That contracts for the purchase of state lands now outstanding shall, upon application of the holders thereof and payment of a fee of four dollars [($4.00)] for each contract of one section or less, and ten cents [($.10)] for each additional section or fraction thereof, be canceled, and new contracts issued under the provisions of this act [19-7-10, 19-7-12 N.M. Stat. Ann.], in lieu of such outstanding contracts. Provided, that the provisions of this act shall not be applicable to lands selected for the benefit of the Santa Fe and Grant county railroad bond fund, but such lands shall be sold as provided by Section 19-7-13 [repealed] NMSA 1978, and outstanding contracts for such lands shall not be subject to the provisions of this section.