(a)(1) A lease shall require payment of a royalty of not less than 12 1/2 percent of the value of the coal removed from a surface mine, except that such royalty rate shall be not more than 7 percent during the period beginning on July 4, 2025, and ending on September 30, 2034.

(2) A lease shall require payment of a royalty of 8 percent of the value of the coal removed from an underground mine, except that such royalty rate shall be not more than 7 percent during the period beginning on July 4, 2025, and ending on September 30, 2034.

(3) The value of coal removed from a mine is defined for royalty purposes in § 3483.4 of this title.

(b) The temporary royalty rate of not more than 7 percent during the period beginning on July 4, 2025, and ending on September 30, 2034, is applicable to all existing Federal coal leases that have not been terminated.

(c) The authorized officer shall have the discretion, upon the request of the lessee, to authorize the payment of an advance royalty in lieu of continued operation for any particular year in accordance with § 3485.2 of this title.

(d) An overriding royalty interest, production payment or similar interest that exceeds 50 percent of royalty first payable to the United States under the Federal lease, or when added to any other overriding royalty interest exceeds that percentage, except those created in order to finance a mine, shall not be created by a Federal lease transfer or surface owner consent. However, when an interest in a Federal lease or operating agreement is transferred, the transferor may retain an overriding royalty in excess of the above limitation if he/she shows that he/she has made substantial investments for improvements directly related to exploration, development and mining on the lands covered by the transfer that would justify a higher payment.

(e) The Secretary, whenever he/she determines it necessary to promote development or finds that the lease cannot be successfully operated under its terms, may waive, suspend or reduce the rental, or reduce the royalty but not advance royalty, on an entire leasehold, or on any deposit, tract or portion thereof, except that in no case shall the royalty be reduced to zero percent. An application for any of these benefits shall be filed with the authorized officer in accordance with part 3480 of this title.