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[Senate Report 112-146]
[From the U.S. Government Publishing Office]

                                                   Calendar No. 315
112th Congress                                                Report
                                 SENATE
 2d Session                                                   112-146
======================================================================
 
                  GEOTHERMAL PRODUCTION EXPANSION ACT

                                _______
                                

                February 7, 2012.--Ordered to be printed

                                _______
                                

   Mr. Bingaman, from the Committee on Energy and Natural Resources, 

                        submitted the following

                              R E P O R T

                         [To accompany S. 1149]

    The Committee on Energy and Natural Resources, to which was 
referred the bill (S. 1149) to expand geothermal production, 
and for other purposes, having considered the same, reports 
favorably thereon with amendments and recommends that the bill, 
as amended, do pass.
    The amendments are as follows:

    1. Beginning on page 1, strike line 6 and all that follows through 
page 2, line 24.
    2. On page 3, line 1, strike ``3'' and insert ``2''.
    3. On page 3, line 15, after ``acre'', insert the following: 
``(taking into account the determination under subparagraph (B)(iii) 
regarding a valid discovery on the adjoining land)''.
    4. On page 3, line 21, strike ``90-day'' and insert ``180-day''.
    5. On page 8, line 14, strike ``180'' and insert ``270''.

                                Purpose

    The purpose of S. 1149 is to expand geothermal production 
by allowing the issuance of noncompetitive leases under certain 
circumstances.

                          Background and Need

    The development of geothermal resources on public lands and 
National Forest System lands is governed by the Geothermal 
Steam Act of 1970, as amended by the Energy Policy Act of 2005 
(30 U.S.C. 1001-1028). The Bureau of Land Management (BLM) has 
the responsibility of managing the geothermal leasing program 
on lands under the jurisdiction of the Department of the 
Interior and the Forest Service (FS) with the involvement of 
the FS on National Forest System lands.
    In order to explore and develop geothermal resources on 
such lands, the developer must obtain a lease from the BLM. 
Pursuant to section 7 of the Geothermal Steam Act (30 U.S.C. 
1006), a geothermal lease is not to exceed more than 5,120 
acres. Interested parties can nominate available lands for 
leasing. With limited exceptions, the law requires that all 
areas to be leased be offered for lease on a competitive basis 
(30 U.S.C. 1002a(b)). BLM must hold a competitive lease sale 
every two years. If bids are not received for the lands 
offered, BLM must offer the lands on a noncompetitive basis for 
two years. Leases are issued for 10 years, and lessees are 
required to pay a royalty calculated as a percentage of gross 
proceeds from the sale of the electricity produced, or in the 
case of direct use geothermal, based on a fee schedule. Leasing 
and development can occur only if consistent with the relevant 
Federal land use plan and after compliance with the National 
Environmental Policy Act (NEPA).
    In the case of Federal lands adjoining proven geothermal 
properties, issues have arisen with respect to the requirement 
that Federal lands to be leased be subject to competitive 
leasing. First, with respect to this narrow category of lands, 
the requirement of competitive leasing can cause delay in the 
expansion of production of already-identified geothermal 
resources. Secondly, the competitive leasing requirement for 
these lands can allow speculative bidders who have no interest 
in actually developing geothermal resources to lease the lands 
adjoining proven resources. For this reason, geothermal 
developers may be reluctant to nominate these adjacent lands, 
so that this geothermal energy is not produced.
    BLM manages 818 leases on BLM and FS land, with 59 
producing leases. Production from these leases accounts for 
over 40 percent of U.S. geothermal energy capacity. According 
to BLM, these leases generated more than 4600 gigawatts of 
electrical power during 2010 and also provided heat sources for 
direct-use commercial businesses. Geothermal potential exists 
in 11 western states and Alaska. A Programmatic Environmental 
Impact Statement relating to the Federal Geothermal Leasing 
Program was finalized in 2008, and served as the basis for 
amending Federal land use plans to facilitate geothermal 
leasing.
    S. 1149 would amend the Geothermal Steam Act of 1970, as 
amended, to provide new authority for the Secretary of the 
Interior to issue leases of not greater than 640 acres on a 
noncompetitive basis for lands managed by the BLM and FS 
adjoining lands on which the qualified lessee has made a valid 
discovery, as defined by the bill. The bill provides that the 
lessee must pay fair market value per acre for the 
noncompetitive lease, as determined by the Secretary pursuant 
to regulation, with a statutory minimum. S. 1149 requires 
public notice of the proposed issuance of the lease and notice 
to the lessee and the public of the fair market value 
determination. The bill requires the Secretary to provide an 
administrative appeal of the fair market value determination. 
In addition, the bill requires the lessee to pay the annual 
rentals required under competitive leases.

