H. R. 6—74
‘‘(d) EXCLUSION FROM DETERMINATION OF HOLDING OR CON-
TROL.—Any land that is subject to a unit agreement approved 
or prescribed by the Secretary under this section shall not be 
considered in determining holdings or control under section 7. 
‘‘(e) POOLING OF CERTAIN LAND.—If separate tracts of land 
cannot be independently developed and operated to use geothermal 
resources pursuant to any section of this Act— 
‘‘(1) the land, or a portion of the land, may be pooled 
with other land, whether or not owned by the United States, 
for 
purposes 
of 
development 
and 
operation 
under 
a 
communitization agreement providing for an apportionment of 
production or royalties among the separate tracts of land com-
prising the production unit, if the pooling is determined by 
the Secretary to be in the public interest; and 
‘‘(2) 
operation 
or 
production 
pursuant 
to 
the 
communitization agreement shall be treated as operation or 
production with respect to each tract of land that is subject 
to the communitization agreement. 
‘‘(f) UNIT AGREEMENT REVIEW.— 
‘‘(1) IN GENERAL.—Not later than 5 years after the date 
of approval of any unit agreement and at least every 5 years 
thereafter, the Secretary shall— 
‘‘(A) review each unit agreement; and 
‘‘(B) after notice and opportunity for comment, elimi-
nate from inclusion in the unit agreement any land that 
the Secretary determines is not reasonably necessary for 
unit operations under the unit agreement. 
‘‘(2) BASIS FOR ELIMINATION.—The elimination shall— 
‘‘(A) be based on scientific evidence; and 
‘‘(B) occur only if the elimination is determined by 
the Secretary to be for the purpose of conserving and 
properly managing the geothermal resource. 
‘‘(3) EXTENSION.—Any land eliminated under this sub-
section shall be eligible for an extension under section 6(g) 
if the land meets the requirements for the extension. 
‘‘(g) DRILLING OR DEVELOPMENT CONTRACTS.— 
‘‘(1) IN GENERAL.—The Secretary may, on such conditions 
as the Secretary may prescribe, approve drilling or development 
contracts made by one or more lessees of geothermal leases, 
with one or more persons, associations, or corporations if, in 
the discretion of the Secretary, the conservation of natural 
resources or the public convenience or necessity may require 
or the interests of the United States may be best served by 
the approval. 
‘‘(2) HOLDINGS OR CONTROL.—Each lease operated under 
an approved drilling or development contract, and interest 
under the contract, shall be excepted in determining holdings 
or control under section 7. 
‘‘(h) COORDINATION WITH STATE GOVERNMENTS.—The Secretary 
shall coordinate unitization and pooling activities with appropriate 
State agencies.’’. 
SEC. 228. ROYALTY ON BYPRODUCTS. 
Section 5 of the Geothermal Steam Act of 1970 (30 U.S.C. 
1004) (as amended by section 223(a)) is further amended in sub-
section (a) by striking paragraph (2) and inserting the following:
H. R. 6—75
‘‘(2) a royalty on any byproduct that is a mineral specified 
in the first section of the Mineral Leasing Act (30 U.S.C. 
181), and that is derived from production under the lease, 
at the rate of the royalty that applies under that Act to produc-
tion of the mineral under a lease under that Act;’’. 
SEC. 229. AUTHORITIES OF SECRETARY TO READJUST TERMS, CONDI-
TIONS, RENTALS, AND ROYALTIES. 
Section 8(b) of the Geothermal Steam Act of 1970 (30 U.S.C. 
1006) is amended in the second sentence by striking ‘‘period, and 
in no event’’ and all that follows through the end of the sentence 
and inserting ‘‘period’’. 
SEC. 230. CREDITING OF RENTAL TOWARD ROYALTY. 
Section 5 of the Geothermal Steam Act of 1970 (30 U.S.C. 
