As Reported by the Senate Agriculture, Environment and Natural Resources Committee

129th General Assembly Regular Session 2011-2012

Sub. H. B. No. 133

Representative Adams, J. 

Cosponsors: Representatives Beck, Blessing, Boose, Brenner, Buchy, Burke, Combs, Gonzales, Goodwin, Grossman, Hackett, Hall, Hayes, Huffman, Landis, Maag, Martin, McKenney, Rosenberger, Ruhl, Sears, Stebelton, Thompson, Uecker, Wachtmann, Young, Amstutz, Blair, Hagan, C., Hottinger, Mecklenborg, Newbold, Roegner, Slaby 

Senators Faber, Schaffer 

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A BILL

To amend sections 123.01, 1531.06, 1531.33, and

1

3345.181, to enact sections 131.50, 1503.012,

2

1509.70, 1509.71, 1509.72, 1509.73, 1509.74,

3

1509.75, 1509.76, 1509.77, 1509.78, and 1541.26,

4

and to repeal sections 5119.40, 5120.12, and

5

5123.23 of the Revised Code to create the Oil and

6

Gas Leasing Commission, to establish a procedure

7

for leasing land owned or under the control of

8

state agencies for oil and gas production in order

9

to provide funding for capital costs for the

10

agencies, and to exclude nature preserves from

11

drilling.

12

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:

Section 1. That sections 123.01, 1531.06, 1531.33, and	13
3345.181 be amended and sections 131.50, 1503.012, 1509.70,	14
1509.71, 1509.72, 1509.73, 1509.74, 1509.75, 1509.76, 1509.77,	15
1509.78, and 1541.26 of the Revised Code be enacted to read as	16
follows:	17

Sec. 123.01.  (A) The department of administrative services,	18
in addition to those powers enumerated in Chapters 124. and 125.	19
of the Revised Code and provided elsewhere by law, shall exercise	20
the following powers:	21

(1) To prepare, or contract to be prepared, by licensed	22
engineers or architects, surveys, general and detailed plans,	23
specifications, bills of materials, and estimates of cost for any	24
projects, improvements, or public buildings to be constructed by	25
state agencies that may be authorized by legislative	26
appropriations or any other funds made available therefor,	27
provided that the construction of the projects, improvements, or	28
public buildings is a statutory duty of the department. This	29
section does not require the independent employment of an	30
architect or engineer as provided by section 153.01 of the Revised	31
Code in the cases to which that section applies nor affect or	32
alter the existing powers of the director of transportation.	33

(2) To have general supervision over the construction of any	34
projects, improvements, or public buildings constructed for a	35
state agency and over the inspection of materials previous to	36
their incorporation into those projects, improvements, or	37
buildings;	38

(3) To make contracts for and supervise the construction of	39
any projects and improvements or the construction and repair of	40
buildings under the control of a state agency, except contracts	41
for the repair of buildings under the management and control of	42
the departments of public safety, job and family services, mental	43
health, developmental disabilities, rehabilitation and correction,	44
and youth services, the bureau of workers' compensation, the	45
rehabilitation services commission, and boards of trustees of	46
educational and benevolent institutions and except contracts for	47
the construction of projects that do not require the issuance of a	48
building permit or the issuance of a certificate of occupancy and	49
that are necessary to remediate conditions at a hazardous waste	50
facility, solid waste facility, or other location at which the	51
director of environmental protection has reason to believe there	52
is a substantial threat to public health or safety or the	53
environment. These contracts shall be made and entered into by the	54
directors of public safety, job and family services, mental	55
health, developmental disabilities, rehabilitation and correction,	56
and youth services, the administrator of workers' compensation,	57
the rehabilitation services commission, the boards of trustees of	58
such institutions, and the director of environmental protection,	59
respectively. All such contracts may be in whole or in part on	60
unit price basis of maximum estimated cost, with payment computed	61
and made upon actual quantities or units.	62

(4) To prepare and suggest comprehensive plans for the	63
development of grounds and buildings under the control of a state	64
agency;	65

(5) To acquire, by purchase, gift, devise, lease, or grant,	66
all real estate required by a state agency, in the exercise of	67
which power the department may exercise the power of eminent	68
domain, in the manner provided by sections 163.01 to 163.22 of the	69
Revised Code;	70

(6) To make and provide all plans, specifications, and models	71
for the construction and perfection of all systems of sewerage,	72
drainage, and plumbing for the state in connection with buildings	73
and grounds under the control of a state agency;	74

(7) To erect, supervise, and maintain all public monuments	75
and memorials erected by the state, except where the supervision	76
and maintenance is otherwise provided by law;	77

(8) To procure, by lease, storage accommodations for a state	78
agency;	79

(9) To lease or grant easements or licenses for unproductive	80
and unused lands or other property under the control of a state	81
agency. Such leases, easements, or licenses shall be granted for a	82
period not to exceed fifteen years and shall be executed for the	83
state by the director of administrative services and the governor	84
and shall be approved as to form by the attorney general, provided	85
that leases, easements, or licenses may be granted to any county,	86
township, municipal corporation, port authority, water or sewer	87
district, school district, library district, health district, park	88
district, soil and water conservation district, conservancy	89
district, or other political subdivision or taxing district, or	90
any agency of the United States government, for the exclusive use	91
of that agency, political subdivision, or taxing district, without	92
any right of sublease or assignment, for a period not to exceed	93
fifteen years, and provided that the director shall grant leases,	94
easements, or licenses of university land for periods not to	95
exceed twenty-five years for purposes approved by the respective	96
university's board of trustees wherein the uses are compatible	97
with the uses and needs of the university and may grant leases of	98
university land for periods not to exceed forty years for purposes	99
approved by the respective university's board of trustees pursuant	100
to section 123.77 of the Revised Code.	101

