SB1603 95TH GENERAL ASSEMBLY

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95TH GENERAL ASSEMBLY
State of Illinois
2007 and 2008
SB1603

Introduced 2/9/2007, by Sen. Dale A. Righter

SYNOPSIS AS INTRODUCED:

New Act

Creates the Clean-Coal Project Indemnification Act. Requires the Attorney General to appear and defend an operator of a clean-coal project in civil proceedings commenced against the operator arising from the escape or migration of injected carbon dioxide. Sets forth requirements and procedures for the representation. Requires the State to indemnify the operator unless the conduct or inaction that gave rise to the claim or cause of action was intentional, wilful, or wanton misconduct. Effective immediately.

FISCAL NOTE ACT MAY APPLY

A BILL FOR

AN ACT concerning energy.

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 Clean-Coal Project Indemnification Act.

Section 5. Definitions. As used in this Act:

"Clean-coal project" means the installation of one or more components of the coal-based integrated sequestration and hydrogen research project to be built in partnership with the United States Department of Energy, commonly referred to as the FutureGen project.

"Injected carbon dioxide" means carbon dioxide that is generated from a clean-coal project, captured, and injected, for storage, into an underground geologic formation, stratum, reservoir, or cavern.

"Operator" means any person or entity operating a clean-coal project and that person's or entity's employees and agents.

Section 10. Representation and indemnification by the State.

(a) If a civil proceeding is commenced against an operator arising from the escape or migration of injected carbon dioxide, then the Attorney General shall, upon timely and appropriate notice by the operator, appear on behalf of the operator and defend the action. Any such notice must be in writing, must be mailed within 15 days after the date of receipt by the operator of service of process, and must authorize the Attorney General to represent and defend the operator in the proceeding. The giving of this notice to the Attorney General constitutes an agreement by the operator to cooperate with the Attorney General in his or her defense of the action and a consent that the Attorney General shall conduct the defense as he or she deems advisable and in the best interests of the operator, including settlement in the Attorney General's discretion. In any such proceeding, the State shall pay the court costs and litigation expenses of defending the action, to the extent approved by the Attorney General as reasonable, as they are incurred.

(b) If the Attorney General determines that so appearing and defending an operator either (i) involves an actual or potential conflict of interest or (ii) that the act or omission that gave rise to the claim was not within the scope of the escape or migration of injected carbon dioxide or was intentional, wilful, or wanton misconduct, then the Attorney General shall decline in writing to appear or defend or shall promptly take appropriate action to withdraw as attorney for the operator.

Upon receipt of such a declination or withdrawal by the Attorney General on the basis of an actual or potential conflict of interest, the operator may employ his or her own attorney to appear and defend, in which event the State shall pay the operator's court costs, litigation expenses, and attorneys' fees to the extent approved by the Attorney General as reasonable, as they are incurred.

In the event that the Attorney General declines to appear or withdraws on the grounds that the act or omission was not within the scope of the escape or migration of injected carbon dioxide or was intentional, wilful, or wanton misconduct, and a court or jury finds that the act or omission of the operator was within the scope of the escape or migration of injected carbon dioxide and was not intentional, wilful, or wanton misconduct, the State shall indemnify the operator for any damages awarded and court costs and attorneys' fees assessed as part of any final and unreversed judgment. In such event the State shall also pay the operator's court costs, litigation expenses, and attorneys' fees to the extent approved by the Attorney General as reasonable.

(c) The Attorney General may file a counterclaim on behalf of an operator if:

(1) the Attorney General determines that the operator is entitled to representation in a civil action under this Section;

(2) the counterclaim arises out of any act or omission occurring within the scope of the operation of a clean-coal project that is the subject of the civil action; and

(3) the operator agrees in writing that if judgment is entered in favor of the operator, the amount of the judgment will be applied to offset any judgment that may be entered in favor of the plaintiff, and then to reimburse the State treasury for court costs and litigation expenses required to pursue the counterclaim. The balance of the collected judgment shall be paid to the operator.

(d) In any such proceeding where notice in accordance with this Section has been given to the Attorney General, unless the court or jury finds that the conduct or inaction that gave rise to the claim or cause of action was intentional, wilful, or wanton misconduct, the State shall indemnify the operator for any damages awarded and court costs and attorneys' fees assessed as part of any final and unreversed judgment or shall pay the judgment.

Unless the Attorney General determines that the conduct or inaction that gave rise to the claim or cause of action was intentional, wilful, or wanton misconduct, the case may be settled, in the Attorney General's discretion and with the operator's consent, and the State shall indemnify the operator for any damages, court costs, and attorneys' fees agreed to as part of the settlement or shall pay such settlement. Where the operator is represented by private counsel, any settlement must be so approved by the Attorney General and the court having jurisdiction, which obligates the State to indemnify the operator.

(e) Court costs and litigation expenses and other costs of providing a defense or counterclaim, including attorneys' fees obligated under this Section, shall be paid from the State treasury on the warrant of the Comptroller out of appropriations made to the Attorney General specifically designed for the payment of costs, fees, and expenses covered by this Section.

Section 99. Effective date. This Act takes effect upon becoming law.