I 

108TH CONGRESS 

1ST SESSION H. R. 2772

To amend the Geothermal Steam Act of 1970 to promote the development 

and use of geothermal resources in the United States. 

IN THE HOUSE OF REPRESENTATIVES 

JULY 17, 2003

Mr. GIBBONS introduced the following bill; which was referred to the 

Committee on Resources 

A BILL

To amend the Geothermal Steam Act of 1970 to promote 

the development and use of geothermal resources in the 

United States.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘John Rishel Geo5 thermal Steam Act Amendments of 2003’’. 

6 SEC. 2. COMPETITIVE LEASE SALE REQUIREMENTS. 

7 (a) IN GENERAL.—Section 4 of the Geothermal 

8 Steam Act of 1970 (30 U.S.C. 1003) is amended to read 

9 as follows: 
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1 ‘‘SEC. 4. LEASING PROCEDURES. 

2 ‘‘(a) IN GENERAL.—

3 ‘‘(1) NOMINATIONS.—The Secretary shall ac4 cept nominations at any time from qualified compa5 nies and individuals of areas to be leased under this 

6 Act. 

7 ‘‘(2) COMPETITIVE LEASE SALE REQUIRED.—

8 The Secretary shall hold a competitive lease sale at 

9 least once every 2 years for lands in a State that are 

10 located in areas with respect to which there are 

11 nominations pending under paragraph (1). 

12 ‘‘(3) NONCOMPETITIVE LEASING.—The Sec13 retary shall make available for a period of 2 years 

14 for noncompetitive leasing any lands for which a 

15 competitive lease sale is held, but for which the Sec16 retary does not receive any bids in a competitive 

17 lease sale. 

18 ‘‘(4) LEASES SOLD AS A BLOCK.—Notwith19 standing the lease acreage limitation, if a geothermal 

20 resource that could be produced as one unit is rea21 sonably expected to underline more than one lease, 

22 the leases for such resources shall be offered for bid23 ding as a block in the competitive lease sale.’’.

24 (b) PENDING LEASE APPLICATIONS.—The Secretary 

25 of the Interior—
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1 (1) subject to paragraph (2), shall expeditiously 

2 process lease applications pending on the date of en3 actment of this Act under the Geothermal Steam 

4 Act of 1970 (30 U.S.C. 1001 et seq.); and 

5 (2) shall, by the end of the one-year period be6 ginning on the date of the enactment of this Act, 

7 initiate competitive lease sales under such Act for 

8 areas with respect to which lease applications are 

9 pending and the lease applicant has not entered into 

10 an agreement with the Secretary to be reimbursed 

11 under the terms of the amendment made by section 

12 7(a) of this Act to fund any analyses, documents, or 

13 studies necessary to complete the processing of the 

14 lease application.

15 SECTION 3. SPECIAL PROVISIONS REGARDING DIRECT USE 

16 OF GEOTHERMAL ENERGY RESOURCES. 

17 (a) LEASING PROCEDURE.—Section 4 of the Geo18 thermal Steam Act of 1970 (30 U.S.C. 1003) is further 

19 amended by adding at the end the following: 

20 ‘‘(b) LEASING FOR DIRECT USE OF GEOTHERMAL

21 RESOURCES.—Lands leased under this Act exclusively for 

22 qualified development and direct utilization of geothermal 

23 resources shall be leased to any qualified applicant who 

24 first applies for such lease under regulations formulated 

25 by the Secretary, if—
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1 ‘‘(1) the Secretary publishes a notice of the 

2 lands proposed for leasing at least 60 days before 

3 the date of the issuance of the lease; and

4 ‘‘(2) the Secretary does not receive in the 60-

5 day period beginning on the date of such publication 

6 any nomination to include the lands concerned in the 

7 next competitive lease sale.’’. 

8 (b) LIMITATION ON LEASE AREA.—Section 7 of the 

9 Geothermal Steam Act of 1970 (30 U.S.C. 1006) is 

10 amended—

11 (1) in the first sentence by striking ‘‘A geo12 thermal lease’’ and inserting ‘‘(a) IN GENERAL.—

13 Except as provided in subsection (b), a geothermal 

14 lease’’; and 

15 (2) by adding at the end the following: 

16 ‘‘(b) LEASING FOR DIRECT USE OF GEOTHERMAL

17 RESOURCES.—A geothermal lease for qualified develop18 ment and direct utilization of geothermal resources shall 

19 embrace not more than the minimum amount of acreage 

20 determined by the Secretary to be reasonably necessary 

21 for such utilization.’’. 

22 (c) ANNUAL PAYMENT.—Section 5 of the Geothermal 

23 Steam Act of 1970 (30 U.S.C. 1004) is amended—

24 (1) in paragraph (c) by redesignating subpara25 graphs (1) and (2) as subparagraphs (A) and (B); 
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1 (2) by redesignating paragraphs (a) through (d) 

2 in order as paragraphs (1) through (4); 

3 (3) by inserting ‘‘(a) IN GENERAL.—’’ after 

4 ‘‘SEC. 5’’; and 

5 (4) by adding at the end the following: 

6 ‘‘(b) EXEMPTION FOR DIRECT USE OF GEOTHERMAL

7 RESOURCES.—

8 ‘‘(1) IN GENERAL.—In lieu of any royalty or 

9 rental under subsection (a), a lease for qualified de10 velopment and direct utilization of geothermal re11 sources shall provide for payment by the lessee of an 

12 annual fee per well of not less than $100, and not 

13 more than $1,000, in accordance with the schedule 

14 issued under paragraph (2). 