(10) To lease space for the use of a state agency;

102

(11) To have general supervision and care of the storerooms,	103
offices, and buildings leased for the use of a state agency;	104

(12) To exercise general custodial care of all real property	105
of the state;	106

(13) To assign and group together state offices in any city	107
in the state and to establish, in cooperation with the state	108
agencies involved, rules governing space requirements for office	109
or storage use;	110

(14) To lease for a period not to exceed forty years,	111
pursuant to a contract providing for the construction thereof	112
under a lease-purchase plan, buildings, structures, and other	113
improvements for any public purpose, and, in conjunction	114
therewith, to grant leases, easements, or licenses for lands under	115
the control of a state agency for a period not to exceed forty	116
years. The lease-purchase plan shall provide that at the end of	117
the lease period, the buildings, structures, and related	118
improvements, together with the land on which they are situated,	119
shall become the property of the state without cost.	120

(a) Whenever any building, structure, or other improvement is	121
to be so leased by a state agency, the department shall retain	122
either basic plans, specifications, bills of materials, and	123
estimates of cost with sufficient detail to afford bidders all	124
needed information or, alternatively, all of the following plans,	125
details, bills of materials, and specifications:	126

(i) Full and accurate plans suitable for the use of mechanics	127
and other builders in the improvement;	128

(ii) Details to scale and full sized, so drawn and	129
represented as to be easily understood;	130

(iii) Accurate bills showing the exact quantity of different	131
kinds of material necessary to the construction;	132

(iv) Definite and complete specifications of the work to be	133
performed, together with such directions as will enable a	134
competent mechanic or other builder to carry them out and afford	135
bidders all needed information;	136

(v) A full and accurate estimate of each item of expense and	137
of the aggregate cost thereof.	138

(b) The department shall give public notice, in such	139
newspaper, in such form, and with such phraseology as the director	140
of administrative services prescribes, published once each week	141
for four consecutive weeks, of the time when and place where bids	142
will be received for entering into an agreement to lease to a	143
state agency a building, structure, or other improvement. The last	144
publication shall be at least eight days preceding the day for	145
opening the bids. The bids shall contain the terms upon which the	146
builder would propose to lease the building, structure, or other	147
improvement to the state agency. The form of the bid approved by	148
the department shall be used, and a bid is invalid and shall not	149
be considered unless that form is used without change, alteration,	150
or addition. Before submitting bids pursuant to this section, any	151
builder shall comply with Chapter 153. of the Revised Code.	152

(c) On the day and at the place named for receiving bids for	153
entering into lease agreements with a state agency, the director	154
of administrative services shall open the bids and shall publicly	155
proceed immediately to tabulate the bids upon duplicate sheets. No	156
lease agreement shall be entered into until the bureau of workers'	157
compensation has certified that the person to be awarded the lease	158
agreement has complied with Chapter 4123. of the Revised Code,	159
until, if the builder submitting the lowest and best bid is a	160
foreign corporation, the secretary of state has certified that the	161
corporation is authorized to do business in this state, until, if	162
the builder submitting the lowest and best bid is a person	163
nonresident of this state, the person has filed with the secretary	164
of state a power of attorney designating the secretary of state as	165
its agent for the purpose of accepting service of summons in any	166
action brought under Chapter 4123. of the Revised Code, and until	167
the agreement is submitted to the attorney general and the	168
attorney general's approval is certified thereon. Within thirty	169
days after the day on which the bids are received, the department	170
shall investigate the bids received and shall determine that the	171
bureau and the secretary of state have made the certifications	172
required by this section of the builder who has submitted the	173
lowest and best bid. Within ten days of the completion of the	174
investigation of the bids, the department shall award the lease	175
agreement to the builder who has submitted the lowest and best bid	176
and who has been certified by the bureau and secretary of state as	177
required by this section. If bidding for the lease agreement has	178
been conducted upon the basis of basic plans, specifications,	179
bills of materials, and estimates of costs, upon the award to the	180
builder the department, or the builder with the approval of the	181
department, shall appoint an architect or engineer licensed in	182
this state to prepare such further detailed plans, specifications,	183
and bills of materials as are required to construct the building,	184
structure, or improvement. The department shall adopt such rules	185
as are necessary to give effect to this section. The department	186
may reject any bid. Where there is reason to believe there is	187
collusion or combination among bidders, the bids of those	188
concerned therein shall be rejected.	189

(15) To acquire by purchase, gift, devise, or grant and to	190
transfer, lease, or otherwise dispose of all real property	191
required to assist in the development of a conversion facility as	192
defined in section 5709.30 of the Revised Code as that section	193
existed before its repeal by Amended Substitute House Bill 95 of	194
the 125th general assembly;	195

(16) To lease for a period not to exceed forty years,	196
notwithstanding any other division of this section, the	197
state-owned property located at 408-450 East Town Street,	198
Columbus, Ohio, formerly the state school for the deaf, to a	199
developer in accordance with this section. "Developer," as used in	200
this section, has the same meaning as in section 123.77 of the	201
Revised Code.	202

Such a lease shall be for the purpose of development of the	203
land for use by senior citizens by constructing, altering,	204
renovating, repairing, expanding, and improving the site as it	205
existed on June 25, 1982. A developer desiring to lease the land	206
shall prepare for submission to the department a plan for	207
development. Plans shall include provisions for roads, sewers,	208
water lines, waste disposal, water supply, and similar matters to	209
meet the requirements of state and local laws. The plans shall	210
also include provision for protection of the property by insurance	211
or otherwise, and plans for financing the development, and shall	212
set forth details of the developer's financial responsibility.	213

The department may employ, as employees or consultants,	214
persons needed to assist in reviewing the development plans. Those	215
persons may include attorneys, financial experts, engineers, and	216
other necessary experts. The department shall review the	217
development plans and may enter into a lease if it finds all of	218
the following:	219

