HB 170 — Establish process to regulate carbon capture, storage technology

321393, (E)U.S.C.A. Whoever violates division (A) of section 1509.223 of 33 the Revised Code shall pay a civil penalty of not more than ten 34 thousand dollars for each violation.

35300(f), (F) Whoever violates section 1509.072 of the Revised"Safe CodeDrinking 36Water orAct anyAmendments rules adopted or orders issued to administer, implement, 37 or enforce that section shall pay a civil penalty of not1986," more100 38Stat. than five thousand dollars for each violation.

39642, (G) In addition to any other penalties provided in this 40 chapter, whoever violates section 1509.05, section 1509.21, 41 division (B) of section 1509.22, or division (A)(1) of section 42 1509.222U.S.C.A. of the Revised Code or a term or condition of a permit 43 or an order issued by the chief of the division of oil and gas 44 resources management under this chapter or knowingly violates 45 division (A) of section 1509.223 of the Revised Code is liable 46 for any damage or injury caused by the violation and for the 47 actual cost of rectifying the violation and conditions caused by 48 Sub.

300(f), and the "Safe Drinking Water Act Amendments of 1996," 110 Stat.

1613, 42 U.S.C.A.

300(f), and regulations adopted under those acts.

(T) "Person" includes any political subdivision, department, agency, or instrumentality of this state;

the United States and any department, agency, or instrumentality thereof;

any legal entity defined as a person under section 1.59 of the Revised Code;

and any other form of business organization or entity recognized by the laws of this state.

(U) "Brine" means all saline geological formation water resulting from, obtained from, or produced in connection with exploration, drilling, well stimulation, production of oil or gas, or plugging of a well.

(V) "Waters of the state" means all streams, lakes, ponds, marshes, watercourses, waterways, springs, irrigation systems, drainage systems, and other bodies of water, surface or underground, natural or artificial, that are situated wholly or partially within this state or within its jurisdiction, except those private waters that do not combine or effect a junction with natural surface or underground waters.

(W) "Exempt Mississippian well" means a well that meets all of the following criteria:

(1) Was drilled and completed before January 1, 1980;

(2) Is located in an unglaciated part of the state;

(3) Was completed in a reservoir no deeper than the Mississippian Big Injun sandstone in areas underlain by Pennsylvanian or Permian stratigraphy, or the Mississippian Berea sandstone in areas directly underlain by Permian stratigraphy;

(4) Is used primarily to provide oil or gas for domestic use.

(X) "Exempt domestic well" means a well that meets all of the following criteria:

(1) Is owned by the owner of the surface estate of the tract on which the well is located;

(2) Is used primarily to provide gas for the owner's domestic use;

(3) Is located more than two hundred feet horizontal distance from any inhabited private dwelling house other than an inhabited private dwelling house located on the tract on which the well is located;

(4) Is located more than two hundred feet horizontal distance from any public building that may be used as a place of resort, assembly, education, entertainment, lodging, trade, manufacture, repair, storage, traffic, or occupancy by the public.

(Y) "Urbanized area" means an area where a well or production facilities of a well are located within a municipal corporation or within a township that has an unincorporated population of more than five thousand in the most recent federal decennial census prior to the issuance of the permit for the well or production facilities.

(Z) "Well stimulation" or "stimulation of a well" means the process of enhancing well productivity, including hydraulic fracturing operations.

Sub.

170 Page136th 3G.A. As Passed by the House the violation.

If(AA) two"Production oroperation" moremeans personsall knowinglyoperations violateand oneactivities orand 49all morerelated ofequipment, thosefacilities, divisionsand other structures that may be used in connectionor associated with the sameexploration event,and 50production activity,of oil, gas, or transaction,other theymineral resources that are jointlyregulated under this chapter, including operations and severallyactivities liableassociated 51with undersite thispreparation, division.site construction, access road construction, well drilling, well completion, well stimulation, well site activities, reclamation, and plugging.

52"Production (H)operation" Thealso attorneyincludes general,all upon the request of the chieffollowing: of 53 the division of oil and gas resources management, shall commence 54 an action under this section against any person who violates 55 sections 1509.01 to 1509.31 or sections 1509.71 to 1509.79 of 56 the Revised Code, or any rules adopted or orders or terms or 57 conditions of a permit or registration certificate issued 58 pursuant to these sections.

Any(1) actionThe underpiping, thisequipment, sectionand isfacilities aused 59for civil action, governed by the Rulesproduction of Civil Procedure and otherpreparation 60 rules of practicehydrocarbon andgas procedureor applicableliquids tofor civiltransportation actions.or delivery;

(2) The 61processes remedyof providedextraction in this division is cumulative and concurrentrecovery, 62lifting, withstabilization, anytreatment, otherseparation, remedyproduction providedprocessing, instorage, thiswaste chapter,disposal, and themeasurement 63 existence or exercise of onehydrocarbon remedygas doesand notliquids, preventincluding therelated 64equipment exercise of any other, except that no person shall be subject to 65 both a civil penalty under division (A), (B), (C), or (D) of 66 this section and afacilities; fine established in section 1509.99 of the 67 Revised Code for the same offense.

68(3) (I)The Forprocesses purposesand ofrelated thisequipment section,and eachfacilities dayassociated with production compression, gas lift, gas injection, fuel gas supply, well drilling, well stimulation, and well completion activities, including dikes, pits, and earthen and other impoundments used for the temporary storage of violationfluids 69and constituteswaste asubstances separateassociated offense.with well drilling, well stimulation, and well completion activities;

70(4) Sec.Equipment and facilities at a wellpad well pad or other location that are used for the transportation, handling, recycling, temporary storage, management, processing, or treatment of any equipment, material, and by-products or other substances from an operation at a wellpad well pad that may be used or reused at the same or another operation at a wellpad well pad or that will be disposed of in accordance with applicable laws and rules adopted under them.

1509.71.(BB) "Annular overpressurization" means the accumulation of fluids within an annulus with sufficient pressure to allow migration of annular fluids into underground sources of drinking water.

As(CC) used"Orphaned well" means a well that has not been properly plugged or its land surface restored in sectionsaccordance 1509.71with this chapter and the rules adopted under it to 1509.79which either of 71 the Revisedfollowing Code:apply:

72(1) "CarbonThe dioxide"owner meansof naturallythe occurring,well geologicallyis 73unknown, sourced,deceased, or anthropogenicallycannot sourcedbe carbonlocated dioxide including 74 its derivatives and allthe mixtures,well combinations,is andabandoned. phases, 75 whether liquid, gaseous, solid, stripped, segregated, or divided 76 from any other fluid stream thereof.

77(2) Sub.The owner of the well has abandoned the well and there is no money available to plug the well in accordance with this chapter and the rules adopted under it.

(DD) "Temporarily inactive well" means a well that has been granted temporary inactive status under section 1509.062 of the Revised Code.

(EE) "Material and substantial violation" means any of the following:

(1) Failure to obtain a permit to drill, reopen, convert, plugback, or plug a well under this chapter;

(2) Failure to obtain, maintain, update, or submit proof of insurance coverage that is required under this chapter;

(3) Failure to obtain, maintain, update, or submit proof of a surety bond that is required Sub.

170 Page136th 4G.A. As Passed by the House "Carbon dioxide well" means a well that is used to inject 78 carbon dioxide into a reservoir for carbon sequestration under a 79 UIC Class VI permit.

"Carbonunder dioxidethis well"chapter; shall be considered a 80 "well" for purposes of section 1509.01 of the Revised Code.

81(4) "CarbonFailure dioxideto plume"restore meansa thedisturbed extent,land underground,surface inas 82required threeby dimensions,section 1509.072 of injectedthe carbonRevised dioxideCode; stream.

83(5) "CarbonFailure sequestration"to meansreimburse the undergroundoil storageand ofgas 84well carbonfund dioxidepursuant into a geologicalfinal formation.order issued under section 1509.071 of the Revised Code;

85(6) "CarbonFailure sequestrationto project"comply meanswith a projectfinal thatnonappealable 86order involvesof the undergroundchief storageissued ofunder carbonsection dioxide1509.04 inof athe 87Revised geologicalCode; formation pursuant to at least one UIC Class VI 88 permit.

89(7) "Owner"Failure includes,to unlesssubmit the context indicates otherwise, 90 a personreport, whotest hasresult, thefee, rightor todocument drillthat ais carbonrequired dioxidein wellthis andchapter toor 91rules injectadopted carbonunder dioxideit. in an underground geologic formation.

92(FF) "Owner,""Severer" ashas defined in section 1509.01 of the Revisedsame Code,meaning doesas 93in notsection apply5749.01 to sections 1509.71 to 1509.79 or sections 5301.58 to 94 5301.60 of the Revised CodeCode. unless the context indicates 95 otherwise.

96(GG) "Pore"Horizontal space"well" means subsurfacea cavitieswell andthat voids,is whetherdrilled 97for naturalthe orproduction artificiallyof created,oil thator aregas suitablein forwhich usethe aswellbore reaches a 98horizontal sequestrationor spacenear forhorizontal carbonposition dioxide.in the Point Pleasant, Utica, or Marcellus formation and the well is stimulated.

