30 U.S.C. § 1004 : US Code - Section 1004: Rents and royalties

Search 30 U.S.C. § 1004 : US Code - Section 1004: Rents and royalties

(a) In general
Geothermal leases shall provide for -
(1) a royalty on electricity produced using geothermal
resources, other than direct use of geothermal 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 electricity produced from such
resources during each year after such 10-year period;
(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 [30 U.S.C. 181 et seq.]
to production of the mineral under a lease under that Act; and
(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 noncompetitive
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; (!1)
(b) Direct use
(1) In general
Notwithstanding subsection (a)(1) of this section, the
Secretary shall establish a schedule of fees, in lieu of
royalties for geothermal resources, that a lessee or its
affiliate -
(A) uses for a purpose other than the commercial generation
of electricity; and
(B) does not sell.
(2) Schedule of fees
The schedule of fees -
(A) may be based on the quantity or thermal content, or both,
of geothermal resources used;
(B) shall ensure a fair return to the United States for use
of the resource; and
(C) shall encourage development of the resource.
(3) State, tribal, or local governments
If a State, tribal, or local government is the lessee and uses
geothermal resources without sale and for public purposes other
than commercial generation of electricity, the Secretary shall
charge only a nominal fee for use of the resource.
(4) Final regulation
In issuing any final regulation establishing a schedule of fees
under this subsection, the Secretary shall seek -
(A) to provide lessees with a simplified administrative
system;
(B) to facilitate development of direct use of geothermal
resources; and
(C) to contribute to sustainable economic development
opportunities in the area.
(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 August 8, 2005.
(d) Credits for in-kind payments of electricity
The Secretary may provide to a lessee a credit against royalties
owed under this chapter, 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 1019
of this title, section 35 of the Mineral Leasing Act (30 U.S.C.
191), except as otherwise provided by this section, or section 355
of this title, 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
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 Government to that entity.
(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.
(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 an aggregate number of 10
years beginning on the date production 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 production.
(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 cessation 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.
(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 chapter 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 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 the amount.