Illinois General Assembly - Full Text of SB2005
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Full Text of SB2005  102nd General Assembly




State of Illinois
2021 and 2022


Introduced 2/26/2021, by Sen. David Koehler


New Act
30 ILCS 105/5.935 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 storage facility permit issued by the Department of Natural Resources. Includes provisions regarding: ownership and conveyance of pore space; ownership requirements; amalgamating property interests; mineral interests; title to carbon dioxide prior to certificate of completion; scope and remedy for claims of subsurface trespass; project completion and title transfer; enhanced recovery projects; Department powers and home rule; and restraint of trade. Limits home rule powers. Creates the Illinois Geologic Sequestration Special Fund. Makes a corresponding change in the State Finance Act.

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SB2005LRB102 15992 LNS 21362 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
9and will promote economic development in this State.
10    To be practical and effective, geologic storage of carbon
11dioxide requires cooperative use of surface and subsurface
12property interests often across large areas. It is therefore
13in the public interest to employ procedures that promote, in a
14manner fair to all interests, the use of all pore space in a
15clearly defined reservoir to ensure comprehensive management
16of the reservoir and the efficient use of natural resources.
17It is important that rules governing the use and development
18of subsurface pore space be consistent with both established
19precedents and subsurface private property rights.
20    Section 10. Definitions. As used in this Act:
21    "Area of review" means the area of review as required to be
22delineated in the storage operator's federal Underground



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1Injection Control (UIC) program Class VI permit.
2    "Carbon dioxide injection well" means a well that is used
3to inject carbon dioxide into a reservoir for geologic
5    "Carbon dioxide plume" means the extent underground, in 3
6dimensions, of an injected carbon dioxide stream.
7    "Department" means the Department of Natural Resources.
8    "Geologic storage" means the underground storage of carbon
9dioxide in a reservoir.
10    "Mineral owner" means, as identified in the records of the
11recorder of deeds for each county containing some portion of
12the proposed reservoir, any owner of a whole or fractional
13interest in any or all minerals in real property above, below,
14or within the proposed reservoir that has been severed from
15the surface estate by grant, exception, reservation, lease, or
16other means.
17    "Pore space" means subsurface cavities or voids that can
18be used as storage space for carbon dioxide.
19    "Pore space owner" means the person, trust, corporation,
20or other entity who has title to the pore space.
21    "Storage facility" means the subsurface area consisting of
22the extent of the modeled carbon dioxide plume, as required to
23be delineated in the storage operator's federal UIC program
24Class VI permit.
25    "Storage facility permit" means a permit issued by the
26Department allowing a person to establish and operate a



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1storage facility.
2    "Storage operator" means a person holding or applying for
3a storage facility permit under this Act and holding or
4applying for a UIC permit for the injection of carbon dioxide.
5    "Surface owner" means, as identified in the records of the
6recorder of deeds for each county containing any portion of
7the proposed storage facility, any owner of a whole or
8undivided fee simple interest or other freehold interest,
9which may or may not include mineral rights, in the surface
10above the proposed storage facility, but does not include an
11owner of a right-of-way, easement, leasehold, or any other
12lesser estate.
13    "UIC permit" means an Underground Injection Control permit
14authorized under the federal Safe Drinking Water Act's
15Underground Injection Control (UIC) Program that allows a
16person to operate a carbon dioxide injection well.
17    Section 15. Applicability. This Act applies only to carbon
18dioxide injections that commence on or after January 1, 2021.
19    Section 20. Storage facility permit.
20    (a) A storage operator may not operate a storage facility
21in this State without a valid storage facility permit issued
22by the Department. A storage facility permit may be
23transferred or assigned from one storage operator to another.
24Each permit is valid for 5 years after issuance.