99"Horizontal "Storagewell" facility"does meansnot theinclude pore space in the subsurface 100 area consisting of the extent of a carbonstratigraphic dioxidewell. plume and the 101 geological seals that confine the carbon dioxide plume that are 102 required to be delineated on an approved UIC Class VI permit or 103 an amendment to a UIC Class VI permit issued to a storage 104 operator.

105(HH) "Storage"Well operator"pad" means anthe individual,area corporation,that is cleared or 106prepared Sub.for the drilling of one or more horizontal wells.

(II) "Stratigraphic well" means a borehole that is drilled within the state on a tract solely to conduct research or testing of the subsurface geology, including porosity and permeability.

"Stratigraphic well" does not include geotechnical or soil borings or a borehole drilled for seismic shot or mining of industrial minerals or coal.

Sec.

1509.33.

(A) Whoever violates sections 1509.01 to 1509.31 or sections 1509.71 to 1509.79 of the Revised Code, or any rules adopted or orders or terms or conditions of a permit or registration certificate issued pursuant to these sections for which no specific penalty is provided in this section, shall pay a civil penalty of not more than ten thousand dollars for each offense.

(B) Whoever violates section 1509.221 of the Revised Code or any rules adopted or orders or terms or conditions of a permit issued thereunder shall pay a civil penalty of not more than ten thousand dollars for each violation.

(C) Whoever violates division (D) of section 1509.22 or division (A)(1) of section 1509.222 of the Revised Code shall pay a civil penalty of not less than two thousand five hundred dollars nor more than twenty thousand dollars for each violation.

(D) Whoever violates division (A) of section 1509.22 of the Revised Code shall pay a civil penalty of not less than two thousand five hundred dollars nor more than ten thousand dollars for each violation.

(E) Whoever violates division (A) of section 1509.223 of the Revised Code shall pay a civil penalty of not more than ten thousand dollars for each violation.

(F) Whoever violates section 1509.072 of the Revised Code or any rules adopted or orders issued to administer, implement, or enforce that section shall pay a civil penalty of not more than five thousand dollars for each violation.

Sub.

170 Page136th 5G.A. As Passed by the House other legal entity that operates a carbon sequestration project, 107 regardless of whether an owner that has the right to drill and 108 store carbon dioxide in the project area contracts, retains, or 109 allows an individual, corporation, or other legal entity to 110 conduct operations or provide other services at the carbon 111 sequestration project.

112(G) "UICIn Classaddition VIto permit"any meansother anpenalties undergroundprovided injectionin 113this controlchapter, programwhoever violates section 1509.05, section 1509.21, division (B) of section 1509.22, or division (A)(1) of section 1509.222 of the Revised Code or a term or condition of a permit or an order issued by the chief of the division of 114 oil and gas resources management thatunder allowsthis chapter or knowingly violates division (A) of section 1509.223 of the operationRevised Code is liable for any damage or injury caused by the violation and for the actual cost of arectifying 115the carbonviolation dioxideand well.conditions caused by the violation.

116If "Undergroundtwo storageor ofmore carbonpersons dioxide"knowingly meansviolate theone 117or injectionmore andof storagethose ofdivisions carbonin dioxideconnection intowith undergroundthe stratasame 118event, andactivity, formationsor undertransaction, atthey leastare onejointly UICand Classseverally VIliable permit.under this division.

119(H) Sec.The attorney general, upon the request of the chief of the division of oil and gas resources management, shall commence an action under this section against any person who violates sections 1509.01 to 1509.31 or sections 1509.71 to 1509.79 of the Revised Code, or any rules adopted or orders or terms or conditions of a permit or registration certificate issued pursuant to these sections.

1509.72.Any action under this section is a civil action, governed by the Rules of Civil Procedure and other rules of practice and procedure applicable to civil actions.

The divisionremedy ofprovided oilin andthis gasdivision resourcesis 120cumulative managementand hasconcurrent solewith andany exclusiveother authorityremedy toprovided regulatein carbonthis 121chapter, sequestration and the operationexistence or exercise of storageone facilitiesremedy withindoes not prevent the 122exercise state,of exceptingany onlyother, thoseexcept activitiesthat regulatedno underperson federalshall 123be lawssubject forto whichboth oversighta hascivil beenpenalty delegatedunder todivision the(A), environmental(B), 124(C), protectionor agency(D) andof activitiesthis regulatedsection underand sectionsa 125fine 6111.01established toin 6111.028section 1509.99 of the Revised Code.Code for the same offense.

The(I) regulationFor ofpurposes 126 carbon sequestration activities is a matter of generalthis statewidesection, 127each interestday that requires uniform statewide regulation, and 128 sections 1509.71 to 1509.79 of theviolation Revisedconstitutes Code and rules 129 adopted under those sections constitute a comprehensiveseparate planoffense. 130 with respect to all aspects of carbon sequestration within this 131 state, including storage facility operation and permitting 132 related to those activities.

133Sec. In order to assist the division in the furtherance of its 134 sole and exclusive authority as established in this section, the 135 chief of the division of oil and gas resources management may 136 Sub.

1509.71.

As used in sections 1509.71 to 1509.79 of the Revised Code:

"Carbon dioxide" means naturally occurring, geologically sourced, or anthropogenically sourced carbon dioxide including its derivatives and all mixtures, combinations, and phases, whether liquid, gaseous, solid, stripped, segregated, or divided from any other fluid stream thereof.

"Carbon dioxide well" means a well that is used to inject carbon dioxide into pore space for carbon sequestration under a UIC Class VI permit.

"Carbon dioxide plume" means the extent, underground, in three dimensions, of injected carbon dioxide stream.

"Carbon sequestration" means the underground storage of carbon dioxide in a geological formation.

"Carbon sequestration project" means a project that involves the underground storage of carbon dioxide in a geological formation pursuant to at least one UIC Class VI permit.

"Owner" includes, unless the context indicates otherwise, a person who has the right to drill a carbon dioxide well and to inject carbon dioxide in an underground geologic formation.

"Owner," as defined in section 1509.01 of the Revised Code, does not apply to sections 1509.71 to 1509.79 or sections 5301.58 to 5301.60 of the Revised Code unless the context indicates otherwise.

"Pore space" means subsurface cavities and voids, whether natural or artificially created, that are used for sequestration.

"Storage facility" means the pore space in the subsurface area consisting of the extent of a Sub.

170 Page136th 6G.A. As Passed by the House enter into cooperative agreements with other states that share 137 jurisdiction regarding carbon sequestration projects and other 138 state agencies regarding carbon sequestration projects.

Suchcarbon 139dioxide cooperativeplume agreementsand dothe notgeological conferseals onthat otherconfine statethe agenciescarbon anydioxide 140plume authoritythat are required to administerbe ordelineated enforceon sectionsan 1509.71approved toUIC 1509.79Class 141VI ofpermit theor Revisedan Codeamendment andto rulesa adoptedUIC underClass thoseVI sections.permit issued to a storage operator.

In"Storage 142operator" addition,means suchan cooperativeindividual, agreementscorporation, shallor notother belegal construedentity tothat 143operates dilutea orcarbon diminishsequestration project, regardless of whether an owner that has the division'sright soleto drill and exclusivestore authoritycarbon 144dioxide asin establishedthe inproject thisarea section.contracts, retains, or allows an individual, corporation, or other legal entity to conduct operations or provide other services at the carbon sequestration project.

145"UIC TheClass divisionVI maypermit" createmeans aan underground injection control program topermit incentivizeissued 146by innovationthe forchief of the usedivision of oil and reutilizationgas resources management or the United States environmental protection agency that allows the operation of captureda carbon 147dioxide dioxide.well.

148"Underground Nothingstorage inof thiscarbon sectiondioxide" affectsmeans the authorityinjection granted to 149 the director of transportation and localstorage authorities in section 150 723.01 or 4513.34 of thecarbon Reviseddioxide Code,into providedunderground thatstrata theand 151formations authority granted under thoseat sectionsleast shallone notUIC beClass exercisedVI inpermit. 152 a manner that discriminates against, unfairly impedes, or 153 obstructs carbon sequestration projects regulated under sections 154 1509.71 to 1509.79 of the Revised Code.

155 Sec.

1509.72.

The division of oil and gas resources management has sole and exclusive authority to regulate carbon sequestration and the operation of storage facilities within the state, excepting only those activities regulated under federal laws and for which the state does not have primacy.

The regulation of carbon sequestration activities is a matter of general statewide interest that requires uniform statewide regulation, and sections 1509.71 to 1509.79 of the Revised Code and rules adopted under those sections constitute a comprehensive plan with respect to all aspects of carbon sequestration within this state, including storage facility operation and permitting related to those activities.

In order to assist the division in the furtherance of its sole and exclusive authority as established in this section, the chief of the division of oil and gas resources management may enter into cooperative agreements with other states that share jurisdiction regarding carbon sequestration projects and other state agencies regarding carbon sequestration projects.

Such cooperative agreements do not confer on other state agencies any authority to administer or enforce sections 1509.71 to 1509.79 of the Revised Code and rules adopted under those sections.

In addition, such cooperative agreements shall not be construed to dilute or diminish the division's sole and exclusive authority as established in this section.

The division may create a program to incentivize innovation for the use of and reutilization of captured carbon dioxide.

Nothing in this section affects the authority granted to the director of transportation and local authorities in section 723.01 or 4513.34 of the Revised Code, provided that the authority granted under those sections shall not be exercised in a manner that discriminates against, unfairly impedes, or obstructs carbon sequestration projects regulated under sections 1509.71 to 1509.79 of the Revised Code.