                          Legislative History

    S. 1149 was introduced by Senator Wyden on June 7, 2011. 
Senators Crapo, Risch, Merkley, and Begich are co-sponsors. The 
Subcommittee on Public Lands and Forests conducted a hearing on 
the measure on August 3, 2011. A companion bill, H.R. 2776, has 
been introduced in the House of Representatives and referred to 
the House Subcommittee on Energy and Mineral Resources. During 
the 111th Congress, Senator Wyden introduced substantially 
similar legislation, S. 3993. No further action was taken on 
the measure. A companion measure, H.R. 3709, was introduced in 
the House of Representatives during the 111th Congress, and 
Subcommittee hearings were held on February 24, 2010.

                        Committee Recommendation

    The Committee on Energy and Natural Resources, in open 
business session on December 15, 2011, by a voice vote of a 
quorum present, recommends that the Senate pass S. 1149, if 
amended as described herein.

                          Committee Amendments

    During its consideration of S. 1149, the Committee adopted 
five amendments. Amendment 1 deletes section 2 of the bill 
relating to findings. Amendment 2 makes a conforming change. 
Amendment 3 amends the definition of ``fair market value'' to 
take into account the information and determination under 
section 4(b)(4)(B)(iii) of the Geothermal Steam Act of 1970 
regarding the presence of a valid discovery on the adjoining 
land. Amendment 4 extends the deadline for the determination of 
fair market value of a lease from 90 days to 180 days after the 
Secretary receives an application for a lease. Amendment 5 
extends the deadline for the Secretary to issue regulations 
from 180 days to 270 days.

                      Section-By-Section Analysis

    Section 1 provides that this Act may be cited as the 
``Geothermal Production Expansion Act of 2011''.
    Section 2 amends section 4(b) of the Geothermal Steam Act 
of 1970 (30 U.S.C. 1003(b)) by adding a new paragraph (4) to 
address adjoining land.
    New paragraph (4)(A) sets forth definitions.
    New paragraph (4)(A)(i) defines ``fair market value per 
acre'' as a dollar amount equal to the market value per acre as 
determined by the Secretary (taking into account the 
determination under subparagraph (B)(iii) regarding a valid 
discovery on the adjoining land) under applicable regulations; 
requires that the amount be determined by the Secretary for a 
lease under this paragraph by not later than the 180-day period 
beginning on the date the Secretary receives an application for 
a lease; and is not less than the greater of 4 times the median 
amount paid per acre for all land leased during the preceding 
year or $50.
    New paragraph (4)(A)(ii) defines ``industry standards'' and 
is self-explanatory.
    New paragraph (4)(A)(iii) defines ``qualified federal 
land'' as land that is otherwise available for leasing under 
the Geothermal Steam Act of 1970, as amended.
    New paragraph (4)(A)(iv) defines ``qualified geothermal 
professional'' and is self-explanatory.
    New paragraph (4)(A)(v) defines ``qualified lessee'' and is 
self-explanatory.
    New paragraph (4)(A)(vi) defines ``valid discovery'' as a 
discovery of a geothermal resource by a new or existing slim 
hole or production well that exhibits temperature with 
measurements with indications of permeability as specified that 
are sufficient to meet industry standards.
    New paragraph (4)(B) provides that an area of qualified 
Federal land of not less than 1 acre and not more than 640 
acres that adjoins other land for which a qualified lessee 
holds a legal right to develop geothermal resources may be 
available for a noncompetitive lease to a qualified lessee at 
the fair market value per acre if it is not already leased 
under the Geothermal Steam Act or nominated to be leased under 
that Act. The qualified lessee may not receive the 
noncompetitive lease if the lessee has previously received a 
noncompetitive lease in connection with the valid discovery. 
The qualified lessee must submit sufficient geological and 
technical data that would lead individuals experienced in the 
subject matter to believe that there is a valid discovery of 
geothermal resources on the land for which the qualified lessee 
holds the right to develop geothermal resources and the thermal 
feature is extending into the adjoining areas.
    New paragraph (4)(C)(i) addresses the determination of fair 
market value by the Secretary and sets forth requirements as 
specified regarding notice to the public and to the lessee. The 
paragraph also requires that the Secretary provide to the 
qualified lessee and any adversely affected party the 
opportunity to appeal the final determination of fair market 
value.
    New paragraph (4)(C)(ii) provides that after publication of 
a notice of request to lease land under this paragraph, the 
Secretary may not accept an application under subsection (a) 
for leasing unless the request has been denied or withdrawn.
    New paragraph (4)(C)(iii) provides that leases issued under 
this paragraph shall be considered a competitive lease for 
purposes of the level of the annual rental payment.
    New paragraph (4)(D) requires the Secretary to issue 
regulations to carry out this paragraph not later than 270 days 
after the date of enactment.

