Illinois General Assembly - Full Text of HB4370
Illinois General Assembly

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Full Text of HB4370  101st General Assembly




State of Illinois
2019 and 2020


Introduced 1/29/2020, by Rep. Thomas M. Bennett


New Act
30 ILCS 105/5.930 new

    Creates the Carbon Dioxide Geologic Storage Act. Provides that the Act applies to carbon dioxide injections that commence on or after January 1, 2021. Provides that a storage operator may not operate a storage facility without a reservoir permit issued by the Department of Natural Resources. Provides that a permit shall be issued if the storage operator: pays a fee to the Department of $0.08 per ton of carbon dioxide estimated to be injected into a storage facility; and owns all of the pore space in a storage facility, or owns more than 50%, but less than 100% of the pore space within a storage facility and an application to the Department to amalgamate the remaining property interests has been granted. Provides that after carbon dioxide injections at a storage facility cease, the storage operator may apply for a certificate of completion. Provides requirements the Department shall find before issuing a certificate of completion. Provides that the Department may adopt rules and issue orders to enforce the Act. Limits home rule powers. Provides for ownership and conveyance of pore space, mineral interests, title to carbon dioxide and liability, enhanced recovery projects, and restraint of trade. Creates the Illinois Geologic Sequestration Special Fund. Makes a corresponding change in the State Finance Act.

LRB101 16519 LNS 69148 b






HB4370LRB101 16519 LNS 69148 b

1    AN ACT concerning property.
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 Carbon
5Dioxide Geologic Storage Act.
6    Section 5. Statement of policy. It is in the public
7interest to promote the geologic storage of carbon dioxide.
8Doing so will help ensure the viability of State industries
9under a spectrum of potential environmental regulations and
10will promote economic development in this State.
11    To be practical and effective, geologic storage of carbon
12dioxide requires cooperative use of surface and subsurface
13property interests often across large areas. It is therefore in
14the public interest to employ procedures that promote, in a
15manner fair to all interests, the use of all pore space in a
16clearly defined reservoir to ensure comprehensive management
17of the reservoir and the efficient use of natural resources. It
18is important that rules governing the use and development of
19subsurface pore space be consistent with both established
20precedents and subsurface private property rights.
21    Section 10. Definitions. As used in this Act:
22    "Carbon dioxide injection well" means a well that is used



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1to inject carbon dioxide into a reservoir for geologic storage.
2    "Department" means the Department of Natural Resources.
3    "Geologic storage" means the underground storage of carbon
4dioxide in a reservoir.
5    "Mineral owner" means, as identified in the records of the
6recorder of deeds for each county containing some portion of
7the proposed reservoir, any owner of a whole or fractional
8interest in any or all minerals in real property above, below,
9or within the proposed reservoir that has been severed from the
10surface estate by grant, exception, reservation, lease, or
11other means.
12    "Pore space" means naturally created subsurface cavities
13or voids that can be used as storage space for carbon dioxide.
14    "Pore space owner" means the person, trust, corporation, or
15other entity who has title to the pore space.
16    "Reservoir permit" means a permit issued by the Department
17allowing a person to establish and operate a storage facility.
18    "Storage facility" means the area of review as delineated
19in the storage operator's federal UIC program Class VI permit.
20    "Storage operator" means a person holding a reservoir
21permit under this Act and holding or applying for a UIC permit
22for the injection of carbon dioxide.
23    "Surface owners" means, as identified in the records of the
24recorder of deeds for each county containing some portion of
25the proposed reservoir, any owner of a whole or undivided fee
26simple interest or other freehold interest, which may or may



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1not include mineral rights, in the surface above the proposed
2reservoir, but does not include an owner of a right-of-way,
3easement, leasehold, or any other lesser estate.
4    "UIC permit" means an Underground Injection Control permit
5authorized under the federal Safe Drinking Water Act's
6Underground Injection Control (UIC) Program that allows a
7person to operate a carbon dioxide injection well.
8    Section 15. Applicability. This Act applies only to carbon
9dioxide injections that commence on or after January 1, 2021.
10    Section 20. Reservoir permit.
11    (a) A storage operator may not operate a storage facility
12in this State without a valid reservoir permit issued by the
13Department. A reservoir permit may be transferred or assigned
14from one storage operator to another. Each permit is valid for
15one year after issuance.
16    (b) The Department shall issue or renew a reservoir permit
17if the storage operator has paid the fee required by subsection
18(c) and has meet the requirements of Section 30.
19    (c) The storage operator shall provide the Department an
20estimate of the amount of carbon dioxide to be injected into a
21storage facility for the period of the permit at the time of
22application for a reservoir permit. A storage operator shall
23pay to the Department a fee of $0.08 per ton of carbon dioxide
24estimated to be injected into a storage facility. Prior to any



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1renewal, the storage operator shall pay a fee of $0.08 per ton
2for carbon dioxide injected into a storage facility beyond the
3amount contained in the storage operator's estimate for the
4previous year. If the amount of carbon dioxide injected into a
5storage facility is less than the amount estimated, the
6Department shall refund the storage operator any overpayment.
7    (d) The Department may require a storage operator to make
8records available to the Department relating to the amount of
9carbon dioxide injected into a storage facility to ensure
10compliance with the fee requirements of subsection (c).
11    (e) The fees collected in subsection (c) shall be deposited
12into the Illinois Geologic Sequestration Special Fund.
13    Section 25. Ownership and conveyance of pore space.
14    (a) Title to pore space is vested in the owner of the
15overlying surface estate.
16    (b) A conveyance of title to the surface estate conveys the
17pore space in all strata underlying the surface estate.
18    (c) Title to pore space may not be severed from the surface
20    (d) Grants of easement to use or leasing of pore space is
21not a severance prohibited by this Section.
22    (e) The grants of easement or leasing of pore space shall
23not confer any right to enter upon or otherwise use the surface
24of the land unless the grant of easement or lease expressly so



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1    Section 30. Ownership requirements.
2    (a) No reservoir permit shall be issued unless the storage
3operator owns, or has obtained grants of easements or
4leaseholds for, all of the pore space in a storage facility.
5    (b) If a storage operator owns, or has obtained grants of
6easement or leaseholds for, more than 50% but less than 100% of
7the pore space within a proposed storage facility, the storage
8operator may apply to the Department to amalgamate the
9remaining property interests.
10    Section 35. Amalgamating property interests.
11    (a) If a storage operator has applied to the Department to
12amalgamate any remaining property interests in a storage
13facility, the Department shall:
14        (1) notify any and all nonconsenting property owners
15    who own property interests to be amalgamated;
16        (2) within 120 days, but no less than 60 days after the
17    filing of the application, the Department shall conduct a
18    hearing to determine the fair market value of each property
19    owner's pore space to be amalgamated. The storage operator
20    and each property owner has the right to present evidence
21    as to the value of the pore space, including, but not
22    limited to, the economic benefits to the storage operator,
23    and to be represented by an attorney; and
24        (3) after the hearing, issue an order determining the



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1    fair market value of each nonconsenting owner's pore space.
2    (b) Upon payment by the storage operator to the Department
3of the total fair market value of the pore space to be
4amalgamated, the storage operator shall be granted an easement
5by the Department upon the pore space. The Department shall
6record the easement with the appropriate county recorder of
7deeds. The Department shall remit funds received from the
8storage operator to each property owner consistent with the
9Department's determination of fair market value.
10    (c) Any easement granted under this Section shall not
11include the right to use the surface above a nonconsenting
12property owner's pore space.
13    (d) The Department has the authority to commit State-owned
14pore space to a storage facility.
15    Section 40. Mineral interests. A mineral owner may drill
16through or near a reservoir to explore for or extract minerals
17if the drilling, extraction, and related activities are
18conducted in cooperation with the storage operator and comply
19with Department requirements that preserve the storage
20facility's integrity.
21    Section 45. Title to carbon dioxide; liability. The storage
22operator has title to the carbon dioxide injected into and
23stored in a reservoir and holds title until the Department
24issues a certificate of completion. While the storage operator