Sec.

(A) The chief of the division of oil and gas 156 resources management shall adopt, rescind, and amend,amend rules forin 157accordance thewith administration,Chapter implementation,119. and enforcement of sections 158 1509.71 to 1509.79 of the Revised Code.

159of (B)the RulesRevised adoptedCode underfor thisthe sectionadministration, shallimplementation, includeand 160enforcement provisionsof regardingsections applications1509.71 forto and1509.79 the issuance of UICthe 161Revised ClassSub. VI permits;

the terms and conditions of those permits;

162 entry to conduct inspections and to examine records to ascertain 163 compliance with sections 1509.71 to 1509.79 of the Revised Code, 164 rules adopted under those sections, and orders and terms and 165 conditions of permits issued under those sections;

the provision 166 Sub.

170 Page136th 7G.A. As Passed by the House and maintenance of information through monitoring, 167 recordkeeping, and reporting;

andCode. other provisions in 168 furtherance of the goals of this chapter and the Safe Drinking 169 Water Act.

170(B) (C)Rules The rules adopted under this section shall establishinclude 171provisions allregarding ofapplications for and the following:issuance of UIC Class VI permits;

172 (1) A requirement that an applicant for a UIC Class VI 173 permit attest that the applicantterms has the legal right to inject 174 carbon dioxide in the underground formation proposed in the 175 application and toconditions theof proposedthose extentspermits; that the carbon dioxide 176 will migrate, including the pressure front associated with the 177 injected carbon dioxide;

178entry (2)to Aconduct requirementinspections thatand ownersto mapexamine fieldrecords drainageto systems,ascertain 179compliance determinewith wayssections 1509.71 to mitigate1509.79 orof avoidthe damageRevised toCode, drainagerules systems,adopted 180under those sections, and promptlyorders repairand orterms restoreand drainageconditions conditions;of permits issued under those sections;

181the (3)provision Requirements and proceduresmaintenance for statutory 182 consolidation applications under section 1509.76 of theinformation Revisedthrough 183monitoring, Coderecordkeeping, thatand includereporting; any land owned by the state;

184and (4)other Theprovisions amountin furtherance of the costsgoals estimated to implement the 185 closure plan of thethis carbonchapter dioxide well and associatedthe 186Safe facilitiesDrinking andWater anyAct. post injection site care and site closure.

187(C) (D) The rules adopted under this section shall includeestablish anall 188 identification of the subjectsfollowing: that the chief shall address when 189 attaching terms and conditions to a UIC Class VI permit.

The(1) 190To subjectsthe shallextent includeground atdisturbance leastis allnecessary, ofa therequirement following:that owners review field drainage systems with landowners, determine ways to mitigate or avoid damage to drainage systems, and promptly repair or restore drainage conditions;

191(2) (1) Requirements and procedures for thestatutory operationconsolidation andapplications monitoringunder section 1509.76 of athe 192Revised carbonCode dioxidethat well;include any land owned by the state;

193(3) (2)The Safetyamount concerningof the drillingcosts andestimated operationto implement the closure plan of athe 194carbon Sub.dioxide well and associated facilities and any post injection site care and site closure;

(4) Requirements and procedures that allow a storage operator to seek a permit to drill a carbon dioxide well while an application for statutory consolidation submitted under section 1509.76 of the Revised Code is pending.

(D) The rules adopted under this section shall include an identification of the subjects that the chief shall address when attaching terms and conditions to a UIC Class VI permit.

The subjects shall include at least all of the following:

(1) Requirements for the operation and monitoring of a carbon dioxide well;

(2) Safety concerning the drilling and operation of a carbon dioxide well;

(3) Spacing, setback, and any other provisions to prevent storage facilities and storage operators from impacting the ability of owners of existing oil and gas well interests to develop those interests;

(4) Protection of the public and private water supply, including the amount of water used and the source or sources of the water;

(5) Fencing and screening of surface facilities of a carbon dioxide well;

(6) Containment and disposal of drilling and other wastes;

(7) Construction of access roads for purposes of the drilling and operation of a carbon dioxide well;

(8) Noise mitigation for purposes of the drilling of a carbon dioxide well and the operation of such a well, excluding safety and maintenance operations;

(9) Liability insurance to pay damages for injury to persons or property caused by the construction or operation of the storage facility, to be maintained for the period of time beginning at the commencement of construction operations and ending when the chief issues a certificate of Sub.

170 Page136th 8G.A. As Passed by the House carbon dioxide well;

195project (3)completion Spacing,under setback,section and1509.77 otherof provisions to prevent 196 storage facilities and storage operators from impacting the 197Revised abilityCode; of owners of oil and gas interests to develop those 198 interests;

199(10) (4)Liability Protectioninsurance coverage of theat publicleast andfifteen privatemillion waterdollars supply,to 200cover includingbodily theinjury amountand ofproperty waterdamage usedcaused andby the sourceconstruction, drilling, or sourcesoperation of 201 the water;owner's carbon dioxide wells in this state.

202The (5)rules Fencingshall andrequire screeningthe ofinsurance surfacepolicy facilitiesto ofinclude aadditional 203coverage carbonfor dioxidean well;environmental endorsement.

204(11) (6)A Containmentfinancial andinstrument, disposalincluding a surety bond, letter of drillingcredit, andinsurance, otherescrow, wastesor 205self-insurance, relatedconditioned on compliance with all obligations imposed under sections 1509.71 to 1509.79 of the Revised Code, to be maintained for the period of time beginning at the commencement of construction operations and ending when the chief issues a carboncertificate sequestrationof project;project completion.

206The (7)rules Constructionshall ofestablish accessthe roadsrequired foramount purposes of the 207financial drillinginstrument andthat operationis ofnot aless carbonthan dioxidethe well;cost estimate identified in the application.

208The (8)financial Noiseinstrument mitigationshall forbe purposessufficient ofto thecover drillingcorrective ofactions, aplugging, 209post-injection carbonsite dioxidecare wellprior andto thereceipt operation of such a well,certificate excludingof 210project safetycompletion, and maintenanceemergency operations;or remedial response.

211(E) (9)Notwithstanding Liabilityany insuranceprovision toof paysection damages121.95 for injury to 212 persons or property caused by the construction or operation of 213 the storageRevised facility,Code to be maintained for the periodcontrary, ofa timeregulatory 214restriction beginningcontained atin thea commencementrule ofadopted constructionunder operationsthis andsection 215is endingnot whensubject theto chiefsections issues121.95 ato certificate121.953 of project completion 216 under section 1509.77 of the Revised Code;Code.

217Sec. (10) Liability insurance coverage of at least fifteen 218 million dollars to cover bodily injury and property damage 219 caused by the construction, drilling, or operation of the 220 owner's carbon dioxide wells in this state.

The rules shall 221 require the insurance policy to include additional coverage for 222 Sub.

H.

B.

No.

170 Page 9 As Passed by the House an environmental endorsement.

223 (11) A surety bond conditioned on compliance with all 224 obligations imposed under sections 1509.71 to 1509.79 of the 225 Revised Code, to be maintained for the period of time beginning 226 at the commencement of construction operations and ending when 227 the chief issues a certificate of project completion.

The rules 228 shall establish the required amount of the surety bond that is 229 not less than the cost estimate identified in the application.

230 The surety bond shall be sufficient to cover corrective actions, 231 plugging, post-injection site care prior to receipt of a 232 certificate of project completion, and emergency or remedial 233 response.

234 Sec.

(A) Carbon sequestration projects are 235 authorized in the state for the purposes of injecting carbon 236 dioxide into the pore space of a storage facility through at 237 least one carbon dioxide injection well under a UIC Class VI 238 permit.

239 (B) To operate a carbon sequestration project under 240 sections 1509.71 to 1509.79 of the Revised Code, a storage 241 operator shall obtain at least both of the following:

242 (1) A UIC Class VI permit, which shall be applied for in 243 the name of the storage operator;

244 (2) Any additional permits required by applicable laws, 245 rules, and regulations, except that a storage operator is not 246 required to obtain a permit required under section 1509.05 of 247 the Revised Code.

248 (C) Prior to carbon sequestration, the chief of the 249 division of oil and gas resources management may require a 250 storage operator to deploy a seismicity monitoring system.

The 251storage Sub.operator shall use the system to determine, to the best of the operator's ability, the presence or absence, magnitude, and the hypocenter location of seismic activity within the vicinity of the storage facility as may be necessary to perform an array and a risk analysis and as required by the chief.

The chief may periodically require the storage operator to utilize the seismicity monitoring system during carbon sequestration operations.

(D) Prior to, or during the operation of, a carbon sequestration project under sections 1509.71 to 1509.79 of the Revised Code, a storage operator shall design the project to endeavor to isolate any existing or future production of oil and gas from above and below the proposed storage facility.

(E) Provisions of this chapter codified in sections other than sections 1509.71 to 1509.79 of the Revised Code apply to carbon sequestration projects to the extent that those provisions are Sub.

170 Page136th 10G.A. As Passed by the House storage operator shall use the system to determine, to the best 252 of the operator's ability, the presence or absence, magnitude, 253 and the hypocenter location of seismic activity within the 254 vicinity of the storage facility as may be necessary to perform 255 an array and a risk analysis and as required by the chief.