                   Cost and Budgetary Considerations

    The following estimate of costs of this measure has been 
provided by the Congressional Budget Office:

S. 1149--Geothermal Production Expansion Act of 2011

    S. 1149 would authorize the Bureau of Land Management (BLM) 
to award leases for certain federal lands on a noncompetitive 
basis for the development of geothermal resources. Based on 
information provided by BLM, the Department of Energy (DOE), 
and individuals working in the geothermal industry, CBO 
estimates that implementing the legislation would have no 
significant impact on the federal budget over the 2012-2022 
period. Enacting S. 1149 could affect direct spending; 
therefore, pay-as-you-go procedures apply. However, CBO 
estimates that the net effect on direct spending would not be 
significant in any year. Enacting the legislation would not 
affect revenues.
    S. 1149 would authorize BLM to offer noncompetitive leases 
of up to 640 acres for lands adjacent to known geothermal 
discoveries. Under the bill, a company that identified a 
geothermal resource that extended onto federal land adjacent to 
company-controlled lands could acquire the lease for a 
specified amount (bonus bid) determined by BLM to be equivalent 
to the fair market value rather than an amount determined 
through a competitive auction. In addition to paying fair 
market value for the parcel, the bill would require any company 
awarded such a noncompetitive lease to make annual rental 
payments equal to those required for lands that are leased 
competitively. Finally, a company could receive only one 
noncompetitive lease for each known geothermal discovery.
    Under current law, 75 percent of all receipts from bonus 
bids, rents, and royalties related to the development of 
geothermal resources on federal lands is paid to the states and 
counties in which those lands are located. The remaining 25 
percent is deposited in the U.S. Treasury. CBO estimates that 
awarding noncompetitive leases for lands adjacent to known 
geothermal discoveries could reduce bonus bids on those 
parcels; however, because the legislation would require the 
companies that are awarded those leases to pay fair market 
value for them, we estimate that implementing the bill would 
not reduce the amount of receipts deposited in the U.S. 
Treasury by more than $500,000 in any year.
    In addition, based on information provided by DOE and 
individuals working in the geothermal industry, CBO expects 
that implementing S. 1149 could increase receipts from 
royalties paid on geothermal energy production by reducing the 
amount of time it takes to develop a known geothermal resource 
and by reducing the likelihood that lands containing geothermal 
resources would be acquired for speculative purposes. CBO 
estimates that any increase in the amount of royalty receipts 
that would be deposited in the U.S. Treasury would not exceed 
$500,000 in any year. Those amounts would offset any reduction 
in receipts from issuing noncompetitive leases under the bill. 
Thus, CBO estimates that implementing S. 1149 would have no 
significant net impact on direct spending over the 2012-2022 
period.
    The bill contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act and 
would impose no costs on state, local, or tribal governments.
    The CBO staff contact for this estimate is Jeff LaFave. 
This estimate was approved by Theresa Gullo, Deputy Assistant 
Director for Budget Analysis.

                      Regulatory Impact Evaluation

    In compliance with paragraph 11(b) of rule XXVI of the 
Standing Rules of the Senate, the Committee makes the following 
evaluation of the regulatory impact which would be incurred in 
carrying out S. 1149.
    The bill is not a regulatory measure in the sense of 
imposing Government-established standards or significant 
economic responsibilities on private individuals and 
businesses.
    No personal information would be collected in administering 
the program. Therefore, there would be no impact on personal 
privacy.
    Little, if any, additional paperwork would result from the 
enactment of S. 1149, as ordered reported.

                   Congressionally Directed Spending

    S. 1149, as reported, does not contain any congressionally 
directed spending items, limited tax benefits, or limited 
tariff benefits as defined in rule XLIV of the Standing Rules 
of the Senate.

