Bill Text: IL HB4370 | 2019-2020 | 101st General Assembly | Introduced

---

Bill Title: 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.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2020-06-23 - Rule 19(b) / Re-referred to Rules Committee [HB4370 Detail]

Download: Illinois-2019-HB4370-Introduced.html

---

101ST GENERAL ASSEMBLY State of Illinois 2019 and 2020 HB4370 Introduced , by Rep. Thomas M. Bennett SYNOPSIS AS INTRODUCED:
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
FISCAL NOTE ACT MAY APPLY HOME RULE NOTE ACT MAY APPLY
A BILL FOR
HB4370 LRB101 16519 LNS 69148 b
AN ACT concerning property.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 1. Short title. This Act may be cited as the Carbon
Dioxide Geologic Storage Act.
Section 5. Statement of policy. It is in the public
interest to promote the geologic storage of carbon dioxide.
Doing so will help ensure the viability of State industries
under a spectrum of potential environmental regulations and
will promote economic development in this State.
To be practical and effective, geologic storage of carbon
dioxide requires cooperative use of surface and subsurface
property interests often across large areas. It is therefore in
the public interest to employ procedures that promote, in a
manner fair to all interests, the use of all pore space in a
clearly defined reservoir to ensure comprehensive management
of the reservoir and the efficient use of natural resources. It
is important that rules governing the use and development of
subsurface pore space be consistent with both established
precedents and subsurface private property rights.
Section 10. Definitions. As used in this Act:
"Carbon dioxide injection well" means a well that is used

HB4370 - 2 - LRB101 16519 LNS 69148 b
to inject carbon dioxide into a reservoir for geologic storage.
"Department" means the Department of Natural Resources.
"Geologic storage" means the underground storage of carbon
dioxide in a reservoir.
"Mineral owner" means, as identified in the records of the
recorder of deeds for each county containing some portion of
the proposed reservoir, any owner of a whole or fractional
interest in any or all minerals in real property above, below,
or within the proposed reservoir that has been severed from the
surface estate by grant, exception, reservation, lease, or
other means.
"Pore space" means naturally created subsurface cavities
or voids that can be used as storage space for carbon dioxide.
"Pore space owner" means the person, trust, corporation, or
other entity who has title to the pore space.
"Reservoir permit" means a permit issued by the Department
allowing a person to establish and operate a storage facility.
"Storage facility" means the area of review as delineated
in the storage operator's federal UIC program Class VI permit.
"Storage operator" means a person holding a reservoir
permit under this Act and holding or applying for a UIC permit
for the injection of carbon dioxide.
"Surface owners" means, as identified in the records of the
recorder of deeds for each county containing some portion of
the proposed reservoir, any owner of a whole or undivided fee
simple interest or other freehold interest, which may or may

HB4370 - 3 - LRB101 16519 LNS 69148 b
not include mineral rights, in the surface above the proposed
reservoir, but does not include an owner of a right-of-way,
easement, leasehold, or any other lesser estate.
"UIC permit" means an Underground Injection Control permit
authorized under the federal Safe Drinking Water Act's
Underground Injection Control (UIC) Program that allows a
person to operate a carbon dioxide injection well.
Section 15. Applicability. This Act applies only to carbon
dioxide injections that commence on or after January 1, 2021.
Section 20. Reservoir permit.
(a) A storage operator may not operate a storage facility
in this State without a valid reservoir permit issued by the
Department. A reservoir permit may be transferred or assigned
from one storage operator to another. Each permit is valid for
one year after issuance.
(b) The Department shall issue or renew a reservoir permit
if the storage operator has paid the fee required by subsection
(c) and has meet the requirements of Section 30.
(c) The storage operator shall provide the Department an
estimate of the amount of carbon dioxide to be injected into a
storage facility for the period of the permit at the time of
application for a reservoir permit. A storage operator shall
pay to the Department a fee of $0.08 per ton of carbon dioxide
estimated to be injected into a storage facility. Prior to any

