Sec. 205. Royalties
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The Secretaries shall require as a term and condition of any lease, right-of-way, permit, or other authorization for the development of wind or solar energy on covered land the payment of a royalty established by the Secretaries pursuant to a joint rulemaking that shall be a percentage of the gross proceeds from the sale of electricity at a rate that— encourages production of solar or wind energy; ensures a fair return to the public comparable to the return that would be obtained on State and private land; and encourages the maximum energy generation while disturbing the least quantity of covered land and other natural resources, including water.
The royalty on electricity produced using wind or solar resources shall be— not less than 1 percent, and not more than 2.5 percent, of the gross proceeds from the sale of electricity produced from the resources during the first 10 years of production; and not less than 2 percent, and not more than 5 percent, of the gross proceeds from the sale of electricity produced from the resources during each year after that initial 10-year period. The Secretaries may establish— a different royalty rate for wind or solar energy generation; and a reduced royalty rate for projects located within a zone identified for development of solar or wind energy.
During the period of production, a royalty shall be collected in lieu of any rent for the land from which the electricity is produced. To promote the generation of renewable energy, the Secretaries may reduce any royalty otherwise required on a showing by clear and convincing evidence by the person holding a lease, right-of-way, permit, or other authorization for the development of wind or solar energy on covered land under which the generation of energy is or will be produced in commercial quantities that— collection of the full royalty would unreasonably burden energy generation; and the royalty reduction is in the public interest.
Not later than 5 years after the date of enactment of this Act and every 5 years thereafter, the Secretary, in consultation with the Secretary of Agriculture, shall— complete a review of collections and impacts of the royalty and fees provided under this Act; and submit to the Committee on Energy and Natural Resources of the Senate and the Committee on Natural Resources of the House of Representatives a report describing the results of the review. The report shall address— the total revenues received (by category) on an annual basis as royalties from wind, solar, and geothermal development and production (specified by energy source) on covered land; whether the revenues received for the development of wind, solar, and geothermal development are comparable to the revenues received for similar development on State and private land; any impact on the development of wind, solar, and geothermal development and production on covered land as a result of the royalties; and any recommendations with respect to changes in Federal law (including regulations) relating to the amount or method of collection (including auditing, compliance, and enforcement) of the royalties.
Not later than 1 year after the date of enactment of this Act, the Secretaries shall jointly issue final regulations to carry out this section.