15 ‘‘(2) SCHEDULE.—The Secretary shall issue a 

16 schedule of fees under this section under which a fee 

17 is based on the scale of development and utilization 

18 to which the fee applies.’’. 

19 (d) DEFINITIONS.—Section 2 of the Geothermal 

20 Steam Act of 1970 (30 U.S.C. 1001) is amended—

21 (1) in paragraph (f) by redesignating subpara22 graphs (1) through (4) in order as subparagraphs 

23 (A) through (D); 

24 (2) by redesignating paragraphs (a) through (f) 

25 in order as paragraphs (1) through (6); and 
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1 (3) by adding at the end the following: 

2 ‘‘(7) DIRECT USE OF GEOTHERMAL RE3 SOURCES.—The term ‘direct use of geothermal re4 sources’ means utilization of the heat from a geo5 thermal resource for commercial, residential, agricul6 tural, or other energy needs, other than the commer7 cial production of electricity. 

8 ‘‘(8) GEOTHERMAL RESOURCE.—The term ‘geo9 thermal resource’ means a subsurface reservoir of 

10 hot water or steam.’’. 

11 (e) EXISTING LEASES.—

12 (1) APPLICATION TO CONVERT.—Any lessee 

13 under a lease under the Geothermal Steam Act of 

14 1970 that was issued before the date of the enact15 ment of this Act may apply to the Secretary of the 

16 Interior, by not later than 18 months after the date 

17 of the enactment of this Act, to convert such lease 

18 to a lease for qualified development and direct utili19 zation of geothermal resources in accordance with 

20 the amendments made by this section. 

21 (2) CONVERSION.—The Secretary shall approve 

22 such an application and convert such a lease to a 

23 lease in accordance with the amendments by not 

24 later than 180 days after receipt of such application, 
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1 unless the Secretary determines that the applicant is 

2 not a qualified applicant with respect to the lease. 

3 (3) APPLICATION OF NEW LEASE TERMS.—The 

4 amendments made by subsection (c) shall apply with 

5 respect to payments under a lease converted under 

6 this subsection that are due and owning to the 

7 United States on or after July 16, 2003.

8 SEC. 4. ROYALTIES AND NEAR-TERM PRODUCTION INCEN9 TIVES. 

10 (a) ROYALTY.—Section 5 of the Geothermal Steam 

11 Act of 1970 (30 U.S.C. 1004) is further amended—

12 (1) in subsection (a) by striking paragraph (1) 

13 and inserting the following: 

14 ‘‘(1) a royalty on electricity produced using geo15 thermal steam and associated geothermal resources, 

16 other than direct use of geothermal resources, that 

17 shall be—

18 ‘‘(A) 1.75 percent of the gross proceeds 

19 from the sale of electricity produced from such 

20 resources during the first 10 years of produc21 tion under the lease; and 

22 ‘‘(B) 3.5 percent of the gross proceeds 

23 from the sale of electricity produced from such 

24 resources during each year after such 10-year 

25 period.’’; and 
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1 (2) by adding at the end the following: 

2 ‘‘(c) TREATMENT OF STATE AND COUNTY SHARES

3 OF ROYALTIES.—

4 ‘‘(1) STATE SHARE.—Notwithstanding section 

5 20 of this Act, section 35 of the Mineral Leasing 

6 Act (30 U.S.C. 191), or section 6 of the Mineral 

7 Leasing Act for Acquired Lands (30 U.S.C. 355), in 

8 the case of monies received by the United States as 

9 royalty under subsection (a)(1)(A) with respect to a 

10 electricity produced in a County in a State under a 

11 geothermal lease—

12 ‘‘(A) the percentage required to be paid by 

13 the Secretary of the Treasury to the State shall 

14 be 75 percent; and 

15 ‘‘(B) the percentage required to be paid by 

16 the Secretary of the Treasury to the County 

17 shall be 25 percent. 

18 ‘‘(2) CREDITS FOR IN-KIND PAYMENTS OF

19 ELECTRICITY.—The Secretary may provide to a les20 see a credit against royalties owed under this Act, 

21 in an amount equal to the value of electricity pro22 vided under contract to a State or county govern23 ment that is entitled under the provisions of other 

24 laws referred to in paragraph (1) to a portion of 

25 such royalties, if—
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1 ‘‘(A) the Secretary has approved an agree2 ment between the lessee and the State or coun3 ty government for such in-kind payments; and

4 ‘‘(B) the agreement establishes a specific 

5 methodology to determine the value of such 

6 credits.’’. 

