THEATJFORNEYGENERAL 

OF TEXAS 

Honorable Jerry Sadler 

Commissioner of the General Land Office 

and Chairman of the School Land Board 

Austin, Texas 

Opinion No. C-349 

Re: Whether the School Land Board 

in fixing the consideration for 

an amendment of a term mineral 

lease may increase the royalty 

Dear Mr. Sadler: chargeable under such lease. 

You request our opinion as to the authority of the School 

Land Board in granting amendments to existing mineral leases 

under Article 5344c, Vernon's Civil Statutes, to increase the 

royalty required to be paid. 

We are informed that over the years the State of Texas 

issued a considerable number of 25-year term oil and gas leases. 

In order to prevent the rapid depletion of reserves under such 

areas and to prevent wasteful production practices, and to increase the revenue of the Public Free School J?und, Iiouse.Bill 

17, Acts of the 50th Legislature, Regular Session 1947, Chapter 

82, page 139, codified in Vernon's as Article 5344c, Vernon's 

Civil Statutes, was enacted. (Section 5 of House Bill 17). 

This Act authorized the School Land Board, on application made 

prior to October 1, 1948, to amend such leases so as to extend 

the term thereof for as long as minerals are being produced in 

paying quantities and authorized the Board to fix the consideration 

for each such amendment. (Section 2 of House Bill 17.). 

Section 2 of House Bill 17, Acts of the 50th Legislature, 

Regular Session 1947, was amended in 1963 by the enactment of 

Senate Bill 196, Acts of the 58th Legislature, Regular Session 

1963, Chapter 174, 

f; 

age 485, so as to change the cutoff date 

from October 1, 194 to January 1, 1965. 

made by the 1963 amegdment. 

No other change was 

Section 2, as amended, now provides: 

"Sec. 2. Any lease heretofore granted and 

in good standing covering any of the lands 

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Hon. Jerry Sadler, Page 2 (c-349) 

or areas referred to in Section 1 of this Act, 

upon application by any owner thereof to the 

Commissioner of the General Land Office before 

January 1, 1965, may be amended under the terms 

of this Act so as to provide that such lease 

shall remain in effect as long after the~expiration of its primary term as oil, gas, or other 

mineral covered by ,such lease is produced therefrom, provided any amendment executed by virtue 

of this Act shall include only those ,minerals 

covered in the original agreement to which said 

amendment is made; and providing further, that 

in ame'nding such,leases same shall be amended and 

renewed separately as to each mineral thereunder, 

except as to 'oil and gas' which may be contained 

in one lease and each such lease shall remain in 

effect as long after the expiration of its primary 

term as such mineral covered by such lease is produced therefrom in paying quantities. The School 

Land Board shall fix the consideration for each 

such amendment; which shall not be less than Two 

Dollars ($2) per acre , 'provided that any such 

amendment shall not change the original consider-. 

atlcnin any lease to the extent that the state 

shall thereafter receive less than the original 

royalty provided in said leases. If the consideration so fixed is paid in cash within ninety (90) 

days after such consideration has been fixed, the 

Commissioner of the General Land Office shall 

execute and deliver to the owner of such lease 

an instrument evidencing such amendment., If the 

consideration is n&paid within the ninety (90) 

days, the application shall be conclusively presumed to have been withdrawn. This Act shall 

not authorize the Commissioner of the General 

Land Office or the School Land Board to change 

or amend the lease involved in any other respect." 

(Underlined portion only than e,by the amendment - 

previously read October 1, 19 f-i 8)., 

The intention of the Legislature is the law. 53 Tex.Jur. 

2d 180, Statutes, Sec. 12.5. The Act allows a new consideration 

for the benefit of the State in exchange for permitting the extension amendment. The last sentence in Section 2, supra, 

therefore, would not prohibit a change in the consideration. 

Had the legislature intended that consideration be only in the 

nature of a cash bonus, we believe that it uould have said so. 

At least, it would have been pointless to forbid royalty change 

only in a downward direction, if it were intended that no royalty 

change at'all was to be permitted. Negating a portion of the 

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Hon. Jerry Sadler, Page 3 (c-349) 

right seems by implication to be an affirmation of the remainder of the right. To held otherwise requires that the royalty 

provision in the statute,' for all practical purposes; be, given 

no effect whatever. 

In our opinion, the provision that the consideration 

must be paid in 90 days should be%construed as meaning only the 

"bonus" part of the consideration, as obviously royalties would 

probably be paid over a much longer period.o,f time. When so 

construed, all parts of the statute are harmonized and every 

part of the statute is given meaning. This accords with standard 

rules of statutory construction. 

Statutes, Sets. 159-60; 

53 Tex.Jur.2d 227 et seq., 

Our conclusion is strengthened by the fact that the identical provisions prior to the change of the cutoff date.were 

construed by the School Land Board as authorizing the royalty 

to be increased as part of the consideration for the amendment 

of leases, and the royalty in numerous leases was so increased. 

The Legislature, by the reenactment of these provisions in the 

1963 Act approved such construction. Isbell v. Gulf Union Oil 

co., 147'Ttx. 6, 209 S.W.2d 762 (1948). 

You are therefore advised that the Board, in fixing the 

considera~tion for a leases amendment under Article 5344c, Vernon% Civil Statutes, may increase the royalty provided in such 

lease in addition to charging the bonus provided in Article 

5344c. 

SUHHARY 

The,,School Land Beard in permitting an 

amendment to an existing term least 

under Article 5344c, Vernon's Civil 

Statutes, may increase the royalty 

chargeable under such lease as a part 

of the censideration for such amtndment. 

Yours very truly, 

WAGGONER CARR 

Attorney General 

JRtms 

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Hon. Jerry Sadler, page 4 (C-349) 

APPROVED: 

OPINION COMMITTEE 

W. V. Geppert, Chairman 

Milton Richardson 

Malcolm L. Quick 

Brady Coleman 

APPROVED F'OR THE ATTORI'WY GENERAL 

By: Roger Tyler 

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