98TH GENERAL ASSEMBLY
State of Illinois
2013 and 2014
HB4465

 

Introduced , by Rep. André M. Thapedi

 

SYNOPSIS AS INTRODUCED:
 
New Act
30 ILCS 105/5.855 new

    Creates the Climate Change and Emissions Management Act. Provides that, beginning in calendar year 2016, a facility that has direct greenhouse gas emissions totalling 1,000,000 metric tons or more shall reduce its greenhouse gas emission by a specified amount. Provides that the reduction may be accomplished by applying emission offsets and emission performance credits to the facility's total annual greenhouse gas emissions or by making payments to the Climate Change and Emissions Management Fund. Creates the Climate Change and Emissions Management Fund. Contains provisions concerning reports, records, penalties, and rulemaking. Effective immediately.


LRB098 15843 HLH 54791 b

FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

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1    AN ACT concerning regulation.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 1. Short title. This Act may be cited as the
5Climate Change and Emissions Management Act.
 
6    Section 5. Definitions. As used in this Act:
7    "Agency" means the Illinois Environmental Protection
8Agency.
9    "Baseline emissions intensity" is defined in Section 15 of
10this Act.
11    "CO2e" means the 100-year time horizon global warming
12potential of a specified gas expressed in terms of equivalency
13to carbon dioxide, as set forth by the Agency by rule.
14    "Direct emissions" means the release of specified gases
15from sources actually located at a facility.
16    "Director" means the Director of the Illinois
17Environmental Protection Agency.
18    "Emission offset" means a reduction in, geological
19sequestration of, or capture of specified gas emissions as
20provided in Section 27.
21    "Emission performance credit" means a reduction in the
22release of specified gases, expressed in metric tons, that
23meets the requirements of Section 20.

 

 

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1    "Established facility" means:
2        (1) a facility that completed its first year of
3    commercial operation prior to December 31, 2008; or
4        (2) a facility that has completed 8 years of commercial
5    operation.
6    "Facility" means a privately-owned plant or other
7commercial or industrial structure located in Illinois.
8"Facility" does not include government-owned or
9government-operated plants or other structures.
10    "Fund" means the Climate Change and Emissions Management
11Fund.
12    "Fund credit" means a contribution to the Climate Change
13and Emissions Management Fund as provided in Section 25.
14    "Metric ton" shall be expressed on a CO2e basis, unless the
15context clearly requires otherwise.
16    "Net emissions intensity" means: (i) the total direct
17emissions from the facility for the applicable calendar year
18minus the sum of (A) the facility's allowable emission offsets,
19(B) the allowable fund credits applied on behalf of the
20facility, and (C) the allowable emission performance credits
21applied on behalf of the facility, divided by (ii) the
22facility's production for the year.
23    "Net emissions intensity limit" means the specified gas
24emission targets established under Section 10.
25    "New facility" means:
26        (1) a facility that completed its first year of

 

 

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1    commercial operation on December 31, 2008 or on December 31
2    of a subsequent year and has completed less than 8 years of
3    commercial operation; or
4        (2) a facility designated as a new facility by the
5    Agency.
6    "Production" means the quantity, expressed in an
7applicable unit of production, of (i) end product produced by a
8facility or (ii) if the facility does not produce an end
9product, an input, output, or other standard of measurement
10specified by the Director as a standard measurement of
11production for the facility.
12    "Person responsible for the facility" means an owner,
13officer, or director of the facility designated in writing by
14the Agency as a person responsible for the facility.
15    "Specified gases" means carbon dioxide, methane, nitrous
16oxide, hydrofluorocarbons, perfluorocarbons, sulfur
17hexafluoride, and any other gas or compound specified as a
18greenhouse gas by the Agency by rule.
 