(a) The best interests of the state will be promoted by	220
entering into a lease with the developer;	221

(b) The development plans are satisfactory;

222

(c) The developer has established the developer's financial	223
responsibility and satisfactory plans for financing the	224
development.	225

The lease shall contain a provision that construction or	226
renovation of the buildings, roads, structures, and other	227
necessary facilities shall begin within one year after the date of	228
the lease and shall proceed according to a schedule agreed to	229
between the department and the developer or the lease will be	230
terminated. The lease shall contain such conditions and	231
stipulations as the director considers necessary to preserve the	232
best interest of the state. Moneys received by the state pursuant	233
to this lease shall be paid into the general revenue fund. The	234
lease shall provide that at the end of the lease period the	235
buildings, structures, and related improvements shall become the	236
property of the state without cost.	237

(17) To lease to any person any tract of land owned by the	238
state and under the control of the department, or any part of such	239
a tract, for the purpose of drilling for or the pooling of oil or	240
gas. Such a lease shall be granted for a period not exceeding	241
forty years, with the full power to contract for, determine the	242
conditions governing, and specify the amount the state shall	243
receive for the purposes specified in the lease, and shall be	244
prepared as in other cases.	245

(18) To manage the use of space owned and controlled by the	246
department, including space in property under the jurisdiction of	247
the Ohio building authority, by doing all of the following:	248

(a) Biennially implementing, by state agency location, a	249
census of agency employees assigned space;	250

(b) Periodically in the discretion of the director of	251
administrative services:	252

(i) Requiring each state agency to categorize the use of	253
space allotted to the agency between office space, common areas,	254
storage space, and other uses, and to report its findings to the	255
department;	256

(ii) Creating and updating a master space utilization plan	257
for all space allotted to state agencies. The plan shall	258
incorporate space utilization metrics.	259

(iii) Conducting a cost-benefit analysis to determine the	260
effectiveness of state-owned buildings;	261

(iv) Assessing the alternatives associated with consolidating	262
the commercial leases for buildings located in Columbus.	263

(c) Commissioning a comprehensive space utilization and	264
capacity study in order to determine the feasibility of	265
consolidating existing commercially leased space used by state	266
agencies into a new state-owned facility.	267

(B) This section and section 125.02 of the Revised Code shall	268
not interfere with any of the following:	269

(1) The power of the adjutant general to purchase military	270
supplies, or with the custody of the adjutant general of property	271
leased, purchased, or constructed by the state and used for	272
military purposes, or with the functions of the adjutant general	273
as director of state armories;	274

(2) The power of the director of transportation in acquiring	275
rights-of-way for the state highway system, or the leasing of	276
lands for division or resident district offices, or the leasing of	277
lands or buildings required in the maintenance operations of the	278
department of transportation, or the purchase of real property for	279
garage sites or division or resident district offices, or in	280
preparing plans and specifications for and constructing such	281
buildings as the director may require in the administration of the	282
department;	283

(3) The power of the director of public safety and the	284
registrar of motor vehicles to purchase or lease real property and	285
buildings to be used solely as locations to which a deputy	286
registrar is assigned pursuant to division (B) of section 4507.011	287
of the Revised Code and from which the deputy registrar is to	288
conduct the deputy registrar's business, the power of the director	289
of public safety to purchase or lease real property and buildings	290
to be used as locations for division or district offices as	291
required in the maintenance of operations of the department of	292
public safety, and the power of the superintendent of the state	293
highway patrol in the purchase or leasing of real property and	294
buildings needed by the patrol, to negotiate the sale of real	295
property owned by the patrol, to rent or lease real property owned	296
or leased by the patrol, and to make or cause to be made repairs	297
to all property owned or under the control of the patrol;	298

(4) The power of the division of liquor control in the	299
leasing or purchasing of retail outlets and warehouse facilities	300
for the use of the division;	301

(5) The power of the director of development to enter into	302
leases of real property, buildings, and office space to be used	303
solely as locations for the state's foreign offices to carry out	304
the purposes of section 122.05 of the Revised Code;	305

(6) The power of the director of environmental protection to	306
enter into environmental covenants, to grant and accept easements,	307
or to sell property pursuant to division (G) of section 3745.01 of	308
the Revised Code.	309

(C) Purchases for, and the custody and repair of, buildings	310
under the management and control of the capitol square review and	311
advisory board, the rehabilitation services commission, the bureau	312
of workers' compensation, or the departments of public safety, job	313
and family services, mental health, developmental disabilities,	314
and rehabilitation and correction, and buildings of educational	315
and benevolent institutions under the management and control of	316
boards of trustees, are not subject to the control and	317
jurisdiction of the department of administrative services.	318

(D) Any instrument by which real property is acquired	319
pursuant to this section shall identify the agency of the state	320
that has the use and benefit of the real property as specified in	321
section 5301.012 of the Revised Code.	322

Sec. 131.50.  (A) There is hereby created in the state	323
treasury the state land royalty fund consisting of money credited	324
to it under section 1509.73 of the Revised Code. Any investment	325
proceeds earned on money in the fund shall be credited to the fund	326
and used as required in division (B) of this section.	327

(B) Money in the state land royalty fund shall be used by	328
state agencies to acquire land and to pay capital costs of state	329
agencies, including equipment and renovations and repairs of	330
facilities, that have contributed to the fund under section	331
1509.73 of the Revised Code. Such a state agency is entitled to	332
receive from the fund the amount that the state agency contributed	333
and a share of the investment earnings of the fund in an amount	334
that is equivalent to the proportionate share of contributions	335
made by the state agency to the fund.	336

(C) As used in this section, "state agency" has the same	337
meaning as in section 1509.70 of the Revised Code.	338

