A. Each lease issued pursuant to the Geothermal Resources Act shall provide for the following base rentals, royalties and percentage rentals with respect to geothermal resources produced or sold from the lands included within the lease:

(1) a base lease rent to be charged under each lease based upon fair market value at the time of leasing as determined by the commissioner;

(2) a royalty or percentage rent to be charged as a percentage of gross revenue derived from the production, sale or use of geothermal resources, or the energy produced therefrom, under the lease as determined by the commissioner, who shall not determine a value below or above a range that could be determined by the federal bureau of land management, based on fair market value of the geothermal resource or use of the geothermal resource at the time of leasing. The commissioner may require an escalation of the royalty or percentage rent over time; and

(3) a royalty of the gross revenue received from the sale of mineral products or chemical compounds recovered from geothermal fluids, if any, based on fair market value of the mineral product as determined by the commissioner, except that as to any by-product or minerals covered by other mineral leasing statutes administered by the commissioner or rules or regulations of the commissioner, the rate of royalty for such mineral or by-product shall be the same as the then-existing rate of royalty under leases currently being issued by the commissioner.

B. The commissioner shall have the authority in leasing lands pursuant to the Geothermal Resources Act to prescribe a development program. In prescribing the program, the commissioner shall consider all applicable economic factors, including market conditions and the cost of drilling for, producing, processing and utilizing geothermal resources.

History: 1953 Comp., § 7-15-7, enacted by Laws 1967, ch. 158, § 7; 1979, ch. 386, § 2; 2013, ch. 125, § 3.

The 2013 amendment, effective June 14, 2013, provided for conditions of leases of geothermal resources to sustain the resource and for terms based on market value; in Subsection A, in the introductory sentence, after "following", added "base", after "royalties", added "and percentage rentals", and after "resources produced", deleted "saved and" and added "or"; in Paragraph (1) of Subsection A, at the beginning of the sentence, after "a", deleted language which provided for a ten percent royalty from the sale of steam, brine, or hot water and between ten and fifteen percent from leases of known geothermal resource fields, and added the remainder of the sentence; added Paragraph (2) of Subsection A; in Paragraph (3) of Subsection A, after "a royalty of", deleted "not less than two percent nor more than five percent of" and after "geothermal fluids", deleted "in the first marketable form as to each such mineral product or chemical compound for the primary term of the lease" and added "if any, based on fair market value of the mineral product as determined by the commissioner", deleted former Paragraph (3) of Subsection A, which provided a royalty of eight percent of revenue from an energy-producing plant; deleted former Paragraph (4) of Subsection A, which provided for a royalty of not less than two percent nor more than ten percent on revenue from geothermal resources for recreational, space heating or health purposes; deleted former Paragraph (5) of Subsection A, which provided for an annual rental of one dollar per acre; deleted former Paragraph (6) of Subsection A, which provided for a minimum rental when the royalty did not exceed two dollars per acre; deleted Paragraph (7) of Subsection A, which required the renegotiation of royalties after twenty years; deleted former Paragraph (8) of Subsection A, which provided that except for royalties on minerals, royalties and rentals could be other than the rates specified in Subsection A; and deleted former Subsection B, which provided the method for calculating royalties on resources that were used and not sold.