19    Section 10. Specified gas emission targets.
20    (a) This Section applies to facilities that are required to
21apply for the establishment of a baseline emissions intensity
22under Section 15.
23    (b) Beginning with calendar year 2016 or the first calendar
24year after the facility is required to apply for the
25establishment of a baseline emissions intensity, whichever is

 

 

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1later, a facility's net emissions intensity for a calendar year
2shall not exceed:
3        (1) for an established facility, 88% of the baseline
4    emissions intensity for the facility; and
5        (2) for a new facility:
6            (A) 98% of the baseline emissions intensity in the
7        fourth year of commercial operation of the facility;
8            (B) 96% of the baseline emissions intensity in the
9        fifth year of commercial operations of the facility;
10            (C) 94% of the baseline emissions intensity in the
11        sixth year of commercial operations of the facility;
12            (D) 92% of the baseline emissions intensity in the
13        seventh year of commercial operations of the facility;
14        and
15            (E) 90% of the baseline emissions intensity in the
16        eighth year of commercial operations of the facility;
17        thereafter, the facility shall be classified as an
18        established facility.
 
19    Section 15. Application; determination of baseline
20emission intensity.
21    (a) Each facility that had direct emissions totalling
221,000,000 metric tons or more in calendar year 2011, 2012,
232013, or 2014 shall apply to the Agency for the establishment
24of a baseline emissions intensity no later than December 31,
252015.

 

 

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1    (b) Each new facility that is not otherwise required to
2apply for the establishment of a baseline emissions intensity
3under subsection (a) that had direct emissions totalling
41,000,000 metric tons or more in any of its first 3 years of
5commercial operation shall apply for the establishment of a
6baseline emissions intensity no later than June 1 of the
7facility's fourth year of commercial operation.
8    (c) Each facility that is not otherwise required to apply
9for the establishment of a baseline emissions intensity under
10subsection (a) or (b) of this Section shall apply for the
11establishment of a baseline emissions intensity no later than
12June 1 of the year following the year of commercial operation
13of a facility in which the facility first has direct emissions
14totalling 1,000,000 metric tons or more.
15    (d) An application for the establishment of a baseline
16emissions intensity for a facility shall:
17        (1) be submitted by an owner, officer, or director of
18    the facility;
19        (2) be submitted on a form prescribed by the Agency;
20    and
21        (3) include a verification of the information provided
22    on the form by a third party auditor qualified under
23    Section 35.
24    (e) The baseline emissions intensity for a facility that is
25an established facility on January 1, 2015 shall be determined
26by one of the following methods:

 

 

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1        (1) by calculating the average of the ratio of total
2    annual emissions to production for calendar year 2012,
3    2013, and 2014; or
4        (2) by using an alternative method approved in writing
5    by the Director where the Director determines that the
6    method in paragraph (1) is not appropriate.
7    (f) The baseline emissions intensity for a new facility
8shall be determined by one of the following methods:
9        (1) by calculating the ratio of total annual emissions
10    to production for the third year of commercial operation of
11    the facility; or
12        (2) by using an alternative method approved in writing
13    by the Director where the Director determines that the
14    method in paragraph (1) is not appropriate.
15    (g) The Director may establish a baseline emissions
16intensity that is different from the baseline emissions
17intensity specified in the application and may determine the
18unit of production for the facility. If the Director
19establishes a baseline emissions intensity that is different
20from the baseline emissions intensity specified in the
21application, then he or she shall notify the applicant in
22writing of his or her decision.
 
23    Section 20. Emission performance credits.
24    (a) When a facility's net emissions intensity for a
25calendar year is less than the facility's net emissions

 

 

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1intensity limit for that period, the reduction in specified gas
2emissions that is not used in meeting the net emissions
3intensity limit constitutes an emission performance credit.
4    (b) An emission performance credit created at a facility in
5a year may be used to meet net emissions intensity limits for
6that facility in any subsequent year.
7    (c) An emission performance credit may be used only once by
8a facility.
 
