I
104TH CONGRESS
1ST SESSION
H. R. 699
To amend the Mineral Leasing Act to provide for a royalty payment for
heavy crude oil produced from the public lands which is based on the
degree of API gravity, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
JANUARY 26, 1995
Mr. DOOLEY introduced the following bill; which was referred to the
Committee on Resources
A BILL
To amend the Mineral Leasing Act to provide for a royalty
payment for heavy crude oil produced from the public
lands which is based on the degree of API gravity, and
for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Royalty Relief Act of
1995’’.
SEC 2. SLIDING SCALE OF ROYALTY PAYMENTS FOR HEAVY
CRUDE OIL.
(a) IN GENERAL.—Section 17 of the Mineral Leasing
Act (30 U.S.C. 226) is amended by adding at the end the
following:
‘‘(p) ROYALTY RATES FOR HEAVY CRUDE OIL.—(1)
Except as provided in paragraph (2) and notwithstanding
any other provision of this Act and section 5 of the Act
of May 21, 1930 (ch. 307, 46 Stat. 374) (relating to mini-
mum royalty under lease of oil and gas deposits in or
under railroads and other rights-of-way), the royalty rate
for heavy crude oil, determined as a percentage of an
amount or value of the production removed or sold from
a lease, shall be in accordance with the following table:
Degree of API gravity
Royalty rate
25° or greater ..........................................................................
12.5%
Less than 25° but 21° or greater ............................................
10 %
Less than 21° but 17° or greater ............................................
7 %
Less than 17° but 13° or greater ............................................
4 %
Less than 13° but 9° or greater ..............................................
1 %
‘‘(2) In the case that the average price of heavy crude
oil on the major spot markets, as determined by the Sec-
retary, is $28 per barrel or greater for any 90-day period,
paragraph (1) does not apply, and the royalty rate of
heavy crude oil shall be determined under this Act without
regard to paragraph (1), for the period—
‘‘(A) which begins at the end of such 90 days,
and
‘‘(B) which terminates at the end of the first
succeeding 30-day period for which the Secretary de-
termines that the average price of heavy crude oil on
such spot markets is less than $28 per barrel.
‘‘(3)(A) Not later than 90 days after the date of the
enactment of this subsection, an operator of a well produc-
ing heavy crude oil may make an irrevocable election to
be subject to the royalty rates specified in paragraph (1)
in lieu of receiving a royalty reduction under section
3103.4–1 of title 43, Code of Federal Regulations. Such
election shall be made in the manner prescribed by the
Secretary.
‘‘(B) Not later than 45 days after the date of the
enactment of this Act, the Secretary shall provide notice
of the provisions of this subsection to each operator re-
ferred to in subparagraph (A).
‘‘(4) For the purposes of this subsection—
‘‘(A) the term ‘heavy crude oil’ means crude oil
with an API gravity greater than 9° but less than
25°; and
‘‘(B) the term ‘API gravity’ has the meaning
given such term by the American Petroleum Insti-
tute, as published in 1983 by the Petroleum Exten-
sion Service of the University of Texas at Austin in
the third edition of the document entitled ‘A Dic-
tionary of Petroleum Terms’ .’’.
(b) EFFECTIVE DATE
AND TRANSITION PROVI-
SIONS.—The amendment made by subsection (a) applies
with respect to heavy crude oil removed from the ground
after the date of the enactment of this Act.
Æ