Illinois General Assembly - Full Text of HB2202
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Full Text of HB2202  103rd General Assembly

HB2202 103RD GENERAL ASSEMBLY

  
  

 


 
103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
HB2202

 

Introduced 2/8/2023, by Rep. Jay Hoffman

 

SYNOPSIS AS INTRODUCED:
 
New Act
30 ILCS 105/5.990 new
30 ILCS 105/5.991 new

    Creates the Underground Carbon Dioxide Storage Act. Provides that the Act applies to the underground storage of carbon dioxide but does not apply to extractable mineral resources, and the rights and requirements of the Act are subordinate to the rights pertaining to oil, gas, and coal resources. 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: pore space ownership; integration of ownership interests; fees; requirements for drilling near a storage facility; the applicability of certain tort claims; certificate of project completion; and rulemaking. Creates the Carbon Dioxide Storage Administrative Fund and the Carbon Dioxide Long-Term Trust Fund. Makes corresponding changes in the State Finance Act. Effective immediately.


LRB103 26411 AMQ 52774 b

 

 

A BILL FOR

 

HB2202LRB103 26411 AMQ 52774 b

1    AN ACT concerning regulation.
 
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
5Underground Carbon Dioxide Storage Act.
 
6    Section 5. Statement of policy. The General Assembly finds
7that it is in the public interest to promote the permanent
8underground storage of carbon dioxide. Underground storage of
9carbon dioxide benefits the citizens of this State by reducing
10greenhouse gas emissions and by supporting jobs and economic
11development in local communities. Therefore, it is the policy
12of this State to promote the use and employment of
13technologies that enable the capture of carbon dioxide for the
14purpose of storing the carbon dioxide underground in a
15permanent manner.
 
16    Section 10. Applicability.
17    (a) This Act applies to the underground storage of carbon
18dioxide.
19    (b) Except as otherwise provided in this Act, this Act
20does not apply to extractable mineral resources.
21    (c) The rights and requirements of this Act:
22        (1) are subordinate to the rights pertaining to oil,

 

 

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1    gas, and coal resources; and
2        (2) may not adversely affect oil, gas, and coal
3    resources, except as is strictly necessary to construct
4    and maintain a storage facility that will provide for
5    permanent storage of carbon dioxide.
 
6    Section 15. Definitions. As used in this Act:
7    "Carbon dioxide" means the chemical compound composed of
8one carbon and 2 oxygen atoms and includes phases, mixtures,
9and combinations of carbon dioxide, whether fluid, liquid or
10gaseous, stripped, segregated, or divided from any other fluid
11stream thereof, plus incidental associated substances derived
12from the source materials and the capture process, and any
13substances added to the stream to enable or improve the
14injection process.
15    "Carbon dioxide injection well" refers to a well that is
16used to inject carbon dioxide into a storage facility pursuant
17to a UIC Class VI well permit.
18    "Carbon dioxide plume" means the underground,
193-dimensional extent of an injected carbon dioxide stream.
20    "Department" means the Department of Natural Resources.
21    "Mineral lessee" means a lessee, identified by the records
22of the recorder of deeds for each county containing a portion
23of the proposed storage facility, who holds an interest in
24minerals on real property that are located above, below, or
25within the proposed storage facility that has been severed

 

 

HB2202- 3 -LRB103 26411 AMQ 52774 b

1from the surface estate by grant, exception, reservation,
2lease, or any other means.
3    "Mineral owner" means an owner identified by the records
4of the recorder of deeds for each county containing a portion
5of the proposed storage facility who holds an interest in
6minerals on real property that are located above, below, or
7within the proposed storage facility that has been severed
8from the surface estate by grant, exception, reservation,
9lease, or any other means.
10    "Pore space" means subsurface cavities or voids that can
11be used as a storage space for carbon dioxide.
12    "Pore space owner" means a person, a trust, a corporation,
13or another entity that has title to, a right to, or an interest
14in pore space.
15    "Proposed storage facility" means a subsurface sedimentary
16stratum, formation, aquifer, cavity, or void that is naturally
17or artificially created for the use of, or is capable of being
18made suitable for, injecting and storing carbon dioxide and
19which a storage operator proposes to develop as a storage
20facility for the underground storage of carbon dioxide.
21    "Storage facility" means the subsurface area consisting of
22the extent of a carbon dioxide plume which is required to be
23delineated in an approved UIC Class VI well permit or an
24amendment to a UIC Class VI well permit of a storage operator.
25    "Storage operator" means a person, a trust, a corporation,
26or another entity that operates a storage facility.