9    Section 25. Climate Change and Emissions Management Fund;
10creation; fund credits.
11    (a) The Climate Change and Emissions Management Fund is
12hereby created as a special fund in the State treasury. Moneys
13in the Fund shall be used only for purposes related to reducing
14emissions of specified gases or to improve the State's ability
15to adapt to climate change, including, without limitation, the
16following purposes:
17        (1) energy conservation and energy efficiency;
18        (2) demonstration and use of new technologies that
19    emphasize reductions in specified gas emissions in the
20    discovery, recovery, processing, transportation, and use
21    of the State's energy resources;
22        (3) demonstration and use of new technologies that
23    emphasize reductions in specified gas emissions through
24    the use of alternative energy and renewable energy sources;
25        (4) demonstration and use of specified gas capture,

 

 

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1    use, and storage technology;
2        (5) development of opportunities for removal of
3    specified gases from the atmosphere through sequestration
4    by sinks;
5        (6) measurement of the natural removal and storage of
6    carbon; and
7        (7) climate change adaptation programs and measures.
8    (b) Any interest earned on moneys in the Climate Change and
9Emissions Management Fund shall be deposited into the Fund.
10    (c) Notwithstanding any other law to the contrary, the
11Climate Change and Emissions Management Fund is not subject to
12sweeps, administrative charge-backs, or any other fiscal or
13budgetary maneuver that would in any way transfer any amounts
14from the Climate Change and Emissions Management Fund into any
15other fund of the State.
16    (d) A person may obtain fund credits on behalf of a
17facility by contributing an amount equal to $15 per metric ton
18of direct emissions to the Fund. A fund credit obtained on or
19before March 31 in a year may only be used in meeting net
20annual emissions intensity limits for the previous year. A fund
21credit obtained after March 31 in a year may only be used in
22meeting net annual emissions intensity limits for that year. A
23fund credit may not be used by more than one party.
 
24    Section 27. Emission offsets.
25    (a) The following requirements must be met in order for a

 

 

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1reduction in specified gas emissions to constitute one or more
2emission offsets:
3        (1) the specified gas emissions reduction must occur in
4    Illinois;
5        (2) the specified gas emissions reduction must be from
6    an action taken that is not otherwise required by law at
7    the time the action is initiated;
8        (3) the specified gas emissions reduction must be real
9    and demonstrable; and
10        (4) the specified gas emissions reduction must be
11    quantifiable and measurable, directly or by accurate
12    estimation, using replicable techniques.
13    (b) The following requirements must be met in order for a
14geological sequestration of specified gas to constitute one or
15more emission offsets:
16        (1) the specified gas that is geologically sequestered
17    must be captured through a dedicated process from sources
18    located at a facility in Illinois;
19        (2) the specified gas must be stored in a geological
20    formation that is located wholly or partly in Illinois;
21        (3) the geological sequestration of the specified gas
22    must not be required by law at the time geological
23    sequestration of specified gas is initiated;
24        (4) the geological sequestration of the specified gas
25    must be real and demonstrable; and
26        (5) the quantity of specified gas that is geologically

 

 

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1    sequestered must be quantifiable and measurable, directly
2    or by accurate estimation, using replicable techniques.
3    (c) The following requirements must be met in order for a
4capture of specified gas to constitute one or more emission
5offsets:
6        (1) the specified gas must be captured through a
7    dedicated process from sources located at a facility
8    upgrading or refining bitumen in Illinois;
9        (2) the capture of the specified gas must not be
10    required by law at the time capture of specified gas is
11    initiated;
12        (3) the specified gas must be captured by
13    infrastructure capable of capturing, and stored in
14    geological formations capable of storing, at least
15    10,000,000 metric tons of specified gas per year;
16        (4) the quantity of specified gas that is captured must
17    be quantifiable and measurable, directly or by accurate
18    estimation using replicable techniques.
19    (d) A reduction in, geological sequestration of, or capture
20of specified gas emissions of one metric ton that meets the
21requirements of this Section constitutes one emission offset.
22    (e) If an emission offset is jointly held, each holder may
23use only a portion of the offset. The offset shall be
24distributed on a pro rata basis or according to any other
25formula set forth in an agreement between the parties.
 