Theconsistent 256with, chiefand maynot periodicallyspecifically requireexcepted thefrom, storagesections operator1509.71 to utilize1509.79 257of the seismicityRevised monitoringCode. system during carbon sequestration 258 operations.

259Sec. (D) Prior to, or during the operation of, a carbon 260 sequestration project under sections 1509.71 to 1509.79 of the 261 Revised Code, a storage operator shall design the project to 262 isolate any existing or future production of oil and gas from 263 within, above, and below the proposed storage facility.

The 264 chief shall issue a permit under those sections only if the 265 chief is satisfied that the interests of the owners of the oil 266 and gas will not be adversely affected.

267 (E) Provisions of this chapter codified in sections other 268 than sections 1509.71 to 1509.79 of the Revised Code apply to 269 carbon sequestration projects to the extent that those 270 provisions are consistent with, and not specifically excepted 271 from, sections 1509.71 to 1509.79 of the Revised Code.

272 Sec.

(A)(1)(A) If, after good-faith negotiation, the 273 applicant for a UIC Class VI permit or a storage operator cannot 274 locate or reach an agreement with all necessary pore space 275 owners in the proposed storage facility but has obtained the consent of owners of at least 276 seventy per cent of the pore space proposed to be used in a 277 storage facility, the applicant or storage operator may submit a 278 statutory consolidation application for the operation of the 279 entire proposed storage facility to the chief of the division of 280 oil and gas resources management.

In calculating the seventy per 281cent, Sub.a pore space owner's entire interest in the proposed storage facility, including any divided, undivided, partial, fee, or other interest in the pore space, shall be included to the fullest extent of that interest.

(B) An applicant shall include the following with the application:

(1) A list of all persons reasonably known to own oil, gas, or coal interests above or below the pore space proposed to be used for the storage facility;

(2) An application fee in the amount of fifty thousand dollars.

The division shall maintain a record of all costs incurred processing the application.

If the costs of processing the application exceed the initial application fee, the division shall send the applicant a final statement of those additional costs.

The applicant shall pay the additional amount before the division issues its final decision on the application.

If the costs of processing the application are less than the initial application fee, the division shall refund the difference to the applicant.

The division shall send the applicant the refund after the division issues its final decision on the application.

Except for any portion of the application fee that is refunded, the applicant shall pay the complete application fee regardless of whether a permit is issued or denied or the application is withdrawn.

All application fees shall be credited to the carbon capture administrative fund created under section 1509.78 of the Revised Code.

(3) Proof of notice provided under division (D) of this section, if applicable;

(4) A notarized affidavit listing a minimum of three attempts to contact all known pore space owners on three separate dates;

(5) Any additional information reasonably requested by the chief.

(C) For each application, the chief shall provide notice to all pore space owners and lessees located within the proposed storage facility and all owners and lessees of the subsurface areas located above and below the proposed storage facility of the proposed carbon sequestration project, as identified by the applicant in the application.

The notice shall be sent not later than thirty days after the chief determines that the application is complete.

The chief shall not rule on an application until after such notice has been provided.

If, upon receipt of the notice, an owner or lessee of the subsurface area that is located above or below the proposed storage facility expresses an objection to the chief regarding the design of the carbon sequestration project based on the potential adverse effect to an existing or future oil, gas, coal, or potable water operation, the storage operator shall demonstrate, to the satisfaction of the chief, that any such objection has been addressed as part of the Sub.

170 Page136th 11G.A. As Passed by the House cent, a pore space owner's entire interest in the proposed 282 storage facility, including any divided, undivided, partial, 283 fee, or other interest in the pore space, shall be included to 284 the fullest extent of that interest.

Theapplication applicantrequirements orestablished storageunder 285this operatorsection. shall obtain the consent of the pore space owners prior 286 to injecting carbon dioxide into the well.

287Such (B)objections Anare applicantnot shallrequired includeto be submitted in the followingtimeframe withrequired for notifications to the 288chief application:under division (D) of this section, but shall be made not later than thirty days after receipt of a notification.

289(D)(1) (1)If Athe listproposed ofstorage allfacility personscontains reasonablypore knownspace tofor ownwhich anthe 290owner interestis inunknown theor poreunlocatable, spacethe proposedstorage tooperator beshall useddo forboth of the storagefollowing: 291 facility;

292(a) (2)Publish Aone processingnotice feein baseda onnewspaper actualof applicationgeneral 293circulation processingin costseach incurredcounty byin which the divisioncarbon ofsequestration oilproject andis gaslocated. 294 resources management.

PromptlyThe afternotice receivingshall anappear application,not 295more thethan divisionthirty shalldays prepareprior and submit to the applicantdate an 296 estimate of the processingapplication feeis andsubmitted ato paymentthe billingchief. schedule.

297(b) TheRequest divisionthe shallchief maintainto post a recordnotice ofon allthe applicationdivision's 298web processingsite. costs incurred.

AfterUpon thereceiving division's work on the 299request, application has concluded, the divisionchief shall sendensure athat finalsuch 300notice statementis posted to the applicant.division's web site.

The(2) applicantAny shallnotice paypublished thein fullaccordance 301with processing fee before the division issues(D)(1) itsof finalthis decisionsection onshall: 302 an application.

The(a) applicantState shallthat payan theapplication processingfor feestatutory 303consolidation regardlesswill ofbe whetherfiled awith permit is issued or denied, or whether 304 the applicationdivision; is withdrawn.

The(b) divisionDescribe shall return any 305 unused funds paid to the divisionproposed asstorage partfacility; of the processing fee 306 estimate to the applicant.

307(c) (3)In Proofthe case of noticean providedunknown underpore divisionspace (D)owner, state the owner's interest in the proposed storage facility, and the name of thisthe 308last section,known ifowner applicable;of that interest;

309(d) (4)State Athat notarizeda affidavitperson listingclaiming aan minimuminterest in the pore space proposed to be consolidated shall notify the chief and the applicant at the published address within twenty days of threethe 310notice's Sub.publication date.

Within seven days of receiving notice of a claim, the applicant shall provide information to the claimant, in a form and manner prescribed by the chief, regarding the right of the claimant to file an objection and participate in the application proceeding before the division.

(E)(1)(a) The chief shall hold a hearing regarding an application submitted under this section, except as otherwise provided in division (E)(1)(b) of this section.

(b) If the chief determines that an application is materially incomplete before the required hearing date, the chief shall notify the applicant.

If the applicant does not timely correct the application, the chief may reschedule the hearing date.

(2) At the hearing, the chief shall consider whether the application is reasonably necessary to facilitate carbon sequestration.

(F)(1) The chief shall issue an order approving the application submitted under this section and providing for the operation of the proposed storage facility if the chief finds that such operation is reasonably necessary to facilitate carbon sequestration.

The chief shall issue the order not later than sixty days after the date of the hearing under division (E) of this section, unless the chief denies the application by order within that sixty-day period.

(2) An order approving an application shall be upon terms and conditions that are just and reasonable and shall prescribe a plan for operations that include:

(a) A description of the pore space and storage facility proposed to be operated;

(b) The location of and means to access carbon injection wells, outbuildings, roads, and monitoring equipment;

(c) A statement of the nature of the operations contemplated;

Sub.

170 Page136th 12G.A. As Passed by the House attempts to contact all known pore space owners on three 311 separate dates;

312(d)(i) (5)An Anyallocation additionalto informationthe reasonablyseparately requestedowned byinterests in the 313storage chief.facility of all economic benefits derived from operation of the storage facility.

314The (C)order For each application, the chief shall provideensure noticethat 315 to all pore space owners locatedare withincompensated thein proposeda storagefair 316 facility and allreasonable ownersmanner. of the subsurface areas located within, 317 above, and below the proposed storage facility of the proposed 318 carbon sequestration project, as identified by the applicant in 319 the application.

(ii) The chiefallocation shall notbe rulein onaccord anwith applicationthe 320agreement, untilif afterany, suchof noticethe hasinterested beenparties. provided.

If,If uponthere receiptis ofno 321agreement between the notice,parties, the subsurfacechief propertyshall ownerdetermine expressesthe anvalue objectionof 322each toseparately theowned chiefinterest regardingin the designstorage offacility, theexclusive carbonof sequestrationphysical 323equipment, projectfor baseddevelopment onof the potentialstorage adversefacility, effectand tothe aeconomic commerciallybenefits 324allocated valuableto mineral,each including,interest withoutshall limitationbe athe coalproportion orthat oil 325 and gas estate, the storagevalue operatorof shalleach addressinterest theso objectiondetermined 326bears to the satisfactionvalue of all interests in the chief.storage facility.

Such(e) objectionsThe aretime notwhen 327the requiredstorage tofacility beoperations submittedshall incommence and the timeframemanner requiredin forwhich, 328and notifications to the chiefcircumstances under divisionwhich, (D)the ofoperations this section, 329 but shall beterminate; made in accordance with requirements established by 330 the chief.

331(f) (D)Any Ifadditional theprovisions proposedas storageare facilityfound containsto porebe spaceappropriate 332 for whichcarrying on the owneroperations, isand unknownfor or unlocatable, the storageprotection 333or operatoradjustment shall publish one notice in a newspaper of thecorrelative largestrights. 334 circulation in each county in which the carbon sequestration 335 project is located.

