159  both. Each zone of a general structure which is completely
  160  separated from any other zone on the structure is considered a
  161  separate pool as used herein.
  162         (23)(22) “Producer” means the owner or operator of a well
  163  or wells capable of producing oil or gas, or both.
  164         (24)(23) “Product” means a commodity made from oil or gas
  165  and includes refined crude oil, crude tops, topped crude,
  166  processed crude petroleum, residue from crude petroleum,
  167  cracking stock, uncracked fuel oil, fuel oil, treated crude oil,
  168  residuum, gas oil, casinghead gasoline, natural gas gasoline,
  169  naphtha, distillate, condensate, gasoline, waste oil, kerosene,
  170  benzine, wash oil, blended gasoline, lubricating oil, blends or
  171  mixtures of oil with one or more liquid products or byproducts
  172  derived from oil or gas, and blends or mixtures of two or more
  173  liquid products or byproducts derived from oil or gas, whether
  174  hereinabove enumerated or not.
  175         (25)(24) “Reasonable market demand” means the amount of oil
  176  reasonably needed for current consumption, together with a
  177  reasonable amount of oil for storage and working stocks.
  178         (26)(25) “Reservoir protective area” means the area
  179  extending up to and including 2,000 feet surrounding a natural
  180  gas storage reservoir.
  181         (27)(26) “Shut-in bottom hole pressure” means the pressure
  182  at the bottom of a well when all valves are closed and no oil or
  183  gas has been allowed to escape for at least 24 hours.
  184         (28)(27) “Shut-in well” means an oil or gas well that has
  185  been taken out of service for economic reasons or mechanical
  186  repairs.
  187         (29)(28) “State” means the State of Florida.
  188         (30)(29) “Temporarily abandoned well” means a permitted
  189  well or wellbore that has been abandoned by plugging in a manner
  190  that allows reentry and redevelopment in accordance with oil or
  191  gas rules of the Department of Environmental Protection.
  192         (31)(30) “Tender” means a permit or certificate of
  193  clearance for the transportation or the delivery of oil, gas, or
  194  products, approved and issued or registered under the authority
  195  of the division.
  196         (32)(31) “Waste,” in addition to its ordinary meaning,
  197  means “physical waste” as that term is generally understood in
  198  the oil and gas industry. The term “waste” includes:
  199         (a) The inefficient, excessive, or improper use or
  200  dissipation of reservoir energy; and the locating, spacing,
  201  drilling, equipping, operating, or producing of any oil or gas
  202  well or wells in a manner that results, or tends to result, in
  203  reducing the quantity of oil or gas ultimately to be stored or
  204  recovered from any pool in this state.
  205         (b) The inefficient storing of oil; and the locating,
  206  spacing, drilling, equipping, operating, or producing of any oil
  207  or gas well or wells in a manner that causes, or tends to cause,
  208  unnecessary or excessive surface loss or destruction of oil or
  209  gas.
  210         (c) The producing of oil or gas in a manner that causes
  211  unnecessary water channeling or coning.
  212         (d) The operation of any oil well or wells with an
  213  inefficient gas-oil ratio.
  214         (e) The drowning with water of any stratum or part thereof
  215  capable of producing oil or gas.
  216         (f) The underground waste, however caused and whether or
  217  not defined.
  218         (g) The creation of unnecessary fire hazards.
  219         (h) The escape into the open air, from a well producing
  220  both oil and gas, of gas in excess of the amount that is
  221  necessary in the efficient drilling or operation of the well.
  222         (i) The use of gas for the manufacture of carbon black.
  223         (j) Permitting gas produced from a gas well to escape into
  224  the air.
  225         (k) The abuse of the correlative rights and opportunities
  226  of each owner of oil and gas in a common reservoir due to
  227  nonuniform, disproportionate, and unratable withdrawals, causing
  228  undue drainage between tracts of land.
  229         (33)(32) “Well site” means the general area around a well,
  230  which area has been disturbed from its natural or existing
  231  condition, as well as the drilling or production pad, mud and
  232  water circulation pits, and other operation areas necessary to
  233  drill for or produce oil or gas, or to inject gas into and
  234  recover gas from a natural gas storage facility.