Sec. 1503.012. There is hereby created in the state treasury	339
the forestry mineral royalties fund. The fund shall consist of	340
money deposited into it under section 1509.73 of the Revised Code.	341
Any investment proceeds earned on money in the fund shall be	342
credited to the fund.	343

Money in the fund shall be used by the division of forestry	344
to acquire land and to pay capital costs, including equipment and	345
repairs and renovations of facilities, that are owned by the state	346
and administered by the division. Expenditures from the fund shall	347
be approved by the director of natural resources.	348

Sec. 1509.70. As used in sections 1509.70 to 1509.77 of the	349
Revised Code:	350

(A) "Class 1 property" means property owned or controlled by	351
a state agency concerning which there are no encumbrances or deed	352
restrictions that limit the exploration or drilling for oil or gas	353
on the property.	354

(B) "Class 2 property" means property that is owned or	355
controlled by a state university or college or that is owned or	356
controlled by another state agency concerning which there is a	357
federal encumbrance or monetary interest that limits or prohibits	358
the exploration or drilling for oil or gas on the property.	359

(C) "Class 3 property" means property owned or controlled by	360
a state agency to which all of the following apply:	361

(1) The property is not a class 2 or class 4 property.

362

(2) The property is of insufficient size or shape to meet the	363
requirements for drilling a well on the property established under	364
section 1509.24 or 1509.25 of the Revised Code.	365

(3) The property is necessary for pooling with other parcels	366
of property for the purpose of forming a drilling unit in order to	367
meet the requirements for drilling a well established under	368
section 1509.24 or 1509.25 of the Revised Code.	369

(D) "Class 4 property" means property owned or controlled by	370
a state agency concerning which there is a provision in the deed	371
that limits the exploration or drilling for oil or gas on the	372
property.	373

(E) "Formation" means any of the following:

374

(1) The distance from the surface of the land to the top of	375
the Onondaga limestone;	376

(2) The distance from the top of the Onondaga limestone to	377
the bottom of the Queenston formation;	378

(3) The distance from the bottom of the Queenston formation	379
to the top of the Trenton limestone;	380

(4) The distance from the top of the Trenton limestone to the	381
top of the Knox formation;	382

(5) The distance from the top of the Knox formation to the	383
basement rock.	384

(F) "State agency" means both of the following:

385

(1) "State agency" as defined in section 1.60 of the Revised	386
Code;	387

(2) "State university or college" as defined in section	388
3345.12 of the Revised Code.	389

Sec. 1509.71. (A) It is the policy of the state to provide	390
access to and support the exploration for, development of, and	391
production of oil and natural gas resources owned or controlled by	392
the state in an effort to use the state's natural resources	393
responsibly.	394

(B) There is hereby created the oil and gas leasing	395
commission consisting of the chief of the division of geological	396
survey and the following four members appointed by the governor:	397

(1) Two members from a list of not less than four persons	398
recommended by a statewide organization representing the oil and	399
gas industry;	400

(2) One member of the public with expertise in finance or	401
real estate;	402

(3) One member representing a statewide environmental or	403
conservation organization.	404

(C) Initial appointments shall be made to the commission not	405
later than thirty days after the effective date of this section.	406
Of the initial members appointed to the commission, one shall	407
serve a term of two years, one shall serve a term of three years,	408
one shall serve a term of four years, and one shall serve a term	409
of five years. Thereafter, terms of office of members shall be for	410
five years from the date of appointment. Each member appointed by	411
the governor shall hold office from the date of appointment until	412
the end of the term for which the member was appointed. The	413
governor shall fill a vacancy occurring on the commission by	414
appointing a member within sixty days after the vacancy occurs. A	415
member appointed to fill a vacancy occurring prior to the	416
expiration of the term for which the member's predecessor was	417
appointed shall hold office for the remainder of that term. A	418
member shall continue in office subsequent to the expiration date	419
of the member's term until the member's successor takes office, or	420
until a period of sixty days has elapsed, whichever occurs first.	421

(D) Three members constitute a quorum of the commission, and	422
no action of the commission is valid unless it has the concurrence	423
of at least three members. The commission shall keep a record of	424
its proceedings. The chief of the division of geological survey	425
shall serve as the chairperson of the commission.	426

(E) The governor may remove an appointed member from the	427
commission for inefficiency, malfeasance, misfeasance, or	428
nonfeasance.	429

(F) Members of the commission shall receive no compensation,	430
but shall be reimbursed for their actual and necessary expenses	431
incurred in the course of the performance of their duties as	432
members of the commission.	433

(G) The department of natural resources shall furnish	434
clerical, technical, legal, and other services required by the	435
commission in the performance of its duties.	436

Sec. 1509.72.  (A) A state agency shall submit to the oil and	437
gas leasing commission an inventory of each parcel of land that is	438
owned or controlled by the agency. The inventory shall classify	439
each parcel as a class 1, class 2, class 3, or class 4 property.	440
The commission may request a state agency to submit documentation	441
supporting the classification of each parcel of land.	442

(B) Not later than ninety days after the acquisition of a	443
parcel of state land occurring after the effective date of this	444
section, the state agency that owns or controls the parcel shall	445
classify the parcel in the same manner that parcels are classified	446
under division (A) of this section.	447

(C) The department of natural resources shall post on the	448
department's web site a listing of each parcel of state land and	449
the classification assigned to the parcel under this section. The	450
commission shall provide to the department the information	451
necessary for the department to comply with this division.	452

(D) Not later than two hundred seventy days after the	453
effective date of this section, the director of natural resources	454
shall adopt rules in accordance with Chapter 119. of the Revised	455
Code establishing procedures and requirements for publishing	456
notice on the department's web site of each nomination received by	457
the commission under section 1509.73 of the Revised Code for a	458
period of not less than twenty-one days prior to the commission's	459
approval or disapproval of each nomination. The notification shall	460
identify the parcel of land that is the subject of a nomination	461
and include a statement that a person may submit comments to the	462
commission concerning the nomination. The commission shall provide	463
to the department the information necessary for the department to	464
comply with this division.	465