1004) (as amended by sections 223 and 224) is further amended— 
(1) in subsection (a)(2) by inserting ‘‘and’’ after the semi-
colon at the end; 
(2) in subsection (a)(3) by striking ‘‘; and’’ and inserting 
a period; 
(3) by striking paragraph (4) of subsection (a); and 
(4) by adding at the end the following: 
‘‘(e) CREDITING
OF RENTAL TOWARD ROYALTY.—Any annual 
rental under this section that is paid with respect to a lease before 
the first day of the year for which the annual rental is owed 
shall be credited to the amount of royalty that is required to 
be paid under the lease for that year.’’. 
SEC. 231. LEASE DURATION AND WORK COMMITMENT REQUIREMENTS. 
Section 6 of the Geothermal Steam Act of 1970 (30 U.S.C. 
1005) is amended— 
(1) by striking so much as precedes subsection (c), and 
striking subsections (e), (g), (h), (i), and (j); 
(2) by redesignating subsections (c), (d), and (f) in order 
as subsections (g), (h), and (i); and 
(3) by inserting before subsection (g), as so redesignated, 
the following: 
‘‘SEC. 6. LEASE TERM AND WORK COMMITMENT REQUIREMENTS. 
‘‘(a) IN GENERAL.— 
‘‘(1) PRIMARY TERM.—A geothermal lease shall be for a 
primary term of 10 years. 
‘‘(2) INITIAL EXTENSION.—The Secretary shall extend the 
primary term of a geothermal lease for 5 years if, for each 
year after the 10th year of the lease— 
‘‘(A) the Secretary determined under subsection (b) 
that the lessee satisfied the work commitment require-
ments that applied to the lease for that year; or 
‘‘(B) the lessee paid in annual payments accordance 
with subsection (c). 
‘‘(3) ADDITIONAL EXTENSION.—The Secretary shall extend 
the primary term of a geothermal lease (after an initial exten-
sion under paragraph (2)) for an additional 5 years if, for 
each year of the initial extension under paragraph (2), the 
Secretary determined under subsection (b) that the lessee satis-
fied the minimum work requirements that applied to the lease 
for that year.
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‘‘(b) REQUIREMENT
TO
SATISFY
ANNUAL
MINIMUM
WORK 
REQUIREMENT.— 
‘‘(1) IN GENERAL.—The lessee for a geothermal lease shall, 
for each year after the 10th year of the lease, satisfy minimum 
work requirements prescribed by the Secretary that apply to 
the lease for that year. 
‘‘(2) PRESCRIPTION OF MINIMUM WORK REQUIREMENTS.—The 
Secretary shall issue regulations prescribing minimum work 
requirements for geothermal leases, that— 
‘‘(A) establish a geothermal potential; and 
‘‘(B) if a geothermal potential has been established, 
confirm the existence of producible geothermal resources. 
‘‘(c) PAYMENTS IN LIEU OF MINIMUM WORK REQUIREMENTS.—
In lieu of the minimum work requirements set forth in subsection 
(b)(2), the Secretary shall by regulation establish minimum annual 
payments which may be made by the lessee for a limited number 
of years that the Secretary determines will not impair achieving 
diligent development of the geothermal resource, but in no event 
shall the number of years exceed the duration of the extension 
period provided in subsection (a). 
‘‘(d) TRANSITION RULES FOR LEASES ISSUED PRIOR TO ENACT-
MENT OF ENERGY POLICY ACT OF 2005.—The Secretary shall by 
regulation establish transition rules for leases issued before the 
date of the enactment of this subsection, including terms under 
which a lease that is near the end of its term on the date of 
enactment of this subsection may be extended for up to 2 years— 
‘‘(1) to allow achievement of production under the lease; 
or 
‘‘(2) to allow the lease to be included in a producing unit. 
‘‘(e) GEOTHERMAL LEASE OVERLYING MINING CLAIM.— 
‘‘(1) EXEMPTION.—The lessee for a geothermal lease of an 
area overlying an area subject to a mining claim for which 
a plan of operations has been approved by the relevant Federal 
land management agency is exempt from annual work require-
ments established under this Act, if development of the geo-
thermal resource subject to the lease would interfere with the 
mining operations under such claim. 
