shall jointly establish terms and conditions for 
the issuance, transfer, renewal, suspension, and 
cancellation of a lease issued under this sub-
section. 
(C) 
READJUSTMENT
PROVISION
RE-
QUIRED.—Each lease issued under this sub-
section shall provide for readjustment in ac-
cordance with subparagraph (A). 
(8) SURFACE-DISTURBING
ACTIVITIES.—The 
Secretary of the Interior and the Secretary of Agri-
culture shall jointly issue regulations regarding sur-
face-disturbing activities conducted under any lease 
issued under this subsection, including any reclama-
tion and other actions necessary for the conservation 
of surface resources. 
(9) SECURITY.— 
(A) IN
GENERAL.—The Secretary con-
cerned shall require that the holder of a lease 
issued under this subsection— 
(i) furnish a surety bond or other 
form of security, as prescribed by the Sec-
retary; 
(ii) provide for the reclamation and 
restoration of the covered land that is the 
subject of the lease; and 
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(iii) comply with such other require-
ments as the Secretary considers necessary 
to protect the interests of the public and 
the United States. 
(B) PERIODIC
REVIEW.—Not less fre-
quently than once every 5 years, the Secretary 
concerned shall conduct a review of the ade-
quacy of the surety bond or other form of secu-
rity provided by the holder of a lease issued 
under this subsection. 
SEC. 5. ROYALTIES. 
(a) IN GENERAL.—The Secretary concerned shall re-
quire as a term and condition of any lease issued under 
section 4, the payment of a royalty. The Secretary of the 
Interior and the Secretary of Agriculture shall establish 
such royalty pursuant to a joint rulemaking that shall be 
a percentage of the gross proceeds from the sale of elec-
tricity produced on covered land that is the subject of such 
lease at a rate that— 
(1) encourages production of renewable energy; 
(2) ensures a fair return to the public com-
parable to the return that would be obtained on 
State or private land; and 
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(3) encourages the maximum energy generation 
while disturbing the least quantity of covered land 
and other natural resources, including water. 
(b) CONSIDERATION.—In establishing the royalty 
under subsection (a), the Secretary of the Interior and the 
Secretary of Agriculture shall consider the relative capac-
ity factors of the source of the renewable energy. 
(c) EXCLUSIVE
PAYMENT
ON
SALE
OF
ELEC-
TRICITY.—The royalty under subsection (a) shall be the 
only rent, royalty, or similar payment to the Federal Gov-
ernment required with respect to the sale of electricity pro-
duced under a lease issued under section 4. 
(d) ROYALTY RELIEF.—The Secretary concerned 
may reduce the royalty rate established under subsection 
(a) if the holder of a lease issued under this title shows 
by clear and convincing evidence that— 
(1) collection of the full royalty would unreason-
ably burden energy generation on covered land that 
is the subject of the lease; and 
(2) the royalty reduction is in the public inter-
est. 
(e) ENFORCEMENT.— 
(1) AUDITING SYSTEM.—The Secretary of the 
Interior and the Secretary of Agriculture shall joint-
ly establish a comprehensive inspection, collection, 
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fiscal, and production accounting and auditing sys-
tem— 
(A) to accurately determine royalties, in-
terest, fines, penalties, fees, deposits, and other 
payments owed under this title; and 
(B) to collect and account for the pay-
ments in a timely manner. 
(2) APPLICABILITY OF FEDERAL OIL AND ROY-
ALTY
MANAGEMENT
ACT.—The provisions of the 
Federal Oil and Gas Royalty Management Act of 
1982 (30 U.S.C. 1701 et seq.) (including the civil 
and criminal enforcement provisions of such Act) 
shall apply to leases issued under this title with re-
spect to renewable energy projects in the same man-
ner as such provisions apply to oil and gas leases. 
(f) REPORT ON ROYALTIES.—Not later than 5 years 
after the date of the enactment of this Act and every 5 
years thereafter, the Secretary of the Interior, in consulta-
tion with the Secretary of Agriculture, shall submit to the 
Committee on Energy and Natural Resources of the Sen-
ate and the Committee on Natural Resources of the House 
of Representatives a report consisting of a review of the 
collections and impacts of the royalties and fees collected 
under this title, including— 
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(1) the total revenues received (by category) on 
an annual basis as royalties from renewable energy 
development and production (specified by energy 
source) on covered land; 
(2) whether the revenues received from the de-
velopment of renewable energy development are com-
parable to the revenues received for similar develop-
ment on State or private land; 
(3) any impact on the development of renewable 
energy development and production on covered land 
as a result of the royalties; and 
(4) any recommendations with respect to 
changes in Federal law (including regulations) relat-
ing to the amount or method of collection (including 
auditing, compliance, and enforcement) of the royal-
ties. 
(g) REGULATIONS.—Not later than one year after the 
date of the enactment of this Act, the Secretary of the 
Interior and the Secretary of Agriculture shall jointly issue 
final regulations to carry out this section. 
SEC. 6. DISPOSITION OF ROYALTY REVENUE. 
(a) ALLOCATION OF REVENUE.—Effective beginning 
on the date of the enactment of this Act, all amounts col-
lected by the Secretary concerned as royalties or bonuses 
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under subsection (a)(5) or (c)(6) of section 4, shall be dis-
tributed as follows: 
(1) Twenty-five percent shall be paid by the 
Secretary of the Treasury to States within the 
boundaries of which the royalties or bonuses are de-
rived, to be allocated among such States based on 
the percentage of covered land from which such roy-
alties or bonuses are derived in each State. 
(2) Twenty-five percent shall be paid by the 
Secretary of the Treasury to the counties within the 
boundaries of which the royalties or bonuses are de-
rived, to be allocated among such counties based on 
the percentage of covered land from which such roy-
alties or bonuses are derived in each county. 
(3) Twenty-five percent shall be deposited in 
the Fund (established by subsection (b)). 
(4) For the period that begins on the date of 
the enactment of this Act and ending on the date 
that is 15 years after the date of the enactment of 
this Act, 15 percent shall be paid by the Secretary 
of the Treasury directly to the State offices of the 
Bureau of Land Management in States within the 
boundaries of which the royalties or bonuses are de-
rived for purposes of reducing the number of renew-
able energy permits that have not been processed be-
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