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1    (b) The Department shall issue or renew a storage facility
2permit if the storage operator has paid the first year's
3annual fee required by subsection (c) and has met the
4requirements of Section 30. In addition, the Department shall
5issue a storage facility permit following the public hearing
6described in subsection (f) upon its determination that:
7        (1) the storage facility permit is in the public
8    interest; and
9        (2) to the extent the storage facility contains
10    commercially valuable minerals, the interests of the
11    mineral lessee or owner will not be adversely affected or
12    have been addressed in an arrangement between the interest
13    holder and the storage operator.
14    (c) The storage operator shall provide the Department an
15estimate of the amount of carbon dioxide to be injected into a
16storage facility for the period of the permit at the time of
17application for a storage facility permit. On an annual basis,
18a storage operator shall pay to the Department a fee of $0.08
19per ton of carbon dioxide estimated to be injected into a
20storage facility. Each year the storage operator shall
21reconcile the past year's payment with the volume of carbon
22dioxide injected into a storage facility the previous year.
23The storage operator shall submit payment for the amount
24injected above the storage operator's estimate for the
25previous year. If the amount of carbon dioxide injected into a
26storage facility is less than the amount estimated, the



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1Department shall refund the storage operator any overpayment.
2    (d) The Department may require a storage operator to make
3records available to the Department relating to the amount of
4carbon dioxide injected into a storage facility to ensure
5compliance with the fee requirements of subsection (c).
6    (e) The fees collected in subsection (c) shall be
7deposited into the Illinois Geologic Sequestration Special
9    (f) Prior to issuing a storage facility permit, the
10Department shall hold a public hearing. At least 30 days prior
11to the hearing, notice of the hearing shall first be published
12in the official newspaper of the county or counties where the
13area of review is proposed to be located and in other print or
14online publications as required by the Department, consistent
15with the requirements of the Notice By Publication Act. Notice
16shall be published daily for 2 consecutive weeks. At least 30
17days prior to the hearing, notice of the hearing must be given
19        (1) each surface owner of land overlying the storage
20    facility and within one-half mile of the storage
21    facility's boundaries;
22        (2) each mineral lessee or mineral owner with property
23    interests within one-half mile of the storage facility's
24    boundaries; and
25        (3) any pore space owners within the storage facility
26    and within one-half mile of the storage facility's



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1    boundaries.
2    Any objections to the issuance of the storage facility's
3permit not raised at the public hearing shall be waived.
4    Section 25. Ownership and conveyance of pore space.
5    (a) For real property that was divided into a surface
6estate and a mineral estate before the effective date of this
7Act, nothing in this Section shall alter, amend, diminish, or
8invalidate rights to the use of pore space that were
9explicitly acquired by conveyance document. Any such rights to
10the use of pore space that were not explicitly acquired remain
11vested in the surface estate.
12    (b) For real property that is divided into a surface
13estate and a mineral estate on or after the effective date of
14this Act, rights to the use of pore space shall remain vested
15in the surface estate unless such rights are explicitly
17    (c) Grants of an easement to use or a lease of pore space
18for geologic storage shall be in perpetuity if so specified,
19except to the extent the grantee relinquishes the easement or
20lease because the pore space was not utilized for geologic
21storage purposes.
22    (d) Any conveyance of rights pertaining to pore space
23shall not confer any right to enter upon or otherwise use the
24surface of the land unless the conveyance document expressly
25so provides.



