§ 1522. — Establishment of program.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 30USC1522]
TITLE 30--MINERAL LANDS AND MINING
CHAPTER 27--GEOTHERMAL ENERGY
SUBCHAPTER II--STUDY, ESTABLISHMENT, AND IMPLEMENTATION OF INSURANCE
PROGRAM
Sec. 1522. Establishment of program
(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) the term ``investment'' means the expenditure of, and any
irrevocable legal obligation to expend, funds (together with the
reasonable interest costs thereof) for the purchase or construction
of machinery, equipment, and facilities manufactured, or for
services contracted to be furnished, for the development and
utilization of a geothermal resource in the United States to provide
energy in the form of heat for direct use or for generation of
electricity;
(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 2(a)-(c) of the Shipping Act, 1916
[46 App. U.S.C. 802], or in the first sentence of section 27A of the
Merchant Marine Act, 1920 [46 App. 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) of this section, 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)
of this section 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 1144 of this title), for purposes
of this section, such amounts as are authorized for such purposes in the
law referred to in subsection (a) of this section 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) of this section, 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) of this section, on the need for any additional authority to obtain
such participation.
(Pub. L. 96-294, title VI, Sec. 622, June 30, 1980, 94 Stat. 765.)
References in Text
This Act, referred to in subsec. (i), is Pub. L. 96-294, June 30,
1980, 94 Stat. 611, as amended, 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 Referred to in Other Sections
This section is referred to in section 1521 of this title.
