## THEATJFORNEYGENERAL
**OF TEXAS** 

Honorable Jerry Sadler Commissionerof the General Land Office and Chairman of the School Land Board Austin, Texas OpinionNo. C-349

Re: Whether the School Land Board in fixing the consideration for an amendment of a termmineral leasemay increase the royalty Dear Mr. Sadler: chargeableunder such lease.

You request our opinion as to the authority of the School Land Board in granting amendments to existingmineral leases under Article 5344c,Vernon's Civil Statutes, to increase the royalty required tobe paid.

We are informed that over the years the State of Texas issueda considerablenumber of 25-year term oil and gas leases. In order toprevent the rapid depletion of reservesunder such areas and to prevent wasteful productionpractices,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. (Section5 of House Bill 17). This Act authorized the School Land Board, on applicationmade 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 theBoard to fix the consideration for each such amendment. (Section2 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 changewas

Section 2, as amended, now provides:

"Sec. 2. Any lease heretoforegranted 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 thisAct, upon applicationby any owner thereof to the Commissioner of the General Land Office before January 1, 

## 1965,

may be amended under the terms of thisAct 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 coveredby ,suchlease is produced therefrom,provided any amendment executedby virtue of thisAct shall include only those ,minerals covered in the original agreement to which said amendment ismade; and providing further, that in ame'ndingsuch,leasessame shallbe amended and renewed separatelyas to eachmineral thereunder, except as to 'oiland gas' which may be contained in one lease and each such lease shall remain in effect as long after the expirationof itsprimary term as suchmineral coveredby such lease is produced therefrom in paying quantities. The School Land Board shall fix the consideration for each such amendment;which shallnot be less than Two Dollars ($2)per acre, 'providedthat any such amendment shall not change the original consider-. atlcnin any lease to the extent that the state shall thereafterreceive less than the original royaltyprovided in said leases. If the consideration so fixed is paid in cash within ninety (90) days after such considerationhas been fixed, the Commissioner of the General Land Office shall execute and deliver to the owner of such lease an instrumentevidencing such amendment., If the consideration is n&paid within theninety (90) days, the application shallbe conclusivelypresumed 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." (Underlinedportion only than e,by the amendment - previously read October 1, 19 

## 8)., f-i
The intention of the Legislature is the law. 

## 53Tex.Jur. 2d 180, Statutes, Sec. 12.5. The Act allows a new consideration for thebenefit of the State in exchange forpermitting the extension amendment. The last sentence in Section 2, supra, therefore,would not prohibit a change in the consideration. Had the legislature intended that considerationbe 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 thatno royalty change at'all was to be permitted. Negating a portion of the -1658-. .-

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

right seemsby implication to be an affirmation of the remainder of the right. To held otherwise requires that the royalty provision in the statute,' for all practicalpurposes;be,given
no effectwhatever.

In our opinion, theprovision that the consideration must be paid in 90 days shouldbe%construed as meaning only the "bonus"part of the consideration,as obviously royaltieswould probably be paid over a much longerperiod.o,ftime. When so construed, all parts of the statuteare 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 strengthenedby the fact that the identicalprovisionsprior to the change of the cutoff date.were construedby 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 theseprovisions in the 1963 Act approved such construction. Isbellv. 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 underArticle 5344c, Vernon% Civil Statutes,may increase the royaltyprovided 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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