Sec. 1509.73. (A)(1) Beginning on the effective date of this	466
section and ending on the effective date of the rules adopted	467
under section 1509.74 of the Revised Code, a state agency, in	468
consultation with the oil and gas leasing commission, may lease a	469
formation within a parcel of land that is owned or controlled by	470
the state agency for the exploration for and development and	471
production of oil or natural gas. The state agency shall establish	472
bid fees, signing fees, rentals, and at least a one-eighth	473
landowner royalty. On and after the effective date of the rules	474
adopted under section 1509.74 of the Revised Code, a formation	475
within a parcel of land that is owned or controlled by a state	476
agency may be leased for the exploration for and development and	477
production of oil or natural gas only in accordance with divisions	478
(A)(2) to (H) of this section and those rules.	479

(2) Not earlier than two hundred seventy days after the	480
effective date of this section, a person that is an owner and that	481
is interested in leasing a formation within a parcel of land that	482
is owned or controlled by a state agency for the exploration for	483
and the development and production of oil or natural gas may	484
submit to the oil and gas leasing commission a nomination that	485
identifies the parcel of land. A person submitting a nomination	486
shall submit it in the manner and form established in rules	487
adopted under section 1509.74 of the Revised Code and shall	488
include with the nomination both of the following:	489

(a) The information required by those rules;

490

(b) The nomination fee established in those rules.

491

(B)(1) In the calendar quarter following the receipt of a	492
nomination of a parcel of land, the commission shall conduct a	493
meeting for the purpose of determining whether to enter into a	494
lease for a formation within the parcel of land that is identified	495
in the nomination. The commission also shall review the nomination	496
of the parcel of land and determine if the parcel of land has been	497
classified under section 1509.72 of the Revised Code. If the	498
parcel of land that is the subject of the nomination has not been	499
classified, the commission immediately shall send a copy of the	500
nomination to the state agency that owns or controls the parcel	501
that is the subject of the nomination. Not later than fifteen days	502
after receipt of a copy of the nomination, the state agency shall	503
classify the parcel of land as a class 1, class 2, class 3, or	504
class 4 property and submit the classification to the commission.	505
On receipt of the state agency's classification of the parcel of	506
land, the commission shall provide the department of natural	507
resources the information necessary for the department to comply	508
with divisions (C) and (D) of section 1509.72 of the Revised Code.	509

After a parcel of land that is the subject of a nomination	510
has been classified under section 1509.72 of the Revised Code or	511
division (B)(1) of this section, as applicable, the commission	512
shall approve or disapprove the nomination. In making its decision	513
to approve or disapprove the nomination of the parcel of land, the	514
commission shall consider all of the following:	515

(a) The economic benefits, including the potential income	516
from an oil or natural gas operation, that would result if the	517
lease of a formation that is the subject of the nomination were	518
approved;	519

(b) Whether the proposed oil or gas operation is compatible	520
with the current uses of the parcel of land that is the subject of	521
the nomination;	522

(c) The environmental impact that would result if the lease	523
of a formation that is the subject of the nomination were	524
approved;	525

(d) Any potential adverse geological impact that would result	526
if the lease of a formation that is the subject of the nomination	527
were approved;	528

(e) Any potential impact to visitors or users of a parcel of	529
land that is the subject of the nomination;	530

(f) Any potential impact to the operations or equipment of a	531
state agency that is a state university or college if the lease of	532
a formation within a parcel of land owned or controlled by the	533
university or college that is the subject of the nomination were	534
executed;	535

(g) Any objections to the nomination submitted to the	536
commission by the state agency that owns or controls the land on	537
which the proposed oil or natural gas operation would take place;	538

(h) Any comments or objections to the nomination submitted to	539
the commission by residents of this state or other users of the	540
parcel of land that is the subject of the nomination;	541

(i) Any other factors that the commission establishes in	542
rules adopted under section 1509.74 of the Revised Code.	543

(2) The commission shall deny a nomination of a parcel of	544
land that is a class 3 property. The commission shall send notice	545
of the denial by certified mail to the person that submitted the	546
nomination.	547

(3) Prior to making its decision to approve or disapprove a	548
nomination, the commission shall notify the state agency that owns	549
or controls the land on which the oil or gas operation would take	550
place.	551

(4) The commission shall approve or deny a nomination not	552
later than two calendar quarters following the receipt of the	553
nomination. Notice of the decision of the commission shall be sent	554
by certified mail to the person that submitted the nomination.	555

(5) If the commission approves a nomination, the commission	556
shall notify the state agency that owns or controls the parcel of	557
land that is the subject of a nomination of the commission's	558
approval of the nomination. The notification shall request the	559
state agency to submit to the commission special terms and	560
conditions that will apply to the lease of a formation within the	561
parcel of land because of specific conditions related to the	562
parcel of land. The state agency shall submit the special terms	563
and conditions not later than sixty days after receipt of a notice	564
from the commission.	565

(6) If the commission approves a nomination for a parcel of	566
land that is a class 1 property, the commission shall offer for	567
lease each formation that is within the parcel of land. If the	568
commission approves a nomination for a parcel of land that is a	569
class 2 or class 4 property, the commission shall not offer for	570
lease any formation that is within the parcel of land unless the	571
state agency that owns or controls the parcel of land notifies the	572
commission that a formation or formations that are within the	573
parcel of land may be offered for lease.	574