  235         Section 3. Subsection (2) of section 377.22, Florida
  236  Statutes, is amended to read:
  237         377.22 Rules and orders.—
  238         (2) The department shall issue orders and adopt rules
  239  pursuant to ss. 120.536 and 120.54 to implement and enforce the
  240  provisions of this chapter. Such rules and orders shall ensure
  241  that all precautions are taken to prevent the spillage of oil or
  242  any other pollutant in all phases of the drilling for, and
  243  extracting of, oil, gas, or other petroleum products, including
  244  fracturing well stimulations, or during the injection of gas
  245  into and recovery of gas from a natural gas storage reservoir.
  246  The department shall revise such rules from time to time as
  247  necessary for the proper administration and enforcement of this
  248  chapter. Rules adopted and orders issued in accordance with this
  249  section are for, but not limited to, the following purposes:
  250         (a) To require the drilling, casing, and plugging of wells
  251  to be done in such a manner as to prevent the pollution of the
  252  fresh, salt, or brackish waters or the lands of the state and to
  253  protect the integrity of natural gas storage reservoirs.
  254         (b) To prevent the alteration of the sheet flow of water in
  255  any area.
  256         (c) To require that appropriate safety equipment be
  257  installed to minimize the possibility of an escape of oil or
  258  other petroleum products in the event of accident, human error,
  259  or a natural disaster during drilling, casing, or plugging of
  260  any well and during extraction operations.
  261         (d) To require the drilling, casing, and plugging of wells
  262  to be done in such a manner as to prevent the escape of oil or
  263  other petroleum products from one stratum to another.
  264         (e) To prevent the intrusion of water into an oil or gas
  265  stratum from a separate stratum, except as provided by rules of
  266  the division relating to the injection of water for proper
  267  reservoir conservation and brine disposal.
  268         (f) To require a reasonable bond, or other form of security
  269  acceptable to the department, conditioned upon properly
  270  drilling, casing, producing, and operating each well and
  271  properly plugging the performance of the duty to plug properly
  272  each dry and abandoned well and upon the full and complete
  273  restoration by the applicant of the area over which geophysical
  274  exploration, drilling, or production is conducted to the similar
  275  contour and general condition in existence before prior to such
  276  operation.
  277         (g) To require and carry out a reasonable program of
  278  monitoring and inspecting or inspection of all drilling
  279  operations, fracturing well stimulations, producing wells, or
  280  injecting wells, and well sites, including regular inspections
  281  by division personnel. Inspections are required during the
  282  testing of blowout preventers, during the pressure testing of
  283  the casing and casing shoe, and during the integrity testing of
  284  the cement plugs in plugging and abandonment operations.
  285         (h) To require the making of reports showing the location
  286  of all oil and gas wells; the making and filing of logs; the
  287  taking and filing of directional surveys; the filing of
  288  electrical, sonic, radioactive, and mechanical logs of oil and
  289  gas wells; if taken, the saving of cutting and cores, the cuts
  290  of which shall be given to the Bureau of Geology; and the making
  291  of reports with respect to drilling and production records.
  292  However, such information, or any part thereof, at the request
  293  of the operator, shall be exempt from the provisions of s.
  294  119.07(1) and held confidential by the division for a period of
  295  1 year after the completion of a well.
  296         (i) To prevent wells from being drilled, operated, or
  297  produced in such a manner as to cause injury to neighboring
  298  leases, property, or natural gas storage reservoirs.
  299         (j) To prevent the drowning by water of any stratum, or
  300  part thereof, capable of producing oil or gas in paying
  301  quantities and to prevent the premature and irregular
  302  encroachment of water which reduces, or tends to reduce, the
  303  total ultimate recovery of oil or gas from any pool.
  304         (k) To require the operation of wells with efficient gas
  305  oil ratio, and to fix such ratios.
  306         (l) To prevent “blowouts,” “caving,” and “seepage,” in the
  307  sense that conditions indicated by such terms are generally
  308  understood in the oil and gas business.
  309         (m) To prevent fires.
  310         (n) To identify the ownership of all oil or gas wells,
  311  producing leases, refineries, tanks, plants, structures, and
  312  storage and transportation equipment and facilities.
  313         (o) To regulate the “shooting,” perforating, and chemical
  314  treatment, and fracturing stimulations of wells.
  315         (p) To regulate secondary recovery methods, including the
  316  introduction of gas, air, water, or other substance into
  317  producing formations.
  318         (q) To regulate gas cycling operations.
