PRIA, Government Policy, Made Personal

Summary

If Congress approves the Secretary’s earlier recommendation, the Secretary must set up a reservoir insurance program within six months, working with the insurance industry. People or entities that have at least $1,000,000 invested in developing and using a geothermal resource tied to a reservoir, and who cannot get other insurance at reasonable prices, can apply. The applicant must say how much they plan to invest, describe the risk with geologic, engineering, and financial facts from site testing, list needed permits and leases, explain what other insurance they could get, and give any other information the Secretary asks for. Unless the Secretary finds the risk unreasonable, the Secretary has 90 days after a good application to say what the risk is, how much investment is at risk, how much other insurance is available at reasonable prices, and how much the program will insure (the difference, but not more than 90% or $50,000,000). The Secretary will also set reasonable terms and premiums (premiums go into the Geothermal Resources Development Fund). Within 90 days after those findings and if the applicant agrees, the Secretary will issue a certificate and sign a contract that is not transferable without approval and that protects U.S. interests. Defined terms (one line each): "investment" — money spent or legally committed to buy or build equipment or facilities to use a geothermal resource for heat or power; "geothermal resource" — steam, hot water, hot brines, heat, and related byproducts in U.S. geothermal formations; "risk" — the chance a reservoir stops producing enough resource to keep the project viable; "reasonable premiums" — prices the Secretary finds fair compared to similar insurance; "other insurance" — any private or public insurance besides this program; "reservoir" — the underground rock formation holding the geothermal resource; "person" — a public or private U.S. legal entity that meets U.S. citizenship tests. If a certificate holder proves a covered loss, the Secretary will pay the insured loss not covered by other insurance from the Fund; the United States pledges its full faith and credit for those payments. A person cannot be denied this insurance just because they get other federal help. Money may be appropriated to the Fund as authorized. The Secretary may also reinsure private insurers to encourage private participation and must report to Congress within one year after the law is enacted about any extra authority needed.

Title 30, §1522

Mineral Lands and Mining, Source: USLM XML via OLRC

(a)Authorization; requirements; scope

If the report of the Secretary submitted pursuant to section 1521 of this title affirmatively recommends the establishment of the program and the Congress by law (after review of such recommendation) specifically authorizes the establishment of the program, the Secretary shall establish and implement within six months after the date of the enactment of such authorization a program, in cooperation with the insurance and reinsurance industry, to provide reservoir insurance to qualified eligible applicants in accordance with this section.

(b)Definitions

For the purpose of this section

(1)

(2)the term “geothermal resource” means a resource in the United States including (A) all products of geothermal processes embracing indigenous steam, hot water, and hot brines; (B) steam and other gases, hot water and hot brines resulting from water, gas, or other fluids artificially introduced into geothermal formations; (C) heat or other associated energy found in geothermal formations; and (D) any byproducts derived from them, where “byproduct” means any mineral or minerals (exclusive of oil, hydrocarbon gas, and helium) which are found in solution or in association with other geothermal resources and which have a value of less than 75 per centum of the value of the geothermal steam or are not, because of quantity, quality, or technical difficulties in extraction and production, of sufficient value to warrant extraction and production by themselves;

(3)the term “risk” means the hazard that a reservoir of geothermal resources will cease to provide sufficient quantities of geothermal resources at minimum conditions required to maintain an economically or technically viable operation for utilization of the geothermal resource;

(4)the term “reasonable premiums” means premium amounts determined by the Secretary to be reasonable in light of the amount of investment subject to the risk and premiums charged in similar or analogous situations by private insurers where private insurance is concerned and by insurers or guarantors, both public and private, where public insurance is concerned;

(5)the term “other insurance” means any combination of private or public insurance other than investment insurance provided by the Secretary under this section;

(6)the term “reservoir” means the physical subsurface geologic structure which forms the natural repository for the undisturbed geothermal resource; and

(7)the term “person” means any public or private agency, institution, association, partnership, corporation, political subdivision, or other legal entity which is a United States citizen as determined by application of the test for United States citizenship contained in section 50501 of title 46, or in the first sentence of section 27A of the Merchant Marine Act, 1920 (46 U.S.C. 883–1(a)–(e)).

(c)Eligibility for investment insurance

Any person with a total direct investment of not less than $1,000,000 in the development and use, not including exploration and testing, of a geothermal resource associated with a reservoir, and unable to obtain other insurance at reasonable premiums for the amount of the investment subject to risk, as determined by the Secretary under this section, shall be eligible for investment insurance.

(d)Application for investment insurance; contents, etc.