                        Executive Communications

    The views of the Administration were included in testimony 
received by the Committee at a hearing on S. 1149 on August 3, 
2011, which is provided below.

    Statement of Robert Abbey, Director, Bureau of Land Management, 
                       Department of the Interior

    Mr. Chairman and members of the Subcommittee thank you for 
the opportunity to provide the views of the Department of the 
Interior on S. 1149, the Geothermal Production Expansion Act. 
S. 1149 would amend the Geothermal Steam Act of 1970 to allow 
non-competitive leasing of Federal geothermal energy resources 
when a valid geothermal discovery is made on adjoining lands. 
The Bureau of Land Management (BLM) supports the goal of 
enhancing geothermal exploration and development by ensuring 
that valid discoveries can be responsibly developed. 
Accordingly, the BLM generally supports S. 1149, and believes 
that the bill's provision that the Secretary of the Interior 
establish regulatory procedures for determining fair market 
values of adjoining lands is the most effective way to ensure a 
fair return to American taxpayers. The BLM has concerns with a 
few provisions in the legislation and would like to work with 
the Committee to address them.

                               background

    Geothermal energy resources on Federal lands are leased and 
managed in accordance with the Geothermal Steam Act of 1970 
(GSA), which was amended by the Energy Policy Act of 2005 
(EPAct). The EPAct made extensive changes to the law governing 
geothermal leasing and royalty policies. The changes were 
designed to encourage geothermal energy development and 
simplify the royalty structure, while ensuring a fair return 
for the use of Federal lands and geothermal resources. The GSA, 
as amended, provides the BLM with the authority for leasing and 
managing geothermal resources on the public lands, and the 
delegated authority for leasing geothermal resources on lands 
managed by the U.S. Forest Service (FS). In 2008, the BLM and 
FS jointly prepared and issued a Programmatic Environmental 
Impact Statement (PEIS) that analyzed the potential for 
geothermal leasing on their respective lands. Based on this 
analysis, the BLM and FS have opened 192 million acres to 
potential geothermal leasing.
    Federal geothermal resources have the potential to make an 
important contribution toward the President's goal of 
increasing energy production from clean, renewable sources. To 
date, the BLM has issued 818 geothermal leases that cover 1.2 
million acres of Federal lands. Approximately 59 leases have 
reached producing status with a generating capacity of nearly 
1,300 megawatts (MW). These producing leases account for more 
than 40 percent of current U.S. geothermal capacity. Despite 
this progress, the development of geothermal energy is just 
beginning, and its future role and importance is expected to 
increase significantly, from the current level to 12,200 MW by 
2025, according to estimates in the 2008 PEIS. Notably, this is 
often baseload power that does not have the variable qualities 
of some other renewable sources and may pair well with them.
    The BLM's geothermal leasing program is administered under 
regulations (43 CFR 3200 and 3280) issued in 2007 to reflect 
the 2005 EPAct's amendments to the GSA. Under these 
regulations, most leases for geothermal development on Federal 
lands are offered initially through competitive oral auctions, 
which are held about twice per year. Typically, the parcels 
offered at auction are nominated for lease by industry, but may 
also be nominated by the public, or by Federal, state, and 
local governments. Since competitive auctions began in 2007, a 
total of 366 geothermal leases have been sold, generating more 
than $74 million in revenue. In addition to the price paid at 
auction, geothermal lease holders pay annual per-acre rental 
fees until production begins. Thereafter, lease holders pay 
royalties or fees on production.
    Lease parcels that do not receive a bid at auction are made 
available for noncompetitive lease for a period of 2 years, at 
a price of $1.00 per acre. In addition, noncompetitive 
geothermal leases may be offered under certain conditions for 
direct, on-site energy uses, which include the use of 
geothermal steam and hot water in greenhouses and aquaculture. 
Noncompetitive leases are also offered to qualified mining 
claim holders.