 

 

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1    Section 30. Exemptions. The Director may, on written
2application, exempt a facility from the provisions of this Act
3for a period not exceeding one year for each application if the
4Director determines that:
5        (1) the facility was operated under unusual conditions
6    or was shut down for a prolonged period of time; and
7        (2) the conditions or shutdown caused a material
8    reduction in the specified gas emission for the applicable
9    period.
 
10    Section 35. Qualifications of third party auditors. A
11person is eligible to be a third party auditor if the person
12meets the following criteria:
13        (1) the person is a professional engineer registered
14    under the Professional Engineering Practice Act of 1989 or
15    a certified public accountant;
16        (2) the person has technical knowledge of specified gas
17    emission quantification methodologies, audit practices,
18    and other matters considered relevant by the Director; and
19        (3) the person is not a director, officer, employee, or
20    owner of the facility or an employee or agent of the
21    Agency.
 
22    Section 40. Reports. On or before December 31 of each year
23during which a facility is subject to Section 10 of this Act,
24the person responsible for the facility shall submit to the

 

 

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1Agency a compliance report with respect to that facility in the
2form and manner prescribed by the Agency by rule. Each
3compliance report shall include a verification of the
4information provided in the report by a third party auditor
5qualified under Section 35.
 
6    Section 45. Records. A person responsible for a facility
7shall retain all records, information, and data respecting
8emissions intensity for at least 7 years after the date of
9their creation.
 
10    Section 50. Investigations. The Agency shall cause
11investigations to be made upon receipt of information
12concerning an alleged violation of this Act or any rule or
13regulation adopted under this Act and may cause to be made such
14other investigations as it shall deem advisable.
 
15    Section 55. Orders where net emissions intensity limit
16exceeded.
17    (a) The Agency may issue an order to the person responsible
18for a facility requiring the person responsible to take the
19measures specified in the order to minimize or remedy the
20effects of the facility releasing specified gases into the
21environment in amounts in excess of those within the net
22emissions intensity limit for the facility where:
23        (1) a compliance report indicates that the net

 

 

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1    emissions intensity limit for the facility has not been
2    met;
3        (2) the Agency determines that the calculation of the
4    net emissions intensity of the facility was incorrect or
5    was based on inaccurate, incorrect or false information and
6    that the net emissions intensity limit for the facility was
7    exceeded; or
8        (3) the value for the emission offsets that was used to
9    calculate the net emissions intensity of the facility for a
10    year is no longer valid because some or all of the metric
11    tons of specified gases which the emission offsets
12    represented as not being released into the environment have
13    subsequently been released.
14    (b) An order under this Section may require the person
15responsible to:
16        (1) obtain emission offsets or emission performance
17    credits;
18        (2) make contributions to the Fund; or
19        (3) take any other measures that the director considers
20    advisable.
21    (c) This Section applies whether or not a person has been
22required to pay an administrative penalty in relation to the
23matter with respect to which the order is made.
 
24    Section 60. Penalties.
25    (a) Any person that knowingly violates Section 10 of this

 

 

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1Act shall be liable for a civil penalty not to exceed $200 for
2every metric ton by which the total release of specified gases
3exceeds the net emissions intensity limit for the facility.
4Such penalties may, upon order of the Agency or a court of
5competent jurisdiction, be made payable to the Climate Change
6and Emissions Management Fund, to be used in accordance with
7the provisions of this Act.
8    (b) Any person responsible for a facility who knowingly
9fails to file, in a timely manner, a compliance report under
10Section 40 shall be liable for a civil penalty of $100 per day
11for each day the report is late, not to exceed a maximum total
12penalty of $6,000. The penalty shall be paid to the Agency. All
13penalties collected by the Agency pursuant to this subsection
14shall be deposited into the Climate Change and Emissions
15Management Fund, to be used in accordance with the provisions
16of this Act.
17    (c) A person who knowingly (i) performs the functions of a
18third party auditor and does not meet the requirements set
19forth in Section 35 or (ii) retains a person as a third party
20auditor who does not meet the requirements set forth in Section
2135 is liable for a civil penalty of not more than $50,000 in
22the case of an individual and not more than $500,000 in the
23case of a corporation.
24    (d) All final orders imposing civil penalties pursuant to
25this Section shall prescribe the time for payment of such
26penalties. If any such penalty is not paid within the time