7 (b) DISPOSAL OF MONEYS FROM SALES, BONUSES, 

8 ROYALTIES AND RENTALS.—Section 20 of the Geo9 thermal Steam Act of 1970 (30 U.S.C. 1019) is amended 

10 to read as follows: 

11 ‘‘SEC. 20. DISPOSAL OF MONEYS FROM SALES, BONUSES, 

12 ROYALTIES AND RENTALS. 

13 ‘‘(a) RENTALS.—All moneys received by the United 

14 States from rentals under this Act shall be disposed of 

15 in the same manner as such moneys received pursuant to 

16 section 35 of the Mineral Leasing Act (30 U.S.C. 191) 

17 or section 6 of the Mineral Leasing Act for Acquired 

18 Lands (30 U.S.C. 355), as the case may be. 

19 ‘‘(b) SALES, BONUSES, AND ROYALTIES.—

20 ‘‘(1) IN GENERAL.—All monies received by the 

21 United States from sales, bonuses, and royalties 

22 under this Act shall be paid into the Treasury of the 

23 United States. Of amounts deposited under this sub24 section, subject to the provisions of section 35 of the 
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1 Mineral Leasing Act (30 U.S.C. 191(b)) and section 

2 5(a)(2) of this Act—

3 ‘‘(A) 50 percent shall be paid to the State 

4 within the boundaries of which the leased lands 

5 or geothermal resources are or were located; 

6 and 

7 ‘‘(B) 25 percent shall be paid to the Coun8 ty within the boundaries of which the leased 

9 lands or geothermal resources are or were lo10 cated; 

11 except that this sentence shall not apply with respect 

12 to lands in Alaska.

13 ‘‘(2) USE OF PAYMENTS.—Amounts paid to a 

14 State or county under paragraph (1) shall be used 

15 consistent with the terms of section 35 of the Min16 eral Leasing Act (30 U.S.C. 191).’’. 

17 (c) NEAR-TERM PRODUCTION INCENTIVE.—

18 (1) IN GENERAL.—Notwithstanding section 

19 5(a) of the Geothermal Steam Act of 1970 the roy20 alty required to be paid on any lease issued under 

21 such Act before the date of enactment of this Act—

22 (A) with respect to commercial production 

23 of heat or energy from a facility that begins 

24 such production in the 6-year period beginning 

25 on the date of the enactment of this Act; or 
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1 (B) on qualified expansion geothermal en2 ergy; 

3 shall be 50 percent of the amount of royalty other4 wise required to be paid under that section. 

5 (2) STATE SHARE.—Notwithstanding section 20 

6 of the Geothermal Steam Act of 1970 (30 U.S.C. 

7 1019), section 35 of the Mineral Leasing Act (30 

8 U.S.C. 191), or section 6 of the Mineral Leasing Act 

9 for Acquired Lands (30 U.S.C. 355), in the case of 

10 monies received by the United States from royalty 

11 described in subparagraph (A) or (B) of paragraph 

12 (1), the percentage required to be paid by the Sec13 retary of the Treasury to a State under those sec14 tions shall be 100 percent. 

15 (3) 4-YEAR APPLICATION.—Paragraphs (1) and 

16 (2) apply only to commercial production of heat or 

17 energy from a facility in the first 4 years of such 

18 production. 

19 (4) NO EFFECT ON STATE PORTION.—This sub20 section shall not be construed to reduce the amount 

21 of royalty required to be paid to a State. 

22 (d) DEFINITIONS.—In this section: 

23 (1) QUALIFIED EXPANSION GEOTHERMAL EN24 ERGY.—The term ‘‘qualified expansion geothermal 
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1 energy’’ means geothermal energy produced from a 

2 generation facility for which—

3 (A) the production is increased by more 

4 than 10 percent as a result of expansion of the 

5 facility carried out in the 6-year period begin6 ning on the date of the enactment of this Act; 

7 and 

8 (B) such production increase is greater 

9 than 10 percent of the average production by 

10 the facility during the 5-year period preceding 

11 the expansion of the facility. 

12 (2) QUALIFIED GEOTHERMAL ENERGY

13 LEASE.—The term ‘‘qualified geothermal energy 

14 lease’’ means a lease under the Geothermal Steam 

15 Act of 1970 (30 U.S.C. 1001 et seq.)—

16 (A) that was executed before the end of 

17 the 6-year period beginning on the date of the 

18 enactment of this Act; and 

19 (B) under which no commercial production 

20 of any form of heat or energy occurred before 

21 the date of the enactment of this Act. 

22 (e) ROYALTY UNDER EXISTING LEASES.—

23 (1) IN GENERAL.—Any lessee under a lease 

24 issued under the Geothermal Steam Act of 1970 be25 fore the date of the enactment of this Act may mod-
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1 ify the terms of the lease relating to payment of roy2 alties to comply with the amendment made by sub3 section (a), by applying to the Secretary of the Inte4 rior by not later than 18 months after the date of 

5 the enactment of this Act. 

6 (2) APPLICATION OF MODIFICATION.—Such 

7 modification shall apply to any use of geothermal 

8 steam and associated geothermal resources to which 

9 the amendment applies that occurs after the date of 

10 that application. 

11 (3) CONSULTATION.—The Secretary—

12 (A) shall consult with the State and local 

13 governments affected by any proposed changes 

14 in lease royalty terms under this subsection; 

15 (B) may agree to a gross proceeds percent16 age other than the amount specified in the 

17 amendment made by subsection (a) only with 

18 the concurrence of the lessee and the State, 

19 SEC. 5. CONSULTATION REGARDING GEOTHERMAL LEAS20 ING AND PERMITTING ON PUBLIC LANDS. 

21 (a) IN GENERAL.—Not later than 6 months after the 

22 date of the enactment of this Act, the Secretary of the 

23 Interior and the Secretary of Agriculture shall enter into 

24 and submit to the Congress a memorandum of under25 standing in accordance with this section regarding leasing 
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1 and permitting, for geothermal development, of public 

2 lands under their respective administrative jurisdictions. 