  319         (r) To regulate the storage and recovery of gas injected
  320  into natural gas storage facilities.
  321         (s) If necessary for the prevention of waste, as herein
  322  defined, to determine, limit, and prorate the production of oil
  323  or gas, or both, from any pool or field in the state.
  324         (t) To require, either generally or in or from particular
  325  areas, certificates of clearance or tenders in connection with
  326  the transportation or delivery of oil or gas, or any product.
  327         (u) To regulate the spacing of wells and to establish
  328  drilling units.
  329         (v) To prevent, so far as is practicable, reasonably
  330  avoidable drainage from each developed unit which is not
  331  equalized by counterdrainage.
  332         (w) To require that geophysical operations requiring a
  333  permit be conducted in a manner which will minimize the impact
  334  on hydrology and biota of the area, especially environmentally
  335  sensitive lands and coastal areas.
  336         (x) To regulate aboveground crude oil storage tanks in a
  337  manner which will protect the water resources of the state.
  338         (y) To act in a receivership capacity for fractional
  339  mineral interests for which the owners are unknown or unlocated
  340  and to administratively designate the operator as the lessee.
  341         (z)To evaluate the history of prior adjudicated,
  342  uncontested, or settled violations committed by permit
  343  applicants or the applicants’ affiliated entities of any
  344  substantive and material rule or law pertaining to the
  345  regulation of oil or gas.
  346         Section 4. Subsections (1), (2), (4), and (5) of section
  347  377.24, Florida Statutes, are amended, and subsections (10) and
  348  (11) are added to that section, to read:
  349         377.24 Notice of intention to drill well; permits;
  350  abandoned wells and dry holes.—
  351         (1) Before drilling a well in search of oil or gas, before
  352  performing a fracturing well stimulation, or before storing gas
  353  in or recovering gas from a natural gas storage reservoir, the
  354  person who desires to drill for, store, or recover gas, or drill
  355  for oil or gas, or perform a fracturing well stimulation shall
  356  notify the division upon such form as it may prescribe and shall
  357  pay a reasonable fee set by rule of the department not to exceed
  358  the actual cost of processing and inspecting for each well or
  359  reservoir. The drilling of any well, the performance of any
  360  fracturing well stimulation, and the storing and recovering of
  361  gas are prohibited until such notice is given, the fee is paid,
  362  and a the permit is granted. A permit may authorize a single
  363  activity or multiple activities.
  364         (2) An application for the drilling of a well in search of
  365  oil or gas, for the performance of a fracturing well
  366  stimulation, or for the storing of gas in and recovering of gas
  367  from a natural gas storage reservoir, in this state must include
  368  the address of the residence of the applicant, or applicants,
  369  which must be the address of each person involved in accordance
  370  with the records of the Division of Water Resource Management
  371  until such address is changed on the records of the division
  372  after written request.
  373         (4) Application for permission to drill or abandon any well
  374  or perform a fracturing well stimulation may be denied by the
  375  division for only just and lawful cause.
  376         (5) No permit to drill a gas or oil well shall be granted
  377  within the jurisdictional boundaries of any municipality or
  378  county, unless the applicant provides notice of the permit
  379  application, by certified mail, to the corporate limits of any
  380  municipality, unless the governing authority of the county or
  381  municipality. The applicant shall include a copy of the notice
  382  with the permit application shall have first duly approved the
  383  application for such permit by resolution.
  384         (10)The department may not approve a permit to authorize a
  385  fracturing well stimulation until the department adopts rules
  386  for fracturing well stimulations which are based upon the
  387  findings of the study required pursuant to s. 377.2436 and such
  388  rules take effect.
  389         (11)The rules for fracturing well stimulation shall be
  390  submitted to the President of the Senate and Speaker of the
  391  House of Representatives and such rules may not take effect
  392  until they are ratified by the Legislature.
  393         Section 5. Subsections (5), (6), and 7 are added to section
  394  377.241, Florida Statutes, to read:
  395         377.241 Criteria for issuance of permits.—The division, in
  396  the exercise of its authority to issue permits as hereinafter
  397  provided, shall give consideration to and be guided by the
  398  following criteria:
  399         (5) For fracturing well stimulations, whether the
  400  fracturing well stimulation as proposed is designed to ensure
  401  that:
  402         (a)The groundwater near the well location, including
  403  groundwater through which the well will be or has been drilled,
  404  is not contaminated as a result of the fracturing well
  405  stimulation; and
  406         (b) The fracturing well stimulation is consistent with the
  407  public policy of this state as specified in s. 377.06.
