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U.S. Code as of:
01/19/04
Section 1004. Rents and royalties
Geothermal leases shall provide for -
(a) Royalty provision for percentage of amount or value of steam
or other form of heat or energy
a royalty of not less than 10 per centum or more than 15 per
centum of the amount or value of steam, or any other form of heat
or energy derived from production under the lease and sold or
utilized by the lessee or reasonably susceptible to sale or
utilization by the lessee;
(b) Royalty provision for percentage of value of byproduct; rate
for certain mineral byproducts
a royalty of not more than 5 per centum of the value of any
byproduct derived from production under the lease and sold or
utilized or reasonably susceptible of sale or utilization by the
lessee, except that as to any byproduct which is a mineral named
in section 1 of the Mineral Leasing Act of February 25, 1920, as
amended (30 U.S.C. 181), the rate of royalty for such mineral
shall be the same as that provided in that Act [30 U.S.C. 181 et
seq.] and the maximum rate of royalty for such mineral shall not
exceed the maximum royalty applicable under that Act;
(c) Annual rental; advance payment; amount; termination of lease
for nonpayment; deficiency payments: notice and payment of
deficiency; reinstatement of lease: reasons and conditions
payment in advance of an annual rental of not less than $1 per
acre or fraction thereof for each year of the lease. If there is
no well on the leased lands capable of producing geothermal
resources in commercial quantities, the failure to pay rental on
or before the anniversary date shall terminate the lease by
operation of law: Provided, however, That whenever the Secretary
discovers that the rental payment due under a lease is paid
timely but the amount of the payment is deficient because of an
error or other reason and the deficiency is nominal, as
determined by the Secretary pursuant to regulations prescribed by
him, he shall notify the lessee of the deficiency and such lease
shall not automatically terminate unless the lessee fails to pay
the deficiency within the period prescribed in the notice:
Provided further, That, where any lease has been terminated
automatically by operation of law under this section for failure
to pay rental timely and it is shown to the satisfaction of the
Secretary of the Interior that the failure to pay timely the
lease rental was justifiable or not due to a lack of reasonable
diligence, he in his judgment may reinstate the lease if -
(1) a petition for reinstatement, together with the required
rental, is filed with the Secretary of the Interior; and
(2) no valid lease has been issued affecting any of the lands
in the terminated lease prior to the filing of the petition for
reinstatement; and
(d) Royalties in lieu of rentals for producing leases; amount;
initial payment; value of unsold geothermal steam and
byproducts; consideration of exploration and production costs
and use value
a minimum royalty of $2 per acre or fraction thereof in lieu of
rental payable at the expiration of each lease year for each
producing lease, commencing with the lease year beginning on or
after the commencement of production in commercial quantities.
For the purpose of determining royalties hereunder the value of
any geothermal steam and byproduct used by the lessee and not
sold and reasonably susceptible of sale shall be determined by
the Secretary, who shall take into consideration the cost of
exploration and production and the economic value of the resource
in terms of its ultimate utilization.
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