H. R. 6—70
‘‘(B) not less than 2 and not more than 5 percent 
of the gross proceeds from the sale of electricity produced 
from such resources during each year after such 10-year 
period;’’; and 
(2) by adding at the end the following: 
‘‘(c) FINAL REGULATION ESTABLISHING ROYALTY RATES.—In 
issuing any final regulation establishing royalty rates under this 
section, the Secretary shall seek— 
‘‘(1) to provide lessees a simplified administrative system; 
‘‘(2) to encourage new development; and 
‘‘(3) to achieve the same level of royalty revenues over 
a 10-year period as the regulation in effect on the date of 
enactment of this subsection. 
‘‘(d) CREDITS
FOR IN-KIND PAYMENTS
OF ELECTRICITY.—The 
Secretary may provide to a lessee a credit against royalties owed 
under this Act, in an amount equal to the value of electricity 
provided under contract to a State or county government that 
is entitled to a portion of such royalties under section 20 of this 
Act, section 35 of the Mineral Leasing Act (30 U.S.C. 191), except 
as otherwise provided by this section, or section 6 of the Mineral 
Leasing Act for Acquired Lands (30 U.S.C. 355), if— 
‘‘(1) the Secretary has approved in advance the contract 
between the lessee and the State or county government for 
such in-kind payments; 
‘‘(2) the contract establishes a specific methodology to deter-
mine the value of such credits; and 
‘‘(3) the maximum credit will be equal to the royalty value 
owed to the State or county that is a party to the contract 
and the electricity received will serve as the royalty payment 
from the Federal Government to that entity.’’. 
(b) DISPOSAL OF MONEYS FROM SALES, BONUSES, ROYALTIES, 
AND RENTS.—Section 20 of the Geothermal Steam Act of 1970 
(30 U.S.C. 1019) is amended to read as follows: 
‘‘SEC. 20. DISPOSAL OF MONEYS FROM SALES, BONUSES, RENTALS, 
AND ROYALTIES. 
‘‘(a) IN GENERAL.—Except with respect to lands in the State 
of Alaska, all monies received by the United States from sales, 
bonuses, rentals, and royalties under this Act shall be paid into 
the Treasury of the United States. Of amounts deposited under 
this subsection, subject to the provisions of subsection (b) of section 
35 of the Mineral Leasing Act (30 U.S.C. 191(b)) and section 5(a)(2) 
of this Act— 
‘‘(1) 50 percent shall be paid to the State within the bound-
aries of which the leased lands or geothermal resources are 
or were located; and 
‘‘(2) 25 percent shall be paid to the county within the 
boundaries of which the leased lands or geothermal resources 
are or were located. 
‘‘(b) USE OF PAYMENTS.—Amounts paid to a State or county 
under subsection (a) shall be used consistent with the terms of 
section 35 of the Mineral Leasing Act (30 U.S.C. 191).’’. 
(c) NEAR-TERM PRODUCTION INCENTIVE FOR EXISTING LEASES.— 
(1) IN GENERAL.—Notwithstanding section 5(a) of the Geo-
thermal Steam Act of 1970, the royalty required to be paid 
shall be 50 percent of the amount of the royalty otherwise 
required, on any lease issued before the date of enactment
H. R. 6—71
of this Act that does not convert to new royalty terms under 
subsection (e)— 
(A) with respect to commercial production of energy 
from a facility that begins such production in the 6-year 
period beginning on the date of enactment of this Act; 
or 
(B) on qualified expansion geothermal energy. 
(2) 4-YEAR APPLICATION.—Paragraph (1) applies only to new 
commercial production of energy from a facility in the first 
4 years of such production. 
(d) 
DEFINITION
OF
QUALIFIED
EXPANSION
GEOTHERMAL 
ENERGY.—In this section, the term ‘‘qualified expansion geothermal 
energy’’ means geothermal energy produced from a generation 
facility for which— 
(1) the production is increased by more than 10 percent 
as a result of expansion of the facility carried out in the 6-
year period beginning on the date of enactment of this Act; 
and 
(2) such production increase is greater than 10 percent 
of the average production by the facility during the 5-year 
period preceding the expansion of the facility (as such average 
is adjusted to reflect any trend in changes in production during 
that period). 
(e) ROYALTY UNDER EXISTING LEASES.— 
(1) IN GENERAL.—Any lessee under a lease issued under 
the Geothermal Steam Act of 1970 (30 U.S.C. 1001 et seq.) 
before the date of enactment of this Act may, within the time 
period specified in paragraph (2), submit to the Secretary of 
the Interior a request to modify the terms of the lease relating 
to payment of royalties to provide— 
(A) in the case of a lease that meets the requirements 
of subsection (b) of section 5 of the Geothermal Steam 
Act of 1970 (30 U.S.C. 1004) (as amended by section 223), 
that royalties be based on the schedule of fees established 
under that section; and 
(B) in the case of any other lease, that royalties be 
computed on a percentage of the gross proceeds from the 
sale of electricity, at a royalty rate that is expected to 
yield total royalty payments equivalent to payments that 
would have been received for comparable production under 
the royalty rate in effect for the lease before the date 
of enactment of this subsection. 
(2) TIMING.—A request for a modification under paragraph 
(1) shall be submitted to the Secretary of the Interior by the 
date that is not later than— 
(A) in the case of a lease for direct use, 18 months 
after the effective date of the schedule of fees established 
by the Secretary of the Interior under section 5 of the 
Geothermal Steam Act of 1970 (30 U.S.C. 1004); or 
(B) in the case of any other lease, 18 months after 
the effective date of the final regulation issued under sub-
section (a). 
(3) APPLICATION OF MODIFICATION.—If the lessee requests 
modification of a lease under paragraph (1)— 
(A) the Secretary of the Interior shall, within 180 days 
after the receipt of the request for modification, modify 
the lease to comply with—
H. R. 6—72
(i) in the case of a lease for direct use, the schedule 
of fees established by the Secretary under section 5 
of the Geothermal Steam Act of 1970 (30 U.S.C. 1004); 
or 
(ii) in the case of any other lease, the royalty 
for the lease established under paragraph (1)(B); and 
(B) the modification shall apply to any use of geo-
thermal resources to which subsection (a) applies that 
occurs after the date of the modification. 
(4) CONSULTATION.—The Secretary of the Interior shall 
consult with the State and local governments affected by any 
proposed changes in lease royalty terms under this subsection. 
SEC. 225. COORDINATION OF GEOTHERMAL LEASING AND PERMITTING 
ON FEDERAL LANDS. 
(a) IN GENERAL.—Not later than 180 days after the date of 
enactment of this section, the Secretary of the Interior and the 
Secretary of Agriculture shall enter into and submit to Congress 
a memorandum of understanding in accordance with this section, 
the Geothermal Steam Act of 1970 (as amended by this Act), and 
other applicable laws, regarding coordination of leasing and permit-
ting for geothermal development of public lands and National Forest 
System lands under their respective jurisdictions. 
(b) LEASE AND PERMIT APPLICATIONS.—The memorandum of 
understanding shall— 
(1) establish an administrative procedure for processing 
geothermal lease applications, including lines of authority, steps 
in application processing, and time limits for application proces-
sion; 
(2) establish a 5-year program for geothermal leasing of 
lands in the National Forest System, and a process for updating 
that program every 5 years; and 
(3) establish a program for reducing the backlog of geo-
thermal lease application pending on January 1, 2005, by 90 
percent within the 5-year period beginning on the date of 
enactment of this Act, including, as necessary, by issuing leases, 
rejecting lease applications for failure to comply with the provi-
sions of the regulations under which they were filed, or deter-
mining that an original applicant (or the applicant’s assigns, 
heirs, or estate) is no longer interested in pursuing the lease 
application. 
(c) DATA RETRIEVAL SYSTEM.—The memorandum of under-
standing shall establish a joint data retrieval system that is capable 
of tracking lease and permit applications and providing to the 
applicant information as to their status within the Departments 
of the Interior and Agriculture, including an estimate of the time 
required for administrative action. 
SEC. 226. ASSESSMENT OF GEOTHERMAL ENERGY POTENTIAL. 
Not later than 3 years after the date of enactment of this 
Act and thereafter as the availability of data and developments 
in technology warrants, the Secretary of the Interior, acting through 
the Director of the United States Geological Survey and in coopera-
tion with the States, shall— 
(1) update the Assessment of Geothermal Resources made 
during 1978; and 
(2) submit to Congress the updated assessment.
H. R. 6—73
SEC. 227. COOPERATIVE OR UNIT PLANS. 
Section 18 of the Geothermal Steam Act of 1970 (30 U.S.C. 
1017) is amended to read as follows: 
‘‘SEC. 18. UNIT AND COMMUNITIZATION AGREEMENTS. 
‘‘(a) ADOPTION OF UNITS BY LESSEES.— 
‘‘(1) IN GENERAL.—For the purpose of more properly con-
serving the natural resources of any geothermal reservoir, field, 
or like area, or any part thereof (whether or not any part 
of the geothermal reservoir, field, or like area, is subject to 
any cooperative plan of development or operation (referred to 
in this section as a ‘unit agreement’)), lessees thereof and 
their representatives may unite with each other, or jointly 
or separately with others, in collectively adopting and operating 
under a unit agreement for the reservoir, field, or like area, 
or any part thereof, including direct use resources, if determined 
and certified by the Secretary to be necessary or advisable 
in the public interest. 
‘‘(2) MAJORITY INTEREST OF SINGLE LEASES.—A majority 
interest of owners of any single lease shall have the authority 
to commit the lease to a unit agreement. 
‘‘(3) INITIATIVE
OF
SECRETARY.—The Secretary may also 
initiate the formation of a unit agreement, or require an 
existing Federal lease to commit to a unit agreement, if in 
the public interest. 
‘‘(4) MODIFICATION
OF
LEASE
REQUIREMENTS
BY
SEC-
RETARY.— 
‘‘(A) IN GENERAL.—The Secretary may, in the discretion 
of the Secretary and with the consent of the holders of 
leases involved, establish, alter, change, or revoke rates 
of operations (including drilling, operations, production, 
and other requirements) of the leases and make conditions 
with respect to the leases, with the consent of the lessees, 
in connection with the creation and operation of any such 
unit agreement as the Secretary may consider necessary 
or advisable to secure the protection of the public interest. 
‘‘(B) UNLIKE
TERMS
OR
RATES.—Leases with unlike 
lease terms or royalty rates shall not be required to be 
modified to be in the same unit. 
‘‘(b) REQUIREMENT OF PLANS UNDER NEW LEASES.—The Sec-
retary may— 
‘‘(1) provide that geothermal leases issued under this Act 
shall contain a provision requiring the lessee to operate under 
a unit agreement; and 
‘‘(2) prescribe the unit agreement under which the lessee 
shall operate, which shall adequately protect the rights of all 
parties in interest, including the United States. 
‘‘(c) MODIFICATION OF RATE OF PROSPECTING, DEVELOPMENT, 
AND PRODUCTION.—The Secretary may require that any unit agree-
ment authorized by this section that applies to land owned by 
the United States contain a provision under which authority is 
vested in the Secretary, or any person, committee, or State or 
Federal officer or agency as may be designated in the unit agree-
ment to alter or modify, from time to time, the rate of prospecting 
and development and the quantity and rate of production under 
the unit agreement.