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‘‘(2) the Secretary does not receive in the 60-
day period beginning on the date of such publication
any nomination to include the lands concerned in the
next competitive lease sale.
‘‘(g) AREA SUBJECT TO LEASE FOR DIRECT USE.—
A geothermal lease for the direct use of geothermal re-
sources shall embrace not more than the amount of acre-
age determined by the Secretary to be reasonably nec-
essary for such proposed utilization.’’.
(c) EXISTING LEASES WITH A DIRECT USE FACIL-
ITY.—
(1) APPLICATION
TO
CONVERT.—Any lessee
under a lease under the Geothermal Steam Act of
1970 that was issued before the date of enactment
of this Act may apply to the Secretary of the Inte-
rior, by not later than 18 months after the date of
enactment of this Act, to convert such lease to a
lease for direct utilization of geothermal resources in
accordance with the amendments made by this sec-
tion.
(2) CONVERSION.—The Secretary shall approve
such an application and convert such a lease to a
lease in accordance with the amendments by not
later than 180 days after receipt of such application,
826
unless the Secretary determines that the applicant is
not a qualified applicant with respect to the lease.
(3) APPLICATION OF NEW LEASE TERMS.—The
schedule of fees established under the amendment
made by subsection (a)(4) shall apply with respect to
payments under a lease converted under this sub-
section that are due and owing to the United States
on or after July 16, 2003.
SEC. 1804. ROYALTIES AND NEAR-TERM PRODUCTION IN-
CENTIVES.
(a) ROYALTY.—Section 5 of the Geothermal Steam
Act of 1970 (30 U.S.C. 1004) is further amended—
(1) in subsection (a) by striking paragraph (1)
and inserting the following:
‘‘(1) a royalty on electricity produced using geo-
thermal resources, other than direct use of geo-
thermal resources, that shall be—
‘‘(A) not less than 1 percent and not more
than 2.5 percent of the gross proceeds from the
sale of electricity produced from such resources
during the first 10 years of production under
the lease; and
‘‘(B) not less than 2 and not more than 5
percent of the gross proceeds from the sale of
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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 roy-
alty rates under this section, the Secretary shall seek—
‘‘(1) to provide lessees a simplified administra-
tive system;
‘‘(2) to encourage new development;
‘‘(3) to achieve the same long-term level of roy-
alty revenues to States and counties as the regula-
tion in effect on the date of enactment of this sub-
section; and
‘‘(4) to reflect any change in profitability of op-
erations for which royalties will be paid due to the
requirements imposed by Federal agencies, including
delays.
‘‘(d) CREDITS FOR IN-KIND PAYMENTS OF ELEC-
TRICITY.—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), or section
828
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 method-
ology to determine 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 Gov-
ernment 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, sub-
ject to the provisions of section 35 of the Mineral Leasing
Act (30 U.S.C. 191(b)) and section 5(a)(2) of this Act—