  408         (6) As a basis for permit denial or imposition of specific
  409  permit conditions, including increased bonding up to five times
  410  the applicable limits and increased monitoring, the history of
  411  prior adjudicated, uncontested, or settled violations committed
  412  by the applicant or an affiliated entity of the applicant of any
  413  substantive and material rule or law pertaining to the
  414  regulation of oil or gas, including violations that occurred
  415  outside the state.
  416         (7)Matters raised in comments timely submitted by a
  417  municipality or county to the division pursuant to s. 377.24(5).
  418         Section 6. Section 377.242, Florida Statutes, is amended to
  419  read:
  420         377.242 Permits for drilling or exploring and extracting
  421  through well holes or by other means.—The department is vested
  422  with the power and authority:
  423         (1)(a) To issue permits for the performance of a fracturing
  424  well stimulation or the drilling for, exploring for, or
  425  production of oil, gas, or other petroleum products that which
  426  are to be extracted from below the surface of the land,
  427  including submerged land, only through the well hole drilled for
  428  oil, gas, and other petroleum products.
  429         1. A No structure intended for the drilling for, or
  430  production of, oil, gas, or other petroleum products may not be
  431  permitted or constructed on any submerged land within any bay or
  432  estuary.
  433         2. A No structure intended for the drilling for, or
  434  production of, oil, gas, or other petroleum products may not be
  435  permitted or constructed within 1 mile seaward of the coastline
  436  of the state.
  437         3. A No structure intended for the drilling for, or
  438  production of, oil, gas, or other petroleum products may not be
  439  permitted or constructed within 1 mile of the seaward boundary
  440  of any state, local, or federal park or aquatic or wildlife
  441  preserve or on the surface of a freshwater lake, river, or
  442  stream.
  443         4. A No structure intended for the drilling for, or
  444  production of, oil, gas, or other petroleum products may not be
  445  permitted or constructed within 1 mile inland from the shoreline
  446  of the Gulf of Mexico, the Atlantic Ocean, or any bay or estuary
  447  or within 1 mile of any freshwater lake, river, or stream unless
  448  the department is satisfied that the natural resources of such
  449  bodies of water and shore areas of the state will be adequately
  450  protected in the event of accident or blowout.
  451         5. Without exception, after July 1, 1989, a no structure
  452  intended for the drilling for, or production of, oil, gas, or
  453  other petroleum products may not be permitted or constructed
  454  south of 26°00′00″ north latitude off Florida’s west coast and
  455  south of 27°00′00″ north latitude off Florida’s east coast,
  456  within the boundaries of Florida’s territorial seas as defined
  457  in 43 U.S.C. s. 1301. After July 31, 1990, a no structure
  458  intended for the drilling for, or production of, oil, gas, or
  459  other petroleum products may not be permitted or constructed
  460  north of 26°00′00″ north latitude off Florida’s west coast to
  461  the western boundary of the state bordering Alabama as set forth
  462  in s. 1, Art. II of the State Constitution, or located north of
  463  27°00′00″ north latitude off Florida’s east coast to the
  464  northern boundary of the state bordering Georgia as set forth in
  465  s. 1, Art. II of the State Constitution, within the boundaries
  466  of Florida’s territorial seas as defined in 43 U.S.C. s. 1301.
  467         (b) Subparagraphs (a)1. and 4. do not apply to permitting
  468  or construction of structures intended for the drilling for, or
  469  production of, oil, gas, or other petroleum products pursuant to
  470  an oil, gas, or mineral lease of such lands by the state under
  471  which lease any valid drilling permits are in effect on the
  472  effective date of this act. In the event that such permits
  473  contain conditions or stipulations, such conditions and
  474  stipulations shall govern and supersede subparagraphs (a)1. and
  475  4.
  476         (c) The prohibitions of subparagraphs (a)1.-4. in this
  477  subsection do not include “infield gathering lines,” provided no
  478  other placement is reasonably available and all other required
  479  permits have been obtained.
  480         (2) To issue permits to explore for and extract minerals
  481  which are subject to extraction from the land by means other
  482  than through a well hole.
