Senate Bill 2500

AN ACT TO AMEND SECTION 29-7-3, MISSISSIPPI CODE OF 1972, TO PROVIDE THAT A PORTION OF THE MONEY FROM MINERAL LEASES OF OFFSHORE STATE-OWNED PROPERTY SHALL BE DISTRIBUTED TO PUBLIC SCHOOL DISTRICTS IN THE SIX MOST SOUTHERN COUNTIES OF THE STATE; AND FOR RELATED PURPOSES.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:

SECTION 1. Section 29-7-3, Mississippi Code of 1972, is amended as follows:

29-7-3. (1) There shall be no development or extraction of oil, gas, or other minerals from state-owned lands by any private party without first obtaining a mineral lease therefor from the commission. The commission is hereby authorized and empowered, for and on behalf of the state, to lease any and all of the state land now owned (including that submerged or whereover the tide may ebb and flow) or hereafter acquired, to some reputable person, association, or company for oil and/or gas and/or other minerals in and under and which may be produced therefrom, excepting, however, sixteenth section school land, lieu lands, and such forfeited tax land and property the title to which is subject to any lawful redemption, for such consideration and upon such terms and conditions as the commission deems just and proper.

(2) No mineral lease of offshore lands shall allow offshore drilling operations north of the coastal barrier islands, except in Blocks 40, 41, 42, 43, 63, 64 and 66 through 98, inclusive. Further, surface offshore drilling operations will not be allowed within one (1) mile of Cat Island. The commission may only offer for lease the state-owned lands in Blocks 40, 41, 42, 43, 63, 64 and 66 through 98, inclusive, as shown on the Mississippi Department of Environmental Quality Bureau of Geology Plat of Lease Blocks (Open File Report 151) on terms and conditions and for a length of time as determined by the commission. The commission may not lease any lands or submerged lands off the Mississippi Gulf Coast that have been leased by the Department of Marine Resources before January 1, 2004, for any public or private oyster reef lease or any lands or submerged lands within one (1) mile of that lease for the purposes of drilling offshore for oil, gas and other minerals.

(3) Consistent with the conservation policies of this state under Section 53-1-1 et seq., the commission may offer for public bid any tracts or blocks of state-owned lands not currently under lease, which have been identified to the commission as having development potential for oil or natural gas, not less than once a year. Upon consultation with the Office of Geology in the Mississippi Department of Environmental Quality, the Secretary of State and any other state agency as the commission deems appropriate, the commission shall promulgate rules and regulations consistent with this chapter governing all aspects of the process of leasing state lands within its jurisdiction for mineral development, including the setting of all terms of the lease form to be used for leasing state-owned lands, any necessary fees, public bidding process, delay rental payments, shut-in royalty payments, and such other provisions as may be required. The Attorney General shall review the lease form adopted by the commission for legal sufficiency.

(4) There shall not be conducted any seismographic or other mineral exploration or testing activities on any state-owned lands within the mineral leasing jurisdiction of the commission without first obtaining a permit therefor from the commission. Upon consultation with the Office of Geology in the Mississippi Department of Environmental Quality, the Secretary of State and any other state agency as the commission deems appropriate, the commission shall promulgate rules and regulations governing all aspects of seismographic or other mineral exploration activity on state lands within its jurisdiction, including the establishing of fees and issuance of permits for the conduct of such mineral exploration activities. The Attorney General shall review the permit form adopted by the commission for legal sufficiency; * * * however, * * * persons obtaining permits from the commission 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 therefor by the Mississippi Commission on Wildlife, Fisheries and Parks which shall also receive all permit fees for such testing on those lands. In addition, persons obtaining permits from the commission for seismographic or other mineral exploration or testing activities on state-owned marine waters shall be subject to rules and regulations promulgated therefor by the Mississippi Department of Marine Resources which shall also receive all permit fees for such testing on those waters.

