Geothermal Royalty Reform Act

Bill Number

H.R. 5638

Origin Chamber

House

Congress

119th Congress, Session 1

Policy Area

Energy

Status

Introduced

Latest Action

2026-05-20: Placed on the Union Calendar, Calendar No. 575.

Last Updated

2026-06-04T19:26:23Z

AI-Generated Summary

Summary of H.R. 5638 – Geothermal Royalty Reform Act

Purpose of the Legislation

This bill amends the Geothermal Steam Act of 1970 to reform the calculation of royalties on geothermal resources produced under federal leases. It requires that royalty payments be determined based on electricity production from each individual geothermal electric generating facility rather than on a lease-wide basis.

Key Provisions

• Definitions Added: The bill introduces two new definitions to Section 2 of the Geothermal Steam Act of 1970:
• A "geothermal electric generating facility" includes all necessary equipment and structures (such as turbines and cooling equipment) used to produce electricity from geothermal resources. Facilities are treated as separate unless they share a turbine.
• The "in-service date" is defined as the date a geothermal electric generating facility begins operating.
• Royalty Calculation Changes: Section 5(a)(1) is amended to specify that the minimum royalty rate applies to the value of electricity produced by each geothermal electric generating facility. The initial 10-year period for reduced royalty rates begins on the in-service date of the specific facility rather than the start of production under the overall lease.

Significant Changes to Existing Law

• Royalties shift from being calculated across an entire lease to being assessed separately for each qualifying electric generating facility.
• The 10-year reduced royalty period is now tied to the operational start date of individual facilities, allowing staggered application for facilities brought online at different times.
• Facilities that share a turbine are explicitly treated as a single unit for royalty purposes.

Potential Impacts

• Government Agencies: The Department of the Interior, which administers geothermal leases, may need updated procedures for tracking production and royalty payments on a per-facility basis.
• Citizens and Energy Sector: Lease holders and geothermal developers could see changes in royalty obligations depending on how their projects are structured, potentially affecting project economics for multi-facility developments.
• International Relations: No direct effects are outlined, as the bill focuses exclusively on domestic federal leasing and royalty administration.

Main Stakeholders Affected

• Federal lease holders and geothermal energy developers.
• The Department of the Interior and its agencies responsible for resource management and royalty collection.
• State and local governments that may receive portions of royalty revenues.
• Electricity producers and consumers in regions with geothermal resources.

Notable Legal, Constitutional, or Political Implications

• The legislation clarifies statutory language around royalty periods and facility definitions, which could reduce disputes over how royalties apply to complex geothermal projects.
• No constitutional issues are addressed in the bill text itself.
• The changes maintain the existing royalty framework while introducing facility-specific accounting, which may influence future interpretations of federal mineral leasing authority.

This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.

Sponsor

Rep. Kennedy, Mike [R-UT-3]

Cosponsors (1)

Rep. Begich, Nicholas J. [R-AK-At Large]

Recent Actions

• 2026-05-20: Placed on the Union Calendar, Calendar No. 575.
• 2026-05-20: Reported (Amended) by the Committee on Natural Resources. H. Rept. 119-661.
• 2026-05-20: Reported (Amended) by the Committee on Natural Resources. H. Rept. 119-661.
• 2026-03-05: Ordered to be Reported in the Nature of a Substitute (Amended) by Unanimous Consent.
• 2026-03-05: Committee Consideration and Mark-up Session Held
• 2026-03-05: Subcommittee on Energy and Mineral Resources Discharged
• 2025-12-16: Subcommittee Hearings Held
• 2025-12-09: Referred to the Subcommittee on Energy and Mineral Resources.
• 2025-09-30: Referred to the House Committee on Natural Resources.
• 2025-09-30: Introduced in House
• 2025-09-30: Introduced in House

Bill Versions

• Geothermal Royalty Reform Act — issued 2025-09-30 — PDF (2 pages)
• Geothermal Royalty Reform Act — issued 2026-05-20 — PDF (6 pages)