(3) The noticestorage operator shall appearfile nota morecertified thancopy thirtyof 336the daysorder priorand toa survey of the datestorage facility in the applicationoffice isof submittedthe tocounty recorder of the 337county chief.in which all or a portion of the storage facility is located.

338 The noticechief shall:shall make the order publicly available, which may include posting the order on the division's web site.

339(G) Sub.Storage facility operations conducted pursuant to an order issued under this section constitute a fulfillment of all the express or implied obligations of each lease or contract covering lands in the storage facility to the extent that compliance with such obligations cannot be had because of the order of the chief.

Economic benefits allocated to any interest shall be the property and income of the several persons to whom, or to whose credit, the same are allocated or payable under the order providing for storage facility operations.

(H) No order of the chief or other contract relating to the pore space and the storage of carbon dioxide from a separately owned interest shall be terminated by the order providing for storage facility operations, but shall remain in force until terminated in accordance with the provisions thereof.

Except to the extent that the parties affected so agree, no order providing for storage facility operations shall be construed to result in a transfer of any person's title to all or any part of the pore space in the storage facility.

All property, whether real or personal, that may be acquired for the account of the owners within the storage facility shall be the property of such owners in the proportion that the expenses of operations are charged.

(I)(1) Except as provided in division (I)(2) of this section, the right to utilize pore space for a storage facility pursuant to this section does not confer a right to enter upon, or otherwise use, the surface of the land above such pore space unless authorized by a properly executed surface use agreement.

A statutory consolidation order shall not grant the storage operator expressed or implied rights of surface use or access.

(2) Notwithstanding division (I)(1) of this section, a storage operator may have a right to Sub.

170 Page136th 13G.A. As Passed by the House (1) State that an application for statutory consolidation 340 will be filed with the division;

341enter (2)upon Describethe surface of the proposedland storageas facility;required by state or federal law, due to an imminent or emergent threat to public health, safety, or the environment pursuant to an order from the chief, or pursuant to any other order from the chief.

342Sec. (3) In the case of an unknown pore space owner, state the 343 owner's interest in the proposed storage facility, and the name 344 of the last known owner of that interest;

345 (4) State that a person claiming an interest in the pore 346 space proposed to be consolidated shall notify the chief and the 347 applicant at the published address within twenty days of the 348 notice's publication date.

Within seven days of receiving notice 349 of a claim, the applicant shall provide information to the 350 claimant, in a form and manner prescribed by the chief, 351 regarding the right of the claimant to file an objection and 352 participate in the application proceeding before the division.

353 (E)(1)(a) The chief shall hold a hearing regarding an 354 application submitted under this section, except as otherwise 355 provided in division (E)(1)(b) of this section.

356 (b) If the chief determines that an application is 357 materially incomplete before the required hearing date, the 358 chief shall notify the applicant.

If the applicant does not 359 timely correct the application, the chief may reschedule the 360 hearing date.

361 (2) At the hearing, the chief shall consider whether the 362 application is reasonably necessary to facilitate the 363 underground storage of carbon dioxide.

364 (F)(1) The chief shall issue an order approving the 365 application submitted under this section and providing for the 366 operation of the proposed storage facility if the chief finds 367 that such operation is reasonably necessary to facilitate the 368 Sub.

H.

B.

No.

170 Page 14 As Passed by the House underground storage of carbon dioxide.

The chief shall issue the 369 order not later than sixty days after the date of the hearing 370 under division (E) of this section, unless the chief denies the 371 application by order within that sixty-day period.

372 (2) An order approving an application shall be upon terms 373 and conditions that are just, reasonable, and equitable and 374 shall prescribe a plan for operations that include:

375 (a) A description of the pore space and storage facility 376 proposed to be operated;

377 (b) The location of and means to access carbon injection 378 wells, outbuildings, roads, and monitoring equipment;

379 (c) A statement of the nature of the operations 380 contemplated;

381 (d)(i) An allocation to the separately owned interests in 382 the storage facility of all economic benefits derived from 383 operation of the storage facility.

The order shall ensure that 384 all pore space owners are compensated in a fair and reasonable 385 manner.

386 (ii) The allocation shall be in accord with the agreement, 387 if any, of the interested parties.

If there is no agreement 388 between the parties, the chief shall determine the value of each 389 separately owned interest in the storage facility, exclusive of 390 physical equipment, for development of the storage facility, and 391 the economic benefits allocated to each interest shall be the 392 proportion that the value of each interest so determined bears 393 to the value of all interests in the storage facility.

394 (e) A provision describing how the credits and charges 395 shall be made in the adjustment among the owners in the storage 396 facility for their respective investments in wells, machinery, 397 Sub.

H.

B.

No.

170 Page 15 As Passed by the House materials, and equipment contributed to the operations;

398 (f) A provision describing how the expenses of operations, 399 including capital investment, shall be determined and charged to 400 the separately owned interests and how the expenses shall be 401 paid;

402 (g) A provision, if necessary, for carrying or otherwise 403 financing any person who does not meet the person's financial 404 obligations in connection with the storage facility, allowing a 405 reasonable interest charge for such service;

406 (h) A provision for the supervision and conduct of the 407 storage facility operations, in respect to which each person 408 shall have a vote with a value corresponding to the percentage 409 of the expenses of operations chargeable against the interest of 410 that person;

411 (i) The time when the storage facility operations shall 412 commence and the manner in which, and the circumstances under 413 which, the operations shall terminate;

414 (j) Any additional provisions as are found to be 415 appropriate for carrying on the operations, and for the 416 protection or adjustment of correlative rights.

417 (3) The storage operator shall file a certified copy of 418 the order and a survey of the storage facility in the office of 419 the county recorder of the county in which all or a portion of 420 the storage facility is located.

The chief shall make the order 421 publicly available, which may include posting the order on the 422 division's web site.

423 (G) Storage facility operations conducted pursuant to an 424 order issued under this section constitute a fulfillment of all 425 the express or implied obligations of each lease or contract 426 Sub.

H.

B.

No.

170 Page 16 As Passed by the House covering lands in the storage facility to the extent that 427 compliance with such obligations cannot be had because of the 428 order of the chief.

429 Economic benefits allocated to any interest shall be the 430 property and income of the several persons to whom, or to whose 431 credit, the same are allocated or payable under the order 432 providing for storage facility operations.

433 (H) No order of the chief or other contract relating to 434 the pore space and the storage of carbon dioxide from a 435 separately owned interest shall be terminated by the order 436 providing for storage facility operations, but shall remain in 437 force until terminated in accordance with the provisions 438 thereof.

439 Except to the extent that the parties affected so agree, 440 no order providing for storage facility operations shall be 441 construed to result in a transfer of any person's title to all 442 or any part of the pore space in the storage facility.

All 443 property, whether real or personal, that may be acquired for the 444 account of the owners within the storage facility shall be the 445 property of such owners in the proportion that the expenses of 446 operations are charged.

447 (I) The right to utilize pore space for a storage facility 448 pursuant to this section does not confer a right to enter upon, 449 or otherwise use, the surface of the land above such pore space 450 unless authorized by a properly executed surface use agreement.

451 A statutory consolidation order shall not grant the storage 452 operator expressed or implied rights of surface use or access.

453 Sec.

(A) After carbon dioxide injection into a 454 storage facility ceases, the chief of the division of oil and 455gas Sub.resources management may issue a certificate of project completion upon application by the storage operator.

The chief shall issue a certificate only upon satisfaction of the conditions imposed under this section and after providing public notice of the application, an opportunity for public comment, and if deemed necessary by the chief, a public hearing on the application.

(B) A certificate shall not be issued until at least fifty years after carbon dioxide injections cease or until an established alternative timeline approved by the chief has elapsed.

(C) A certificate shall not be issued until the storage operator establishes with a degree of certainty to the satisfaction of the chief that all of the following apply:

(1) The storage operator is in full compliance with all laws governing carbon sequestration.

(2) The following apply to the carbon dioxide that has been injected underground for storage:

(a) It is not expected to extend or migrate outside of the storage facility and is not expected to pose a threat to public health or safety or the environment or underground sources of drinking water.

(b) It is not likely to cross any boundary vertically from the storage facility and is not expected to endanger public health or safety or the environment or underground sources of drinking water.

(3) All carbon dioxide wells and associated equipment and facilities to be used in maintaining and managing the stored carbon dioxide, including any monitoring wells, are in good condition and will retain mechanical integrity.

(4) The storage operator has plugged all carbon dioxide wells not used in maintaining and managing the stored carbon dioxide and has completed all reclamation required by the division.

(D) Upon the issuance of a certificate of project completion, the following shall occur:

(1) Except as otherwise provided in this section, the former storage operator is released from all regulatory requirements associated with continued storage and maintenance of the injected carbon dioxide, and financial assurance required under rules adopted under section 1509.73 of the Revised Code shall be released to the former storage operator.

(2) Primary responsibility and liability for the stored or injected carbon dioxide shall be transferred to the state, except for criminal and contractual liability and except under any of the following circumstances:

(a) The storage operator violated a duty imposed on the storage operator by state law or rule prior to the issuance of the certificate of project completion and any applicable statutes of limitations have not run out;

Sub.

170 Page136th 17G.A. As Passed by the House gas resources management may issue a certificate of project 456 completion upon application by the storage operator.

