HB3217sam002 96TH GENERAL ASSEMBLY

Sen. John M. Sullivan

Filed: 11/29/2010

09600HB3217sam002 LRB096 06230 ASK 44154 a

AMENDMENT TO HOUSE BILL 3217

AMENDMENT NO. ______. Amend House Bill 3217, AS AMENDED, by replacing everything after the enacting clause with the following:

"Section 5. The Clean Coal FutureGen for Illinois Act is amended by changing Sections 5, 10, 15, 20, 23, 25, 30, 50, and 998 as follows:

(20 ILCS 1107/5)

(Section scheduled to be repealed on December 31, 2010)

Sec. 5. Purpose. Recognizing that the FutureGen Project is a first-of-a-kind research project to permanently sequester underground captured CO2 carbon-dioxide emissions from: (1) a coal-fueled power plant that uses as its primary fuel source high volatile bituminous rank coal with greater than 1.7 pounds of sulfur per million btu content or (2) other approved and permitted captured CO2 sources in the State of Illinois, and that such a project would have benefits to the economy and environment of Illinois, the purpose of this Act is to provide the FutureGen Alliance with adequate liability protection and permitting certainty to facilitate the siting of the FutureGen Project in the State of Illinois, to provide to the State of Illinois certain financial benefits from environmental attributes for the Project, and to help secure over $1 billion in federal funding for the Project.

(Source: P.A. 95-18, eff. 7-30-07.)

(20 ILCS 1107/10)

(Section scheduled to be repealed on December 31, 2010)

Sec. 10. Legislative findings. The General Assembly finds and determines that:

(1) human-induced greenhouse gas emissions have been identified as contributing to global warming, the effects of which pose a threat to public health and safety and the economy of the State of Illinois;

(2) in order to meet the energy needs of the State of Illinois, keep its economy strong and protect the environment while reducing its contribution to human-induced greenhouse gas emissions, the State of Illinois must be a leader in developing new low-carbon technologies;

(3) carbon capture and storage is a low-carbon technology that involves capturing the captured CO2 carbon dioxide from fossil fuel energy electric and hydrogen generating units and other industrial facilities and injecting it into secure geologic strata for permanent storage;

(4) the FutureGen Project is a public-private partnership between the Federal Department of Energy and the FutureGen Alliance that proposes to use this new technology as part of a plan to transport and store captured CO2 from a coal-fueled power plant that uses as its primary fuel source high-volatile bituminous rank coal with greater than 1.7 pounds of sulfur per million btu content and other captured CO2 sources that are approved by the appropriate State of Illinois agency and permitted in the State of Illinois build and operate a near zero emission coal fueled power plant;

(5) the FutureGen Project will help ensure the long-term viability of Illinois Basin coal as a major energy source in the State of Illinois and throughout the nation and represents a significant step in the State of Illinois' efforts to become a self-sufficient, clean energy producer;

(6) the FutureGen Project provides an opportunity for the State of Illinois to partner with the Federal Department of Energy and the FutureGen Alliance in the development of these innovative clean-coal technologies;

(7) the FutureGen Project will make the State of Illinois a center for developing and refining clean coal technology, hydrogen production and carbon capture and storage, and will result in the development of new technologies designed to improve the efficiency of the energy industry that will be replicated world wide;

(8) the FutureGen Project is an important coal development and conversion project that will create jobs in the State of Illinois during the construction and operational phases, contribute to the overall economy of the State of Illinois and help reinvigorate the Illinois Basin coal industry; and

(9) the FutureGen Project and the property necessary for the FutureGen Project serve a substantial public purpose as its advanced clean-coal coal gasification, electricity generation, hydrogen production, advanced emissions control and carbon capture and storage technologies will benefit the citizens of the State of Illinois.

(Source: P.A. 95-18, eff. 7-30-07.)

(20 ILCS 1107/15)

(Section scheduled to be repealed on December 31, 2010)

Sec. 15. Definitions. For the purposes of this Act:

"Agency" means the Illinois Environmental Protection Agency.

"Captured CO2" means CO2 and other trace chemical constituents approved by the Agency for injection into the Mount Simon Formation.

"Carbon capture and storage" means the process of collecting captured CO2 capturing CO2 and other chemical constituents from coal combustion by-products for the purpose of injecting and storing the captured CO2 gas for permanent storage.

"Carbon dioxide" or "CO2" means a colorless, odorless gas in the form of one carbon and 2 oxygen atoms that is the principal greenhouse gas.