  483         (3) To issue permits to establish natural gas storage
  484  facilities or construct wells for the injection and recovery of
  485  any natural gas for storage in natural gas storage reservoirs.
  487  Each permit shall contain an agreement by the permitholder that
  488  the permitholder will not prevent inspection by division
  489  personnel at any time, including during installation and
  490  cementing of casing, during the testing of blowout preventers,
  491  during the pressure testing of the casing and casing shoe, and
  492  during the integrity testing of the cement plugs in plugging and
  493  abandonment operations. The provisions of this section
  494  prohibiting permits for drilling or exploring for oil in coastal
  495  waters do not apply to any leases entered into before June 7,
  496  1991.
  497         Section 7. Subsection (1) of section 377.2425, Florida
  498  Statutes, is amended to read:
  499         377.2425 Manner of providing security for geophysical
  500  exploration, drilling, and production.—
  501         (1) Before Prior to granting a permit for conducting to
  502  conduct geophysical operations; drilling of exploratory,
  503  injection, or production wells; producing oil and gas from a
  504  wellhead; performing a fracturing well stimulation; or
  505  transporting oil and gas through a field-gathering system, the
  506  department shall require the applicant or operator to provide
  507  surety that these operations will be conducted in a safe and
  508  environmentally compatible manner.
  509         (a) The applicant for a drilling, production, fracturing
  510  well stimulation, or injection well permit or a geophysical
  511  permit may provide the following types of surety to the
  512  department for this purpose:
  513         1. A deposit of cash or other securities made payable to
  514  the Minerals Trust Fund. Such cash or securities so deposited
  515  shall be held at interest by the Chief Financial Officer to
  516  satisfy safety and environmental performance provisions of this
  517  chapter. The interest shall be credited to the Minerals Trust
  518  Fund. Such cash or other securities shall be released by the
  519  Chief Financial Officer upon request of the applicant and
  520  certification by the department that all safety and
  521  environmental performance provisions established by the
  522  department for permitted activities have been fulfilled.
  523         2. A bond of a surety company authorized to do business in
  524  the state in an amount as provided by rule.
  525         3. A surety in the form of an irrevocable letter of credit
  526  in an amount as provided by rule guaranteed by an acceptable
  527  financial institution.
  528         (b) An applicant for a drilling, production, fracturing
  529  well stimulation, or injection well permit, or a permittee who
  530  intends to continue participating in long-term production
  531  activities of such wells, has the option to provide surety to
  532  the department by paying an annual fee to the Minerals Trust
  533  Fund. For an applicant or permittee choosing this option the
  534  following shall apply:
  535         1. For the first year, or part of a year, of a drilling,
  536  production, or injection well permit, or change of operator, the
  537  fee is $4,000 per permitted well.
  538         2. For each subsequent year, or part of a year, the fee is
  539  $1,500 per permitted well.
  540         3. The maximum fee that an applicant or permittee may be
  541  required to pay into the trust fund is $30,000 per calendar
  542  year, regardless of the number of permits applied for or in
  543  effect.
  544         4. The fees set forth in subparagraphs 1., 2., and 3. shall
  545  be reviewed by the department on a biennial basis and adjusted
  546  for the cost of inflation. The department shall establish by
  547  rule a suitable index for implementing such fee revisions.
  548         (c) An applicant for a drilling or operating permit for
  549  operations planned in coastal waters that by their nature
  550  warrant greater surety shall provide surety only in accordance
  551  with paragraph (a), or similar proof of financial responsibility
  552  other than as provided in paragraph (b). For all such
  553  applications, including applications pending at the effective
  554  date of this act and notwithstanding the provisions of paragraph
  555  (b), the Governor and Cabinet in their capacity as the
  556  Administration Commission, at the recommendation of the
  557  department of Environmental Protection, shall set a reasonable
  558  amount of surety required under this subsection. The surety
  559  amount shall be based on the projected cleanup costs and natural
  560  resources damages resulting from a maximum oil spill and adverse
  561  hydrographic and atmospheric conditions that would tend to
  562  transport the oil into environmentally sensitive areas, as
  563  determined by the department of Environmental Protection.
  564         Section 8. Section 377.2436, Florida Statutes, is created
  565  to read:
  566         377.2436 Study on fracturing well stimulations.—
  567         (1) The department shall conduct a study on fracturing well
  568  stimulations. The study must:
  569         (a) Evaluate the underlying geologic features present in
  570  the counties where oil wells have been permitted and analyze the
  571  potential impact that fracturing well stimulation and wellbore
  572  construction may have on the underlying geologic features.