The(b) chiefAfter 457notice shalland issue a certificatehearing, only upon satisfaction of the 458chief conditionsdetermines imposedeither under this section and after providing public 459 notice of the application,following: an opportunity for public comment, 460 and if deemed necessary by the chief, a public hearing on the 461 application.

462(i) (B)The Astorage certificateoperator shallprovided notdeficient beor issuederroneous untilinformation atthat leastwas fiftymaterial 463and yearsrelied afterupon carbonby dioxidethe injectionschief ceaseto orsupport untilthe anissuance 464of established alternative timeline approved by the chiefcertificate hasof 465project elapsed.completion;

466(ii) (C)There Ais certificatecarbon shalldioxide notmigration bethat issuedthreatens untilpublic thehealth storageor 467safety operatoror establishes with a degree of certainty to the 468environment satisfactionor ofunderground thesources chief that all of thedrinking followingwater; apply:

469(c) (1) The storagebalance operatorof isthe incarbon fulldioxide compliancestorage withfacility allfund 470is lawsinsufficient governingto thecover injectioncosts andarising from storage offacilities theand associated carbon dioxide.dioxide wells after site closure.

471(3) (2) The followingstorage applyoperator toand theall individuals who generated, injected, or stored carbon dioxide thatshall hasbe 472forever beenreleased from all regulatory requirements associated with the continued storage and maintenance of the injected undergroundcarbon fordioxide, storage:except as provided in division (D)(2) of this section.

473Sec. (a) It is not expected to extend or migrate outside of the 474 storage facility and is not expected to pose any threat to 475 public health or safety or the environment or underground 476 sources of drinking water.

4771509.78. (b) It is not likely to cross any boundary vertically from 478 the storage facility and is not expected to endanger public 479 health or safety or the environment or underground sources of 480 drinking water.

481(A) (3)Storage Alloperators carbonshall dioxidepay wellsthe anddepartment associatedof equipmentnatural andresources 482a facilitiesfee toof befive usedcents infor maintainingeach andmetric managington theof stored 483 carbon dioxide,dioxide includinginjected anyfor monitoringstorage wells, are in gooda 484storage Sub.facility.

The fee shall be paid quarterly and credited to the carbon dioxide storage facility fund created under this section.

(B)(1) The carbon dioxide storage facility fund is created in the state treasury.

Except for fees collected under divisions (C) and (D) of this section, the fund shall consist of any money collected under this section in relation to a carbon dioxide well, including money received by the department from financial responsibility mechanisms established and penalties imposed for violations of sections 1509.71 to 1509.79 of the Revised Code, rules adopted under those sections, and orders and terms and conditions of a permit issued under those sections.

All interest earnings of the fund shall be credited to the fund.

(2) The chief of the division of oil and gas resources management shall use the money in the fund for the purpose of defraying expenses of the division that are associated with post-closure care of sequestered carbon dioxide in a storage facility, including the maintenance of carbon dioxide wells, associate surface facilities, remediation of any environmental impacts from the injected carbon dioxide, and plugging of monitoring wells associated with the injection of carbon dioxide in a carbon dioxide well.

(3) The existence, management, and expenditure of money from the fund do not constitute a waiver of governmental immunity or an assumption of any liability by the state for carbon sequestration.

(C) In addition to the fee established under division (A) of this section, an owner of a carbon dioxide well, an applicant for a UIC class VI permit, and the holder of a UIC class VI permit shall pay fees to defray the department's costs of administering sections 1509.71 to 1509.79 of the Revised Code and the rules adopted under those sections.

The chief, by rule, shall establish the type and amount of the fees.

The fees may include, without limitation, additional application fees, annual fees, and other fees that the chief determines are necessary to administer sections 1509.71 to 1509.79 of the Revised Code and the rules adopted under those sections.

The fees shall be credited to the Sub.

170 Page136th 18G.A. As Passed by the House condition and will retain mechanical integrity.

485 (4) The storage operator has plugged all carbon dioxidecapture 486administrative wellsfund notcreated usedunder inthis maintainingsection. and managing the stored carbon 487 dioxide and has completed all reclamation required by the 488 division.

489 (D) UponIn addition to the issuancefee established under division (A) of this section, an owner of a certificatecarbon dioxide well shall pay to the chief a fee of projectthree 490cents completion,for each metric ton of carbon dioxide injected for storage in a storage facility, for the followingpurpose shallof occur:supporting the needs of host communities in which the storage facility is located.

491The (1)owner Exceptshall aspay otherwisethe providedfee into this section, the 492chief formerquarterly storageon operatorthe isbasis released from all regulatory 493 requirements associated with continued storage and maintenance 494 of the injected carbon dioxide,dioxide andinjected financialduring assurance required 495 under rules adopted under section 1509.73 of the Revisedcalendar Codequarter. 496 shall be released to the former storage operator.

497The (2)fees Primary responsibility and liability for the stored or 498 injected carbon dioxide shall be transferredcredited to the state,carbon 499capture exceptadministrative forfund criminalcreated and contractual liability and except under 500this anysection. of the following circumstances:

501(E)(1) (a) The storagecarbon operatorcapture violatedadministrative afund dutyis imposedcreated onin the 502 storage operator by state lawtreasury. or rule prior to approval of site 503 closure and any applicable statutes of limitations have not run 504 out;

505The (b)fund Aftershall noticeconsist andof athe hearing,fees thecollected chiefunder determinesdivisions 506(C) eitherand (D) of thethis following:section.

507The (i)chief Theshall storageuse operatorthe providedfunds deficientcollected orunder erroneousdivision 508(C) informationof thatthis wassection materialfor the sole and reliedexclusive uponpurpose byof theadministering chiefsections 1509.71 to 5091509.79 supportof approvalthe ofRevised siteCode closure;and the rules adopted under those sections.

510The (ii)chief Thereshall isuse carbonthe dioxidefunds migrationcollected thatunder threatensdivision 511(D) publicof healththis orsection safetyin oraccordance thewith environmentdivision or(E) underground(2) 512of Sub.this section.

All investment earnings of the fund shall be credited to the fund.

(2) The chief shall provide for payment of the revenue from the fee collected under division (D) of this section to the county treasurer of the county in which the storage facility is located.

If the storage facility is located in more than one county, the chief shall provide for payment of the revenue equally to the county treasurer of each such county.

The county treasurer shall deposit any such payment into a special fund the treasurer shall create in the county treasury called the carbon storage host community fund.

(3) Money in a carbon storage host community fund shall be used by the board of county commissioners, or disbursed to a township, municipal corporation, school district, or other subdivision located within the county, solely and exclusively for one or more of the following purposes within the county or other subdivision:

(a) Infrastructure, including roads, bridges, water and wastewater systems, broadband, and other public works;

(b) Parks, recreation, and trails;

(c) Education, including support for primary, secondary, and career-technical education within the subdivision;

(d) Public safety, including law enforcement, fire protection, emergency medical services, and emergency preparedness and response.

Sec.

1509.79.

Any person adversely affected by an order issued by the chief of the division of oil and gas resources management under sections 1509.71 to 1509.79 of the Revised Code may appeal to the oil and gas commission for an order vacating or modifying the order.

Notwithstanding any provision of the Revised Code to the contrary, a person to whom a permit is issued by the chief may appeal any of the terms and conditions included in the permit to the commission.

The person so appealing to the commission shall be known as appellant, and the chief shall be known as appellee.

Appellant and appellee shall be deemed to be parties to the appeal.

The appeal shall be in writing and shall set forth the order complained of and the grounds Sub.

170 Page136th 19G.A. As Passed by the House sources of drinking water;

513upon (c)which The balance of the carbonappeal dioxide storage facility 514 fund is insufficientbased. to cover costs arising from storage 515 facilities and associated carbon dioxide wells after site 516 closure.

517 (3) The storageappeal operatorshall andbe allfiled individualswith whothe 518commission generated,within injected,thirty ordays storedafter carbonthe dioxidedate shallupon bewhich foreverthe 519person releasedto fromwhom allthe regulatoryorder requirementswas associatedissued withreceived the 520order continuedand, storagefor andall maintenanceother ofpersons theadversely injectedaffected carbonby 521the dioxide,order, exceptwithin asthirty provideddays inafter divisionthe (D)(2)date of thisthe section.order complained of.

522Notice (4)of Anythe bondfiling orof financialthe assuranceappeal submittedshall tobe filed with the 523chief divisionwithin shallthree bedays released.after the appeal is filed with the commission.

524Upon Sec.the filing of the appeal, the commission may decide the appeal, in whole or in part, without a hearing when, in its judgment, it is appropriate to do so.

1509.79.If the commission decides to hold a hearing, the commission promptly shall fix the time and place at which the hearing on the appeal will be held and shall give the appellant and the chief at least ten days' written notice thereof by mail.

(A)The Storagecommission operatorsmay shallpostpone payor thecontinue 525any departmenthearing ofupon naturalits resourcesown amotion feeor ofupon fiveapplication andof twenty-fivethe 526appellant oneor hundredth cents for each metric ton of carbonthe dioxidechief. 527 injected for storage in a storage facility.

The feefiling shallof bean 528appeal depositedprovided intofor in this section does not automatically suspend or stay execution of the carbonorder dioxideappealed storagefrom, facilitybut fundupon createdapplication 529by underthe thisappellant section.the commission may suspend or stay the execution pending determination of the appeal upon such terms as the commission considers proper.

