Bill Text: IL SB2005 | 2021-2022 | 102nd General Assembly | Introduced

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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 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.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2021-04-16 - Rule 3-9(a) / Re-referred to Assignments [SB2005 Detail]

Download: Illinois-2021-SB2005-Introduced.html

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102ND GENERAL ASSEMBLY State of Illinois 2021 and 2022 SB2005 Introduced 2/26/2021, by Sen. David Koehler SYNOPSIS AS INTRODUCED:
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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FISCAL NOTE ACT MAY APPLY HOME RULE NOTE ACT MAY APPLY
A BILL FOR
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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
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:
"Area of review" means the area of review as required to be
delineated in the storage operator's federal Underground

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Injection Control (UIC) program Class VI permit.
"Carbon dioxide injection well" means a well that is used
to inject carbon dioxide into a reservoir for geologic
storage.
"Carbon dioxide plume" means the extent underground, in 3
dimensions, of an injected carbon dioxide stream.
"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 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.
"Storage facility" means the subsurface area consisting of
the extent of the modeled carbon dioxide plume, as required to
be delineated in the storage operator's federal UIC program
Class VI permit.
"Storage facility permit" means a permit issued by the
Department allowing a person to establish and operate a

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storage facility.
"Storage operator" means a person holding or applying for
a storage facility permit under this Act and holding or
applying for a UIC permit for the injection of carbon dioxide.
"Surface owner" means, as identified in the records of the
recorder of deeds for each county containing any portion of
the proposed storage facility, any owner of a whole or
undivided fee simple interest or other freehold interest,
which may or may not include mineral rights, in the surface
above the proposed storage facility, 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. Storage facility permit.
(a) A storage operator may not operate a storage facility
in this State without a valid storage facility permit issued
by the Department. A storage facility permit may be
transferred or assigned from one storage operator to another.
Each permit is valid for 5 years after issuance.

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(b) The Department shall issue or renew a storage facility
permit if the storage operator has paid the first year's
annual fee required by subsection (c) and has met the
requirements of Section 30. In addition, the Department shall
issue a storage facility permit following the public hearing
described in subsection (f) upon its determination that:
(1) the storage facility permit is in the public
interest; and
(2) to the extent the storage facility contains
commercially valuable minerals, the interests of the
mineral lessee or owner will not be adversely affected or
have been addressed in an arrangement between the interest
holder and the storage operator.
(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 storage facility permit. On an annual basis,
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. Each year the storage operator shall
reconcile the past year's payment with the volume of carbon
dioxide injected into a storage facility the previous year.
The storage operator shall submit payment for the amount
injected above 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

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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.
(f) Prior to issuing a storage facility permit, the
Department shall hold a public hearing. At least 30 days prior
to the hearing, notice of the hearing shall first be published
in the official newspaper of the county or counties where the
area of review is proposed to be located and in other print or
online publications as required by the Department, consistent
with the requirements of the Notice By Publication Act. Notice
shall be published daily for 2 consecutive weeks. At least 30
days prior to the hearing, notice of the hearing must be given
to:
(1) each surface owner of land overlying the storage
facility and within one-half mile of the storage
facility's boundaries;
(2) each mineral lessee or mineral owner with property
interests within one-half mile of the storage facility's
boundaries; and
(3) any pore space owners within the storage facility
and within one-half mile of the storage facility's

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

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Section 30. Ownership requirements.
(a) No storage facility 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 areal extent of 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

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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 a permanent
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 grant a permanent
easement to State-owned pore space to a storage facility.
Section 40. Mineral interests. With the written consent of
the storage operator, a mineral owner may drill through or
near a storage facility to explore for or extract minerals if
the drilling, extraction, and related activities are conducted
in cooperation with the storage operator and in compliance
with:
(1) Department requirements that preserve the storage
facility's integrity; and
(2) all requirements of the storage operator's UIC permit.

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Section 45. Title to carbon dioxide prior to certificate
of completion. Absent conveyance documents to the contrary,
the storage operator has title to the carbon dioxide injected
into and stored in a storage facility and holds title until the
Department issues a certificate of completion.
Section 50. Scope and remedy for claims of subsurface
trespass.
(a) A claim of subsurface trespass shall not be actionable
against a storage operator conducting geologic storage in
accordance with a valid UIC permit and storage facility permit
unless the injection or migration of carbon dioxide materially
impairs interests outside the storage facility.
(b) A surface or subsurface property interest holder shall
be permitted to recover money damages only for loss of a
nonspeculative value resulting from the injection and
migration of carbon dioxide beyond the storage facility.
(c) Punitive damages shall be barred if the storage
operator acts in all material respects in compliance with the
operational and monitoring requirements of the UIC permit.
Section 55. Project completion and title transfer.
(a) After carbon dioxide injections at a storage facility
permanently 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

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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 escape, release, leakage, or any similar
migration of carbon dioxide outside the storage facility;
(3) all carbon dioxide injection wells are plugged,
associated 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, or to the extent
beyond the area of review, the plume does not pose a risk
of endangerment to underground sources of drinking water,
consistent with Class VI permit requirements; and
(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 deemed issued at the end of the 90-day

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period. 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 submit an amended application. Upon receipt of
the amended application, the Department shall have 30 days to
either grant or decline to grant the certificate of completion
or the certificate of completion. The Department's failure to
timely issue a certificate of completion or denial of a
certificate of completion shall be considered final agency
action reviewable in the county court in the jurisdiction in
which the storage facility is located.
(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
State.
(2) Title acquired by the State includes all rights

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

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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 facilities 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.
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; so long as nothing in
this Section 65 restricts or interferes with the Illinois
Environmental Protection Agency's authority to:
(1) issue any necessary permits for operation of
aboveground facilities associated with the geologic storage
project; or
(2) issue permits under the UIC program and inspect

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geologic storage sites pursuant to Section 13.7 of the
Environmental Protection Act. To the extent there is any
inconsistency between this Act and Section 13.7 of the
Environmental Protection Act, this Act shall control.
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.
Section 97. Severability. The provisions of this Act are
severable under Section 1.31 of the Statute on Statutes.

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Section 905. The State Finance Act is amended by adding
Section 5.935 as follows: