By Hawley                                             H.B. No. 2449
         76R7896 SMH-F                           
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to the period during which the School Land Board may
 1-3     reduce the royalty rate under certain oil and gas leases.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1.  Sections 32.067(c) and (d), Natural Resources
 1-6     Code, are amended to read as follows:
 1-7           (c)  The royalty rate for oil and gas produced from a
 1-8     qualifying reservoir may be reduced to not less than one-sixteenth
 1-9     (6.25 percent) for a term prescribed [not to exceed two years
1-10     unless extended at the reduced rate for additional  periods not to
1-11     exceed two years on approval] by the board.  In determining whether
1-12     to grant a reduction in the royalty rate, the board may consider
1-13     whether the qualifying property is being operated efficiently,
1-14     including whether the property is pooled or has reasonable
1-15     potential for the application of secondary or tertiary recovery
1-16     techniques.
1-17           (d)  The royalty rate for the state's share under a lease
1-18     issued under Subchapter F, Chapter 52, or Sections 51.195(c)(2) and
1-19     (d) may be reduced under this section to not less than
1-20     one-thirty-second (3.125 percent) for a term prescribed [not to
1-21     exceed two years unless extended at the reduced rate for additional
1-22     periods not  to exceed two years on approval] by the board.  The
1-23     state's royalty rate may be reduced under this subsection only if
1-24     the royalty rate for the owner of the soil is reduced in the same
 2-1     proportion.
 2-2           SECTION 2.  This Act takes effect September 1, 1999.
 2-3           SECTION 3.  The importance of this legislation and the
 2-4     crowded condition of the calendars in both houses create an
 2-5     emergency and an imperative public necessity that the
 2-6     constitutional rule requiring bills to be read on three several
 2-7     days in each house be suspended, and this rule is hereby suspended.