  573         (b) Evaluate the potential hazards and risks that
  574  fracturing well stimulation poses to surface water or
  575  groundwater resources. The study must assess the potential
  576  impacts of fracturing well stimulation on drinking water
  577  resources and identify the main factors affecting the severity
  578  and frequency of impacts and must analyze the potential for the
  579  use or reuse of recycled water in well stimulation fluids while
  580  meeting appropriate water quality standards.
  581         (c) Review and evaluate the potential for groundwater
  582  contamination from conducting fracturing well stimulation under
  583  or near wells that have been previously plugged and abandoned
  584  and identify a setback radius from previously plugged and
  585  abandoned wells that could be impacted by fracturing well
  586  stimulation.
  587         (d) Review and evaluate the ultimate disposition of
  588  fracturing well stimulation fluids after use in fracturing well
  589  stimulation processes.
  590         (e)Review and evaluate the potential direct and indirect
  591  economic benefits resulting from the use of fracturing well
  592  stimulation, including effects on state and local tax revenues,
  593  royalty payments, employment opportunities, and demand for goods
  594  and services.
  595         (f)Review and evaluate potential seismic activity
  596  associated with fracturing well stimulation and the deep-well
  597  disposal of oil and gas production wastewater.
  598         (g)Review and evaluate the feasibility and impact of
  599  waterless fracturing technologies to perform fracturing well
  600  stimulation.
  601         (2) The department shall continue conventional oil and gas
  602  business operations during the performance of the study. There
  603  may not be a moratorium on the evaluation and issuance of
  604  permits for conventional drilling, exploration, conventional
  605  completions, or conventional workovers during the performance of
  606  the study.
  607         (3) The study is subject to independent scientific peer
  608  review.
  609         (4) The department shall submit the findings of the study
  610  to the Governor, the President of the Senate, and the Speaker of
  611  the House of Representatives by June 30, 2017, and shall
  612  prominently post the findings on its website.
  613         (5)The department may not adopt rules for fracturing well
  614  stimulation until the findings of the study have been submitted
  615  to the Legislature. However, by March 1, 2018, the department
  616  must adopt rules to implement the findings of the study, if such
  617  rules are warranted to protect public health, safety, and the
  618  environment.
  619         Section 9. Paragraph (a) of subsection (1) of section
  620  377.37, Florida Statutes, is amended to read:
  621         377.37 Penalties.—
  622         (1)(a) A Any person who violates any provision of this
  623  chapter law or any rule, regulation, or order of the division
  624  made under this chapter or who violates the terms of any permit
  625  to drill for or produce oil, gas, or other petroleum products
  626  referred to in s. 377.242(1) or to store gas in a natural gas
  627  storage facility, or any lessee, permitholder, or operator of
  628  equipment or facilities used in the exploration for, drilling
  629  for, or production of oil, gas, or other petroleum products, or
  630  storage of gas in a natural gas storage facility, who refuses
  631  inspection by the division as provided in this chapter, is
  632  liable to the state for any damage caused to the air, waters, or
  633  property, including animal, plant, or aquatic life, of the state
  634  and for reasonable costs and expenses of the state in tracing
  635  the source of the discharge, in controlling and abating the
  636  source and the pollutants, and in restoring the air, waters, and
  637  property, including animal, plant, and aquatic life, of the
  638  state. Furthermore, such person, lessee, permitholder, or
  639  operator is subject to the judicial imposition of a civil
  640  penalty in an amount of not more than $25,000 $10,000 for each
  641  offense. However, the court may receive evidence in mitigation.
  642  Each day during any portion of which such violation occurs
  643  constitutes a separate offense. This paragraph does not Nothing
  644  herein shall give the department the right to bring an action on
  645  behalf of a any private person.
  646         Section 10. Section 377.45, Florida Statutes, is created to
  647  read:
  648         377.45 Fracturing well stimulation chemical disclosure
  649  registry.—
  650         (1)(a) The department shall designate the national chemical
  651  disclosure registry, known as FracFocus, developed by the Ground
  652  Water Protection Council and the Interstate Oil and Gas Compact
  653  Commission, as the state’s registry for chemical disclosure for
  654  all wells on which fracturing well stimulations are performed,
  655  if and to the extent permitted by the department. The department
  656  shall provide a link to FracFocus through its website.
