[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2772 Introduced in House (IH)]







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.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``John Rishel Geothermal Steam Act 
Amendments of 2003''.

SEC. 2. COMPETITIVE LEASE SALE REQUIREMENTS.

    (a) In General.--Section 4 of the Geothermal Steam Act of 1970 (30 
U.S.C. 1003) is amended to read as follows:

``SEC. 4. LEASING PROCEDURES.

    ``(a) In General.--
            ``(1) Nominations.--The Secretary shall accept nominations 
        at any time from qualified companies and individuals of areas 
        to be leased under this Act.
            ``(2) Competitive lease sale required.--The Secretary shall 
        hold a competitive lease sale at least once every 2 years for 
        lands in a State that are located in areas with respect to 
        which there are nominations pending under paragraph (1).
            ``(3) Noncompetitive leasing.--The Secretary shall make 
        available for a period of 2 years for noncompetitive leasing 
        any lands for which a competitive lease sale is held, but for 
        which the Secretary does not receive any bids in a competitive 
        lease sale.
            ``(4) Leases sold as a block.--Notwithstanding the lease 
        acreage limitation, if a geothermal resource that could be 
        produced as one unit is reasonably expected to underline more 
        than one lease, the leases for such resources shall be offered 
        for bidding as a block in the competitive lease sale.''.
    (b) Pending Lease Applications.--The Secretary of the Interior--
            (1) subject to paragraph (2), shall expeditiously process 
        lease applications pending on the date of enactment of this Act 
        under the Geothermal Steam Act of 1970 (30 U.S.C. 1001 et 
        seq.); and
            (2) shall, by the end of the one-year period beginning on 
        the date of the enactment of this Act, initiate competitive 
        lease sales under such Act for areas with respect to which 
        lease applications are pending and the lease applicant has not 
        entered into an agreement with the Secretary to be reimbursed 
        under the terms of the amendment made by section 7(a) of this 
        Act to fund any analyses, documents, or studies necessary to 
        complete the processing of the lease application.

SECTION 3. SPECIAL PROVISIONS REGARDING DIRECT USE OF GEOTHERMAL ENERGY 
              RESOURCES.

