Royalty Relief Act of 1995

Royalty Relief Act of 1995 - Amends the Mineral Leasing Act to set forth a sliding scale of royalty payments, based on API (American Petroleum Institute) gravity, for the drilling of heavy crude oil from leased public lands.

[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[H.R. 699 Introduced in House (IH)]







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 Representatives 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 minimum 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 Secretary, 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 determines 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 producing 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 referred 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 deg. but less than 25 deg.; and
            ``(B) the term `API gravity' has the meaning given such 
        term by the American Petroleum Institute, as published in 1983 
        by the Petroleum Extension Service of the University of Texas 
        at Austin in the third edition of the document entitled `A 
        Dictionary of Petroleum Terms'.''.
    (b) Effective Date and Transition Provisions.--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.
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