Lands (30 U.S.C. 351–358), and the leasehold is primarily valuable for the production thereof, the lessee shall be entitled to convert his geothermal lease to a mineral lease under, and subject to all the terms and conditions of, such appropriate Act upon application at any time before expiration of the lease extension by reason of byproduct production. Any such converted lease affecting lands withdrawn or acquired in aid of a function of a Federal department or agency, including the Department of the Interior, shall be subject to such additional terms and conditions as may be prescribed by such department or agency with respect to the additional operations or effects resulting from such conversion upon adequate utilization of the lands for the purpose for which they are administered. SEC. 7. Geothermal leases shall embrace a reasonably compact area of not less than six hundred and forty acres and not more than two thousand five hundred and sixty acres, except where a departure therefrom is occasioned by an irregular subdivision or subdivisions. No person, association, or corporation, except as otherwise provided in this Act, shall take, hold, own, or control at one time, whether acquired directly from the Secretary under this Act or otherwise, any direct or indirect interest in Federal geothermal leases in any one State exceeding fifty-one thousand two hundred acres. At any time after fifteen years from the effective date of this Act, the Secretary, after public hearings, may reduce this maximum holding by regulation.

SEC. 8. If the production, use, or conversion of geothermal steam is susceptible of producing a valuable byproduct or byproducts, the Secretary shall require substantial beneficial production or use thereof unless, in individual circumstances, he modifies or waives this requirement in the interest of conservation of natural resources or for other reasons satisfactory to him. However, the production or use of such byproducts shall be subject to the rights of the holders of preexisting leases, claims, or permits covering the same land or the same minerals, if any.

SEC. 9. The holder of any geothermal lease at any time may make and file in the appropriate land office a written relinquishment of all rights under such lease or of any legal subdivision of the area covered by such lease. Such relinquishment shall be effective as of the date of its filing. Thereupon the lessee shall be released of all obligations thereafter accruing under said lease with respect to the lands relinquished, but no such relinquishment shall release such lessee, or his surety or bond, from any liability for breach of any obligation of the lease. other than an obligation to drill, accrued at the date of the relinquishment, or from the continued obligation, in accordance with the applicable lease terms and regulations, (1) to make payment of all accrued rentals and royalties, (2) to place all wells on the relinquished lands in condition for suspension or abandonment, and (3) to protect or restore the surface and surface resources. SEC. 10. The Secretary, upon application by the lessee, may suspend operations and production on a producing lease and he may, on his own motion, in the interest of conservation suspend operations on any lease, but in either case he may extend the lease term for the period of any suspension.

SEC. 11. Leases may be terminated by the Secretary for any violation of the regulations or lease terms after thirty days' notice, but the lessee shall be entitled to a hearing on the matter if request for the hearing is made to the Secre tary within the thirty-day period after notice.

SEC. 12. The Secretary may waive, suspend, or reduce the rental or minimum royalty for any lease or portion thereof in the interests of conservation and to encourage the greatest ultimate recovery of geothermal resources, if he determines that this is necessary to promote development or that the lease cannot be successfully operated under the lease terms.

SEC. 13. Subject to the other provisions of this Act, a lessee shall be entitled to use so much of the surface of the land covered by his geothermal lease as may be found by the Secretary to be necessary for the production and conservation of geothermal resources.

SEC. 14. (a) Geothermal leases for lands withdrawn or acquired in aid of functions of the Department of the Interior may be issued only under such terms and conditions as the Secretary may prescribe to insure adequate utilization of the lands for the purpose for which they were withdrawn or acquired.

(h) Geothermal leases for lands withdrawn or acquired in aid of functions of the Department of Agriculture may be issued only with the consent of. and subject to such terms and conditions as may be prescribed by, the head of that Department to insure adequate utilization of the lands for the purposes for which they were withdrawn or acquired.

(c) Geothermal leases shall not be issued for lands administered in accordance with (1) the Act of August 25, 1916 (39 Stat. 535), as amended or supplemented, (2) for lands in a fish hatchery administered by the Secretary, wildlife refuge, wildlife range, game range, wildlife management area, water fowl production area, or for lands acquired or reserved for the protection and conservation of fish and wildlife that are threatened with extinction, or (3) for Indian-owned trust or restricted lands.