(C) Each calendar quarter, the commission shall proceed to	575
advertise for bids for a lease for a formation within a parcel of	576
land that was the subject of a nomination approved during the	577
previous calendar quarter that is a class 1 property or that is a	578
class 2 or class 4 property for which the commission has received	579
notice from the state agency that owns or controls the parcel of	580
land under division (B)(6) of this section that a formation or	581
formations that are within the parcel of land may be offered for	582
lease. The advertisement shall be provided to the department of	583
natural resources, and the department shall publish the	584
advertisement on its web site for a period of time established by	585
the commission. The advertisement shall include all of the	586
following:	587

(1) The procedure for the submission of a bid to enter into a	588
lease for a formation within a parcel of land;	589

(2) A statement that a standard lease form that is consistent	590
with the practices of the oil and natural gas industries will be	591
used for the lease of a formation within the parcel of land;	592

(3) A copy of the standard lease form that will be used for	593
the lease of a formation within the parcel of land;	594

(4) Special terms and conditions, if applicable, that apply	595
to the lease because of specific conditions related to the parcel	596
of land;	597

(5) The amount of the bid fee that is required to be	598
submitted with a bid;	599

(6) Any other information that the commission considers	600
pertinent to the advertisement for bids.	601

(D) A person submitting a bid to enter into a lease under	602
this section shall pay a bid fee established in rules adopted	603
under section 1509.74 of the Revised Code.	604

(E) In order to encourage the submission of bids and the	605
responsible and reasonable development of the state's natural	606
resources, the information that is contained in a bid submitted to	607
the commission under this section shall be confidential and shall	608
not be disclosed before a person is selected under division (F) of	609
this section unless the commission determines otherwise.	610

(F) The commission shall establish a deadline for the	611
submission of bids for each lease regarding a particular parcel of	612
land and shall notify the department of the deadline. The	613
department shall post the deadline for the submission of bids for	614
each lease on the department's web site. A person shall submit a	615
bid in accordance with the procedures and requirements established	616
by the commission in rules adopted under section 1509.74 of the	617
Revised Code.	618

The commission shall select the person who submits the	619
highest and best bid for each formation within that parcel of	620
land, taking into account the financial responsibility of the	621
prospective lessee and the ability of the prospective lessee to	622
perform its obligations under the lease. After the commission	623
selects a person, the commission shall notify the applicable state	624
agency and send the person's bid to the agency. The state agency	625
shall enter into a lease with the person selected by the	626
commission.	627

(G)(1) Except as otherwise provided in division (G)(2) of	628
this section, all money received by a state agency from signing	629
fees, rentals, and royalty payments for leases entered into under	630
this section shall be paid by the state agency into the state	631
treasury to the credit of the state land royalty fund created in	632
section 131.50 of the Revised Code.	633

(2) Money received by a state agency from signing fees,	634
rentals, and royalty payments for leases entered into under this	635
section on land owned or controlled by the division of forestry,	636
wildlife, or parks and recreation in the department of natural	637
resources shall be deposited into one of the following funds, as	638
applicable:	639

(a) The forestry mineral royalties fund created in section	640
1503.012 of the Revised Code if the lease pertains to land owned	641
or controlled by the division of forestry;	642

(b) The wildlife habitat fund created in section 1531.33 of	643
the Revised Code if the lease pertains to land owned or controlled	644
by the division of wildlife;	645

(c) The parks mineral royalties fund created in section	646
1541.26 of the Revised Code if the lease pertains to land owned or	647
controlled by the division of parks and recreation.	648

(H) All money received from nomination fees and bid fees	649
shall be paid into the state treasury to the credit of the oil and	650
gas leasing commission administration fund created in section	651
1509.75 of the Revised Code.	652

(I) Notwithstanding any other provision of this section to	653
the contrary, a nature preserve as defined in section 1517.01 of	654
the Revised Code that is owned or controlled by a state agency	655
shall not be nominated or leased under this section for the	656
purpose of exploring for and developing and producing oil and	657
natural gas resources.	658

Sec. 1509.74. Not later than two hundred seventy days after	659
the effective date of this section, the oil and gas leasing	660
commission shall adopt rules in accordance with Chapter 119. of	661
the Revised Code establishing all of the following:	662

(A) The form of and the information to be included in	663
nominations that are submitted under section 1509.73 of the	664
Revised Code;	665

(B) Procedures for the submission of nominations to the	666
commission and the amount of nomination fees to be charged. The	667
rules shall require that if a person who has paid a nomination fee	668
does not enter into a lease regarding the parcel of land that the	669
person nominated, the fee shall be refunded to the person, and, if	670
applicable, the person that enters into the lease shall pay the	671
nomination fee. In addition, the rules shall provide that a state	672
agency is exempt from nomination fees and that a person who enters	673
into a lease regarding a parcel of land nominated by a state	674
agency shall pay the nomination fee.	675

(C) Factors that the commission may consider when determining	676
whether to approve or disapprove a nomination submitted under	677
section 1509.73 of the Revised Code;	678

(D) Procedures and requirements for the submission of bids	679
for a lease under section 1509.73 of the Revised Code;	680

(E) The amount of bid fees to be charged for the submission	681
of bids to enter into leases under section 1509.73 of the Revised	682
Code;	683

(F) A standard lease form that is consistent with the	684
practices of the oil and natural gas industries and that contains	685
at least a one-eighth landowner royalty, which standard lease form	686
shall be used by a state agency for leases entered into under	687
section 1509.73 of the Revised Code;	688

(G) Any other procedures and requirements that the commission	689
determines necessary to implement sections 1509.70 to 1509.77 of	690
the Revised Code.	691

Sec. 1509.75.  There is hereby created in the state treasury	692
the oil and gas leasing commission administration fund consisting	693
of the proceeds of nomination fees and bid fees credited to it	694
under section 1509.73 of the Revised Code. Money in the fund shall	695
be used by the oil and gas leasing commission and the department	696
of natural resources to pay the administrative expenses of the	697
commission and the department regarding the implementation of	698
sections 1509.70 to 1509.77 of the Revised Code. Money in the fund	699
also shall be used to pay the actual and necessary expenses	700
incurred by members of the commission in the course of the	701
performance of their duties.	702