  657         (b) In addition to providing the following information to
  658  the department as part of the permitting process, a service
  659  provider, vendor, or well owner or operator shall report, as
  660  established by department rule, to the department, at a minimum,
  661  the following information:
  662         1. The name of the service provider, vendor, or owner or
  663  operator.
  664         2. The date of completion of the fracturing well
  665  stimulation.
  666         3. The county in which the well is located.
  667         4. The API Well Number.
  668         5. The well name and number.
  669         6. The longitude and latitude of the wellhead.
  670         7. The total vertical depth of the well.
  671         8. The total volume of water used in the fracturing well
  672  stimulation.
  673         9. Each chemical ingredient that is subject to 29 C.F.R. s.
  674  1910.1200(g)(2) and the ingredient concentration in the
  675  fracturing well stimulation fluid by mass for each well on which
  676  a fracturing well stimulation is performed.
  677         10. The trade or common name and the CAS Registry Number
  678  for each chemical ingredient.
  679         (c) The department shall report to FracFocus all
  680  information received under paragraph (b), excluding any
  681  information subject to chapter 688.
  682         (d) If FracFocus cannot accept and make publicly available
  683  any information specified in this section, the department shall
  684  post the information on its website, excluding any information
  685  subject to chapter 688.
  686         (2) A service provider, vendor, or well owner or operator
  687  shall:
  688         (a) Report the information required under subsection (1) to
  689  the department within 60 days after the initiation of the
  690  fracturing well stimulation for each well on which such
  691  fracturing well stimulation is performed.
  692         (b) Notify the department if any chemical ingredient not
  693  previously reported is intentionally included and used for the
  694  purpose of performing a fracturing well stimulation.
  695         (3) This section does not apply to an ingredient that:
  696         (a) Is not intentionally added to the fracturing well
  697  stimulation; or
  698         (b) Occurs incidentally or is otherwise unintentionally
  699  present in a fracturing well stimulation.
  700         (4) The department shall adopt rules to administer this
  701  section.
  702         Section 11. Section 377.07, Florida Statutes, is amended to
  703  read:
  704         377.07 Division of Water Resource Management; powers,
  705  duties, and authority.—The Division of Water Resource Management
  706  of the Department of Environmental Protection is hereby vested
  707  with power, authority, and duty to administer, carry out, and
  708  enforce the provisions of this part law as directed in s.
  709  370.02(3).
  710         Section 12. Section 377.10, Florida Statutes, is amended to
  711  read:
  712         377.10 Certain persons not to be employed by division.—A No
  713  person in the employ of, or holding any official connection or
  714  position with any person, firm, partnership, corporation, or
  715  association of any kind, engaged in the business of buying or
  716  selling mineral leases, drilling wells in the search of oil or
  717  gas, producing, transporting, refining, or distributing oil or
  718  gas may not shall hold any position under, or be employed by,
  719  the Division of Water Resource Management in the prosecution of
  720  its duties under this part law.
  721         Section 13. Subsection (1) of section 377.243, Florida
  722  Statutes, is amended to read:
  723         377.243 Conditions for granting permits for extraction
  724  through well holes.—
  725         (1) Before applying Prior to the application to the
  726  Division of Water Resource Management for the permit to drill
  727  for oil, gas, and related products referred to in s. 377.242(1),
  728  the applicant must own a valid deed, or other muniment of title,
  729  or lease granting the said applicant the privilege to explore
  730  for oil, gas, or related mineral products to be extracted only
  731  through the well hole on the land or lands included in the
  732  application. However, unallocated interests may be unitized
  733  according to s. 377.27.
  734         Section 14. Subsection (1) of section 377.244, Florida
  735  Statutes, is amended to read:
  736         377.244 Conditions for granting permits for surface
  737  exploratory and extraction operations.—
  738         (1) Exploration for and extraction of minerals under and by
  739  virtue of the authority of a grant of oil, gas, or mineral
  740  rights, or which, subsequent to such grant, may be interpreted
  741  to include the right to explore for and extract minerals which
  742  are subject to extraction from the land by means other than
  743  through a well hole, that is by means of surface exploratory and
  744  extraction operations such as sifting of the sands, dragline,
  745  open pit mining, or other type of surface operation, which would
  746  include movement of sands, dirt, rock, or minerals, shall be
  747  exercised only pursuant to a permit issued by the Division of
  748  Water Resource Management upon the applicant’s compliance
  749  applicant complying with the following conditions:
  750         (a) The applicant must own a valid deed, or other muniment
  751  of title, or lease granting the applicant the right to explore
  752  for and extract oil, gas, and other minerals from the said
  753  lands.