SEC. 15. Leases under this Act may be issued only to citizens of the United States, associations of such citizens, corporations organized under the laws of the United States or of any State or the District of Columbia, or governmental units, including, without limitation, municipalities.

SEC. 16. Administration of this Act shall be under the principles of multiple use of lands and resources, and geothermal leases shall, insofar as possible, allow for coexistence of other leases of the same lands for deposits of minerals under the laws applicable to them and for other uses of the areas covered by them. Operations under such other leases or for such other uses, however, shall not reasonably interfere with or endanger operation under any lease issued pursuant to this Act, nor shall operations under leases so issued unreasonably interfere with or endanger operations under any lease, license, claim, or permit issued pursuant to the provisions of any other Act.

SEC. 17. For the purpose of properly conserving the natural resources of any geothermal pool, field, or like area, or any part thereof, 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 pool, field, or like area, or any part thereof, whenever this is determined and certified by the Secretary to be necessary or advisable in the public interest. The Secretary may in his discretion and with the consent of the holders of leases involved, establish, alter, change, revoke, and make such regulations with reference to such leases in connection with the institution and operation of any such cooperative or unit plan as he may deem necessary or proper to secure reasonable protection of the public interest. He may include in geothermal leases a provision requiring the lessee to operate under such a reasonable cooperative or unit plan, and he 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 Any such plan may, in the discretion of the Secretary, provide for vesting in the Secretary or any other person, committee, or Federal or State agency designated therein, authority to alter or modify from time to time the rate of prospecting and development and the quantity and rate of production under such plan. All leases operated under any such plan approved or prescribed by the Secretary shall be excepted in determining holdings or control for the purposes of section 7 of this Act.

When separate tracts cannot be independently developed and operated in conformity with an established well-spacing or development program, any lease, or a portion thereof, may be pooled with other lands, whether or not owned by the United States, under a communitization or drilling agreement providing for an apportionment of production or royalties among the separate tracts of land comprising the drilling or spacing unit when determined by the Secretary to be in the public interest, and operations or production pursuant to such an agreement shall be deemed to be operations or production as to each lease committed thereto.

The Secretary is hereby authorized, on such conditions as he may prescribe, to approve operating, drilling, or development contracts made by one or more lessees of geothermal leases, with one or more persons, associations, or corporations whenever, in his discretion, the conservation of natural products 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. SEC. 18. Upon request of the Secretary, other Federal departments and agencies shall furnish him with any relevant data then in their possession or knowledge concerning or having bearing upon fair and adequate charges to be made for geothermal steam produced or to be produced for conversion to electric power or other purposes. Data given to any department or agency as confidential under law shall not be furnished in any fashion which identifies or tends to identify the business entity whose activities are the subject of such data or the person or persons who furnished such information.

SEC. 19. All moneys received under this Act from public lands under the jurisdiction of the Secretary shall be disposed of in the same manner as moneys received from the sale of public lands. Moneys received under this Act from other lands shall be disposed of in the same manner as other receipts from such lands. SEC. 20. (a) Within one hundred and twenty days after the effective date of this Act, the Secretary shall cause to be published in the Federal Register a determination of all lands which were included within any known geothermal resources area on the effective date of the Act. He shall likewise publish in the Federal Register from time to time his determination of other known geothermal resources areas specifying in each case the date the lands were included in such

area.

(b) Geothermal resources in lands the surface of which has passed from Federal ownership but in which the minerals have been reserved to the United States shall not be developed or produced except under geothermal leases made pursuant to this Act. If the Secretary of the Interior finds that such development is imminent, or that production from a well heretofore drilled on such lands is imminent, he shall so report to the Attorney General, and the Attorney General is authorized and directed to institute an appropriate proceeding in the United States district court of the district in which such lands are located, to quiet the title of the United States in such resources, and if the court determines that the reservation of minerals to the United States in the lands involved included the geothermal resources, to enjoin their production otherwise than under the terms of this Act; Provided, That upon an authoritative judicial determination that Federal mineral reservation does not include geothermal steam and associated geothermal resources the duties of the Secretary of the Interior to report and of the Attorney General to institute proceedings, as hereinbefore set forth, shall cease. SEC. 21. Nothing in this Act shall constitute an express or implied claim or denial on the part of the Federal Government as to its exemption from State water laws.