(5) * * * Each permit within the Mississippi Sound or tidelands shall be reviewed by the Mississippi Commission on Marine Resources and such special conditions as it may specify will be included in the permit. Information or data obtained in any mineral exploration activity on any and all state lands shall be disclosed to the state through the commission, upon demand. Such information or data shall be treated as confidential for a period of ten (10) years from the date of receipt thereof 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 such confidential information or data shall be guilty of a misdemeanor, and upon conviction thereof, be fined not more than Five Thousand Dollars ($5,000.00) or imprisoned in the county jail not more than one (1) year, or both.

(6) Whenever any state-owned land or property is leased for oil and gas and/or other minerals, such lease contract shall provide for a lease royalty to the state of at least three-sixteenths (3/16) of such oil and gas or other minerals, * * * to be paid in the manner prescribed by the commission. * * * The monies received in connection with the execution of such leases shall be distributed as follows:

(a) Five-tenths of one percent (5/10 of 1%) shall be retained in a special fund to be appropriated by the Legislature, One Hundred Thousand Dollars ($100,000.00) of which amount to be used by the commission for the administration of the leasing and permitting under this section. * * *

(b) Two percent (2%) shall be paid into a special fund to be designated as the "Gulf and Wildlife Protection Fund" to be appropriated by the Legislature, one-half (1/2) thereof to be apportioned as follows: an amount which shall not exceed One Million Dollars ($1,000,000.00) shall be used by the Mississippi Department of Wildlife, Fisheries and Parks and the Mississippi Department of Marine Resources solely for the purpose of cleanup, remedial or abatement actions involving pollution as a result of the exploration or production of oil or gas, and any amount in excess of such One Million Dollars ($1,000,000.00) shall be deposited into the Education Trust Fund, created in Section 206A, Mississippi Constitution of 1890. The remaining one-half (1/2) of such Gulf and Wildlife Protection Fund to be apportioned as follows: an amount which shall not exceed One Million Dollars ($1,000,000.00) shall be used by the Mississippi Commission on Wildlife, Fisheries and Parks and the Mississippi Department of Marine Resources for use first in the prudent management, preservation, protection and conservation of existing waters, lands and wildlife of this state and then, provided such purposes are accomplished, for the acquisition of additional waters and lands and any amount in excess of such One Million Dollars ($1,000,000.00) shall be deposited into the Education Trust Fund, created in Section 206A, Mississippi Constitution of 1890. However, in the event that the Legislature is not in session to appropriate funds from the Gulf and Wildlife Protection Fund for the purpose of cleanup, remedial or abatement actions involving pollution as a result of the exploration or production of oil or gas, then the Mississippi Department of Wildlife, Fisheries and Parks and the Mississippi Department of Marine Resources may make expenditures from this special fund account solely for said purpose. The commission may lease the submerged beds for sand and gravel on such a basis as it may deem proper, but where the waters lie between this state and an adjoining state, there must be a cash realization to this state, including taxes paid for such sand and gravel, equal to that being had by such adjoining state, in all cases the requisite consents therefor being lawfully obtained from the United States.

(c) Four percent (4%) of such amount that is attributable to offshore mineral leases shall be distributed to all the public school districts in the six (6) most southern counties of the state in the proportion that the average daily attendance of each school district bears to the total average daily attendance of all school districts in those counties.

(d) Four percent (4%) of such amount that is attributable to offshore mineral leases on Blocks 40, 41, 42 and 43 shall be distributed to all the public school districts in Jackson County, Mississippi in the proportion that the average daily attendance of each school district bears to the total average daily attendance of all school districts in the county.

(e) The remainder of such amount shall be deposited into the Education Trust Fund, created in Section 206A, Mississippi Constitution of 1890.

(7) The Department of Environmental Quality is authorized to employ competent engineering personnel to survey the territorial waters of this state in the Mississippi Sound and the Gulf of Mexico and to prepare a map or plat of such 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 is authorized to adopt such survey, plat or map for leasing of such submerged lands for mineral development; and such leases may, after the adoption of such plat or map, be made by reference to the map or plat, which shall be on permanent file with the commission and a copy thereof on file in the Office of the State Oil and Gas Board.

SECTION 2. This act shall take effect and be in force from and after July 1, 2012.