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1    Section 30. Ownership requirements.
2    (a) No storage facility permit shall be issued unless the
3storage operator 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 areal extent of pore space within a proposed storage
8facility, the storage operator may apply to the Department to
9amalgamate the remaining 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
19    property owner's pore space to be amalgamated. The storage
20    operator and each property owner has the right to present
21    evidence as to the value of the pore space, including, but
22    not limited to, the economic benefits to the storage
23    operator, 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
2    space.
3    (b) Upon payment by the storage operator to the Department
4of the total fair market value of the pore space to be
5amalgamated, the storage operator shall be granted a permanent
6easement by the Department upon the pore space. The Department
7shall record the easement with the appropriate county recorder
8of deeds. The Department shall remit funds received from the
9storage operator to each property owner consistent with the
10Department's determination of fair market value.
11    (c) Any easement granted under this Section shall not
12include the right to use the surface above a nonconsenting
13property owner's pore space.
14    (d) The Department has the authority to grant a permanent
15easement to State-owned pore space to a storage facility.
16    Section 40. Mineral interests. With the written consent of
17the storage operator, a mineral owner may drill through or
18near a storage facility to explore for or extract minerals if
19the drilling, extraction, and related activities are conducted
20in cooperation with the storage operator and in compliance
22    (1) Department requirements that preserve the storage
23facility's integrity; and
24    (2) all requirements of the storage operator's UIC permit.



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1    Section 45. Title to carbon dioxide prior to certificate
2of completion. Absent conveyance documents to the contrary,
3the storage operator has title to the carbon dioxide injected
4into and stored in a storage facility and holds title until the
5Department issues a certificate of completion.
6    Section 50. Scope and remedy for claims of subsurface
8    (a) A claim of subsurface trespass shall not be actionable
9against a storage operator conducting geologic storage in
10accordance with a valid UIC permit and storage facility permit
11unless the injection or migration of carbon dioxide materially
12impairs interests outside the storage facility.
13    (b) A surface or subsurface property interest holder shall
14be permitted to recover money damages only for loss of a
15nonspeculative value resulting from the injection and
16migration of carbon dioxide beyond the storage facility.
17    (c) Punitive damages shall be barred if the storage
18operator acts in all material respects in compliance with the
19operational and monitoring requirements of the UIC permit.
20    Section 55. Project completion and title transfer.
21    (a) After carbon dioxide injections at a storage facility
22permanently cease, the storage operator may apply for a
23certificate of completion. Before issuing a certificate of
24completion, the Department, in consultation with the issuer of



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1the UIC permit, shall find that:
2        (1) the storage operator is in full compliance with
3    all laws governing the storage facility, including any
4    ongoing UIC permit requirements;
5        (2) the storage operator addressed all pending claims,
6    if any, regarding escape, release, leakage, or any similar
7    migration of carbon dioxide outside the storage facility;
8        (3) all carbon dioxide injection wells are plugged,
9    associated equipment and facilities are removed, and
10    reclamation work is completed as required by the UIC
11    permit issuer or the Department;
12        (4) the carbon dioxide in the reservoir is stable,
13    which means that it is essentially stationary or, if it is
14    migrating or may migrate, any migration will be unlikely
15    to be outside of the storage facility, or to the extent
16    beyond the area of review, the plume does not pose a risk
17    of endangerment to underground sources of drinking water,
18    consistent with Class VI permit requirements; and
19        (5) all monitoring wells, equipment, and facilities to
20    be used in the post-closure period are in good condition
21    and retain mechanical integrity.
22    (b) If the Department does not complete the review of a
23certificate of completion application within 90 days after
24receipt, including the public notice and input deemed
25appropriate by the Department, then the certificate of
26completion shall be deemed issued at the end of the 90-day



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1period. If the Department does not find that the requirements
2in subsection (a) are met, then it may decline the application
3or require amendment to the application before granting the
4certificate of completion. If the Department requires
5amendment to the application, then the storage operator shall
6have 30 days to submit an amended application. Upon receipt of
7the amended application, the Department shall have 30 days to
8either grant or decline to grant the certificate of completion
9or the certificate of completion. The Department's failure to
10timely issue a certificate of completion or denial of a
11certificate of completion shall be considered final agency
12action reviewable in the county court in the jurisdiction in
13which the storage facility is located.
14    (c) The Department may charge a fee to the storage
15operator for reviewing the certificate of completion
16application. The fee shall be in the amount set by Department
17rule. The amount shall be based on the Department's
18anticipated expenses that it shall incur in reviewing the
19certificate of completion application and shall not exceed
21    (d) Once a certificate of completion is issued, the
22following occurs:
23        (1) Title to the storage facility and to the stored
24    carbon dioxide transfers, without compensation, to the
25    State.
26        (2) Title acquired by the State includes all rights