SEC. 22. Rights to develop and utilize geothermal steam and associated geothermal resources underlying lands owned by the United States may be acquired solely in accordance with the provisions of this Act.

SEC. 23. The Secretary shall prescribe such rules and regulations as he may deem appropriate to carry out the provisions of this Act. Such regulations may include, without limitation, provisions for (a) the prevention of waste, (b) development and conservation of geothermal and other natural resources, (c) the protection of the public interest, (d) assignment, segregation, extension of terms, relinquishment of leases, development contracts, unitization, pooling, and drilling agreements, (e) compensatory royalty agreements, suspension of operations or production, and suspension or reduction of rentals or royalties, (f) the filing of surety bonds to assure compliance with the terms of the lease and to protect surface use and resources, (g) use of the surface by a lessee of the lands embraced in his lease, and (h) the maintenance by the lessee of an active development program.

[H.R. 9583, 90th Cong., first sess.]

A BILL To authorize the Secretary of the Interior to make disposition of geothermal steam and associated geothermal resources, and for other purposes

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That this Act may be cited as the "Geothermal Steam Act of 1967".

SEC. 2. As used in this Act, the term

(a) "Secretary" means the Secretary of the Interior;

(b) "geothermal lease” means a lease issued under authority of this Act; (c) "geothermal steam and associated geothermal resources" means all fluid products of geothermal processes, embracing steam, naturally heated water and brines, and the heat or other energy associated with them and, in addition, any byproduct derived from them;

(d) "byproduct" means any mineral or minerals (exclusive of oil, hydrocarbon gas, and helium) which are found in solution or in association with geothermal steam.

SEC. 3. Subject to the provisions of section 15 of this Act, the Secretary of the Interior may issue leases for the development and utilization of geothermal steam and associated geothermal resources (a) in lands administered by him, whether those lands are unreserved, withdrawn, or acquired, (b) in any national forest or

other lands administered by the Department of Agriculture through the Forest Service, whether those lands are withdrawn or acquired, and (c) in lands which have been conveyed by the United States subject to a reservation to the United States of the geothermal steam and associated geothermal resources therein. SEC. 4. Geothermal leases under this Act may be issued only to the highest responsible qualified bidder by competitive bidding under regulations formulated by the Secretary.

SEC. 5. Geothermal leases shall provide for

(a) a royalty of not less than 10 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 or reasonably susceptible of sale or utilization by the lessee;

(b) a royalty of not less than 5 per centum of the amount or 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 minimum rate of royalty for such mineral shall be the same as that provided in that Act; (c) 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 or for failure to pay the full amount due and the deficient amount is not nominal and it is shown to the satisfaction of the Secretary of the Interior that such failure was either 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, including back rental accruing from the date of termination, for such lease, is filed with the Secretary; 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. The Secretary shall not issue any new geothermal lease affecting any of the lands covered by such terminated lease for a reasonable period, as determined in accordance with regulations issued by him;

(d) 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.

SEC. 6. (a) Each geothermal lease shall be for a primary term of ten years. If geothermal steam is produced or utilized in commercial quantities within this term, such lease shall continue for so long thereafter as geothermal steam is produced or utilized in commercial quantities, but such continuation shall not exceed an additional fifty years.

(b) Any geothermal lease which has been continued under subsection (a) of this section, and which has been determined by the Secretary (1) to be incapable of further commercial production or utilization of geothermal steam, and (2) to be capable of producing minerals of the kind that are leasable under the Mineral Leasing Act of February 25, 1920, as amended (30 U.S.C. 181 et seq.), or under the Mineral Leasing Act for Acquired Lands (30 U.S.C. 351-358), or that are locatable under the United States mining laws, and that would constitute a byproduct if commercial production or utilization of geothermal steam continued, shall not be terminated automatically and shall be extended for so long as one or more of such valuable minerals are produced or utilized in commercial quantities, if the lessee files an application with the Secretary for such extension within sixty days after notice of such determination. Such minerals shall be developed on the lands covered by a geothermal lease only in accordance with the terms of such lease, and such minerals and such lands shall not be subject to appropriation under the United States mining laws during the term of the lease or after

the termination or relinquishment of the lease unless and until the Secretary has opened such lands thereto. Any such extended lease affecting lands withdrawn or acquired in aid of a function of a Federal department or agency, including the Department of the Interior, shall be subject to such additional terms and conIditions as may be prescribed by such department or agency with respect to the additional operations or effects resulting from such extension upon adequate utilization of the lands for the purpose for which they are administered.