"Department" means the Department of Commerce and Economic Opportunity.

"Director" means the Director of Commerce and Economic Opportunity.

"Federal Department" means the federal Department of Energy.

"FutureGen Alliance" is a 501(c)(3) non-profit consortium of coal and energy producers created to benefit the public interest and the interest of science through the research, development, and demonstration of near zero-emission coal technology, with the cooperation of the Federal Department that, as of the effective date of this Act, includes American Electric Power, Anglo American plc, BHP Billiton, E. ON US, China Huaneng Group, CONSOL Energy, Foundation Coal, Kennecott Energy, Peabody Energy, PPL Corporation, Rio Tinto Energy American, Southern Company, and Xstrata Coal.

"FutureGen Project" means the public-private partnership between the Federal Department and the FutureGen Alliance that will control captured CO2 and will construct and operate a pipeline and storage field for captured CO2 coal-fueled power plant utilizing state-of-the-art clean-coal technology and carbon capture and storage. Two locations in Illinois, Tuscola and Mattoon, are under consideration for the FutureGen Project. These are the only locations eligible for benefits under this Act.

"Mount Simon Formation" means the deep sandstone reservoir into which the sequestered CO2 gas is to be injected at a depth greater than 3,500 feet depths generally ranging between 5,500 and 8,500 feet below ground surface and that is bounded by the granitic basement below and the Eau Claire Shale above.

"Operator" means the FutureGen Alliance and its member companies, including their parent companies, subsidiaries, affiliates, directors, officers, employees, and agents, or a not-for-profit successor-in-interest approved by the Department.

"Post-injection" means after the captured CO2 gas has been successfully injected into the wellhead at the point at which the captured CO2 gas is transferred into the wellbore for carbon sequestration and storage into the Mount Simon Formation.

"Pre-injection" means all activities and occurrences prior to successful delivery into the wellhead at the point at which the captured CO2 gas is transferred into the wellbore for carbon sequestration and storage into the Mount Simon Formation, including but not limited to, the operation of the FutureGen Project.

"Public liability" means any civil legal liability arising out of or resulting from the storage, escape, release, or migration of the post-injection sequestered CO2 gas that was injected by the Operator and for which title is transferred to the State pursuant to Section 20 of this Act during the operation of the FutureGen Project by the FutureGen Alliance. The term "public liability", however, does not include any legal liability arising out of or resulting from the construction, operation, or other pre-injection activity of the Operator or any other third party.

"Public liability action" or "action" means a written demand, lawsuit, or claim from any third party received by the Operator seeking a remedy or alleging liability on behalf of Operator resulting from any public liability.

"Sequestered CO2 gas" means the captured CO2 and other chemical constituents from the FutureGen Project operations that is are injected into the Mount Simon Formation by the Operator.

(Source: P.A. 95-18, eff. 7-30-07.)

(20 ILCS 1107/20)

(Section scheduled to be repealed on December 31, 2010)

Sec. 20. Title to sequestered CO2 gas. If the FutureGen Alliance identifies a designated Project locates at either the Tuscola or Mattoon site in the State of Illinois suitable for injection of captured CO2 into the Mount Simon Formation, then the FutureGen Alliance agrees that the Operator shall transfer and convey and the State of Illinois shall accept and receive, with no payment due from the State of Illinois, all rights, title, and interest in and to and any liabilities associated with the sequestered CO2 gas, including any current or future environmental benefits, marketing claims, tradable credits, emissions allocations or offsets (voluntary or compliance based) associated therewith, upon such gas reaching the status of post-injection, which shall be verified by the Agency or other designated State of Illinois agency. The Operator or owner of the captured CO2 to be sequestered shall retain all rights, title, and interest in and to and any liabilities associated with the pre-injection captured CO2. In cooperation with and at the reasonable cost of the Operator, the sequestered gas. The Illinois State Geological Survey of the University of Illinois shall monitor, measure, and verify the permanent status of sequestered CO2 carbon dioxide and co-sequestered gases in which the State has acquired the right, title, and interest under this Section.

(Source: P.A. 95-18, eff. 7-30-07; 95-728, eff. 7-1-08 - See Sec. 999.)

(20 ILCS 1107/23)

(Section scheduled to be repealed on December 31, 2010)

Sec. 23. Sequestered CO2 gas. The State of Illinois may not intentionally remove sequestered CO2 gas unless the removal is for the purpose of research and development.

(Source: P.A. 95-18, eff. 7-30-07.)