Any eligible person seeking investment insurance under this section shall file an application with the Secretary setting forth (1) the total amount of the contemplated investment in a geothermal resource and associated reservoir; (2) the views of the applicant concerning the nature and extent of the risk, including a geologic, engineering, and financial assessment based on site specific results of exploration and testing of the geothermal resource and the reservoir, stated with as much specificity as is possible; (3) the status of all required Federal, State, and local approvals, permits, and leases for the proposed development and utilization operations at the site; (4) the extent to which the applicant has been able to obtain other insurance against the risk; and (5) such other information as the Secretary may require.

(e)Determinations respecting application for insurance

Unless the Secretary determines the risk proposed by the applicant is unreasonable, the Secretary, within ninety days after receipt of a satisfactory application, shall determine in writing and submit to the applicant (1) the risk which may cause loss of investment for the applicant; (2) the total investment subject to the risk; (3) the amount of the other insurance which is available at reasonable premiums for the purpose of indemnifying the applicant against the risk; (4) the amount of investment insurance available pursuant to this section, which shall be the difference between the total investment subject to the risk and the total other insurance determined to be available at reasonable premiums, but not in excess of the lesser of 90 per centum of, or $50,000,000 of, the loss of investment subject to the risk; and (5) any reasonable terms and conditions necessary for the prudent administration of the program, including reasonable premiums for the insurance pursuant to this section (which shall be deposited in the Geothermal Resources Development Fund).

(f)Certificate of insurance; issuance, etc.

The Secretary, within ninety days after making and submitting the determinations under subsection (e), and upon agreement of the applicant to such determinations, shall issue a certificate of insurance containing such terms and conditions as the Secretary shall specify, which shall not be transferrable without the express approval of the Secretary for good cause shown, and shall execute a contract with the applicant setting forth the terms and conditions of the investment insurance and such other provisions as may be necessary to protect the interests of the United States, including provisions with respect to the ownership, use, and disposition of any currency, credits, assets, or investments on account of which payment under such insurance is to be made and any right, title, claim, or course of action existing in relation thereto.

(g)Compensation payable to holder of certificate of insurance; amount, etc.

Any holder of a certificate of insurance pursuant to subsection (f) who claims a loss of value of his investment by reason of the specified risk shall receive compensation, to the extent the Secretary determines that the holder is eligible to receive compensation pursuant to the certificate and the contract, in the amount of the loss incurred by the holder which is subject to insurance and for which the holder has not received and will not receive compensation from other insurance.

(h)Withdrawal and payment of compensation

Any compensation received by the holder shall be withdrawn from the Geothermal Resources Development Fund. The full faith and credit of the United States is hereby pledged to the payment of any compensation under this section.

(i)Denial of insurance

A person shall not be denied insurance pursuant to this section solely because such person is the recipient of other Federal assistance under this or any other Act.

(j)Appropriations

There may be appropriated to the Geothermal Resources Development Fund (established pursuant to section 11441 of this title), for purposes of this section, such amounts as are authorized for such purposes in the law referred to in subsection (a) or in other legislation hereafter enacted.

(k)Reinsurance agreements; procedures applicable; criteria; report to Congress

The Secretary may enter into agreements to reinsure any private insurer for any risk associated with insurance for the development and utilization of a geothermal resource and associated reservoir, using the procedures set forth in subsections (c) through (i), to the extent that he deems it appropriate in order to provide an incentive for the participation of the private insurance industry in geothermal development; and he may also use any other available authority to obtain such participation. The Secretary shall submit a report to the Congress, within one year after the enactment of the law referred to in subsection (a), on the need for any additional authority to obtain such participation.

Notes & Related Subsidiaries

Editorial Notes

References in Text

section 27A of the Merchant Marine Act, 1920, referred to in subsec. (b)(7), is section 27A of act

June 5, 1920, ch. 250, as added Pub. L. 85–902, Sept. 2, 1958, 72 Stat. 1736, which was classified to section 883–1 of the former Appendix to Title 46, Shipping, and was repealed and restated in section 12118 of Title 46, Shipping, by Pub. L. 109–304, §§ 5, 19, Oct. 6, 2006, 120 Stat. 1491, 1710. This Act, referred to in subsec. (i), is Pub. L. 96–294,

June 30, 1980, 94 Stat. 611, known as the Energy Security Act. For complete classification of this Act to the Code, see

Short Title

note set out under section 8801 of Title 42, The Public Health and Welfare, and Tables. section 1144 of this title, referred to in subsec. (j), was repealed by Pub. L. 116–260, div. Z, title III, § 3002(i)(3), Dec. 27, 2020, 134 Stat. 2495. Codification In subsec. (b)(7), “section 50501 of title 46” substituted for “section 2(a)–(c) of the Shipping Act, 1916 (46 U.S.C. 802)” on authority of Pub. L. 109–304, § 18(c), Oct. 6, 2006, 120 Stat. 1709, which Act enacted section 50501 of Title 46, Shipping.

§1522 Establishment of Program