3 (b) LEASE AND PERMIT APPLICATIONS.—The memo4 randum of understanding shall include provisions that—

5 (1) identify known geothermal areas on public 

6 lands within the National Forest System and when 

7 necessary review management plans to consider leas8 ing under the Geothermal Steam Act of 1970 (30 

9 U.S.C. 1001 et seq.) as a land use; 

10 (2) establish an administrative procedure for 

11 processing geothermal lease applications, including 

12 lines of authority, steps in application processing, 

13 and timeframes for application processing; 

14 (3) provide that the Secretary concerned 

15 shall—

16 (A) within 14 days after receiving an ap17 plication for a lease, determine whether the ap18 plication contains sufficient information to 

19 allow processing of the application; and 

20 (B) if the application is found not to con21 tain sufficient information to allow processing 

22 the application the Secretary shall, before the

23 end of such 14-day period, provide written noti24 fication to the lease applicant that the applica25 tion is being returned to the applicant without 
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1 processing and itemizing the deficiencies in the 

2 application that prevent processing; 

3 (4) provide that the Secretary concerned shall 

4 within 30 days after receiving a lease application, 

5 provide written notice to the lease applicant regard6 ing the status of the application, including an esti7 mation of the time that will be required to complete 

8 action on the application; and 

9 (5) establish an administrative procedure for 

10 processing geothermal development permits, includ11 ing lines of authority, steps in permit processing, 

12 and timeframes for permit processing. 

13 (c) FIVE-YEAR LEASING PLAN.—The memorandum 

14 of understanding shall develop a 5-year plan for leasing 

15 under the Geothermal Steam Act of 1970 (30 U.S.C. 1001 

16 et seq.) of public land in the National Forest System. The 

17 plan for geothermal leasing shall be updated every 5 years. 

18 (d) DATA RETRIEVAL SYSTEM.—The memorandum 

19 of understanding shall establish a joint data retrieval sys20 tem that is capable of tracking lease and permit applica21 tions and requests and providing to the applicant or re22 quester information as to their status within the Depart23 ments of the Interior and Agriculture, including an esti24 mate of the time required for administrative action. 
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1 SEC. 6. REVIEW AND REPORT TO CONGRESS. 

2 The Secretary of the Interior shall promptly review 

3 and report to the Congress within 3 years after the date 

4 of the enactment of this Act regarding the status of all 

5 moratoria on and withdrawals from leasing under the Geo6 thermal Steam Act of 1970 (30 U.S.C. 1001 et seq.) of 

7 known geothermal resources areas (as that term is defined 

8 in section 2 of that Act (30 U.S.C. 1001), specifying for 

9 each such area whether the basis for such moratoria or 

10 withdrawal still applies. 

11 SEC. 7. REIMBURSEMENT FOR COSTS OF NEPA ANALYSES, 

12 DOCUMENTATION, AND STUDIES. 

13 (a) IN GENERAL.—The Geothermal Steam Act of 

14 1970 (30 U.S.C. 1001 et seq.) is amended by adding at 

15 the end the following: 

16 ‘‘SEC. 30. REIMBURSEMENT FOR COSTS OF CERTAIN ANAL17 YSES, DOCUMENTATION, AND STUDIES. 

18 ‘‘(a) IN GENERAL.—The Secretary of the Interior 

19 may, through royalty credits, reimburse a person who is 

20 a lessee, operator, operating rights owner, or applicant for 

21 a lease under this Act for reasonable amounts paid by the 

22 person for preparation by the Secretary (or a contractor 

23 or other person selected by the Secretary) of any project24 level analysis, documentation, or related study required 

25 under the National Environmental Policy Act of 1969 (42 

26 U.S.C. 4321 et seq.) with respect to the lease. 
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1 ‘‘(b) CONDITIONS.—The Secretary may provide reim2 bursement under subsection (a) only if—

3 ‘‘(1) adequate funding to enable the Secretary 

4 to timely prepare the analysis, documentation, or re5 lated study is not appropriated; 

6 ‘‘(2) the person paid the amounts voluntarily; 

7 and 

8 ‘‘(3) the person maintains records of its costs 

9 in accordance with regulations prescribed by the 

10 Secretary.’’. 

11 (b) APPLICATION.—The amendments made by this 

12 section shall apply with respect to any lease entered into 

13 before, on, or after the date of the enactment of this Act. 

14 (c) DEADLINE FOR REGULATIONS.—The Secretary 

15 shall issue regulations implementing the amendments 

16 made by this section by not later than 90 days after the 

17 date of the enactment of this Act. 

18 SEC. 8. ASSESSMENT OF GEOTHERMAL ENERGY POTEN19 TIAL. 

20 The Secretary of Interior, acting through the Direc21 tor of the United States Geological Survey and in coopera22 tion with the States, shall update the 1978 Assessment 

23 of Geothermal Resources, and submit that updated assess24 ment to the Committee on Resources of the House of Rep-
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1 resentatives and the Committee on Energy and Natural 

2 Resources of the Senate—

3 (1) within 3 years after the date of enactment 

4 of this Act; and 

5 (2) thereafter as the availability of data and de6 velopments in technology warrant. 