    (a) Leasing Procedure.--Section 4 of the Geothermal Steam Act of 
1970 (30 U.S.C. 1003) is further amended by adding at the end the 
following:
    ``(b) Leasing for Direct Use of Geothermal Resources.--Lands leased 
under this Act exclusively for qualified development and direct 
utilization of geothermal resources shall be leased to any qualified 
applicant who first applies for such lease under regulations formulated 
by the Secretary, if--
            ``(1) the Secretary publishes a notice of the lands 
        proposed for leasing at least 60 days before the date of the 
        issuance of the lease; and
            ``(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.''.
    (b) Limitation on Lease Area.--Section 7 of the Geothermal Steam 
Act of 1970 (30 U.S.C. 1006) is amended--
            (1) in the first sentence by striking ``A geothermal 
        lease'' and inserting ``(a) In General.--Except as provided in 
        subsection (b), a geothermal lease''; and
            (2) by adding at the end the following:
    ``(b) Leasing for Direct Use of Geothermal Resources.--A geothermal 
lease for qualified development and direct utilization of geothermal 
resources shall embrace not more than the minimum amount of acreage 
determined by the Secretary to be reasonably necessary for such 
utilization.''.
    (c) Annual Payment.--Section 5 of the Geothermal Steam Act of 1970 
(30 U.S.C. 1004) is amended--
            (1) in paragraph (c) by redesignating subparagraphs (1) and 
        (2) as subparagraphs (A) and (B);
            (2) by redesignating paragraphs (a) through (d) in order as 
        paragraphs (1) through (4);
            (3) by inserting ``(a) In General.--'' after ``sec. 5''; 
        and
            (4) by adding at the end the following:
    ``(b) Exemption for Direct Use of Geothermal Resources.--
            ``(1) In general.--In lieu of any royalty or rental under 
        subsection (a), a lease for qualified development and direct 
        utilization of geothermal resources shall provide for payment 
        by the lessee of an annual fee per well of not less than $100, 
        and not more than $1,000, in accordance with the schedule 
        issued under paragraph (2).
            ``(2) Schedule.--The Secretary shall issue a schedule of 
        fees under this section under which a fee is based on the scale 
        of development and utilization to which the fee applies.''.
    (d) Definitions.--Section 2 of the Geothermal Steam Act of 1970 (30 
U.S.C. 1001) is amended--
            (1) in paragraph (f) by redesignating subparagraphs (1) 
        through (4) in order as subparagraphs (A) through (D);
            (2) by redesignating paragraphs (a) through (f) in order as 
        paragraphs (1) through (6); and
            (3) by adding at the end the following:
            ``(7) Direct use of geothermal resources.--The term `direct 
        use of geothermal resources' means utilization of the heat from 
        a geothermal resource for commercial, residential, 
        agricultural, or other energy needs, other than the commercial 
        production of electricity.
            ``(8) Geothermal resource.--The term `geothermal resource' 
        means a subsurface reservoir of hot water or steam.''.
    (e) Existing Leases.--
            (1) Application to convert.--Any lessee under a lease under 
        the Geothermal Steam Act of 1970 that was issued before the 
        date of the enactment of this Act may apply to the Secretary of 
        the Interior, by not later than 18 months after the date of the 
        enactment of this Act, to convert such lease to a lease for 
        qualified development and direct utilization of geothermal 
        resources in accordance with the amendments made by this 
        section.
            (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, unless the Secretary determines that the 
        applicant is not a qualified applicant with respect to the 
        lease.
            (3) Application of new lease terms.--The amendments made by 
        subsection (c) shall apply with respect to payments under a 
        lease converted under this subsection that are due and owning 
        to the United States on or after July 16, 2003.

SEC. 4. ROYALTIES AND NEAR-TERM PRODUCTION INCENTIVES.

    (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 geothermal 
        steam and associated geothermal resources, other than direct 
        use of geothermal resources, that shall be--
                    ``(A) 1.75 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) 3.5 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) Treatment of State and County Shares of Royalties.--
            ``(1) State share.--Notwithstanding section 20 of this Act, 
        section 35 of the Mineral Leasing Act (30 U.S.C. 191), or 
        section 6 of the Mineral Leasing Act for Acquired Lands (30 
        U.S.C. 355), in the case of monies received by the United 
        States as royalty under subsection (a)(1)(A) with respect to a 
        electricity produced in a County in a State under a geothermal 
        lease--
                    ``(A) the percentage required to be paid by the 
                Secretary of the Treasury to the State shall be 75 
                percent; and
                    ``(B) the percentage required to be paid by the 
                Secretary of the Treasury to the County shall be 25 
                percent.
            ``(2) 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 under the provisions of other laws 
        referred to in paragraph (1) to a portion of such royalties, 
        if--
                    ``(A) the Secretary has approved an agreement 
                between the lessee and the State or county government 
                for such in-kind payments; and
                    ``(B) the agreement establishes a specific 
                methodology to determine the value of such credits.''.
    (b) Disposal of Moneys From Sales, Bonuses, Royalties and 
Rentals.--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, ROYALTIES AND 
              RENTALS.