 

 

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1prescribed, interest on such penalty at the rate set forth in
2subsection (a) of Section 1003 of the Illinois Income Tax Act,
3shall be paid for the period from the date payment is due until
4the date payment is received. However, if the time for payment
5is stayed during the pendency of an appeal, interest shall not
6accrue during such stay.
7    (e) The State's Attorney of the county in which the
8violation occurred, or the Attorney General, may, at the
9request of the Agency or on his own motion, institute a civil
10action for an injunction, prohibitory or mandatory, to restrain
11violations of this Act or any rule or regulation adopted under
12this Act.
13    The State's Attorney of the county in which the violation
14occurred, or the Attorney General, shall bring such actions in
15the name of the people of the State of Illinois. Without
16limiting any other authority which may exist for the awarding
17of attorney's fees and costs, a court of competent jurisdiction
18may award costs and reasonable attorney's fees, including the
19reasonable costs of expert witnesses and consultants, to the
20State's Attorney or the Attorney General in a case where he has
21prevailed against a person who has committed a wilful, knowing,
22or repeated violation of this Act or any rule or regulation
23adopted under this Act.
24    (f) A person who voluntarily self-discloses non-compliance
25to the Agency, of which the Agency had been unaware, is
26entitled to a waiver of the penalties under this Section if the

 

 

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1person can establish the following:
2        (1) that the non-compliance was discovered through an
3    environmental audit or a compliance management system
4    documented by the regulated entity as reflecting the
5    regulated entity's due diligence in preventing, detecting,
6    and correcting violations;
7        (2) that the non-compliance was disclosed in writing
8    within 30 days of the date on which the person discovered
9    it;
10        (3) that the non-compliance was discovered and
11    disclosed prior to:
12            (A) the commencement of an Agency inspection,
13        investigation, or request for information;
14            (B) the filing of a complaint by the Illinois
15        Attorney General or the State's Attorney of the county
16        in which the violation occurred;
17            (C) the reporting of the non-compliance by an
18        employee of the person without that person's
19        knowledge; or
20            (D) imminent discovery of the non-compliance by
21        the Agency;
22        (4) that the non-compliance is being corrected and any
23    environmental harm is being remediated in a timely fashion;
24        (5) that the person agrees to prevent a recurrence of
25    the non-compliance;
26        (6) that no related non-compliance events have

 

 

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1    occurred in the past 3 years at the same facility or in the
2    past 5 years as part of a pattern at multiple facilities
3    owned or operated by the person;
4        (7) that the non-compliance did not result in serious
5    actual harm or present an imminent and substantial
6    endangerment to human health or the environment or violate
7    the specific terms of any judicial or administrative order
8    or consent agreement;
9        (8) that the person cooperates as reasonably requested
10    by the Agency after the disclosure; and
11        (9) that the non-compliance was identified voluntarily
12    and not through a monitoring, sampling, or auditing
13    procedure that is required by statute, rule, permit,
14    judicial or administrative order, or consent agreement.
15    If a person can establish all of the elements under this
16subsection except the element set forth in paragraph (1) of
17this subsection, the person is entitled to a 75% reduction in
18the amount of the penalty.
 
19    Section 65. Judicial review. A party may appeal any final
20decision of the Agency under this Act in the same manner set
21forth in Section 41 of the Environmental Protection Act.
 
22    Section 70. Rulemaking. The Agency shall adopt rules to
23implement this Act.
 

 

 

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1    Section 90. The State Finance Act is amended by adding
2Section 5.855 as follows:
 
3    (30 ILCS 105/5.855 new)
4    Sec. 5.855. The Climate Change and Emissions Management
5Fund.
 
6    Section 99. Effective date. This Act takes effect upon
7becoming law.