530Either (B)(1)party Theto carbonthe dioxideappeal storageor facilityany fundinterested isperson createdwho, 531pursuant into commission rules has been granted permission to appear, may submit such evidence as the statecommission treasury.considers admissible.

ExceptFor forthe feespurpose collectedof underconducting divisiona 532hearing (C)on ofan thisappeal, section, the fundcommission shallmay consistrequire ofthe anyattendance moneyof 533witnesses collectedand underthe thisproduction sectionof inbooks, relationrecords, toand apapers, Classand VIit well,may, 534and includingat money received by the departmentrequest fromof financialany 535party responsibilityit mechanismsshall, establishedissue andsubpoenas penalties imposed for 536witnesses violationsor ofsubpoenas sectionsduces 1509.71tecum to 1509.79compel of the Revisedproduction Code,of 537any rulesbooks, adoptedrecords, underor thosepapers, sections,directed andto ordersthe andsheriffs terms and 538 conditions of athe permitcounties issuedwhere underthe thosewitnesses sections.are found.

AllThe interestsubpoenas 539shall earningsbe ofserved and returned in the fundsame shallmanner beas creditedsubpoenas toin thecriminal fund.cases are served and returned.

540 (2) The chieffees of sheriffs shall be the divisionsame ofas oilthose andallowed gasby resourcesthe 541court Sub.of common pleas in criminal cases.

Witnesses shall be paid the fees and mileage provided for under section 119.094 of the Revised Code.

Such fees and mileage expenses incurred at the request of appellant shall be paid in advance by the appellant, and the remainder of those expenses shall be paid out of funds appropriated for the expenses of the division of oil and gas resources management.

In case of disobedience or neglect of any subpoena served on any person, or the refusal of any witness to testify to any matter regarding which the witness may be lawfully interrogated, the court of common pleas of the county in which the disobedience, neglect, or refusal occurs, or any judge thereof, on application of the commission or any member thereof, shall compel obedience by attachment proceedings for contempt as in the case of disobedience of the requirements of a subpoena issued from that court or a refusal to testify therein.

Witnesses at such hearings shall testify under oath, and any member of the commission may administer oaths or affirmations to persons who so testify.

If a hearing occurs, and at the request of any party to the appeal, a record of the testimony and other evidence submitted shall be taken by an official court reporter at the expense of the party Sub.

170 Page136th 20G.A. As Passed by the House management shall use the money in the fund for the purpose of 542 defraying expenses of the division that are associated with 543 post-closure care of sequestered carbon dioxide in a storage 544 facility, including the maintenance of carbon dioxide wells, 545 associate surface facilities, remediation of any environmental 546 impacts from the injected carbon dioxide, and plugging of 547 monitoring wells associated with the injection of carbon dioxide 548 in a carbon dioxide well.

549making (3) The existence, management, and expenditure of money 550 from the fundrequest dofor not constitute a waiver of governmental 551 immunity or an assumption of any liability by the staterecord. for 552 carbon dioxide storage.

553The (C)(1)record Inshall additioninclude toall the fee established under division 554 (A) of thisthe section,testimony anand ownerother ofevidence aand carbonthe dioxiderulings wellon shallthe payadmissibility 555thereof apresented feeat for each metric ton of carbon dioxide injected in the 556hearing. carbon dioxide well.

The chief,commission byshall rule,pass shallupon establishthe admissibility of evidence, but any party may at the 557time amountobject to the admission of any evidence and except to the fee,rulings of the commission thereon, and if the feecommission shallrefuses beto depositedadmit inevidence the carbonparty 558offering capturesame administrativemay fundmake createda underproffer thisthereof, section.and such proffer shall be made a part of the record of the hearing.

559If (2)the Thecommission carbonfinds capturethat administrativethe fundorder isappealed createdfrom inwas 560lawful and reasonable, it shall make a written order affirming the stateorder treasury.appealed from;

Theif fundthe commission finds that the order was unreasonable or unlawful, it shall consistmake ofa written order vacating the moneyorder 561appealed collectedfrom underand divisionmaking (C)(1)the oforder thisthat section.it finds the chief should have made.

TheEvery chieforder shallmade 562by use the fundscommission forshall thecontain purposea ofwritten administeringfinding sectionsby 1509.71the 563commission to 1509.79 of the Revisedfacts Codeupon andwhich the rulesorder adoptedis underbased. those 564 sections that are associated with injection and sequestration of 565 carbon dioxide in a carbon dioxide well and for other purposes 566 determined by the chief.

AllNotice interestof earningsthe making of the fundorder shall 567 be creditedgiven forthwith to each party to the fund.appeal by mailing a certified copy thereof to each such party by certified mail.

568The Sec.order of the commission is final unless vacated by the court of common pleas of Franklin county in an appeal as provided for in section 1509.37 of the Revised Code.

Sec.

(A) Whoever violates sections 1509.01 to 569 1509.31 or sections 1509.71 to 1509.79 of the Revised Code or 570 any rules adopted or orders or terms or conditions of a permit 571issued Sub.pursuant to these sections for which no specific penalty is provided in this section shall be fined not less than one hundred nor more than one thousand dollars for a first offense;

for each subsequent offense the person shall be fined not less than two hundred nor more than two thousand dollars.

(B) Whoever violates section 1509.221 of the Revised Code or any rules adopted or orders or terms or conditions of a permit issued thereunder shall be fined not more than five thousand dollars for each violation.

(C) Whoever knowingly violates section 1509.072, division (A), (B), or (D) of section 1509.22, division (A)(1) or (C) of section 1509.222, or division (A) or (D) of section 1509.223 of the Revised Code or any rules adopted or orders issued under division (C) of section 1509.22 or rules adopted or orders or terms or conditions of a registration certificate issued under division (E) of section 1509.222 of the Revised Code shall be fined ten thousand dollars or imprisoned for six months, or both for a first offense;

for each subsequent offense the person shall be fined twenty thousand dollars or imprisoned for two years, or both.

Whoever negligently violates those divisions, sections, rules, orders, or terms or conditions of a registration certificate shall be fined not more than five thousand dollars.

(D) Whoever violates division (C) of section 1509.223 of the Revised Code shall be fined not more than five hundred dollars for a first offense and not more than one thousand dollars for a subsequent offense.

(E) The prosecuting attorney of the county in which the offense was committed or the attorney general may prosecute an action under this section.

(F) For purposes of this section, each day of violation constitutes a separate offense.

Sub.

170 Page136th 21G.A. As Passed by the House issued pursuant to these sections for which no specific penalty 572 is provided in this section shall be fined not less than one 573 hundred nor more than one thousand dollars for a first offense;

574Sec. for each subsequent offense the person shall be fined not less 575 than two hundred nor more than two thousand dollars.

576 (B) Whoever violates section 1509.221 of the Revised Code 577 or any rules adopted or orders or terms or conditions of a 578 permit issued thereunder shall be fined not more than five 579 thousand dollars for each violation.

580 (C) Whoever knowingly violates section 1509.072, division 581 (A), (B), or (D) of section 1509.22, division (A)(1) or (C) of 582 section 1509.222, or division (A) or (D) of section 1509.223 of 583 the Revised Code or any rules adopted or orders issued under 584 division (C) of section 1509.22 or rules adopted or orders or 585 terms or conditions of a registration certificate issued under 586 division (E) of section 1509.222 of the Revised Code shall be 587 fined ten thousand dollars or imprisoned for six months, or both 588 for a first offense;

for each subsequent offense the person 589 shall be fined twenty thousand dollars or imprisoned for two 590 years, or both.

Whoever negligently violates those divisions, 591 sections, rules, orders, or terms or conditions of a 592 registration certificate shall be fined not more than five 593 thousand dollars.

594 (D) Whoever violates division (C) of section 1509.223 of 595 the Revised Code shall be fined not more than five hundred 596 dollars for a first offense and not more than one thousand 597 dollars for a subsequent offense.

598 (E) The prosecuting attorney of the county in which the 599 offense was committed or the attorney general may prosecute an 600 action under this section.

601 Sub.

H.

B.

No.

170 Page 22 As Passed by the House (F) For purposes of this section, each day of violation 602 constitutes a separate offense.

603 Sec.

(A) As used in sections 5301.57 to 5301.60 604 of the Revised Code, "carbon dioxide," "carbon dioxide well," 605 "carbon sequestration," "carbon sequestration project," "owner," "pore space," "storage 606 operator," and "storage facility,"facility" have the same meanings as in 607 section 1509.71 of the Revised Code.

608 (B) As used in sections 5301.58 to 5301.60 of the Revised 609 Code, "subsurface property interest owner" means a property 610 interest owner identified by the records of the recorder of 611 deeds for each county in which a portion of a proposed storage 612 facility is located who holds a fee simple interest, other 613 freehold interest, or leasehold interest in the subsurface of 614 the property, which may include mineral rights, such as coal or 615 oil and gas rights.

"Subsurface property interest owner" does 616 not include an owner who holds an interest in property 617 consisting solely of an easement or right-of-way.right-of- way.

618 Sec.

(A) The ownership of all pore space in all 619 strata below the surface lands and waters is vested in the owner 620 of the surface directly above the pore space.