HB4370 - 4 - LRB101 16519 LNS 69148 b
renewal, the storage operator shall pay a fee of $0.08 per ton
for carbon dioxide injected into a storage facility beyond the
amount contained in the storage operator's estimate for the
previous year. If the amount of carbon dioxide injected into a
storage facility is less than the amount estimated, the
Department shall refund the storage operator any overpayment.
(d) The Department may require a storage operator to make
records available to the Department relating to the amount of
carbon dioxide injected into a storage facility to ensure
compliance with the fee requirements of subsection (c).
(e) The fees collected in subsection (c) shall be deposited
into the Illinois Geologic Sequestration Special Fund.
Section 25. Ownership and conveyance of pore space.
(a) Title to pore space is vested in the owner of the
overlying surface estate.
(b) A conveyance of title to the surface estate conveys the
pore space in all strata underlying the surface estate.
(c) Title to pore space may not be severed from the surface
estate.
(d) Grants of easement to use or leasing of pore space is
not a severance prohibited by this Section.
(e) The grants of easement or leasing of pore space shall
not confer any right to enter upon or otherwise use the surface
of the land unless the grant of easement or lease expressly so
provides.

HB4370 - 5 - LRB101 16519 LNS 69148 b
Section 30. Ownership requirements.
(a) No reservoir permit shall be issued unless the storage
operator owns, or has obtained grants of easements or
leaseholds for, all of the pore space in a storage facility.
(b) If a storage operator owns, or has obtained grants of
easement or leaseholds for, more than 50% but less than 100% of
the pore space within a proposed storage facility, the storage
operator may apply to the Department to amalgamate the
remaining property interests.
Section 35. Amalgamating property interests.
(a) If a storage operator has applied to the Department to
amalgamate any remaining property interests in a storage
facility, the Department shall:
(1) notify any and all nonconsenting property owners
who own property interests to be amalgamated;
(2) within 120 days, but no less than 60 days after the
filing of the application, the Department shall conduct a
hearing to determine the fair market value of each property
owner's pore space to be amalgamated. The storage operator
and each property owner has the right to present evidence
as to the value of the pore space, including, but not
limited to, the economic benefits to the storage operator,
and to be represented by an attorney; and
(3) after the hearing, issue an order determining the

HB4370 - 6 - LRB101 16519 LNS 69148 b
fair market value of each nonconsenting owner's pore space.
(b) Upon payment by the storage operator to the Department
of the total fair market value of the pore space to be
amalgamated, the storage operator shall be granted an easement
by the Department upon the pore space. The Department shall
record the easement with the appropriate county recorder of
deeds. The Department shall remit funds received from the
storage operator to each property owner consistent with the
Department's determination of fair market value.
(c) Any easement granted under this Section shall not
include the right to use the surface above a nonconsenting
property owner's pore space.
(d) The Department has the authority to commit State-owned
pore space to a storage facility.
Section 40. Mineral interests. A mineral owner may drill
through or near a reservoir to explore for or extract minerals
if the drilling, extraction, and related activities are
conducted in cooperation with the storage operator and comply
with Department requirements that preserve the storage
facility's integrity.
Section 45. Title to carbon dioxide; liability. The storage
operator has title to the carbon dioxide injected into and
stored in a reservoir and holds title until the Department
issues a certificate of completion. While the storage operator

HB4370 - 7 - LRB101 16519 LNS 69148 b
holds title, the storage operator is liable for any damage the
carbon dioxide may cause, including damage caused by carbon
dioxide that escapes from the storage facility. The pore space
owner has no liability associated with the operation of a
storage facility unless the storage operator is the pore space
owner.
Section 55. Project completion and title transfer.
(a) After carbon dioxide injections at a storage facility
cease, the storage operator may apply for a certificate of
completion. Before issuing a certificate of completion, the
Department, in consultation with the issuer of the UIC permit,
shall find that:
(1) the storage operator is in full compliance with all
laws governing the storage facility, including any ongoing
UIC permit requirements;
(2) the storage operator addressed all pending claims,
if any, regarding the storage facility's operation;
(3) all carbon dioxide injection wells are plugged,
equipment and facilities are removed, and reclamation work
is completed as required by the UIC permit issuer or the
Department;
(4) the carbon dioxide in the reservoir is stable,
which means that it is essentially stationary or, if it is
migrating or may migrate, any migration will be unlikely to
be outside of the storage facility; and