 

 

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1    "Surface or subsurface property interest owner" means a
2property interest owner identified by the records of the
3recorder of deeds for each county containing a portion of the
4proposed storage facility who holds a fee simple interest,
5other freehold interest, or leasehold in the surface or
6subsurface of the property, which may include mineral rights.
7    "UIC Class VI well permit" means a permit issued under the
8Underground Injection Control program of the federal Safe
9Drinking Water Act that allows a person, a trust, a
10corporation, or another entity to operate a carbon dioxide
11injection well.
12    "Underground storage of carbon dioxide" means the
13injection and permanent storage of carbon dioxide into
14underground strata and formations pursuant to at least one UIC
15Class VI well permit.
 
16    Section 20. Pore space ownership.
17    (a) Unless expressly modified, reserved, or altered by a
18deed, conveyance, lease, or contract, the ownership of the
19pore space underlying a surface estate is declared to be
20vested in and owned by the owner or owners of the surface
21estates above the pore space.
22    (b) This Act does not alter, amend, diminish, or
23invalidate common law established prior to the effective date
24of this Act regarding the relationship between the mineral
25estate and the surface estate.

 

 

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1    (c) A grant of (i) an easement to use or (ii) a lease of
2pore space for underground storage of carbon dioxide is in
3perpetuity if specified by an easement or lease. Unless an
4individual who obtains an easement or lease operates carbon
5dioxide injection not later than 20 years after obtaining the
6easement or lease, interest shall lapse, extinguish, and
7revert to the owner of the surface estate.
 
8    Section 25. Integration of ownership interests.
9    (a) If at least 2 pore space owners own pore space located
10within a proposed carbon dioxide storage area of a storage
11facility, the owners may agree to integrate the owners'
12interests to develop the pore space as a proposed storage
13facility for the underground storage of carbon dioxide.
14    (b) If all of the owners of the pore space under subsection
15(a) do not agree to integrate the owners' interests, the
16Department may issue an order requiring the owners to
17integrate the owners' interests and to develop the pore space
18as a proposed storage facility for the underground storage of
19carbon dioxide to serve the public interest subject to the
20findings under subsection (c).
21    (c) Before issuing an order under subsection (b), the
22Department must make the following findings:
23        (1) that the storage operator has undertaken specific
24    efforts to obtain a UIC Class VI well permit and is
25    reasonably likely to obtain such a permit;

 

 

HB2202- 6 -LRB103 26411 AMQ 52774 b

1        (2) that the storage operator has made a good faith
2    effort to obtain the consent of all pore space owners
3    located within the proposed storage facility;
4        (3) that the storage operator has obtained the consent
5    of the owners of the pore space underlying at least 61% of
6    the surface area above the proposed storage facility or
7    amended proposed storage facility; and
8        (4) that all pore space owners who do not agree to
9    integrate the owners' interests to develop the pore space
10    as a proposed storage facility for the underground storage
11    of carbon dioxide are or will be equitably compensated.
12    (d) Any unknown or missing pore space owner shall be
13deemed to have consented to integrate the owner's interest if
14the proposed storage operator complied with the notice
15requirements in paragraph (3) of subsection (b) of Section 30.
16Any unknown or missing pore space owner shall be deemed
17eligible for equitable compensation pursuant to paragraph (4)
18of subsection (c).
19    (e) A right to pore space granted by this Section does not
20confer a right to enter upon, or otherwise use, the surface of
21the land that is integrated under this Section unless provided
22in an order requiring the owners to integrate the owners'
23interests and to develop the pore space as a proposed storage
24facility for the underground storage of carbon dioxide.
 
25    Section 30. Injection permits.

 

 

HB2202- 7 -LRB103 26411 AMQ 52774 b

1    (a) Injection permits have the following requirements:
2        (1) A storage operator may not operate a storage
3    facility in this State without:
4            (A) a UIC Class VI well permit; and
5            (B) a valid permit issued by the Department.
6        (2) If a storage facility is owned by an entity other
7    than the storage operator, the storage operator shall be
8    responsible for obtaining a permit for a storage facility
9    under paragraph (1). A permit for a storage facility may
10    be transferred or assigned from one storage operator to
11    another storage operator.
12        (3) An entity shall apply to the Department for a
13    permit for a storage facility in a form and manner
14    prescribed by the Department.
15        (4) An application under paragraph (3) must include
16    the following:
17            (A) a filing fee of $1,000;
18            (B) the signature of the applicant;
19            (C) a statement verifying that the information
20        submitted is true, accurate, and complete to the best
21        of the applicant's knowledge;
22            (D) a statement that the interests of a mineral
23        lessee or mineral owner will not be adversely
24        affected. If a mineral owner or mineral lessee is
25        adversely affected, the adversely affected mineral
26        owner or mineral lessee and the applicant may enter

 

 

HB2202- 8 -LRB103 26411 AMQ 52774 b

1        into an agreement under Section 25;
2            (E) documentation describing the scope of the
3        proposed project and copies of any relevant federal
4        permits, including UIC Class VI well permits, once
5        obtained; and
6            (F) an estimate of the amount of carbon dioxide to
7        be injected into a storage facility.
8    (b) Injection permit applications have the following
9procedural requirements:
10        (1) The Department shall review an application
11    submitted under subsection (a). If the Department
12    determines that the application is complete, the
13    Department shall notify the applicant. If the Department
14    determines that the application is incomplete, inaccurate,
15    or both, the Department shall return the application to
16    the applicant.
17        (2) If the Department returns an application to an
18    applicant under paragraph (1), the Department shall inform
19    the applicant in writing that the applicant may file a
20    corrected application not more than 60 days after the
21    receipt of the returned application. Upon receiving a
22    corrected application, the Department shall review the
23    application. If the Department determines that the
24    corrected application is complete, the Department shall
25    notify the applicant.
26        (3) Upon receiving notification that the application

 

 

HB2202- 9 -LRB103 26411 AMQ 52774 b

1    or corrected application is complete, the applicant shall:
2            (A) not more than 60 days after receiving the
3        notice that the application or corrected application
4        is complete:
5                (i) place a copy of the application in a
6            public library located in each county in which the
7            storage facility is proposed to be located for
8            public inspection;
9                (ii) publish notice under the Notice By
10            Publication Act in each county in which the
11            storage facility is proposed to be located and the
12            name and address of each library in which a copy of
13            the application is placed as required by item (1);
14            and
15                (iii) provide mailed notice to each known and
16            locatable surface estate, mineral estate, and pore
17            space owner within or adjacent to the storage
18            facility; and
19            (B) not more than 30 days after the publication or
20        delivery of the notice under subparagraph (A), provide
21        to the Department proof of publication of notice.
22        (4) Not later than 90 days after receiving proof of
23    publication of notice under subparagraph (B) of paragraph
24    (3), the Department shall notify the applicant in writing
25    that the Department has either approved or denied the
26    application.

 

 

HB2202- 10 -LRB103 26411 AMQ 52774 b

1    (c) If the Department approves an application under this
2Section, the Department shall issue to the applicant a storage
3facility permit.
4    (d)(1) If a storage operator identifies information as
5trade secret or confidential and proprietary information in
6its permit application, the Department shall take all
7necessary precautions to avoid public disclosure of that
8information.
9    (2) If any entity other than the storage operator files
10with the Department a request for release of the confidential
11information identified in paragraph (1) including a statement
12of the reasons that the information should be disclosed, the
13Department shall consult with the storage operator. The
14Department may only release information identified in
15paragraph (1) if the storage operator consents.
 
16    Section 35. Fees.
17    (a) At the conclusion of each calendar year, the storage
18operator shall pay the Department a fee of $0.06 for every ton
19of carbon dioxide injected into a storage facility in that
20year, deposited into the Carbon Dioxide Storage Administrative
21Fund.
22    (b) Upon approval by the Department of an application for
23certificate of completion, the storage operator shall pay an
24additional one-time transfer fee of $0.02 per ton of carbon
25dioxide injected and stored at the storage facility over the

 

 

HB2202- 11 -LRB103 26411 AMQ 52774 b

1permit period, deposited into the Carbon Dioxide Storage
2Long-Term Trust Fund.
 