                                s. 1149

    S. 1149 seeks to focus Federal geothermal energy leasing 
activities toward entities that intend to develop geothermal 
resources rather than toward those who may intend to obtain 
leases for parcels with geothermal resources for speculative 
purposes. More specifically, the bill aims to address a 
practice whereby speculators purchase at auction Federal 
geothermal leases for parcels that are located adjacent to 
parcels of Federal or private land with existing geothermal 
leases or developments. This practice is viewed by some as an 
effort to capitalize upon another company's geothermal 
exploration efforts, and is a disincentive for future 
geothermal investment and development. Because the geothermal 
competitive leasing program is open to all qualified bidders, 
the potential exists for such speculative activity.
    To address this concern, the legislation authorizes non-
competitive leasing of adjoining Federal geothermal resources 
when a valid discovery of geothermal resources is made, and the 
geothermal resources are shown to extend into unleased Federal 
land. Under the bill, a Federal non-competitive lease would be 
available only for areas not exceeding 640 acres that have not 
already been leased or nominated to be leased competitively. 
Only one noncompetitive lease could be issued for each valid 
geothermal discovery.
    To qualify for a noncompetitive lease under this 
legislation, an applicant would have to demonstrate, consistent 
with industry standards, a valid discovery of a geothermal 
resource. An applicant also would have to present sufficient 
geological and technical data showing that the geothermal 
resource extends into adjoining Federal lands.
    Section 3 of S. 1149 would amend Section 4(b) of the GSA to 
define fair market value per acre for the non-competitive 
lease. Under the provisions of Section 3, the lessee would pay 
fair market value for the non-competitive lease in accordance 
with regulations issued by the Secretary of the Interior. The 
bill would set a minimum price on how much the Secretary may 
determine the fair market value to be at not less than the 
greater of $50 per acre, or four times the median amount paid 
per acre for all land leased during the preceding year.
    This legislation would make proposed fair market value 
determinations open for public comment for a period of 30 days 
and would allow a qualified lessee and any affected party to 
appeal a fair market value determination. Further, the lease 
awarded non-competitively would be assessed the annual rental 
rate of leases awarded competitively.
    The BLM supports the objective of S. 1149 to enhance 
geothermal development by increasing investor confidence that 
geothermal discoveries could be fully developed. Additionally, 
BLM supports a requirement that regulations be promulgated to 
establish procedures for determining the fair market value of 
leases on adjoining lands.
    The BLM is concerned, however, about the provision of S. 
1149 that sets a minimum price on how much the Secretary may 
determine the fair market value to be. Though the minimum price 
set forth in the bill may provide some assurance of a return to 
American taxpayers, the price may not reflect a fair market 
value. The BLM believes that the provision is unnecessary, 
because under the bill, the Secretary would be required to 
establish procedures for determining fair market values of 
these leases. With these procedures, the BLM would consider a 
number of factors, including available information on the known 
resources and the value of other leases within the local 
market, in determining a price that is fair for that lease. 
Thus, the BLM recommends that the provision that sets a minimum 
price be removed from the bill.
    The BLM also has concerns with the timeframes included in 
the legislation. Specifically, the promulgation of regulations 
issued by the Secretary typically requires more than 180 days. 
The 90 days provided in the bill for determining the fair 
market value of a lease may not be adequate to conduct such an 
evaluation.

                               conclusion

    The BLM supports efforts to enhance geothermal exploration 
and development in the United States in a manner that is fair 
to geothermal developers and other participants in the 
competitive leasing process. We must ensure those efforts 
result in a fair return to the American taxpayers. Thank you 
for the opportunity to testify and I would be happy to answer 
any questions.

                        Changes in Existing Law

    In compliance with paragraph 12 of rule XXVI of the 
Standing Rules of the Senate, changes in existing law made by 
the bill, as ordered reported, are shown as follows (existing 
law proposed to be omitted is enclosed in black brackets, new 
material is printed in italic, existing law in which no change 
is proposed is shown in roman):

                      GEOTHERMAL STEAM ACT OF 1970

                  (Public Law No. 91-581, as amended)

(30 U.S.C. 1001, et seq.)

           *       *       *       *       *       *       *

SEC. 4. LEASING PROCEDURES.