‘‘(2) TERMINATION OF EXEMPTION.—An exemption under this 
paragraph expires upon the termination of the mining oper-
ations. 
‘‘(f) TERMINATION
OF APPLICATION
OF REQUIREMENTS.—Min-
imum work requirements prescribed under this section shall not 
apply to a geothermal lease after the date on which the geothermal 
resource is utilized under the lease in commercial quantities.’’. 
SEC. 232. ADVANCED ROYALTIES REQUIRED FOR CESSATION OF 
PRODUCTION. 
Section 5 of the Geothermal Steam Act of 1970 (30 U.S.C. 
1004) (as amended by sections 223, 224, and 230) is further 
amended by adding at the end the following: 
‘‘(f) ADVANCED
ROYALTIES
REQUIRED
FOR
CESSATION
OF 
PRODUCTION.— 
‘‘(1) IN GENERAL.—Subject to paragraphs (2) and (3), if, 
at any time after commercial production under a lease is 
achieved, production ceases for any reason, the lease shall 
remain in full force and effect for a period of not more than
H. R. 6—77
an aggregate number of 10 years beginning on the date produc-
tion ceases, if, during the period in which production is ceased, 
the lessee pays royalties in advance at the monthly average 
rate at which the royalty was paid during the period of produc-
tion. 
‘‘(2) REDUCTION.—The amount of any production royalty 
paid for any year shall be reduced (but not below 0) by the 
amount of any advanced royalties paid under the lease to 
the extent that the advance royalties have not been used to 
reduce production royalties for a prior year. 
‘‘(3) EXCEPTIONS.—Paragraph (1) shall not apply if the ces-
sation in production is required or otherwise caused by— 
‘‘(A) the Secretary; 
‘‘(B) the Secretary of the Air Force; 
‘‘(C) the Secretary of the Army; 
‘‘(D) the Secretary of the Navy; 
‘‘(E) a State or a political subdivision of a State; or 
‘‘(F) a force majeure.’’. 
SEC. 233. ANNUAL RENTAL. 
(a) ANNUAL RENTAL RATE.—Section 5 of the Geothermal Steam 
Act of 1970 (30 U.S.C. 1004) (as amended by section 223(a)) is 
further amended in subsection (a) by striking paragraph (3) and 
inserting the following: 
‘‘(3) payment in advance of an annual rental of not less 
than— 
‘‘(A) for each of the 1st through 10th years of the 
lease— 
‘‘(i) in the case of a lease awarded in a noncompeti-
tive lease sale, $1 per acre or fraction thereof; or 
‘‘(ii) in the case of a lease awarded in a competitive 
lease sale, $2 per acre or fraction thereof for the 1st 
year and $3 per acre or fraction thereof for each of 
the 2nd through 10th years; and 
‘‘(B) for each year after the 10th year of the lease, 
$5 per acre or fraction thereof;’’. 
(b) TERMINATION OF LEASE FOR FAILURE TO PAY RENTAL.—
Section 5 of the Geothermal Steam Act of 1970 (30 U.S.C. 1004) 
(as amended by sections 223, 224, 230, and 232) is further amended 
by adding at the end the following: 
‘‘(g) TERMINATION OF LEASE FOR FAILURE TO PAY RENTAL.— 
‘‘(1) IN GENERAL.—The Secretary shall terminate any lease 
with respect to which rental is not paid in accordance with 
this Act and the terms of the lease under which the rental 
is required, on the expiration of the 45-day period beginning 
on the date of the failure to pay the rental. 
‘‘(2) NOTIFICATION.—The Secretary shall promptly notify 
a lessee that has not paid rental required under the lease 
that the lease will be terminated at the end of the period 
referred to in paragraph (1). 
‘‘(3) REINSTATEMENT.—A lease that would otherwise termi-
nate under paragraph (1) shall not terminate under that para-
graph if the lessee pays to the Secretary, before the end of 
the period referred to in paragraph (1), the amount of rental 
due plus a late fee equal to 10 percent of the amount.’’.