    ``(a) Rentals.--All moneys received by the United States from 
rentals under this Act shall be disposed of in the same manner as such 
moneys received pursuant to section 35 of the Mineral Leasing Act (30 
U.S.C. 191) or section 6 of the Mineral Leasing Act for Acquired Lands 
(30 U.S.C. 355), as the case may be.
    ``(b) Sales, Bonuses, and Royalties.--
            ``(1) In general.--All monies received by the United States 
        from sales, bonuses, 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 section 35 
        of the Mineral Leasing Act (30 U.S.C. 191(b)) and section 
        5(a)(2) of this Act--
                    ``(A) 50 percent shall be paid to the State within 
                the boundaries of which the leased lands or geothermal 
                resources are or were located; and
                    ``(B) 25 percent shall be paid to the County within 
                the boundaries of which the leased lands or geothermal 
                resources are or were located;
        except that this sentence shall not apply with respect to lands 
        in Alaska.
            ``(2) Use of payments.--Amounts paid to a State or county 
        under paragraph (1) 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.--
            (1) In general.--Notwithstanding section 5(a) of the 
        Geothermal Steam Act of 1970 the royalty required to be paid on 
        any lease issued under such Act before the date of enactment of 
        this Act--
                    (A) with respect to commercial production of heat 
                or energy from a facility that begins such production 
                in the 6-year period beginning on the date of the 
                enactment of this Act; or
                    (B) on qualified expansion geothermal energy;
        shall be 50 percent of the amount of royalty otherwise required 
        to be paid under that section.
            (2) State share.--Notwithstanding section 20 of the 
        Geothermal Steam Act of 1970 (30 U.S.C. 1019), section 35 of 
        the Mineral Leasing Act (30 U.S.C. 191), or section 6 of the 
        Mineral Leasing Act for Acquired Lands (30 U.S.C. 355), in the 
        case of monies received by the United States from royalty 
        described in subparagraph (A) or (B) of paragraph (1), the 
        percentage required to be paid by the Secretary of the Treasury 
        to a State under those sections shall be 100 percent.
            (3) 4-year application.--Paragraphs (1) and (2) apply only 
        to commercial production of heat or energy from a facility in 
        the first 4 years of such production.
            (4) No effect on state portion.--This subsection shall not 
        be construed to reduce the amount of royalty required to be 
        paid to a State.
    (d) Definitions.--In this section:
            (1) Qualified expansion geothermal energy.--The term 
        ``qualified expansion geothermal energy'' means geothermal 
        energy produced from a generation facility for which--
                    (A) 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 the enactment of this Act; and
                    (B) 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.
            (2) Qualified geothermal energy lease.--The term 
        ``qualified geothermal energy lease'' means a lease under the 
        Geothermal Steam Act of 1970 (30 U.S.C. 1001 et seq.)--
                    (A) that was executed before the end of the 6-year 
                period beginning on the date of the enactment of this 
                Act; and
                    (B) under which no commercial production of any 
                form of heat or energy occurred before the date of the 
                enactment of this Act.
    (e) Royalty Under Existing Leases.--
            (1) In general.--Any lessee under a lease issued under the 
        Geothermal Steam Act of 1970 before the date of the enactment 
        of this Act may modify the terms of the lease relating to 
        payment of royalties to comply with the amendment made by 
        subsection (a), by applying to the Secretary of the Interior by 
        not later than 18 months after the date of the enactment of 
        this Act.
            (2) Application of modification.--Such modification shall 
        apply to any use of geothermal steam and associated geothermal 
        resources to which the amendment applies that occurs after the 
        date of that application.
            (3) Consultation.--The Secretary--
                    (A) shall consult with the State and local 
                governments affected by any proposed changes in lease 
                royalty terms under this subsection;
                    (B) may agree to a gross proceeds percentage other 
                than the amount specified in the amendment made by 
                subsection (a) only with the concurrence of the lessee 
                and the State,

SEC. 5. CONSULTATION REGARDING GEOTHERMAL LEASING AND PERMITTING ON 
              PUBLIC LANDS.