           *       *       *       *       *       *       *

    (b) Competitive Lease Sale Required.--

           *       *       *       *       *       *       *

          (4) Adjoining land.--
                  (A) Definitions.--In this paragraph:
                          (i) Fair market value per acre.--The 
                        term ``fair market value per acre'' 
                        means a dollar amount per acre that--
                                  (I) except as provided in 
                                this clause, shall be equal to 
                                the market value per acre 
                                (taking into account the 
                                determination under 
                                subparagraph (B)(iii) regarding 
                                a valid discovery on the 
                                adjoining land) as determined 
                                by the Secretary under 
                                regulations issued under this 
                                paragraph;
                                  (II) shall be determined by 
                                the Secretary with respect to a 
                                lease under this paragraph, by 
                                not later than the end of the 
                                180-day period beginning on the 
                                date the Secretary receives an 
                                application for the lease; and
                                  (III) shall be not less than 
                                the greater of--
                                          (aa) 4 times the 
                                        median amount paid per 
                                        acre for all land 
                                        leased under this Act 
                                        during the preceding 
                                        year; or
                                          (bb) $50.
                          (ii) Industry standards.--The term 
                        ``industry standards'' means the 
                        standards by which a qualified 
                        geothermal professional assesses 
                        whether downhole or flowing temperature 
                        measurements with indications of 
                        permeability are sufficient to produce 
                        energy from geothermal resources, as 
                        determined through flow or injection 
                        testing or measurement of lost 
                        circulation while drilling.
                          (iii) Qualified federal land.--The 
                        term ``qualified Federal land'' means 
                        land that is otherwise available for 
                        leasing under this Act.
                          (iv) Qualified geothermal 
                        professional.--The term ``qualified 
                        geothermal professional'' means an 
                        individual who is an engineer or 
                        geoscientist in good professional 
                        standing with at least 5 years of 
                        experience in geothermal exploration, 
                        development, or project assessment.
                          (v) Qualified lessee.--The term 
                        ``qualified lessee'' means a person 
                        that may hold a geothermal lease under 
                        this Act (including applicable 
                        regulations).
                          (vi) Valid discovery.--The term 
                        ``valid discovery'' means a discovery 
                        of a geothermal resource by a new or 
                        existing slim hole or production well, 
                        that exhibits downhole or flowing 
                        temperature measurements with 
                        indications of permeability that are 
                        sufficient to meet industry standards.
                  (B) Authority.--An area of qualified Federal 
                land that adjoins other land for which a 
                qualified lessee holds a legal right to develop 
                geothermal resources may be available for a 
                noncompetitive lease under this section to the 
                qualified lessee at the fair market value per 
                acre, if--
                          (i) the area of qualified Federal 
                        land--
                                  (I) consists of not less than 
                                1 acre and not more than 640 
                                acres; and
                                  (II) is not already leased 
                                under this Act or nominated to 
                                be leased under subsection (a);
                          (ii) the qualified lessee has not 
                        previously received a noncompetitive 
                        lease under this paragraph in 
                        connection with the valid discovery for 
                        which data has been submitted under 
                        clause (iii)(I); and
                          (iii) sufficient geological and other 
                        technical data prepared by a qualified 
                        geothermal professional has been 
                        submitted by the qualified lessee to 
                        the applicable Federal land management 
                        agency that would lead individuals who 
                        are experienced in the subject matter 
                        to believe that--
                                  (I) there is a valid 
                                discovery of geothermal 
                                resources on the land for which 
                                the qualified lessee holds the 
                                legal right to develop 
                                geothermal resources; and
                                  (II) that thermal feature 
                                extends into the adjoining 
                                areas.
                  (C) Determination of fair market value.--
                          (i) In general.--The Secretary 
                        shall--
                                  (I) publish a notice of any 
                                request to lease land under 
                                this paragraph;
                                  (II) determine fair market 
                                value for purposes of this 
                                paragraph in accordance with 
                                procedures for making those 
                                determinations that are 
                                established by regulations 
                                issued by the Secretary;
                                  (III) provide to a qualified 
                                lessee and publish, with an 
                                opportunity for public comment 
                                for a period of 30 days, any 
                                proposed determination under 
                                this subparagraph of the fair 
                                market value of an area that 
                                the qualified lessee seeks to 
                                lease under this paragraph; and
                                  (IV) provide to the qualified 
                                lessee and any adversely 
                                affected party the opportunity 
                                to appeal the final 
                                determination of fair market 
                                value in an administrative 
                                proceeding before the 
                                applicable Federal land 
                                management agency, in 
                                accordance with applicable law 
                                (including regulations).
                          (ii) Limitation on nomination.--After 
                        publication of a notice of request to 
                        lease land under this paragraph, the 
                        Secretary may not accept under 
                        subsection (a) any nomination of the 
                        land for leasing unless the request has 
                        been denied or withdrawn.
                          (iii) Annual rental.--For purposes of 
                        section 5(a)(3), a lease awarded under 
                        this paragraph shall be considered a 
                        lease awarded in a competitive lease 
                        sale.
                  (D) Regulations.--Not later than 270 days 
                after the date of enactment of the Geothermal 
                Production Expansion Act of 2011, the Secretary 
                shall issue regulations to carry out this 
                paragraph.

           *       *       *       *       *       *       *

                                  
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