3    Section 40. Funds.
4    (a) There is hereby created the Carbon Dioxide Storage
5Administrative Fund to be held as a separate fund within the
6State treasury and to be administered by the Department.
7Moneys in the fund shall be expended only as authorized by this
8Act.
9        (1) The fee collected in subsection (a) of Section 35
10    shall be deposited into the Carbon Dioxide Storage
11    Administrative Fund.
12        (2) Moneys in the Carbon Dioxide Storage
13    Administrative Fund may only be used:
14            (A) to defray expenses incurred by the Department
15        for the regulation of storage facilities during their
16        construction, operational, and pre-closure phases; or
17            (B) if the Carbon Dioxide Long-Term Trust Fund
18        becomes depleted, to defray expenses incurred by the
19        Department for the long-term monitoring and management
20        of storage facilities after the department issues a
21        certificate of project completion.
22    (b) There is hereby created the Carbon Dioxide Storage
23Long-Term Trust Fund to be held as a separate fund within the
24State treasury and to be administered by the Department.
25Moneys in the fund shall be expended only as authorized by this

 

 

HB2202- 12 -LRB103 26411 AMQ 52774 b

1Act.
2        (1) The fee collected in subsection (b) of Section 35
3    shall be deposited into the Carbon Dioxide Long-Term Trust
4    Fund.
5        (2) Moneys in the Carbon Dioxide Long-Term Trust Fund
6    may only be used to defray expenses incurred by the
7    Department for the long-term monitoring and management of
8    storage facilities after the Department issues a
9    certification of project completion.
 
10    Section 45. Requirements for drilling near a storage
11facility.
12    (a) A mineral owner or mineral lessee shall provide
13written notice to a storage operator at least 31 days prior to
14drilling a well if the mineral owner or mineral lessee wishes
15to drill a well not more than:
16        (1) 330 feet from the surface location of a well
17    pursuant to a UIC Class VI well permit; or
18        (2) 500 feet from the uppermost confining zone of a
19    storage facility pursuant to a UIC Class VI well permit.
20    (b) A well drilled under subsection (a) must be drilled in
21compliance with the requirements of:
22        (1) the Department to preserve the integrity of the
23    storage facility;
24        (2) a UIC Class VI well permit; and
25        (3) any other applicable rules or regulations.
 

 

 

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1    Section 50. Applicability of certain tort claims.
2    (a) A claim of subsurface trespass shall not be actionable
3against a storage operator conducting underground storage of
4carbon dioxide in accordance with a valid UIC Class VI well
5permit unless the claimant proves that injection or migration
6of carbon dioxide (i) constitutes an invasion of another's
7interest in the use and enjoyment of his or her land that is
8substantial, either intentional or negligent, unreasonable,
9and perceptible to the senses, or (ii) has caused direct
10physical injury to a person, an animal, or tangible property.
11    (b) A surface or subsurface property interest holder shall
12be permitted to recover money damages only for the loss of a
13nonspeculative value resulting from the injection and
14migration of carbon dioxide beyond the storage facility.
15    (c) A surface or subsurface property interest holder may
16seek punitive damages in accordance with Section 2-604.1 of
17the Code of Civil Procedure only if the storage operator
18knowingly or willfully violates the requirements of a UIC
19Class VI well permit or acts with reckless disregard for
20public safety.
 
21    Section 55. Certificate of project completion.
22    (a) Upon application from a storage operator, the
23Department shall consider whether each of the following
24factors is satisfied in determining whether to issue a

 

 