  754         (b) The applicant shall post a good and sufficient surety
  755  bond with the division in such amount as the division determines
  756  may determine is adequate to afford full and complete protection
  757  for the owner of the surface rights of the lands described in
  758  the application, conditioned upon the full and complete
  759  restoration, by the applicant, of the area over which the
  760  exploratory and extraction operations are conducted to the same
  761  condition and contour in existence before prior to such
  762  operations.
  763         Section 15. For the 2016-2017 fiscal year, the sum of $1
  764  million in nonrecurring funds is appropriated from the General
  765  Revenue Fund to the Department of Environmental Protection to
  766  conduct a fracturing well stimulation study pursuant to s.
  767  377.2436, Florida Statutes.
  768         Section 16. This act shall take effect July 1, 2016.
  770  ================= T I T L E  A M E N D M E N T ================
  771  And the title is amended as follows:
  772         Delete everything before the enacting clause
  773  and insert:
  774                        A bill to be entitled                      
  775         An act relating to the regulation of oil and gas
  776         resources; amending s. 377.06, F.S.; preempting the
  777         regulation of all matters relating to the exploration,
  778         development, production, processing, storage, and
  779         transportation of oil and gas; declaring ordinances
  780         and regulations relating thereto void; providing an
  781         exception for certain zoning or land use requirements;
  782         ordinances and regulations relating thereto void;
  783         providing an exception for certain zoning ordinances;
  784         amending s. 377.19, F.S.; applying the definitions of
  785         certain terms to additional sections of ch. 377, F.S.;
  786         revising the definition of the term “division”;
  787         conforming a cross-reference; defining the term
  788         “fracturing well stimulation”; amending s. 377.22,
  789         F.S.; revising the rulemaking authority of the
  790         Department of Environmental Protection; amending s.
  791         377.24, F.S.; requiring that a permit be obtained
  792         before the performance of a fracturing well
  793         stimulation; specifying that a permit may authorize
  794         single or multiple activities; revising provisions
  795         that prohibit the Division of Water Resource
  796         Management from granting permits to drill gas or oil
  797         wells; providing notice requirements for an
  798         application of such permit; prohibiting the department
  799         from approving permits for fracturing well stimulation
  800         until certain rules are adopted and take effect;
  801         requiring legislative ratification of such rules;
  802         amending s. 377.241, F.S.; requiring the Division of
  803         Water Resource Management to give consideration to and
  804         be guided by certain additional criteria when issuing
  805         permits; amending s. 377.242, F.S.; authorizing the
  806         department to issue permits for the performance of a
  807         fracturing well stimulation; revising permit
  808         requirements that permitholders agree not to prevent
  809         division inspections; amending s. 377.2425, F.S.;
  810         requiring an applicant or operator to provide surety
  811         that performance of a fracturing well stimulation will
  812         be conducted in a safe and environmentally compatible
  813         manner; creating s. 377.2436, F.S.; requiring the
  814         department to conduct a study on fracturing well
  815         stimulation; providing study criteria; requiring the
  816         study to be submitted to the Governor and Legislature
  817         and posted on the department website; prohibiting the
  818         department from adopting rules until the study has
  819         been submitted to the Legislature; requiring the
  820         department to adopt rules under certain conditions by
  821         a specified date; amending s. 377.37, F.S.; increasing
  822         the maximum amount of a civil penalty; creating s.
  823         377.45, F.S.; requiring the department to designate
  824         the national chemical disclosure registry as the
  825         state’s registry; requiring service providers,
  826         vendors, and well owners or operators to report
  827         certain information to the department; requiring the
  828         department to report certain information to the
  829         national chemical registry; providing applicability;
  830         requiring the department to adopt rules; amending ss.
  831         377.07, 377.10, 377.243, and 377.244, F.S.; making
  832         technical changes; conforming provisions to changes
  833         made by the act; providing an appropriation; providing
  834         an effective date.