    (a) In General.--Not later than 6 months after the date of the 
enactment of this Act, the Secretary of the Interior and the Secretary 
of Agriculture shall enter into and submit to the Congress a memorandum 
of understanding in accordance with this section regarding leasing and 
permitting, for geothermal development, of public lands under their 
respective administrative jurisdictions.
    (b) Lease and Permit Applications.--The memorandum of understanding 
shall include provisions that--
            (1) identify known geothermal areas on public lands within 
        the National Forest System and when necessary review management 
        plans to consider leasing under the Geothermal Steam Act of 
        1970 (30 U.S.C. 1001 et seq.) as a land use;
            (2) establish an administrative procedure for processing 
        geothermal lease applications, including lines of authority, 
        steps in application processing, and timeframes for application 
        processing;
            (3) provide that the Secretary concerned shall--
                    (A) within 14 days after receiving an application 
                for a lease, determine whether the application contains 
                sufficient information to allow processing of the 
                application; and
                    (B) if the application is found not to contain 
                sufficient information to allow processing the 
                application the Secretary shall, before the end of such 
14-day period, provide written notification to the lease applicant that 
the application is being returned to the applicant without processing 
and itemizing the deficiencies in the application that prevent 
processing;
            (4) provide that the Secretary concerned shall within 30 
        days after receiving a lease application, provide written 
        notice to the lease applicant regarding the status of the 
        application, including an estimation of the time that will be 
        required to complete action on the application; and
            (5) establish an administrative procedure for processing 
        geothermal development permits, including lines of authority, 
        steps in permit processing, and timeframes for permit 
        processing.
    (c) Five-Year Leasing Plan.--The memorandum of understanding shall 
develop a 5-year plan for leasing under the Geothermal Steam Act of 
1970 (30 U.S.C. 1001 et seq.) of public land in the National Forest 
System. The plan for geothermal leasing shall be updated every 5 years.
    (d) Data Retrieval System.--The memorandum of understanding shall 
establish a joint data retrieval system that is capable of tracking 
lease and permit applications and requests and providing to the 
applicant or requester information as to their status within the 
Departments of the Interior and Agriculture, including an estimate of 
the time required for administrative action.

SEC. 6. REVIEW AND REPORT TO CONGRESS.

    The Secretary of the Interior shall promptly review and report to 
the Congress within 3 years after the date of the enactment of this Act 
regarding the status of all moratoria on and withdrawals from leasing 
under the Geothermal Steam Act of 1970 (30 U.S.C. 1001 et seq.) of 
known geothermal resources areas (as that term is defined in section 2 
of that Act (30 U.S.C. 1001), specifying for each such area whether the 
basis for such moratoria or withdrawal still applies.

SEC. 7. REIMBURSEMENT FOR COSTS OF NEPA ANALYSES, DOCUMENTATION, AND 
              STUDIES.

    (a) In General.--The Geothermal Steam Act of 1970 (30 U.S.C. 1001 
et seq.) is amended by adding at the end the following:

``SEC. 30. REIMBURSEMENT FOR COSTS OF CERTAIN ANALYSES, DOCUMENTATION, 
              AND STUDIES.

    ``(a) In General.--The Secretary of the Interior may, through 
royalty credits, reimburse a person who is a lessee, operator, 
operating rights owner, or applicant for a lease under this Act for 
reasonable amounts paid by the person for preparation by the Secretary 
(or a contractor or other person selected by the Secretary) of any 
project-level analysis, documentation, or related study required under 
the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.) 
with respect to the lease.
    ``(b) Conditions.--The Secretary may provide reimbursement under 
subsection (a) only if--
            ``(1) adequate funding to enable the Secretary to timely 
        prepare the analysis, documentation, or related study is not 
        appropriated;
            ``(2) the person paid the amounts voluntarily; and
            ``(3) the person maintains records of its costs in 
        accordance with regulations prescribed by the Secretary.''.
    (b) Application.--The amendments made by this section shall apply 
with respect to any lease entered into before, on, or after the date of 
the enactment of this Act.
    (c) Deadline for Regulations.--The Secretary shall issue 
regulations implementing the amendments made by this section by not 
later than 90 days after the date of the enactment of this Act.

SEC. 8. ASSESSMENT OF GEOTHERMAL ENERGY POTENTIAL.