(20 ILCS 1107/25)

(Section scheduled to be repealed on December 31, 2010)

Sec. 25. Insurance against qualified losses.

(a) The Department shall procure an insurance policy from a private insurance carrier or carriers, if and to the extent that such a policy is available, that insures the Operator against any qualified loss stemming from a public liability action. The policy must be procured in accordance with the provisions of the Procurement Code.

(b) Pursuant to Section 30 of this Act, the State shall indemnify the Operator against any qualified loss stemming from a public liability action to the extent that the qualified loss is not covered under an insurance policy under subsection (a) of this Section.

(c) The Department shall pay any insurance premium, deductible, or liability under subsections (a) or (b) from appropriations by the General Assembly for that purpose. It is the intent of this Act that, to the extent practical, any unexpended balance of the proceeds from the sale of emission reduction rights or tradable credits to which the State has title under Section 20 should be used for the purposes of this subsection (c).

(d) If the FutureGen Alliance identifies a designated site in locates the FutureGen Project at either the Mattoon or Tuscola site in the State of Illinois suitable for injection of captured CO2 into the Mount Simon Formation, then the Department shall be authorized to contract with the FutureGen Alliance, under terms not inconsistent with this Act, in order to define the rights and obligations of the FutureGen Alliance and the Department, including but not limited to, the insurance and indemnification obligations under Sections 25 and 30 of this Act.

(e) If federal indemnification covers all or a portion of the obligations assumed by the State under Section 25 of this Act, such State obligations shall be reduced in proportion to the federal indemnification and be considered subordinated to any federal indemnification.

(g) For the purpose of this Section, "qualified loss" means a loss by the Operator stemming from a public liability action other than those losses arising out of or relating to:

(1) the intentional or willful misconduct of the Operator in its operation of the FutureGen Project;

(2) the failure of the Operator to comply with any applicable law, rule, regulation, or other requirement established by the Federal Department, Agency, or State of Illinois for the carbon capture and storage of the sequestered CO2 gas, including any limitations on the chemical composition of any sequestered CO2 gas; or

(3) any the pre-injection activities operation of the Operator FutureGen Project.

(Source: P.A. 95-18, eff. 7-30-07.)

(20 ILCS 1107/30)

(Section scheduled to be repealed on December 31, 2010)

Sec. 30. Indemnification. Notwithstanding any law to the contrary, the State of Illinois shall indemnify, hold harmless, defend, and release the Operator from and against any public liability action asserted against the Operator, subject to the following terms and conditions:

(a) The obligation of the State of Illinois to indemnify the Operator does not extend to any public liability arising out of or relating to:

(1) the intentional or willful misconduct of the Operator in its operation of the FutureGen Project;

(2) the failure of the Operator to comply with any applicable law, rule, regulation, or other requirement established by the Federal Department, Agency, or State of Illinois for the carbon capture and storage of the sequestered CO2 gas, including any limitations on the chemical composition of any sequestered CO2 gas;

(3) any the pre-injection activities operation of the Operator FutureGen Project; or

(4) a qualified loss to the extent that it is paid under an insurance policy under subsection (a) of Section 25 of this Act.

(b) The indemnification obligations of the State of Illinois assumed under Section 30 of this Act shall be reduced in proportion and be subordinated to any federal indemnification that covers all or a portion of the State's obligations.

(Source: P.A. 95-18, eff. 7-30-07.)

(20 ILCS 1107/50)

(Section scheduled to be repealed on December 31, 2010)

Sec. 50. Jurisdiction. The Court of Claims has jurisdiction concerning any public liability action arising under this Act or arising from the operation of the FutureGen Project, except that a public liability action may be brought in the circuit court if the cause of action is one of personal injury or wrongful death and the injury or death was proximately caused by the storage, escape, release, or migration of the post-injection sequestered CO2 gas that was injected during the operation of the FutureGen Project by the FutureGen Alliance, and the circuit court is hereby granted jurisdiction over these matters. The jurisdiction over civil, administrative, or other legal processes is not, otherwise, affected by this Act.

(Source: P.A. 95-18, eff. 7-30-07.)

(20 ILCS 1107/998)

(Section scheduled to be repealed on December 31, 2010)

Sec. 998. Repeal. This Act is repealed on December 31, 2015 2010 unless the FutureGen Project has been located at a designated either the Mattoon or Tuscola site in Illinois.

(Source: P.A. 95-18, eff. 7-30-07.)

(20 ILCS 1107/43 rep.)

Section 10. The Clean Coal FutureGen for Illinois Act is amended by repealing Section 43.

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