7 SEC. 9. COOPERATIVE OR UNIT PLANS. 

8 (a) IN GENERAL.—Section 18 of the Geothermal 

9 Steam Act of 1970 (30 U.S.C. 1017) is amended to read 

10 as follows: 

11 ‘‘SEC. 18. COOPERATIVE OR UNIT PLANS. 

12 ‘‘(a) ADOPTION OF PLAN BY LESSEES.—

13 ‘‘(1) IN GENERAL.—For the purpose of more 

14 properly conserving the natural resources of any 

15 geothermal field, or like area, or any part thereof 

16 (whether or not any part of the geothermal field, or 

17 like area, is then subject to any cooperative or unit 

18 plan of development or operation), lessees thereof 

19 and their representatives may unite with each other, 

20 or jointly or separately with others, in collectively 

21 adopting and operating under a cooperative or unit 

22 plan of development or operation of such field, or 

23 like area, or any part thereof, if determined and cer24 tified by the Secretary to be necessary or advisable 

25 in the public interest. 
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1 ‘‘(2) MODIFICATION OF LEASE REQUIREMENTS

2 BY SECRETARY.—The Secretary may, in the discre3 tion of the Secretary, and with the consent of the 

4 holders of leases involved, establish, alter, change, or 

5 revoke drilling, producing, rental, minimum royalty, 

6 and royalty requirements of such leases and to make 

7 such regulations with reference to such leases, with 

8 the consent of the lessees, in connection with the in9 stitution and operation of any such cooperative or 

10 unit plan as the Secretary may deem necessary or 

11 proper to secure the proper protection of the public 

12 interest. 

13 ‘‘(b) REQUIREMENT OF PLANS UNDER NEW

14 LEASES.—The Secretary—

15 ‘‘(1) may provide that geothermal leases issued 

16 under this Act after the date of the enactment of 

17 this section shall contain a provision requiring the 

18 lessee to operate under such a reasonable coopera19 tive or unit plan; and 

20 ‘‘(2) may prescribe such a plan under which 

21 such lessee shall operate, which shall adequately pro22 tect the rights of all parties in interest, including the 

23 United States.

24 ‘‘(c) MODIFICATION OF RATE OF PROSPECTING, DE25 VELOPMENT, AND PRODUCTION.—The Secretary may re-
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1 quire that any plan authorized by the this section that 

2 applies to lands owned by the United States contain a pro3 vision under which authority is vested in the Secretary, 

4 or any person, committee, or State or Federal officer or 

5 agency as may be designated in the plan, to alter or mod6 ify from time to time the rate of prospecting and develop7 ment and the quantity and rate of production under such 

8 plan. 

9 ‘‘(d) EXCLUSION FROM DETERMINATION OF HOLD10 ING OR CONTROL.—Any lands that are subject to any plan 

11 approved or prescribed by the Secretary under this section 

12 shall not be considered in determining holdings or control 

13 under any provision of this Act. 

14 ‘‘(e) POOLING OF CERTAIN LANDS.—If separate 

15 tracts of lands cannot be independently developed and op16 erated to use geothermal steam and associated geothermal 

17 resources pursuant to this Act in conformity with an es18 tablished development program—

19 ‘‘(1) any such lands, or a portion thereof, may 

20 be pooled with other lands, whether or not owned by 

21 the United States, for purposes of such development 

22 and operation under a communitization agreement 

23 providing for an apportionment of production or roy24 alties among the separate tracts of land comprising 
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1 the production unit, if such pooling is determined by 

2 the Secretary to be in the public interest; and 

3 ‘‘(2) operation or production pursuant to such 

4 an agreement shall be treated as operation or pro5 duction with respect to each tract of land that is 

6 subject to the agreement. 

7 ‘‘(f) PLAN REVIEW.—No more than 5 years after ap8 proval of any cooperative or unit plan of development or 

9 operation, and at least every 5 years thereafter, the Sec10 retary shall review each such plan and, after notice and 

11 opportunity for comment, eliminate from inclusion in such 

12 plan any lands that the Secretary determines are not rea13 sonably necessary for cooperative or unit operations under 

14 the plan. Such elimination shall be based on scientific evi15 dence, and shall occur only if it is determined by the Sec16 retary to be for the purpose of conserving and properly 

17 managing the geothermal resource. Any land so eliminated 

18 shall be eligible for an extension under subsection (c) or 

19 (g) of section 6 if it meets the requirements for such an 

20 extension. 

21 ‘‘(g) APPROVAL BY SECRETARY.—The Secretary 

22 may, on such conditions as the Secretary may prescribe, 

23 approve operating, drilling, or development contracts made 

24 by one or more lessees of geothermal leases, with one or 

25 more persons, associations, or corporations if, in the dis-
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1 cretion of the Secretary, the conservation of natural re2 sources or the public convenience or necessity may require 

3 or the interests of the United States may be best served 

4 thereby. All leases operated under such approved oper5 ating, drilling, or development contracts, and interests 

6 thereunder, shall be excepted in determining holdings or 

7 control under section 7 of this Act. 

8 ‘‘(h) COORDINATION WITH STATE GOVERNMENTS.—

9 The Secretary—

10 ‘‘(1) shall coordinate unitization and pooling ac11 tivities with the appropriate State agencies; and 

12 ‘‘(2) shall ensure that State leases included in 

13 any unitization or pooling arrangement are treated 

14 equally with Federal leases.’’. 