    The Secretary of Interior, acting through the Director of the 
United States Geological Survey and in cooperation with the States, 
shall update the 1978 Assessment of Geothermal Resources, and submit 
that updated assessment to the Committee on Resources of the House of 
Representatives and the Committee on Energy and Natural Resources of 
the Senate--
            (1) within 3 years after the date of enactment of this Act; 
        and
            (2) thereafter as the availability of data and developments 
        in technology warrant.

SEC. 9. COOPERATIVE OR UNIT PLANS.

    (a) In General.--Section 18 of the Geothermal Steam Act of 1970 (30 
U.S.C. 1017) is amended to read as follows:

``SEC. 18. COOPERATIVE OR UNIT PLANS.

    ``(a) Adoption of Plan by Lessees.--
            ``(1) In general.--For the purpose of more properly 
        conserving the natural resources of any geothermal field, or 
        like area, or any part thereof (whether or not any part of the 
        geothermal field, or like area, is then subject to any 
        cooperative or unit plan of development or operation), lessees 
        thereof and their representatives may unite with each other, or 
        jointly or separately with others, in collectively adopting and 
        operating under a cooperative or unit plan of development or 
        operation of such field, or like area, or any part thereof, if 
        determined and certified by the Secretary to be necessary or 
        advisable in the public interest.
            ``(2) Modification of lease requirements by secretary.--The 
        Secretary may, in the discretion of the Secretary, and with the 
        consent of the holders of leases involved, establish, alter, 
        change, or revoke drilling, producing, rental, minimum royalty, 
        and royalty requirements of such leases and to make such 
        regulations with reference to such leases, with the consent of 
        the lessees, in connection with the institution and operation 
        of any such cooperative or unit plan as the Secretary may deem 
        necessary or proper to secure the proper protection of the 
        public interest.
    ``(b) Requirement of Plans Under New Leases.--The Secretary--
            ``(1) may provide that geothermal leases issued under this 
        Act after the date of the enactment of this section shall 
        contain a provision requiring the lessee to operate under such 
        a reasonable cooperative or unit plan; and
            ``(2) may prescribe such a plan under which such 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 plan authorized by the 
this section that applies to lands 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 plan, to alter or modify from time to time the rate 
of prospecting and development and the quantity and rate of production 
under such plan.
    ``(d) Exclusion From Determination of Holding or Control.--Any 
lands that are subject to any plan approved or prescribed by the 
Secretary under this section shall not be considered in determining 
holdings or control under any provision of this Act.
    ``(e) Pooling of Certain Lands.--If separate tracts of lands cannot 
be independently developed and operated to use geothermal steam and 
associated geothermal resources pursuant to this Act in conformity with 
an established development program--
            ``(1) any such lands, or a portion thereof, may be pooled 
        with other lands, whether or not owned by the United States, 
        for purposes of such development and operation under a 
        communitization agreement providing for an apportionment of 
        production or royalties among the separate tracts of land 
        comprising the production unit, if such pooling is determined 
        by the Secretary to be in the public interest; and
            ``(2) operation or production pursuant to such an agreement 
        shall be treated as operation or production with respect to 
        each tract of land that is subject to the agreement.
    ``(f) Plan Review.--No more than 5 years after approval of any 
cooperative or unit plan of development or operation, and at least 
every 5 years thereafter, the Secretary shall review each such plan 
and, after notice and opportunity for comment, eliminate from inclusion 
in such plan any lands that the Secretary determines are not reasonably 
necessary for cooperative or unit operations under the plan. Such 
elimination shall be based on scientific evidence, and shall occur only 
if it is determined by the Secretary to be for the purpose of 
conserving and properly managing the geothermal resource. Any land so 
eliminated shall be eligible for an extension under subsection (c) or 
(g) of section 6 if it meets the requirements for such an extension.
    ``(g) Approval by Secretary.--The Secretary may, on such conditions 
as the Secretary may prescribe, approve operating, 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 thereby. All leases operated under 
such approved operating, drilling, or development contracts, and 
interests thereunder, shall be excepted in determining holdings or 
control under section 7 of this Act.
    ``(h) Coordination With State Governments.--The Secretary--
            ``(1) shall coordinate unitization and pooling activities 
        with the appropriate State agencies; and
            ``(2) shall ensure that State leases included in any 
        unitization or pooling arrangement are treated equally with 
        Federal leases.''.