621 A conveyance of the surface ownership of real property 622 shall be a conveyance of the pore space in all strata below the 623 surface of the real property unless the ownership interest in 624 the pore space previously has been expressly excepted and 625 reserved, conveyed, or otherwise severed from the surface 626 ownership.

The ownership of pore space in the strata may be 627 conveyed in the manner provided by law for the transfer of real 628 property interests.

No agreement conveying mineral, oil and gas, 629 coal, limestone or similar resource, or other interests 630 underlying the surface shall convey pore space in the strata 631unless Sub.the agreement expressly includes conveyance of the pore space.

(B) No provision of law or rule requiring notice to be given to a surface owner, owner of the mineral or oil and gas interest, or both shall be construed to require notice to individuals holding ownership interests in pore space in the underlying strata unless the applicable law specifies notice to the individuals is required or unless the owner of the pore space also owns an interest in the surface or in the mineral or oil and gas interests.

(C)(1) Nothing in sections 1509.71 to 1509.79 and 5301.58 to 5301.60 of the Revised Code shall be construed to change or alter the common law existing as of the effective date of this section with respect to the rights belonging to, or the dominance of, the mineral estate or oil and gas estate.

For the purpose of determining the priority of surface and subsurface uses between a severed mineral or oil and gas estate and pore space, the severed mineral or oil and gas estate is dominant regardless of whether ownership of the pore space is vested in the owner of the surface or is owned separately from the surface.

(2) If pore space is severed from the surface ownership, the pore space estate shall be considered to be dominant over the surface estate unless the conveyance specifically provides otherwise.

(3) Nothing in sections 5301.58 to 5301.60 of the Revised Code shall alter, amend, diminish, or invalidate rights to the pore space that were acquired by deed, contract, or lease prior to the effective date of this section.

Sub.

170 Page136th 23G.A. As Passed by the House unless the agreement expressly includes conveyance of the pore 632 space.

633(D) (B)An Noinstrument provisionthat oftransfers law or rule requiring notice to be 634 given to a surface owner, owner of the mineralrights or oil and gas 635 interest, or both shall be construed to require notice to 636 individuals holding ownership interests in pore space inshall theinclude 637a underlyingspecific stratadescription unlessof the applicablelocation law specifies notice to 638 the individuals is required or unless the owner of the pore 639 space alsobeing ownstransferred. an interest in the surface or in the mineral or 640 oil and gas interests.

641In (C)(1) Nothing in sections 5301.58 to 5301.60 of the 642event Revisedthat Code shall be construed to change or alter the commoninstrument 643uses lawonly existinga asdescription of the effectivesurface, datethe oftransfer thisshall sectionbe withconsidered 644 respect to theinclude rightspore belongingspace to,owned orby the dominancetransferor of,at theall 645depths mineralunderlying estatethe ordescribed oilsurface andarea gasunless estate.specifically excluded.

ForThe theowner purpose of 646 determining the prioritypore ofspace surfaceshall andhave subsurfaceno usesright betweento 647use athe severedsurface mineral or oil and gas estate andbeyond porethat space,set theout 648in severeda mineralproperly orrecorded oilinstrument anddue gassolely estateto isits dominant regardless of 649 whether ownership ofin the pore spacespace. is vested in the owner of 650 the surface or is owned separately from the surface.

651An (2)instrument Ifthat poreconveys spacethe issurface severeddirectly fromabove the surfacepore ownership,space, 652but theotherwise poreseeks spaceto estateexcept shallor bereserve consideredthe rights to bethe dominantpore overspace, 653shall theinclude surfacea estatespecific unlessreference to the conveyancepore specificallyspace providesin 654the otherwise.instrument.

655In (3)the Nothingevent inof sectionssuch 5301.58exception toor 5301.60reserved ofrights, the Revisedreserved 656 Code shall alter, amend, diminish, or invalidate rights to the 657 pore space thatshall wereinclude acquiredpore byspace deed,owned contract,by orthe leasetransferor priorat 658all todepths underlying the effectivedescribed datesurface ofarea thisunless section.otherwise specifically excluded.

659Sec. (D) An instrument that transfers the rights to pore space 660 Sub.

5301.59.

All carbon dioxide injected into a storage facility for carbon sequestration, and all other substances injected incidental to the injection of carbon dioxide, shall be presumed to be owned by the storage operator.

This presumption may be rebutted by an individual claiming contrary ownership by a preponderance of the evidence in an action to establish ownership.

No owner of pore space, other individual holding any right to control pore space, or other surface or subsurface property interest owner, shall have any liability relating to the injection of carbon dioxide, or any other substances injected incidental to the injection of carbon dioxide, for carbon sequestration activities solely by virtue of their interest in the pore space or their surface or subsurface rights.

Sec.

5301.60.

(A) A claim for damages due to injection or migration of carbon dioxide shall not be recoverable against a storage operator conducting carbon sequestration in accordance with a valid UIC Class VI permit unless the claimant proves that the injection or migration of carbon dioxide has caused direct physical injury to an individual, animal, or real or personal property.

(B) A surface or subsurface property interest owner asserting a claim for injury to personal or real property may recover monetary damages due to injection or migration of carbon dioxide only for the diminution in real or personal property value resulting from the injection or migration of carbon dioxide beyond the storage facility.

(C) A surface or subsurface property interest owner may not seek punitive damages due to injection or migration of carbon dioxide if the storage operator acts in compliance with the requirements of the UIC Class VI permit.

(D) Divisions (A), (B), and (C) of this section do not apply to any claims that may be asserted by owners of oil and gas interests or owners of class II disposal wells for damages or injuries related to any of the following:

(1) The injection or migration of carbon dioxide;

(2) The construction or operation of a storage facility;

(3) A carbon sequestration project.

Sub.

170 Page136th 24G.A. As Passed by the House shall include a specific description of the location of the pore 661 space being transferred.

InS theECTION2. event that the instrument uses 662 only a description of the surface, the transfer shall be 663 considered to include pore space owned by the transferor at all 664 depths underlying the described surface area unless specifically 665 excluded.

TheThat ownerexisting ofsections the1509.01, pore1509.33, spaceand shall1509.99 haveof no right to use 666 the surfaceRevised estateCode beyondare thathereby setrepealed. out in a properly recorded 667 instrument due solely to its ownership in the pore space.

668Sub. An instrument that conveys the surface directly above the 669 pore space, but otherwise seeks to except or reserve the rights 670 to the pore space, shall include a specific reference to the 671 pore space in the instrument.

In the event of such exception or 672 reserved rights, the reserved rights to the pore space shall 673 include pore space owned by the transferor at all depths 674 underlying the described surface area unless otherwise 675 specifically excluded.

676 Sec.

5301.59.

All carbon dioxide injected into a storage 677 facility for carbon sequestration, and all other substances 678 injected incidental to the injection of carbon dioxide, shall be 679 presumed to be owned by the storage operator.

This presumption 680 may be rebutted by an individual claiming contrary ownership by 681 a preponderance of the evidence in an action to establish 682 ownership.

683 No owner of pore space, other individual holding any right 684 to control pore space, or other surface or subsurface property 685 interest owner, shall have any liability relating to the 686 injection of carbon dioxide, or any other substances injected 687 incidental to the injection of carbon dioxide, for carbon 688 sequestration activities solely by virtue of their interest in 689 the pore space or their surface or subsurface rights.

690 Sub.

170 Page136th 25G.A. As Passed by the House Sec.

5301.60.Speaker ___________________ of the House of Representatives.

(A)President A___________________ claim for damages due to injection or 691 migration of carbon dioxide shall not be recoverable against a 692 storage operator conducting carbon sequestration in accordance 693 with a valid UIC Class VI permit unless the claimantSenate. proves that 694 the injection or migration of carbon dioxide:

695Passed (1)________________________, Is20____ injuriousApproved to________________________, health,20____ orGovernor. an obstruction to the free 696 use of property so as essentially to interfere with the 697 comfortable enjoyment of life or property;

orSub. 698 (2) Has caused direct physical injury to an individual, 699 animal, or real or personal property.

700 (B) A surface or subsurface property interest owner 701 asserting a claim for injury to personal or real property may 702 recover monetary damages due to injection or migration of carbon 703 dioxide only for the diminution in real or personal property 704 value resulting from the injection or migration of carbon 705 dioxide beyond the storage facility.

706 (C) A surface or subsurface property interest owner may 707 not seek punitive damages due to injection or migration of 708 carbon dioxide if the storage operator acts in compliance with 709 the requirements of the UIC Class VI permit.

710 (D) Divisions (A), (B), and (C) of this section do not 711 apply to any claims that may be asserted by owners of oil and 712 gas interests or owners of class II disposal wells for damages 713 or injuries related to:

714 (1) The injection or migration of carbon dioxide;

715 (2) The construction or operation of a storage facility;

716 or 717 (3) A carbon sequestration project.

718 Sub.

170 Page136th 26G.A. As Passed by the House Section 2.

ThatThe existingsection sectionsnumbering 1509.33of law of a general and 1509.99permanent ofnature 719is thecomplete Revisedand Codein areconformity herebywith repealed.the Revised Code.

720Director, Legislative Service Commission.

Filed in the office of the Secretary of State at Columbus, Ohio, on the ____ day of ___________,A.

D.

20____.

Secretary of State.

File No.

_________ Effective Date ___________________