Sec. 1509.76. A state agency that has classified a parcel of	703
land as a class 2 property under section 1509.72 or 1509.73 of the	704
Revised Code shall make reasonable and appropriate efforts so that	705
the parcel of land could be classified as a class 1 property.	706

Sec. 1509.77. A state agency that owns or controls a parcel	707
of land that is a class 3 property for which a nomination for that	708
land has been denied under section 1509.73 of the Revised Code may	709
enter into written agreements to use that parcel of land to form a	710
drilling unit that conforms to the minimum acreage and distance	711
requirements established under section 1509.24 or 1509.25 of the	712
Revised Code.	713

Sec. 1509.78. Notwithstanding any other provision of the	714
Revised Code, not less than thirty per cent of the proceeds from a	715
lease executed on and after the effective date of this section for	716
the exploration and production of oil or gas within or under a	717
state park established under Chapter 1541. of the Revised Code	718
shall be credited to the applicable fund created in the state	719
treasury that supports the state park. The department of natural	720
resources shall use the money credited to the applicable fund from	721
a lease for expenses associated with the state park within or	722
under which the oil or gas exploration and production occurred.	723
Money credited shall be used for capital improvements.	724

Sec. 1531.06.  (A) The chief of the division of wildlife,	725
with the approval of the director of natural resources, may	726
acquire by gift, lease, purchase, or otherwise lands or surface	727
rights upon lands and waters or surface rights upon waters for	728
wild animals, fish or game management, preservation, propagation,	729
and protection, outdoor and nature activities, public fishing and	730
hunting grounds, and flora and fauna preservation. The chief, with	731
the approval of the director, may receive by grant, devise,	732
bequest, donation, or assignment evidences of indebtedness, the	733
proceeds of which are to be used for the purchase of such lands or	734
surface rights upon lands and waters or surface rights upon	735
waters.	736

(B)(1) The chief shall adopt rules for the protection of	737
state-owned or leased lands and waters and property under the	738
control of the division of wildlife against wrongful use or	739
occupancy that will ensure the carrying out of the intent of this	740
section, protect those lands, waters, and property from	741
depredations, and preserve them from molestation, spoilation,	742
destruction, or any improper use or occupancy thereof, including	743
rules with respect to recreational activities and for the	744
government and use of such lands, waters, and property.	745

(2) The chief may adopt rules benefiting wild animals, fish	746
or game management, preservation, propagation, and protection,	747
outdoor and nature activities, public fishing and hunting grounds,	748
and flora and fauna preservation, and regulating the taking and	749
possession of wild animals on any lands or waters owned or leased	750
or under the division's supervision and control and, for a	751
specified period of years, may prohibit or recall the taking and	752
possession of any wild animal on any portion of such lands or	753
waters. The division clearly shall define and mark the boundaries	754
of the lands and waters owned or leased or under its supervision	755
and control upon which the taking of any wild animal is	756
prohibited.	757

(C) The chief, with the approval of the director, may acquire	758
by gift, lease, or purchase land for the purpose of establishing	759
state fish hatcheries and game farms and may erect on it buildings	760
or structures that are necessary.	761

The title to or lease of such lands and waters shall be taken	762
by the chief in the name of the state. The lease or purchase price	763
of all such lands and waters may be paid from hunting and trapping	764
and fishing licenses and any other funds.	765

(D) To provide more public recreation, stream and lake	766
agreements for public fishing only may be obtained under rules	767
adopted by the chief.	768

(E) The chief, with the approval of the director, may	769
establish user fees for the use of special public facilities or	770
participation in special activities on lands and waters	771
administered by the division. The special facilities and	772
activities may include hunting or fishing on special designated	773
public lands and waters intensively managed or stocked with	774
artificially propagated game birds or fish, field trial	775
facilities, wildlife nature centers, firearm ranges, boat mooring	776
facilities, camping sites, and other similar special facilities	777
and activities. The chief shall determine whether the user fees	778
are refundable and shall ensure that that information is provided	779
at the time the user fees are paid.	780

(F) The chief, with the approval of the director, may enter	781
into lease agreements for rental of concessions or other special	782
projects situated on state-owned or leased lands or waters or	783
other property under the division's control. The chief shall set	784
and collect the fees for concession rentals or other special	785
projects; regulate through contracts between the division and	786
concessionaires the sale of tangible objects at concessions or	787
other special projects; and keep a record of all such fee payments	788
showing the amount received, from whom received, and for what	789
purpose the fee was collected.	790

(G) The chief may sell or donate conservation-related items	791
or items that promote wildlife conservation, including, but not	792
limited to, stamps, pins, badges, books, bulletins, maps,	793
publications, calendars, and any other educational article or	794
artifact pertaining to wild animals; sell confiscated or forfeited	795
items; and sell surplus structures and equipment, and timber or	796
crops from lands owned, administered, leased, or controlled by the	797
division. The chief, with the approval of the director, also may	798
engage in campaigns and special events that promote wildlife	799
conservation by selling or donating wildlife-related materials,	800
memberships, and other items of promotional value.	801