SEC. 10. ROYALTY ON BYPRODUCTS.

    Section 5 of the Geothermal Steam Act of 1970 (30 U.S.C. 1004) is 
further amended in subsection (a) by striking paragraph (2) and 
inserting the following:
            ``(2) a royalty on any byproduct that is a mineral named 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 production 
        of such mineral under a lease under that Act;''.

SEC. 11. REPEAL OF AUTHORITIES OF SECRETARY TO READJUST TERMS, 
              CONDITIONS, RENTALS, AND ROYALTIES.

    Section 8 of the Geothermal Steam Act of 1970 (30 U.S.C. 1007) is 
amended by repealing subsections (a) and (b), and by striking ``(c)''.

SEC. 12. CREDITING OF RENTAL TOWARD ROYALTY.

    Section 5 of the Geothermal Steam Act of 1970 (30 U.S.C. 1004) is 
further amended--
            (1) in subsection (a)(2) by inserting ``and'' after the 
        semicolon 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:
    ``(d) 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. 13. LEASE DURATION AND WORK COMMITMENT REQUIREMENTS.

    (a) In General.--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) Primary Term.--
            ``(1) In general.--A geothermal lease shall be for a 
        primary term of ten years.
            ``(2) Initial extension.--The Secretary shall extend the 
        primary term of a geothermal lease for 5 years if, for each 
        year after the fifth year of the lease--
                    ``(A) the Secretary determined under subsection (c) 
                that the lessee satisfied the work commitment 
                requirements that applied to the lease for that year; 
                or
                    ``(B) the lessee paid in accordance with subsection 
                (d) the value of any work that was not completed in 
                accordance with those requirements.
            ``(3) Additional extension.--The Secretary shall extend the 
        primary term of a geothermal lease (after an extension under 
        paragraph (2)) for an additional 5 years if, for each year 
        after the fifteenth year of the lease, the Secretary determined 
        under subsection (c) that the lessee satisfied the work 
        commitment requirements that applied to the lease for that 
        year.
    ``(b) Requirement To Satisfy Annual Work Commitment Requirement.--
            ``(1) In general.--The lessee for a geothermal lease shall, 
        for each year after the fifth year of the lease, satisfy work 
        commitment requirements prescribed by the Secretary that apply 
        to the lease for that year.
            ``(2) Prescription of work commitment requirements.--The 
        Secretary shall issue regulations prescribing minimum 
        equivalent dollar value work commitment requirements for 
        geothermal leases, that--
                    ``(A) require that a lessee, in each year after the 
                fifth year of the primary term of a geothermal lease, 
                diligently work to achieve commercial production or 
                utilization of steam under the lease;
                    ``(B) require that in each year to which work 
                commitment requirements under the regulations apply, 
                the lessee shall significantly reduce the amount of 
                work that remains to be done to achieve such production 
                or utilization;
                    ``(C) describe specific work that must be completed 
                by a lessee by the end of each year to which the work 
                commitment requirements apply;
                    ``(D) carry forward and apply to work commitment 
                requirements for a year, work completed in any year in 
                the preceding 3-year period that was in excess of the 
                work required to be performed in that preceding year; 
                and
                    ``(E) 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 Act 
                may be extended for up to two years--
                            ``(i) to allow achievement of production 
                        under the lease;
                            ``(ii) to allow the lease to be included in 
                        a producing unit; and
                    ``(F) establish an annual payment that, at the 
                option of the lessee, may be exercised in lieu of 
                meeting any work requirement for a limited number of 
                years that the Secretary determines will not impair 
                achieving diligent development of the geothermal 
                resource.
            ``(3) Termination of application of requirements.--Work 
        commitment requirements prescribed under this subsection shall 
        not apply to a geothermal lease after the date on which 
        geothermal steam is produced or utilized under the lease in 
        commercial quantities.
    ``(c) Determination of Whether Requirements Satisfied.--The 