15 SEC. 10. ROYALTY ON BYPRODUCTS. 

16 Section 5 of the Geothermal Steam Act of 1970 (30 

17 U.S.C. 1004) is further amended in subsection (a) by 

18 striking paragraph (2) and inserting the following: 

19 ‘‘(2) a royalty on any byproduct that is a min20 eral named in the first section of the Mineral Leas21 ing Act (30 U.S.C. 181), and that is derived from 

22 production under the lease, at the rate of the royalty 

23 that applies under that Act to production of such 

24 mineral under a lease under that Act;’’. 
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1 SEC. 11. REPEAL OF AUTHORITIES OF SECRETARY TO RE2 ADJUST TERMS, CONDITIONS, RENTALS, AND 

3 ROYALTIES. 

4 Section 8 of the Geothermal Steam Act of 1970 (30 

5 U.S.C. 1007) is amended by repealing subsections (a) and 

6 (b), and by striking ‘‘(c)’’. 

7 SEC. 12. CREDITING OF RENTAL TOWARD ROYALTY. 

8 Section 5 of the Geothermal Steam Act of 1970 (30 

9 U.S.C. 1004) is further amended—

10 (1) in subsection (a)(2) by inserting ‘‘and’’ 

11 after the semicolon at the end; 

12 (2) in subsection (a)(3) by striking ‘‘; and’’ and 

13 inserting a period; 

14 (3) by striking paragraph (4) of subsection (a); 

15 and 

16 (4) by adding at the end the following: 

17 ‘‘(d) CREDITING OF RENTAL TOWARD ROYALTY.—

18 Any annual rental under this section that is paid with re19 spect to a lease before the first day of the year for which 

20 the annual rental is owed shall be credited to the amount 

21 of royalty that is required to be paid under the lease for 

22 that year.’’. 

23 SEC. 13. LEASE DURATION AND WORK COMMITMENT RE24 QUIREMENTS. 

25 (a) IN GENERAL.—Section 6 of the Geothermal 

26 Steam Act of 1970 (30 U.S.C. 1005) is amended—
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1 (1) by striking so much as precedes subsection 

2 (c), and striking subsections (e), (g), (h), (i), and 

3 (j); 

4 (2) by redesignating subsections (c), (d), and 

5 (f) in order as subsections (g), (h), and (i); and 

6 (3) by inserting before subsection (g), as so re7 designated, the following: 

8 ‘‘SEC. 6. LEASE TERM AND WORK COMMITMENT REQUIRE9 MENTS. 

10 ‘‘(a) PRIMARY TERM.—

11 ‘‘(1) IN GENERAL.—A geothermal lease shall be 

12 for a primary term of ten years. 

13 ‘‘(2) INITIAL EXTENSION.—The Secretary shall 

14 extend the primary term of a geothermal lease for 

15 5 years if, for each year after the fifth year of the 

16 lease—

17 ‘‘(A) the Secretary determined under sub18 section (c) that the lessee satisfied the work 

19 commitment requirements that applied to the 

20 lease for that year; or 

21 ‘‘(B) the lessee paid in accordance with 

22 subsection (d) the value of any work that was 

23 not completed in accordance with those require24 ments.
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1 ‘‘(3) ADDITIONAL EXTENSION.—The Secretary 

2 shall extend the primary term of a geothermal lease 

3 (after an extension under paragraph (2)) for an ad4 ditional 5 years if, for each year after the fifteenth 

5 year of the lease, the Secretary determined under 

6 subsection (c) that the lessee satisfied the work com7 mitment requirements that applied to the lease for 

8 that year. 

9 ‘‘(b) REQUIREMENT TO SATISFY ANNUAL WORK

10 COMMITMENT REQUIREMENT.—

11 ‘‘(1) IN GENERAL.—The lessee for a geothermal 

12 lease shall, for each year after the fifth year of the 

13 lease, satisfy work commitment requirements pre14 scribed by the Secretary that apply to the lease for 

15 that year. 

16 ‘‘(2) PRESCRIPTION OF WORK COMMITMENT RE17 QUIREMENTS.—The Secretary shall issue regulations 

18 prescribing minimum equivalent dollar value work 

19 commitment requirements for geothermal leases, 

20 that—

21 ‘‘(A) require that a lessee, in each year 

22 after the fifth year of the primary term of a 

23 geothermal lease, diligently work to achieve 

24 commercial production or utilization of steam 

25 under the lease; 
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1 ‘‘(B) require that in each year to which 

2 work commitment requirements under the regu3 lations apply, the lessee shall significantly re4 duce the amount of work that remains to be 

5 done to achieve such production or utilization; 

6 ‘‘(C) describe specific work that must be 

7 completed by a lessee by the end of each year 

8 to which the work commitment requirements 

9 apply; 

10 ‘‘(D) carry forward and apply to work 

11 commitment requirements for a year, work 

12 completed in any year in the preceding 3-year 

13 period that was in excess of the work required 

14 to be performed in that preceding year; and 

15 ‘‘(E) establish transition rules for leases 

16 issued before the date of the enactment of this 

17 subsection, including terms under which a lease 

18 that is near the end of its term on the date of 

19 enactment of this Act may be extended for up 

20 to two years—

21 ‘‘(i) to allow achievement of produc22 tion under the lease; 

23 ‘‘(ii) to allow the lease to be included 

24 in a producing unit; and 
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1 ‘‘(F) establish an annual payment that, at 

2 the option of the lessee, may be exercised in lieu 

3 of meeting any work requirement for a limited 

4 number of years that the Secretary determines 

5 will not impair achieving diligent development 

6 of the geothermal resource. 