SEC. 7. Geothermal leases shall embrace a reasonably compact area of not more than two thousand five hundred and sixty acres, except where a departure therefrom is occasioned by an irregular subdivision or subdivisions. No person, association, or corporation, except as otherwise provided in this Act, shall take, hold, own, or control at one time, whether acquired directly from the Secretary under this Act or otherwise, any direct or indirect interest in Federal geothermal leases in any one State exceeding ten thousand two hundred and forty acres. At any time after fifteen years from the effective date of this Act, the Secretary, after public hearings, may raise this maximum holding by regulation.

SEC. 8. The Secretary shall by regulation establish reasonable intervals for the readjustment of the lease terms and conditions, including, without limitation, rentals and royalties. Each geothermal lease issued under this Act shall provide for such readjustment. The Secretary shall give notice of any proposed readjustment of term and conditions, and, unless the lessee files with the Secretary objection to the proposed terms or relinquishes the lease within thirty days after receipt of such notice, the lessee shall conclusively be deemed to have agreed with such terms and conditions. If the lessee files objections, and no agreement can be reached between the Secretary and the lessee within a period of not less than sixty days, the lease may be terminated by either party. Any readjustment of the terms and conditions as to use, protection, or restoration of the surface of any lease of lands withdrawn or acquired in aid of a function of a Federal department or agency other than the Department of the Interior may be made only upon notice to, and with the approval of, such department or agency.

SEC. 9. If the production, use, or conversion of geothermal steam is susceptible of producing a valuable byproduct or byproducts, the Secretary shall require substantial beneficial production or use thereof unless, in individual circumstances, he modifies or waives this requirement in the interest of conservation of natural resources or for other reasons satisfactory to him. However, the production or use of such byproducts shall be subject to the rights of the holders of preexisting leases, claims, or permits covering the same land or the same minerals, if any. SEC. 10. The holder of any geothermal lease at any time may make and file in the appropriate land office a written relinquishment of all rights under such lease or of any legal subdivision of the area covered by such lease. Such relinquishment shall be effective as of the date of its filing. Thereupon the lessee shall be released of all obligations thereafter accruing under said lease with respect to the lands relinquished, but no such relinquishment shall release such lessee, or his surety or bond, from any liability for breach of any obligation of the lease, other than an obligation to drill, accrued at the date of the relinquishment, or from the continued obligation, in accordance with the applicable lease terms and regulations, (1) to make payment of all accrued rentals and royalties, (2) to place all wells on the relinquished lands in condition for suspension or abandonment, and (3) to protect or restore the surface and surface resources.

SEC. 11. The Secretary, upon application by the lessee, may authorize the lessee to suspend operations and production on a producing lease, and he may, on his own motion, suspend operations on any lease in the interest of conservation. In either case, he may extend the lease term for the period of such suspension, and he may waive, suspend, or reduce the rental or minimum royalty required by such lease.

SEC. 12. Leases may be terminated by the Secretary for any violation of the regulations or lease terms after thirty days' notice, but the lessee shall be entitled to a hearing on the matter if request for the hearing is made to the Secretary within the thirty-day period after notice.

SEC. 13. The Secretary may waive, suspend, or reduce the rental or minimum royalty for any lease or portion thereof when he determines that such action will further the interests of conservation or will promote development of the geothermal steam and associated geothermal resources.

SEC. 14. Subject to the other provisions of this Act, a lessee shall be entitled to use so much of the surface of the land, covered by his geothermal lease as may be found by the Secretary to be necessary for the production and conservation of geothermal resources.