Secretary shall, by not later than 21 days after the end of each year 
for which work commitment requirements under subsection (b) apply to a 
geothermal lease--
            ``(1) determine whether the lessee has satisfied the 
        requirements that apply for that year;
            ``(2) notify the lessee of that determination; and
            ``(3) in the case of a notification that the lessee did not 
        satisfy work commitment requirements for the year, include in 
        the notification--
                    ``(A) a description of the specific work that was 
                not completed by the lessee in accordance with the 
                requirements; and
                    ``(B) the amount of the dollar value of such work 
                that was not completed, reduced by the amount of 
                expenditures made for work completed in a prior year 
                that is carried forward pursuant to subsection 
                (b)(2)(D).
    ``(d) Payment of Value of Uncompleted Work.--
            ``(1) In general.--If the Secretary notifies a lessee that 
        the lessee failed to satisfy work commitment requirements under 
        subsection (b), the lessee shall pay to the Secretary, by not 
        later than the end of the 60-day period beginning on the date 
        of the notification, the dollar value of work that was not 
        completed by the lessee, in the amount stated in the 
        notification (as reduced under subsection (c)(3)(B)).
            ``(2) Failure to pay value of uncompleted work.--If a 
        lessee fails to pay such amount to the Secretary before the end 
        of that period, the lease shall terminate upon the expiration 
        of the period.
    ``(e) Continuation After Commercial Production or Utilization.--If 
geothermal steam is produced or utilized in commercial quantities 
within the primary term of the lease under subsection (a) (including 
any extension of the lease under subsection (a)), such lease shall 
continue until the date on which geothermal steam is no longer produced 
or utilized in commercial quantities.
    ``(f) Conversion of Geothermal Lease to Mineral Lease.--The lessee 
under a lease that has produced geothermal steam for electrical 
generation, has been determined by the Secretary to be incapable of any 
further commercial production or utilization of geothermal steam, and 
that is producing any valuable byproduct in payable quantities may, 
within 6 months after such determination--
            ``(1) convert the lease to a mineral lease under the 
        Mineral Leasing Act (30 U.S.C. 181 et seq.) or under the 
        Mineral Leasing Act for Acquired Lands (30 U.S.C. 351 et seq.), 
        if the lands that are subject to the lease can be leased under 
        that Act for the production of such byproduct; or
            ``(2) convert the lease to a mining claim under the general 
        mining laws, if the byproduct is a locatable mineral.''.
    (b) Conforming Amendment.--
            (1) Section 18 of the Geothermal Steam Act of 1970 (30 
        U.S.C. 1017) is amended by striking ``subsection (c) or (g)'' 
        and inserting ``subsection (g)''.
            (2) Section 20 of the Geothermal Steam Act of 1970 (30 
        U.S.C. 1019) is amended by striking ``, including the payments 
        referred to in section 6(i),''.

SEC. 14. ADVANCED ROYALTIES REQUIRED FOR SUSPENSION OF PRODUCTION.

    Section 5 of the Geothermal Steam Act of 1970 (30 U.S.C. 1004) is 
further amended by adding at the end the following:
    ``(e) Advanced Royalties Required for Suspension of Production.--
            ``(1) Continuation of lease following cessation of 
        production.--If, at any time after commercial production under 
        a lease is achieved, production ceases for any cause the lease 
        shall remain in full force and effect--
                    ``(A) during the one-year period beginning on the 
                date production ceases; and
                    ``(B) after such period if, and so long as, the 
                lessee commences and continues diligently and in good 
                faith until such production is resumed the steps, 
                operations, or procedures necessary to cause a 
                resumption of such production.
    ``(2) If production of heat or energy under a geothermal lease is 
suspended after the date of any such production for which royalty is 
required under subsection (a) and the terms of paragraph (1) are not 
met, the Secretary shall require the lessee, until the end of such 
suspension, to pay royalty in advance at the monthly pro-rata rate of 
the average annual rate at which such royalty was paid each year in the 
5-year-period preceding the date of suspension.
    ``(3) Paragraph (2) shall not apply if the suspension is required 
or otherwise caused by the Secretary, the Secretary of a military 
department, a State or local government, or a force majeur.''.