(H) The chief may sell, lease, or transfer minerals or	802
mineral rights, with the approval of the director, when the chief	803
and the director determine it to be in the best interest of the	804
state. Upon approval of the director, the chief may make, execute,	805
and deliver contracts, including leases, to mine, drill, or	806
excavate iron ore, stone, coal, petroleum, gas, salt, and other	807
minerals, other than oil or gas, upon and under lands owned by the	808
state and administered by the division to any person who complies	809
with the terms of such a contract. No such contract shall be valid	810
for more than fifty years from its effective date. Consideration	811
for minerals and mineral rights shall be by rental or royalty	812
basis as prescribed by the chief and payable as prescribed by	813
contract. Moneys collected under this division shall be paid into	814
the state treasury to the credit of the wildlife habitat fund	815
created in section 1531.33 of the Revised Code. Contracts entered	816
into under this division also may provide for consideration for	817
minerals or mineral rights in the form of acquisition of lands as	818
provided under divisions (A) and (C) of this section.	819

(I) All moneys received under divisions (E), (F), and (G) of	820
this section shall be paid into the state treasury to the credit	821
of a fund that shall be used for the purposes outlined in section	822
1533.15 of the Revised Code and for the management of other wild	823
animals for their ecological and nonconsumptive recreational value	824
or benefit.	825

(J) The chief, with the approval of the director, may barter	826
or sell wild animals to other states, state or federal agencies,	827
and conservation or zoological organizations. Moneys received from	828
the sale of wild animals shall be deposited into the wild animal	829
fund created in section 1531.34 of the Revised Code.	830

(K) The chief shall adopt rules establishing standards and	831
guidelines for the administration of contraceptive chemicals to	832
noncaptive wild animals. The rules may specify chemical delivery	833
methods and devices and monitoring requirements.	834

The chief shall establish criteria for the issuance of and	835
shall issue permits for the administration of contraceptive	836
chemicals to noncaptive wild animals. No person shall administer	837
contraceptive chemicals to noncaptive wild animals without a	838
permit issued by the chief.	839

(L) All fees set by the chief under this section shall be	840
approved by the wildlife council.	841

(M) Information contained in the wildlife diversity database	842
that is established pursuant to division (B)(2) of this section	843
and section 1531.25 of the Revised Code may be made available to	844
any individual or public or private agency for research,	845
educational, environmental, land management, or other similar	846
purposes that are not detrimental to the conservation of a species	847
or feature. Information regarding sensitive site locations of	848
species that are listed pursuant to section 1531.25 of the Revised	849
Code and of features that are included in the wildlife diversity	850
database is not subject to section 149.43 of the Revised Code if	851
the chief determines that the release of the information could be	852
detrimental to the conservation of a species or feature.	853

Sec. 1531.33.  The wildlife habitat fund is hereby created in	854
the state treasury. The fund shall consist of the investment	855
earnings of the wildlife habitat trust fund created in section	856
1531.32 of the Revised Code; gifts, donations, bequests, and other	857
moneys contributed to the division of wildlife for the purposes of	858
the fund; moneys collected under division (H) of section 1531.06	859
of the Revised Code; moneys deposited in the fund under division	860
(G)(2)(b) of section 1509.73 of the Revised Code; and moneys	861
received by the division pursuant to negotiated mitigation	862
settlements from persons who have adversely affected fish and	863
wildlife, or their habitats, over which the division has	864
jurisdiction under this chapter or Chapter 1533. of the Revised	865
Code other than fish and wildlife of the Ohio river or their	866
habitats.	867

The fund shall be used by the division to acquire and develop	868
lands for the preservation, propagation, and protection of wild	869
animals. All expenditures from the wildlife habitat fund shall be	870
approved by the director of natural resources. Quarterly each	871
fiscal year, the treasurer of state shall transfer the investment	872
earnings of the wildlife habitat trust fund to the wildlife	873
habitat fund.	874

Sec. 1541.26.  There is hereby created in the state treasury	875
the parks mineral royalties fund. The fund shall consist of money	876
deposited into it under section 1509.73 of the Revised Code. Any	877
investment proceeds earned on money in the fund shall be credited	878
to the fund.	879

Money in the fund shall be used by the division of parks and	880
recreation to acquire land and to pay capital costs, including	881
equipment and repairs and renovations of facilities, that are	882
owned by the state and administered by the division. Expenditures	883
from the fund shall be approved by the director of natural	884
resources.	885

Sec. 3345.181. (A) The board of trustees of a state	886
university, by majority vote, may make, execute, and deliver	887
contracts or leases to mine minerals upon lands under the	888
supervision of suchthe board, to any person or public entity that	889
complies with the terms prescribed by the board. Such contracts or	890
leases shall not operate as a conveyance of the fee to any part of	891
the realty.	892

(B) A board, by majority vote, may make expenditures and may	893
enter into contracts with any person or public entity for the	894
purposes of investigating, exploring, prospecting, or drilling for	895
petroleum and gas and the constituent components and mineral	896
by-products thereof upon lands under the supervision of such	897
board, and for the purposes of extracting, producing, selling,	898
using, or transporting such petroleum, gas, components, and	899
byproducts.	900

(C) The board may use the proceeds derived from its actions	901
under division (A) or (B) of this section for the furthering of	902
any of the purposes of the university.	903

Section 2.  That existing sections 123.01, 1531.06, 1531.33,	904
and 3345.181 and sections 5119.40, 5120.12, and 5123.23 of the	905
Revised Code are hereby repealed.	906

Section 3.  A lease entered into under division (B) of	907
section 3345.181 or section 123.01, 1531.06, 5119.40, 5120.12, or	908
5123.23 of the Revised Code as those sections existed prior to	909
their amendment or repeal by this act shall remain in effect until	910
the term of the lease expires as provided in the lease.	911

Section 4. Section 123.01 of the Revised Code is presented in	912
this act as a composite of the section as amended by both Am. Sub.	913
H.B. 1 and Sub. S.B. 79 of the 128th General Assembly. The General	914
Assembly, applying the principle stated in division (B) of section	915
1.52 of the Revised Code that amendments are to be harmonized if	916
reasonably capable of simultaneous operation, finds that the	917
composite is the resulting version of the section in effect prior	918
to the effective date of the section as presented in this act.	919