7 ‘‘(3) TERMINATION OF APPLICATION OF RE8 QUIREMENTS.—Work commitment requirements pre9 scribed under this subsection shall not apply to a 

10 geothermal lease after the date on which geothermal 

11 steam is produced or utilized under the lease in com12 mercial quantities. 

13 ‘‘(c) DETERMINATION OF WHETHER REQUIREMENTS

14 SATISFIED.—The Secretary shall, by not later than 21 

15 days after the end of each year for which work commit16 ment requirements under subsection (b) apply to a geo17 thermal lease—

18 ‘‘(1) determine whether the lessee has satisfied 

19 the requirements that apply for that year; 

20 ‘‘(2) notify the lessee of that determination; and 

21 ‘‘(3) in the case of a notification that the lessee 

22 did not satisfy work commitment requirements for 

23 the year, include in the notification—
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1 ‘‘(A) a description of the specific work that 

2 was not completed by the lessee in accordance 

3 with the requirements; and 

4 ‘‘(B) the amount of the dollar value of 

5 such work that was not completed, reduced by 

6 the amount of expenditures made for work com7 pleted in a prior year that is carried forward 

8 pursuant to subsection (b)(2)(D). 

9 ‘‘(d) PAYMENT OF VALUE OF UNCOMPLETED

10 WORK.—

11 ‘‘(1) IN GENERAL.—If the Secretary notifies a 

12 lessee that the lessee failed to satisfy work commit13 ment requirements under subsection (b), the lessee 

14 shall pay to the Secretary, by not later than the end 

15 of the 60-day period beginning on the date of the 

16 notification, the dollar value of work that was not 

17 completed by the lessee, in the amount stated in the 

18 notification (as reduced under subsection (c)(3)(B)). 

19 ‘‘(2) FAILURE TO PAY VALUE OF

20 UNCOMPLETED WORK.—If a lessee fails to pay such 

21 amount to the Secretary before the end of that pe22 riod, the lease shall terminate upon the expiration of 

23 the period. 

24 ‘‘(e) CONTINUATION AFTER COMMERCIAL PRODUC25 TION OR UTILIZATION.—If geothermal steam is produced 
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1 or utilized in commercial quantities within the primary 

2 term of the lease under subsection (a) (including any ex3 tension of the lease under subsection (a)), such lease shall 

4 continue until the date on which geothermal steam is no 

5 longer produced or utilized in commercial quantities. 

6 ‘‘(f) CONVERSION OF GEOTHERMAL LEASE TO MIN7 ERAL LEASE.—The lessee under a lease that has produced 

8 geothermal steam for electrical generation, has been deter9 mined by the Secretary to be incapable of any further com10 mercial production or utilization of geothermal steam, and 

11 that is producing any valuable byproduct in payable quan12 tities may, within 6 months after such determination—

13 ‘‘(1) convert the lease to a mineral lease under 

14 the Mineral Leasing Act (30 U.S.C. 181 et seq.) or 

15 under the Mineral Leasing Act for Acquired Lands 

16 (30 U.S.C. 351 et seq.), if the lands that are subject 

17 to the lease can be leased under that Act for the 

18 production of such byproduct; or 

19 ‘‘(2) convert the lease to a mining claim under 

20 the general mining laws, if the byproduct is a 

21 locatable mineral.’’. 

22 (b) CONFORMING AMENDMENT.—

23 (1) Section 18 of the Geothermal Steam Act of 

24 1970 (30 U.S.C. 1017) is amended by striking ‘‘sub25 section (c) or (g)’’ and inserting ‘‘subsection (g)’’.
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1 (2) Section 20 of the Geothermal Steam Act of 

2 1970 (30 U.S.C. 1019) is amended by striking ‘‘, in3 cluding the payments referred to in section 6(i),’’. 

4 SEC. 14. ADVANCED ROYALTIES REQUIRED FOR SUSPEN5 SION OF PRODUCTION. 

6 Section 5 of the Geothermal Steam Act of 1970 (30 

7 U.S.C. 1004) is further amended by adding at the end 

8 the following: 

9 ‘‘(e) ADVANCED ROYALTIES REQUIRED FOR SUSPEN10 SION OF PRODUCTION.—

11 ‘‘(1) CONTINUATION OF LEASE FOLLOWING

12 CESSATION OF PRODUCTION.—If, at any time after 

13 commercial production under a lease is achieved, 

14 production ceases for any cause the lease shall re15 main in full force and effect—

16 ‘‘(A) during the one-year period beginning 

17 on the date production ceases; and 

18 ‘‘(B) after such period if, and so long as, 

19 the lessee commences and continues diligently 

20 and in good faith until such production is re21 sumed the steps, operations, or procedures nec22 essary to cause a resumption of such produc23 tion. 