SEC. 15. ANNUAL RENTAL.

    (a) Annual Rental Rate.--Section 5 of the Geothermal Steam Act of 
1970 (30 U.S.C. 1004) is further amended in subsection (a) in paragraph 
(3) by striking ``$1 per acre or fraction thereof for each year of the 
lease'' and all that follows through the end of the paragraph and 
inserting ``$1 per acre or fraction thereof for each year of the lease 
in the case of a lease awarded in a noncompetitive lease sale; or $2 
per acre or fraction thereof for the first year, $3 per acre or 
fraction thereof for each of the second through tenth years, and $5 per 
acre or fraction thereof for each year after the 10th year thereof, in 
the case of a lease awarded in a competitive lease sale; and''.
    (b) Termination of Lease for Failure To Pay Rental.--Section 5 of 
the Geothermal Steam Act of 1970 (30 U.S.C. 1004) is further amended by 
adding at the end the following:
    ``(f) 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, upon the expiration of the 45-day period beginning on 
        the date of the failure to pay such 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 
        terminate under paragraph (1) shall not terminate under that 
        paragraph 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 such 
        amount.''.

SEC. 16. PUBLIC LANDS UNDER MILITARY JURISDICTION.

    (a) In General.--Except as otherwise provided in the Geothermal 
Steam Act of 1970 (30 U.S.C. 1001 et seq.) and other provisions of 
Federal law applicable to development of geothermal resources within 
public lands, all public lands under the jurisdiction of a Secretary of 
a military department shall be open to the operation of such laws and 
development and utilization of geothermal resources without the 
necessity for further action by the Secretary or the Congress.
    (b) Conforming Amendment.--Section 2689 of title 10, United States 
Code, is amended by striking ``including public lands,'' and inserting 
``other than public lands,''.
    (c) Treatment of Existing Leases and Contracts.--Upon the 
expiration of any lease or contract or term thereof in effect on the 
date of the enactment of this Act of public lands under the 
jurisdiction of a military department for the development of any 
geothermal resource, such lease or contract may, at the option of the 
lessee or contractor--
            (1) be treated as a lease under the Geothermal Steam Act of 
        1970 (30 U.S.C. 1001 et seq.), and be renewed in accordance 
        with such Act; or
            (2) be renewed in accordance with the terms of the lease or 
        contract, if such renewal is authorized by such terms.
    (d) Regulations.--The Secretary of the Interior, with the advice 
and concurrence of the Secretary of the military department concerned, 
shall prescribe such regulations to carry out this section as may be 
necessary. Such regulations shall contain guidelines to assist in 
determining how much, if any, of the surface of any lands opened 
pursuant to this section may be used for purposes incident to 
geothermal resources development and utilization.
    (e) Closure for Purposes of National Defense or Security.--In the 
event of a national emergency or for purposes of national defense or 
security, the Secretary of the Interior, at the request of the 
Secretary of the military department concerned, shall close any lands 
that have been opened to geothermal resources leasing pursuant to this 
section.
    (f) Lease Management and Operations.--The Secretary of the military 
department concerned may impose such terms and conditions on the 
operations of any lessee under this section as necessary to maintain 
military missions.
    (g) Geothermal Resource Defined.--In this section, the term 
``geothermal resource'' means a subsurface reservoir of hot water or 
steam.
                                 <all>