HB2202- 14 -LRB103 26411 AMQ 52774 b

1certificate of project completion. The Department may only
2issue the certificate if the Department finds that the storage
3operator:
4        (1) is in compliance with all applicable laws
5    governing the storage facility;
6        (2) shows that the storage facility is reasonably
7    expected to retain the carbon dioxide stored therein;
8        (3) shows that the carbon dioxide in the storage
9    facility is stable by showing either that:
10            (A) the stored carbon dioxide is essentially
11        stationary; or
12            (B) if the stored carbon dioxide migrates,
13        migration will be likely to remain within the storage
14        facility;
15        (4) shows that any long-term monitoring wells,
16    equipment, and facilities used after the closure period
17    are in good condition and retain mechanical integrity;
18        (5) shows that injection wells have been plugged;
19        (6) shows that equipment and facilities, not including
20    fixed structures and long-term monitoring equipment and
21    wells, have been removed; and
22        (7) shows the following with respect to site closure:
23            (A) the storage operator has provided a notice of
24        intent for site closure to the United States
25        Environmental Protection Agency, or to the State
26        regulatory body if the State assumes primacy for UIC

 

 

HB2202- 15 -LRB103 26411 AMQ 52774 b

1        Class VI well permitting;
2            (B) site closure has been authorized by the United
3        States Environmental Protection Agency, or by the
4        State regulatory body if the State assumes primacy for
5        UIC Class VI well permitting; and
6            (C) the storage operator has provided to the
7        United States Environmental Protection Agency the site
8        closure report required under 40 CFR 146.93(f) on the
9        effective date of this Act, or has provided a
10        comparable report to the State regulatory body if the
11        State assumes primacy for UIC Class VI well
12        permitting.
13    (b) Not later than 90 days after receiving an application
14from the storage operator, the Department shall either:
15        (1) issue a certificate of project completion; or
16        (2) if the Department determines that the application
17    for a certificate of project completion is incomplete,
18    inaccurate, or both, return the application to the storage
19    operator.
20    (c) If the Department returns the application to the
21storage operator under subsection (b), the Department shall
22inform the storage operator, in writing, of the deficiencies
23of the submitted application and inform the storage operator
24of the right to file a corrected application with the
25Department.
26    (d) Upon issuance of a certificate of project completion

 

 

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1and payment of the fee under subsection (b) of Section 35, the
2following occurs:
3        (1) Title to the storage facility and all carbon
4    dioxide stored therein is immediately transferred to the
5    State. Title acquired by the State under this subsection
6    includes all rights, and interests in, and all
7    responsibilities associated with, the stored carbon
8    dioxide and the storage facility. Notwithstanding the
9    foregoing, no party may transfer to the State, and the
10    State may not accept, any property interests or rights
11    that the party does not own or have legal authority to
12    transfer.
13        (2) The State assumes responsibility for all
14    regulatory requirements associated with the storage
15    facility and stored carbon dioxide, and the storage
16    operator and the owner of the storage facility are
17    released from responsibility for all regulatory
18    requirements associated with the storage facility and
19    stored carbon dioxide.
20        (3) The State assumes any potential liability
21    associated with the storage facility and stored carbon
22    dioxide.
23    (e) A certificate of project completion shall be void if
24the Department finds, after a hearing, that the storage
25operator obtained the certificate on the basis of gross
26misconduct, including intentional misrepresentation of

 

 

HB2202- 17 -LRB103 26411 AMQ 52774 b

1information to the Department that the Department relied upon,
2gross negligence, willful deceit, or criminal wrongdoing. A
3storage operator may appeal this finding in a court of
4competent jurisdiction.
5    (f) Unless there is documentation to the contrary, the
6storage operator holds title to the carbon dioxide injected
7into and stored in a storage facility until and unless the
8storage operator:
9        (1) obtains a certificate of project completion from
10    the Department; or
11        (2) expressly conveys title to a third party.
 
12    Section 60. Rules. The Department shall adopt rules to
13implement this Act within 180 days after the effective date of
14this Act.
 
15    Section 65. The State Finance Act is amended by adding
16Section 5.990 and 5.991 as follows:
 
17    (30 ILCS 105/5.990 new)
18    Sec. 5.990. The Carbon Dioxide Storage Administrative
19Fund.
 
20    (30 ILCS 105/5.991 new)
21    Sec. 5.991. The Carbon Dioxide Long-Term Trust Fund.
 

 

 

HB2202- 18 -LRB103 26411 AMQ 52774 b

1    Section 97. Severability. The provisions of this Act are
2severable under Section 1.31 of the Statute on Statutes.
 
3    Section 99. Effective date. This Act takes effect upon
4becoming law.