1997 Regular Session
To: Oil, Gas and Other Minerals; Environment Prot, Cons and Water Res
By: Senator(s) Gollott, Woodfield
Senate Bill 3025
AN ACT TO AMEND SECTION 29-7-1, MISSISSIPPI CODE OF 1972, TO CONFORM TO REORGANIZATION NOMENCLATURE; TO AMEND SECTION 29-7-3, MISSISSIPPI CODE OF 1972, TO CLARIFY THOSE LANDS WHICH MAY BE LEASED BY THE COMMISSION ON ENVIRONMENTAL QUALITY UNDER THIS ACT, TO PROHIBIT THE COMMISSION ON ENVIRONMENTAL QUALITY FROM LEASING CERTAIN LANDS IN THE MISSISSIPPI SOUND FOR THE DEVELOPMENT OR EXTRACTION OF OIL, GAS OR OTHER MINERALS, TO PROHIBIT DRILLING ACTIVITIES IN THE MISSISSIPPI SOUND, TO REQUIRE THE COMMISSION TO HOLD A PUBLIC HEARING BEFORE SOLICITING BIDS ON LEASING ANY SUBMERGED LANDS, TO PROVIDE FOR AN APPEAL FROM A DECISION OF THE COMMISSION ON ENVIRONMENTAL QUALITY AND TO CLARIFY THE ALLOCATION OF THE PROCEEDS FROM LEASE ROYALTIES; TO AMEND SECTION 29-7-5, MISSISSIPPI CODE OF 1972, TO PROHIBIT THE COMMISSION ON ENVIRONMENTAL QUALITY FROM DRILLING OR CONTRACTING FOR THE DRILLING IN THE MISSISSIPPI SOUND; TO AMEND SECTION 29-7-13, MISSISSIPPI CODE OF 1972, IN CONFORMITY THERETO; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. Section 29-7-1, Mississippi Code of 1972, is amended as follows:
29-7-1. (1) The Mississippi Commission on Environmental Quality shall be the mineral lease commission, and shall exercise the duties and responsibilities of the mineral lease commission * * * under * * * Chapter 2 of Title 49, Mississippi Code of 1972.
(2) The words "mineral lease commission," whenever they may appear in the laws of the State of Mississippi, shall be construed to mean the Mississippi Commission on Environmental Quality.
SECTION 2. Section 29-7-3, Mississippi Code of 1972, is amended as follows:
29-7-3. (1)(a) * * * No development or extraction of oil, gas, or other minerals from state-owned lands by any private party shall be conducted without first obtaining a mineral lease for that activity * * * from the Commission on Environmental Quality. The Commission on Environmental Quality may, * * * on behalf of the state, * * * lease any * * * state-owned land, * * * including * * * submerged lands and tidelands, but excluding sixteenth section school land, lieu lands, and any forfeited tax land and property the title to which is subject to any lawful redemption, to some reputable person, association, or company for the development of extraction of oil, * * * gas * * * or other minerals, or any combination of those resources * * * for any consideration and upon any terms and conditions as the commission deems appropriate. The commission shall not lease any land in the Mississippi Sound for drilling or any other type of exploration or production activity in the Mississippi Sound for the development or extraction of oil, gas or other minerals. No drilling activity shall take place on any land within the area designated as the Mississippi Sound. Before soliciting for bids on any lease of any submerged lands, the commission shall hold a public hearing to receive comments from public and interested parties on the merits of the proposed lease and any terms and conditions of a lease not specified in law or regulations promulgated by the commission. Any hearings conducted by the commission under this chapter shall be held in accordance with Sections 49-17-33 through 49-17-35. Any action or decision of the commission under this chapter shall be subject to review and appeal as provided in Section 49-17-41.
(b) The commission may promulgate rules and regulations governing all aspects of the process of leasing state lands within its jurisdiction for mineral development or any mineral exploration or testing activity, including the setting of any necessary fees, delay rental payments, shut-in royalty payments, issuance, modification, transfer or denial of any permit under its jurisdiction and any other provisions as may be required.
(2) No seismographic or other mineral exploration or testing activities shall be conducted on any state-owned lands within the mineral leasing jurisdiction of the commission without first obtaining a permit * * * from the permit board. * * * Any person obtaining a permit from the permit board for seismographic or other mineral exploration or testing activities on state-owned wildlife management areas, lakes and fish hatcheries, shall be subject to rules and regulations promulgated * * * by the Commission on Wildlife, Fisheries and Parks which shall also receive all permit fees for * * * testing on those lands.
(3) * * * Any permit within the Mississippi Sound or tidelands shall be reviewed by the Department of Marine Resources and any special conditions as the Department of Marine Resources * * * may specify shall be included in the permit. (4) Information or data obtained in any mineral exploration activity on any * * * state-owned lands shall be disclosed to the state through the commission, upon demand. Any information or data shall be treated as confidential for a period of ten (10) years from the date of receipt of the data or information * * * and shall not be disclosed to the public or to any firm, individual or agency other than officials or authorized employees of this state. Any person who makes unauthorized disclosure of that confidential information or data shall be guilty of a misdemeanor, and upon conviction * * *, * * * fined not more than Five Thousand Dollars ($5,000.00) or imprisoned in the county jail not more than one (1) year, or both.
(5) When any state-owned land or property is leased for oil and gas * * * or other minerals, that lease contract shall provide for a lease royalty to the state of at least three-sixteenths (3/16) of any oil and gas or other minerals. The lease royalty shall be paid in the manner prescribed by the commission. The proceeds of any lease royalty shall be allocated as follows:
(a) One-half (1/2) of one percent (1%) shall be paid into a special fund to be appropriated by the Legislature * * * to be used by the commission for the administration of this chapter; * * *
(b) One percent (1%) shall be paid into the Pollution Emergency Fund to be appropriated by the Legislature * * * to be used by the Department of Environmental Quality solely for the purpose of clean-up, remedial or abatement actions involving pollution as a result of the exploration or production of oil or gas; * * *
(c) One percent (1%) shall be paid into the Gulf and Wildlife Protection Fund to be appropriated by the Legislature * * * to be used by the Wildlife Heritage Committee primarily for use * * * in the prudent management, preservation, protection and conservation of existing waters, lands and wildlife of this state and secondarily * * * for the acquisition of additional waters and lands, if the primary use is satisfied; and * * *
(d) Ninety-seven and one-half percent (97-1/2%) shall be deposited into the Education Trust Fund, created in Section 206A, Mississippi Constitution of 1890. * * * If the Legislature is not in session to appropriate funds * * * for the * * * clean-up, remedial or abatement actions involving pollution as a result of the exploration or production of oil or gas, then the Department of Environmental Quality may make expenditures from the Pollution Emergency Fund solely for that purpose.
(6) The commission may lease the submerged beds for sand and gravel * * * as it * * * deems proper. If the submerged beds lie in waters between this state and an adjoining state, there must be a cash realization to this state, including taxes paid for any sand and gravel, equal to that being had by the adjoining state. If required, the requisite consents * * * for leasing those sand and gravel beds shall be obtained from the United States.
(7) The Commission on Environmental Quality may * * * survey the territorial waters of this state in the Mississippi Sound and the Gulf of Mexico and * * * prepare a map or plat of those territorial waters, divided into blocks of not more than six thousand (6,000) acres each with coordinates and reference points based upon longitude and latitude surveys. The commission may adopt that survey, plat or map for leasing of the submerged lands for mineral development. * * * After * * * adoption of the plat or map, leases may be made by reference to the map or plat, which shall be on permanent file with the commission and a copy of the map or plat * * * on file in the offices of the State Oil and Gas Board.
SECTION 3. Section 29-7-5, Mississippi Code of 1972, is amended as follows:
29-7-5. When any state-owned land mentioned in this chapter is known to be within a well defined proven oil * * * or gas field or both, is subject to waste or dissipation, has not been * * *
leased or under contract, is so situated that the production of * * * oil * * * or gas or both is needed and useful to the state for any of its buildings * * * or institutions and can be profitably used because any * * * state-owned building or institution is situated on or in the immediate vicinity of that field or fields, * * * or when the state needs to drill any well or wells to protect its mineral resources, the * * * commission may * * *, in its discretion, * * * make contracts within the limit of appropriations made for those purposes. Any contracts shall be let * * * in the manner * * * provided by law for letting public contracts * * * for drilling a well or wells for oil or gas or both on the land or lands mentioned in this section, * * * completing the * * * well or wells as a producer of oil * * * or gas or both, and connecting any * * * well or wells to any * * * state-owned property or institution for use of the production * * * for fuel or other purposes.
(2) The commission may, * * * in its discretion, * * * proceed to drill under its own direction any well or wells on any state-owned land as it deems advisable, and may employ any drillers and employees as will be necessary in carrying on those operations. * * * The commission may also, in its discretion, * * * purchase, lease, or hire any machinery, tools, and other equipment necessary for drilling any well or wells, * * * which shall be paid for by the commission out of any funds appropriated by the Legislature for the purpose of carrying out * * * this chapter. The * * * commission may, in its discretion, sell or contract the sale of any surplus oil * * * or gas or both not needed by any state building or institution produced from any * * * well or wells, or may exchange or dispose of any oil or gas or both, by reciprocal agreement in order to serve any distant state-owned institution, but any oil or gas * * * or * * * both so disposed of shall not be * * * disposed of at any amount or value less than the market price * * *. The commission shall not drill or contract for the drilling of any well or wells in the Mississippi Sound.
(3) The commission shall determine * * * whether it would be to the best interest of the state to dispose of any resources by lease or proceed by contract to drill to the actual exploration and exploitation of the resources by the state itself. * * * That determination shall be governed * * * by a consideration of the best interest of the state, including environmental protection and economic aspects.
SECTION 4. Section 29-7-13, Mississippi Code of 1972, is amended as follows:
29-7-13. Unless otherwise required by law, all proceeds realized * * * or received from the sale of any and all oil or gas or other minerals, lease contract, rentals, royalties, or otherwise, contemplated by this chapter, shall be immediately deposited in the general fund of the State Treasury.
SECTION 5. This act shall take effect and be in force from and after its passage.