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1holds title, the storage operator is liable for any damage the
2carbon dioxide may cause, including damage caused by carbon
3dioxide that escapes from the storage facility. The pore space
4owner has no liability associated with the operation of a
5storage facility unless the storage operator is the pore space
7    Section 55. Project completion and title transfer.
8    (a) After carbon dioxide injections at a storage facility
9cease, the storage operator may apply for a certificate of
10completion. Before issuing a certificate of completion, the
11Department, in consultation with the issuer of the UIC permit,
12shall find that:
13        (1) the storage operator is in full compliance with all
14    laws governing the storage facility, including any ongoing
15    UIC permit requirements;
16        (2) the storage operator addressed all pending claims,
17    if any, regarding the storage facility's operation;
18        (3) all carbon dioxide injection wells are plugged,
19    equipment and facilities are removed, and reclamation work
20    is completed as required by the UIC permit issuer or the
21    Department;
22        (4) the carbon dioxide in the reservoir is stable,
23    which means that it is essentially stationary or, if it is
24    migrating or may migrate, any migration will be unlikely to
25    be outside of the storage facility; and



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1        (5) all monitoring wells, equipment, and facilities to
2    be used in the post-closure period are in good condition
3    and retain mechanical integrity.
4    (b) If the Department does not complete the review of a
5certificate of completion application within 90 days after
6receipt, including the public notice and input deemed
7appropriate by the Department, then the certificate of
8completion shall be issued. If the Department does not find
9that the requirements in subsection (a) are met, then it may
10decline the application or require amendment to the application
11before granting the certificate of completion. If the
12Department requires amendment to the application, then the
13storage operator shall have 30 days to amend the application.
14Thereafter, the Department shall have 30 days to either grant
15or decline to grant the certificate of completion or the
16certificate of completion shall be issued.
17    (c) The Department may charge a fee to the storage operator
18for reviewing the certificate of completion application. The
19fee shall be in the amount set by Department rule. The amount
20shall be based on the Department's anticipated expenses that it
21shall incur in reviewing the certificate of completion
22application and shall not exceed $10,000.
23    (d) Once a certificate of completion is issued, the
24following occurs:
25        (1) Title to the storage facility and to the stored
26    carbon dioxide transfers, without compensation, to the



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1    State.
2        (2) Title acquired by the State includes all rights and
3    interests in, and all responsibilities associated with,
4    the stored carbon dioxide.
5        (3) The storage operator is released from all
6    regulatory requirements associated with the storage
7    facility.
8        (4) Monitoring and managing the storage facility is the
9    State's responsibility to be overseen by the Department
10    until the federal government assumes responsibility for
11    the long-term monitoring and management of storage
12    facilities.
13        (5) If the federal government has not assumed
14    responsibility for the long-term monitoring and management
15    of storage facilities, then the Illinois Geologic
16    Sequestration Special Fund shall be used for the purposes
17    of monitoring and managing the storage facility and any
18    other responsibility associated with the stored carbon
19    dioxide.
20    Section 60. Enhanced recovery projects. This Act does not
21apply to applications filed with the Department proposing to
22use carbon dioxide for an enhanced oil or gas recovery project.
23Such applications shall be processed pursuant the Illinois Oil
24and Gas Act.



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1    Section 65. Department powers; home rule. The Department
2may adopt rules and issue orders to enforce this Act. The
3Department may authorize its employees, qualified by training
4and experience, to perform the powers and duties set forth in
5this Act. No agency of State government or political
6subdivision of the State may regulate geologic storage except
7as expressly authorized under this Act. This Section is a
8limitation under subsection (i) of Section 6 of Article VII of
9the Illinois Constitution on the concurrent exercise by home
10rule units of powers and functions exercised by the State.
11    Section 70. Restraint of trade. None of the rights and
12responsibilities pursuant to this Act shall be held or
13construed to violate any of the statutes of this State relating
14to trusts, monopolies, or contracts and combinations in the
15restraint of trade.
16    Section 75. Illinois Geologic Sequestration Special Fund.
17The Illinois Geologic Sequestration Special Fund is created as
18a special fund in the State treasury. The Fund shall consist of
19any money deposited into the Fund as provided in subsection (e)
20of Section 20. Money in the Fund shall be used for the
21administration of this Act and for no other purpose. All
22interest earned on money in the Fund shall be deposited into
23the Fund.



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1    Section 97. Severability. The provisions of this Act are
2severable under Section 1.31 of the Statute on Statutes.
3    Section 905. The State Finance Act is amended by adding
4Section 5.930 as follows:
5    (30 ILCS 105/5.930 new)
6    Sec. 5.930. The Illinois Geologic Sequestration Special