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1    and interests in, and all responsibilities, including
2    regulatory requirements associated with, the stored carbon
3    dioxide, so long as the State and the storage operator may
4    contractually agree that the storage operator shall
5    continue to comply with regulatory requirements associated
6    with the storage facility on the State's behalf.
7        (3) The storage operator and, to the extent the owner
8    is a separate entity from the storage operator, the owner
9    of the geologic storage site, including the owner of any
10    surface and subsurface infrastructure associated with the
11    storage facility, are released from and the State assumes
12    all regulatory requirements and liability associated with
13    the storage facility.
14        (4) Monitoring and managing the storage facility is
15    the State's responsibility to be overseen by the
16    Department unless and until the federal government assumes
17    responsibility for the long-term monitoring and management
18    of storage facilities. Upon federal government assumption
19    of responsibility, funds in the Illinois Geologic
20    Sequestration Special Fund shall be transferred to any
21    such parallel fund under federal law for purposes of
22    long-term monitoring and management of storage facilities.
23    To the extent such a fund does not exist, the State shall
24    refund the fees contributed by the storage operators to
25    each party.
26        (5) If the federal government has not assumed



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1    responsibility for the long-term monitoring and management
2    of storage facilities, then the Illinois Geologic
3    Sequestration Special Fund shall be used for the purposes
4    of monitoring and managing the storage facilities and any
5    other responsibility associated with the stored carbon
6    dioxide.
7    Section 60. Enhanced recovery projects. This Act does not
8apply to applications filed with the Department proposing to
9use carbon dioxide for an enhanced oil or gas recovery
10project. Such applications shall be processed pursuant the
11Illinois Oil and Gas Act.
12    Section 65. Department powers; home rule. The Department
13may adopt rules and issue orders to enforce this Act. The
14Department may authorize its employees, qualified by training
15and experience, to perform the powers and duties set forth in
16this Act. No agency of State government or political
17subdivision of the State may regulate geologic storage except
18as expressly authorized under this Act; so long as nothing in
19this Section 65 restricts or interferes with the Illinois
20Environmental Protection Agency's authority to:
21    (1) issue any necessary permits for operation of
22aboveground facilities associated with the geologic storage
23project; or
24    (2) issue permits under the UIC program and inspect



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1geologic storage sites pursuant to Section 13.7 of the
2Environmental Protection Act. To the extent there is any
3inconsistency between this Act and Section 13.7 of the
4Environmental Protection Act, this Act shall control.
5    This Section is a limitation under subsection (i) of
6Section 6 of Article VII of the Illinois Constitution on the
7concurrent exercise by home rule units of powers and functions
8exercised by the State.
9    Section 70. Restraint of trade. None of the rights and
10responsibilities pursuant to this Act shall be held or
11construed to violate any of the statutes of this State
12relating to trusts, monopolies, or contracts and combinations
13in the restraint of trade.
14    Section 75. Illinois Geologic Sequestration Special Fund.
15The Illinois Geologic Sequestration Special Fund is created as
16a special fund in the State treasury. The Fund shall consist of
17any money deposited into the Fund as provided in subsection
18(e) of Section 20. Money in the Fund shall be used for the
19administration of this Act and for no other purpose. All
20interest earned on money in the Fund shall be deposited into
21the Fund.
22    Section 97. Severability. The provisions of this Act are
23severable under Section 1.31 of the Statute on Statutes.



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1    Section 905. The State Finance Act is amended by adding
2Section 5.935 as follows:
3    (30 ILCS 105/5.935 new)
4    Sec. 5.935. The Illinois Geologic Sequestration Special