24 ‘‘(2) If production of heat or energy under a geo25 thermal lease is suspended after the date of any such pro-
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1 duction for which royalty is required under subsection (a) 

2 and the terms of paragraph (1) are not met, the Secretary 

3 shall require the lessee, until the end of such suspension, 

4 to pay royalty in advance at the monthly pro-rata rate of 

5 the average annual rate at which such royalty was paid 

6 each year in the 5-year-period preceding the date of sus7 pension. 

8 ‘‘(3) Paragraph (2) shall not apply if the suspension 

9 is required or otherwise caused by the Secretary, the Sec10 retary of a military department, a State or local govern11 ment, or a force majeur.’’. 

12 SEC. 15. ANNUAL RENTAL. 

13 (a) ANNUAL RENTAL RATE.—Section 5 of the Geo14 thermal Steam Act of 1970 (30 U.S.C. 1004) is further 

15 amended in subsection (a) in paragraph (3) by striking 

16 ‘‘$1 per acre or fraction thereof for each year of the lease’’ 

17 and all that follows through the end of the paragraph and 

18 inserting ‘‘$1 per acre or fraction thereof for each year 

19 of the lease in the case of a lease awarded in a noncompeti20 tive lease sale; or $2 per acre or fraction thereof for the 

21 first year, $3 per acre or fraction thereof for each of the 

22 second through tenth years, and $5 per acre or fraction 

23 thereof for each year after the 10th year thereof, in the 

24 case of a lease awarded in a competitive lease sale; and’’. 
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1 (b) TERMINATION OF LEASE FOR FAILURE TO PAY

2 RENTAL.—Section 5 of the Geothermal Steam Act of 

3 1970 (30 U.S.C. 1004) is further amended by adding at 

4 the end the following: 

5 ‘‘(f) TERMINATION OF LEASE FOR FAILURE TO PAY

6 RENTAL.—

7 ‘‘(1) IN GENERAL.—The Secretary shall termi8 nate any lease with respect to which rental is not 

9 paid in accordance with this Act and the terms of 

10 the lease under which the rental is required, upon 

11 the expiration of the 45-day period beginning on the 

12 date of the failure to pay such rental. 

13 ‘‘(2) NOTIFICATION.—The Secretary shall 

14 promptly notify a lessee that has not paid rental re15 quired under the lease that the lease will be termi16 nated at the end of the period referred to in para17 graph (1). 

18 ‘‘(3) REINSTATEMENT.—A lease that would 

19 otherwise terminate under paragraph (1) shall not 

20 terminate under that paragraph if the lessee pays to 

21 the Secretary, before the end of the period referred 

22 to in paragraph (1), the amount of rental due plus 

23 a late fee equal to 10 percent of such amount.’’. 
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1 SEC. 16. PUBLIC LANDS UNDER MILITARY JURISDICTION. 

2 (a) IN GENERAL.—Except as otherwise provided in 

3 the Geothermal Steam Act of 1970 (30 U.S.C. 1001 et 

4 seq.) and other provisions of Federal law applicable to de5 velopment of geothermal resources within public lands, all 

6 public lands under the jurisdiction of a Secretary of a mili7 tary department shall be open to the operation of such 

8 laws and development and utilization of geothermal re9 sources without the necessity for further action by the Sec10 retary or the Congress. 

11 (b) CONFORMING AMENDMENT.—Section 2689 of 

12 title 10, United States Code, is amended by striking ‘‘in13 cluding public lands,’’ and inserting ‘‘other than public 

14 lands,’’. 

15 (c) TREATMENT OF EXISTING LEASES AND CON16 TRACTS.—Upon the expiration of any lease or contract or 

17 term thereof in effect on the date of the enactment of this 

18 Act of public lands under the jurisdiction of a military 

19 department for the development of any geothermal re20 source, such lease or contract may, at the option of the 

21 lessee or contractor—

22 (1) be treated as a lease under the Geothermal 

23 Steam Act of 1970 (30 U.S.C. 1001 et seq.), and be 

24 renewed in accordance with such Act; or 
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1 (2) be renewed in accordance with the terms of 

2 the lease or contract, if such renewal is authorized 

3 by such terms. 

4 (d) REGULATIONS.—The Secretary of the Interior, 

5 with the advice and concurrence of the Secretary of the 

6 military department concerned, shall prescribe such regu7 lations to carry out this section as may be necessary. Such 

8 regulations shall contain guidelines to assist in deter9 mining how much, if any, of the surface of any lands 

10 opened pursuant to this section may be used for purposes 

11 incident to geothermal resources development and utiliza12 tion. 

13 (e) CLOSURE FOR PURPOSES OF NATIONAL DE14 FENSE OR SECURITY.—In the event of a national emer15 gency or for purposes of national defense or security, the 

16 Secretary of the Interior, at the request of the Secretary 

17 of the military department concerned, shall close any lands 

18 that have been opened to geothermal resources leasing 

19 pursuant to this section. 

20 (f) LEASE MANAGEMENT AND OPERATIONS.—The 

21 Secretary of the military department concerned may im22 pose such terms and conditions on the operations of any 

23 lessee under this section as necessary to maintain military 

24 missions. 
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1 (g) GEOTHERMAL RESOURCE DEFINED.—In this sec2 tion, the term ‘‘geothermal resource’’ means a subsurface 

3 reservoir of hot water or steam.

Æ