18-2.020. Payments and Consideration

(1) Leases.

(a) Consideration for private leases shall be based upon appraisal services obtained as provided in Chapter 18-1, F.A.C., except for oil and gas leases.

(b) For leases, other than oil and gas, staff will recommend awarding of the lease to the bidder offering the highest annual rental.

(c) For oil and gas leases, staff will recommend awarding of the lease to the bidder offering the highest bonus.

(d) Annual payments for oil and gas leases shall be determined by whether the leased parcel is producing or non-producing, as follows:

1. If the leased parcel is non-producing, the annual rental fee shall be $3.50 per net mineral acre.

2. If the leased parcel is producing, the royalties shall be as follows:

a. The royalty shall be 1/4 when the lease area is located within a section that is contiguous to any section with hydrocarbon production or a shut in well capable of producing hydrocarbons. However, if there is an intervening dry hole, the royalty shall be 1/5;

b. The royalty shall be 1/5 when the lease area is located at least one mile but no more than 3 miles from any section with hydrocarbon production or a shut in well capable of producing hydrocarbons. However, if there is an intervening dry hole in the 1/5 royalty area, the royalty shall be 1/6;

c. The royalty shall be 1/6 when the lease area is more than 3 miles from any section with hydrocarbon production or a shut in well capable of producing hydrocarbons.

d. An intervening dry hole must be located between a producing well and the proposed lease area and must be at least to the depth of or the stratigraphic equivalent of the well proposed to be drilled on the lease area.

e. Where multiple wells are drilled and the geographic location raises doubt as to whether the royalty for a potential new location is 1/4, 1/5 or 1/6, the higher royalty shall prevail.

f. As used in reference to oil and gas leases, a chart entitled “Royalty Areas Defined,” is shown as Exhibit “B.”

(e) The annual payment for mineral leases, other than oil and gas leases, shall be a predetermined percentage of revenues received from the extraction of mineral based on current fair market practices.

(2) Disposal.

(a) For parcels with an estimated value in excess of $500,000, the sale price for the disposal of uplands shall take into consideration appraisal services as provided in Chapter 18-1, F.A.C.

(b) Disposal of parcels with a market value over $500,000 shall be initially offered for sale by competitive bid. Any parcels unsuccessfully offered for sale by competitive bid, and parcels with an estimated value of $500,000 or less, may be sold by any reasonable means, such as those identified in Section 253.0341(9), F.S. The real estate brokerage fee or auction fee shall not exceed 10% of the purchase price of the parcel.

(c) Sales of mineral interests shall be competitively bid unless the Trustees do not own the surface, in which case the consideration shall be negotiated with the surface owner.

(d) If successful in the bid process, private landowners may apply their land as full or partial payment for the state parcel but in no case shall the credit given be more than the market value.

(3) Use Agreements.

(a) Appraisals and competitive bidding are not required for use agreements.

(b) Except for geophysical crossings, the consideration for use agreements shall be negotiated based on the type of activity.

(c) The consideration for use agreements for geophysical crossings shall be set at $600 per mile. The mileage fee shall be based upon the number of miles of uplands permitted and is non-refundable.

(4) Easements.

(a) A one-time fee for private easements shall be assessed and based upon an appraisal, a comparable sales analysis, or a broker’s opinion of value. Notwithstanding, private easements shall be assessed and based upon an appraisal if the Division, using best professional judgment, finds the easement has an estimated value greater than $10,000 or if the Division, using best professional judgment, is unable to determine an initial estimated value.

(b) For the purposes of this rule, broker’s opinion of value and comparable sales analysis are valuation techniques, which are not appraisals, that are performed under Chapter 475, Part 1, F.S., comparing available market data such as sales, listings, and contracts to the property being analyzed.

(c) Competitive bidding shall not be required for this activity.

(d) Public easements shall not be subject to an easement fee.

(5) Release of Restrictions or Reverters.

(a) There shall be no consideration for the release of reserved interest for road right of way, canal right of way and right of entry for oil and gas exploration activities.

(b) The consideration for release of all other deed or dedication restrictions or reverters shall be based upon negotiation and shall be sold only to the current property owner.

(6) Letters of authorization.

(a) Appraisals and competitive bidding are not required for letters of authorization.

(b) Consideration for letters of authorization shall be negotiated based on the type of activity.

(7) Competitive Bidding Procedures.

(a) When competitive bidding is required, notice to bidders shall be given by publication in a newspaper published in the county in which the lands are located not less than once a week for two consecutive weeks. The notice shall provide the following:

1. Location of the parcel by Section, Township and Range, or by tax identification number;

2. The total approximate acreage of the parcel for lease or sale;

3. The term of lease and any renewal options, if applicable;

4. A statement of obligations of the grantee for taxes and drainage assessments;

5. The minimum value of improvements to be made, if any;

6. Any conditions deemed necessary by the Board;

7. The deadline, date and time, for the receipt of sealed bids in the office of the division; and,

8. The address to which the bid shall be directed and posted, or

9. In lieu of all the foregoing, the publication may be limited to subparagraphs 1., 2. and 8., and notice that a complete statement concerning terms of the lease or sale will be forwarded to interested bidders upon request.

(b) When the requested lease is for oil and gas activities or a mineral sale, the notice to bidders shall be given by publication in a newspaper of general circulation in Leon County and in the area vicinity not less than once a week for four (4) consecutive weeks. The last publication in both newspapers shall not be less than 5 days in advance of the award date.

(c) Upon request, applicants will be sent a bid specification packet which shall include the following information:

1. Materials, instructions and deadline for submitting bids; and,

2. A copy of the proposed lease or sales contract.

(d) Sealed bids shall be accompanied by a certified check, cashier’s check, or letter of credit from a financial institution as defined by Section 655.005, F.S., and shall not exceed either 10% of the amount bid for the annual rental fee or 10% of the purchase price as payment for the earnest money deposit. The exact amount required as the earnest money deposit shall be set forth in the bid specifications packet. The successful bidder’s deposit will be credited toward the lease fee or purchase price unless otherwised provided in the bid documents.

(e) Deposits for unsuccessful or rejected bids shall be returned within 10 working days after the awarding of the bid by the Trustees.

(8) Administrative Fee.

Each government lessee shall pay to the division an annual administrative fee of $300.00 for each lease or management agreement authorizing the lessee to occupy uplands.

(a) The annual administrative fee shall be payable in advance beginning on July 1, 1993, and continuing on July 1 of each year thereafter.

(b) For leases and for subleases executed after July 1, 1993, the initial annual administrative fee shall be prorated based on the number of months or fraction thereof remaining in the fiscal year of execution.

(c) Each annual payment thereafter shall be due and payable on July 1 of each subsequent year in the amount of $300.00.

Rulemaking Authority 253.03, 253.0341 FS. Law Implemented 253.03, 253.0341, 253.42, 253.51-.54, 253.571, 270.11 FS. History–New 6-4-96, Amended 5-29-08, 5-15-17.