HB4370 - 8 - LRB101 16519 LNS 69148 b
(5) all monitoring wells, equipment, and facilities to
be used in the post-closure period are in good condition
and retain mechanical integrity.
(b) If the Department does not complete the review of a
certificate of completion application within 90 days after
receipt, including the public notice and input deemed
appropriate by the Department, then the certificate of
completion shall be issued. If the Department does not find
that the requirements in subsection (a) are met, then it may
decline the application or require amendment to the application
before granting the certificate of completion. If the
Department requires amendment to the application, then the
storage operator shall have 30 days to amend the application.
Thereafter, the Department shall have 30 days to either grant
or decline to grant the certificate of completion or the
certificate of completion shall be issued.
(c) The Department may charge a fee to the storage operator
for reviewing the certificate of completion application. The
fee shall be in the amount set by Department rule. The amount
shall be based on the Department's anticipated expenses that it
shall incur in reviewing the certificate of completion
application and shall not exceed $10,000.
(d) Once a certificate of completion is issued, the
following occurs:
(1) Title to the storage facility and to the stored
carbon dioxide transfers, without compensation, to the

HB4370 - 9 - LRB101 16519 LNS 69148 b
State.
(2) Title acquired by the State includes all rights and
interests in, and all responsibilities associated with,
the stored carbon dioxide.
(3) The storage operator is released from all
regulatory requirements associated with the storage
facility.
(4) Monitoring and managing the storage facility is the
State's responsibility to be overseen by the Department
until the federal government assumes responsibility for
the long-term monitoring and management of storage
facilities.
(5) If the federal government has not assumed
responsibility for the long-term monitoring and management
of storage facilities, then the Illinois Geologic
Sequestration Special Fund shall be used for the purposes
of monitoring and managing the storage facility and any
other responsibility associated with the stored carbon
dioxide.
Section 60. Enhanced recovery projects. This Act does not
apply to applications filed with the Department proposing to
use carbon dioxide for an enhanced oil or gas recovery project.
Such applications shall be processed pursuant the Illinois Oil
and Gas Act.

HB4370 - 10 - LRB101 16519 LNS 69148 b
Section 65. Department powers; home rule. The Department
may adopt rules and issue orders to enforce this Act. The
Department may authorize its employees, qualified by training
and experience, to perform the powers and duties set forth in
this Act. No agency of State government or political
subdivision of the State may regulate geologic storage except
as expressly authorized under this Act. This Section is a
limitation under subsection (i) of Section 6 of Article VII of
the Illinois Constitution on the concurrent exercise by home
rule units of powers and functions exercised by the State.
Section 70. Restraint of trade. None of the rights and
responsibilities pursuant to this Act shall be held or
construed to violate any of the statutes of this State relating
to trusts, monopolies, or contracts and combinations in the
restraint of trade.
Section 75. Illinois Geologic Sequestration Special Fund.
The Illinois Geologic Sequestration Special Fund is created as
a special fund in the State treasury. The Fund shall consist of
any money deposited into the Fund as provided in subsection (e)
of Section 20. Money in the Fund shall be used for the
administration of this Act and for no other purpose. All
interest earned on money in the Fund shall be deposited into
the Fund.

HB4370 - 11 - LRB101 16519 LNS 69148 b
Section 97. Severability. The provisions of this Act are
severable under Section 1.31 of the Statute on Statutes.
Section 905. The State Finance Act is amended by adding
Section 5.930 as follows: