Introduced Version
SENATE BILL No. 504
_____
DIGEST OF INTRODUCED BILL
Citations Affected: IC 14-37-10-5; IC 14-39; IC 32-24-5-2.
Synopsis: Carbon dioxide. Specifies that an application for a carbon
dioxide transmission pipeline certificate of authority must include: (1)
a risk assessment; and (2) a carbon dioxide injection estimate. Provides
that when determining compensation in certain eminent domain
proceedings, the perceived risk of certain hazardous conditions must
be taken into account. Establishes a carbon sequestration pilot project
fee program, and specifies certain conditions in relation to the fee
money. Provides that a transfer of ownership in regard to a carbon
sequestration pilot project does not relieve a prior operator from
liability for any negligence or willful misconduct that occurred before
the transfer. Requires the department of natural resources to inspect a
carbon sequestration pilot project. Alters the threshold of consent one
must obtain in order to use eminent domain or integration in relation
to carbon sequestration.
Effective: July 1, 2025.
Deery
January 16, 2025, read first time and referred to Committee on Utilities.
2025 IN 504—LS 6428/DI 153 Introduced
First Regular Session of the 124th General Assembly (2025)
PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana
Constitution) is being amended, the text of the existing provision will appear in this style type,
additions will appear in this style type, and deletions will appear in this style type.
Additions: Whenever a new statutory provision is being enacted (or a new constitutional
provision adopted), the text of the new provision will appear in this style type. Also, the
word NEW will appear in that style type in the introductory clause of each SECTION that adds
a new provision to the Indiana Code or the Indiana Constitution.
Conflict reconciliation: Text in a statute in this style type or this style type reconciles conflicts
between statutes enacted by the 2024 Regular Session of the General Assembly.
SENATE BILL No. 504
A BILL FOR AN ACT to amend the Indiana Code concerning
natural and cultural resources.
Be it enacted by the General Assembly of the State of Indiana:
1 SECTION 1. IC 14-37-10-5, AS AMENDED BY P.L.150-2011,
2 SECTION 17, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
3 JULY 1, 2025]: Sec. 5. (a) Money paid into the fund shall be
4 appropriated for the following purposes:
5 (1) To supplement the cost required to abandon a well that has
6 had a permit revoked under IC 14-37-13-1.
7 (2) To cover the costs of remedial plugging and repairing of wells
8 under IC 14-37-8, including the expenses of remedial action
9 under IC 14-37-8-15.
10 (3) To cover the cost to:
11 (A) mitigate environmental damage; or
12 (B) protect public safety against harm;
13 caused by a well regulated under this article or the carbon
14 sequestration pilot project established under IC 14-39-1.
15 (4) Pipeline safety.
16 (5) To monitor or manage the carbon sequestration pilot
17 project established under IC 14-39-1.
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1 (b) The director may make expenditures from the fund for
2 emergency purposes under section 6 of this chapter without the prior
3 approval of the budget agency or the governor. An expenditure under
4 this subsection may not exceed fifty thousand dollars ($50,000).
5 (c) The director may establish a program to reimburse an applicant
6 for the reasonable expenses of remedial action incurred under
7 IC 14-37-8-15. The director may make expenditures from the fund for
8 this purpose and may establish any necessary guidelines and
9 procedures to administer the program.
10 SECTION 2. IC 14-39-1-4, AS AMENDED BY P.L.163-2022,
11 SECTION 1, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
12 JULY 1, 2025]: Sec. 4. (a) A carbon dioxide transmission pipeline
13 company may apply to the department for issuance of a carbon dioxide
14 transmission pipeline certificate of authority. The department shall
15 prescribe the form of the application, which must:
16 (1) include a filing fee of one thousand dollars ($1,000);
17 (2) be signed by a responsible officer of the company;
18 (3) include a statement verifying that the information submitted
19 is true, accurate, and complete to the best of that responsible
20 officer's knowledge and belief; and
21 (4) include all information necessary for the department to find
22 the following:
23 (A) That the applicant or the contractor or subcontractor of the
24 applicant has the financial, managerial, and technical ability
25 to construct, operate, and maintain a carbon dioxide
26 transmission pipeline in Indiana.
27 (B) That the applicant has the requisite experience
28 constructing, operating, and maintaining a transmission
29 pipeline.
30 (C) That the applicant has entered into a contract to transport
31 carbon dioxide by pipeline in Indiana with:
32 (i) at least one (1) producer of carbon dioxide located in
33 Indiana; and
34 (ii) unless all of the carbon dioxide to be transported in the
35 proposed carbon dioxide transmission pipeline is for the
36 applicant's own use or account, at least one (1) end user or
37 storer of carbon dioxide.
38 (D) That the applicant has provided documentation to the
39 department showing the proposed length, diameter, and
40 location of the proposed carbon dioxide transmission pipeline
41 in Indiana.
42 (E) That the applicant will construct, operate, and maintain the
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1 proposed carbon dioxide transmission pipeline in accordance
2 with applicable local, state, and federal law, including federal
3 and state safety regulations and rules governing the
4 construction, operation, and maintenance of carbon dioxide
5 transmission pipelines, and related facilities and equipment, to
6 ensure the safety of pipeline employees and the public.
7 (F) That the applicant has:
8 (i) entered into an agreement with the Indiana utility
9 regulatory commission concerning the mitigation of
10 agricultural impacts associated with the construction of the
11 proposed carbon dioxide transmission pipeline; or
12 (ii) signed a statement indicating that the applicant agrees to
13 use, in connection with the construction of the proposed
14 carbon dioxide transmission pipeline, the guidelines adopted
15 under IC 8-1-22.6-8 by the pipeline safety division of the
16 Indiana utility regulatory commission;
17 (5) include a risk assessment with respect to the proposed
18 carbon dioxide transmission pipeline that includes scenario
19 modeling; and
20 (6) include an estimate of the amount of carbon dioxide to be
21 injected into underground strata and formations for the
22 period of the certificate of authority.
23 (b) The department shall review an application filed under
24 subsection (a). Subject to subsection (f), if the department determines
25 that the application is incomplete or inaccurate, or both, the department
26 shall return the application to the applicant, informing the applicant in
27 writing of the applicant's right to file a corrected application with the
28 department. If the department determines that the application is
29 complete and accurate, the department shall provide notice to the
30 applicant of:
31 (1) that determination; and
32 (2) the date, time, and location of the public information meeting
33 to be held under subsection (d).
34 (c) The applicant shall:
35 (1) upon receipt of a notice under subsection (b):
36 (A) place for public inspection a copy of the application in a
37 public library located in each county in which the carbon
38 dioxide transmission pipeline is proposed to be located; and
39 (B) publish notice, in the same manner that would be required
40 if the applicant were subject to IC 5-3-1, in each county in
41 which the carbon dioxide transmission pipeline is proposed to
42 be located, of:
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1 (i) the name and address of each library in which a copy of
2 the application is placed under clause (A); and
3 (ii) the date, time, and location of the public information
4 meeting to be held under subsection (d);
5 (2) provide to the department proof of publication of notice under
6 subdivision (1)(B); and
7 (3) have a representative present at the public information
8 meeting held under subsection (d).
9 (d) The department shall:
10 (1) conduct a public information meeting in the county seat of one
11 (1) of the counties, as determined by the department, in which the
12 proposed carbon dioxide transmission pipeline will be located;
13 and
14 (2) provide an opportunity at the meeting for members of the
15 public to be briefed and to ask questions about the proposed
16 carbon dioxide transmission pipeline.
17 (e) Not later than ninety (90) days after the public information
18 meeting held under subsection (d), the department shall notify the
19 applicant in writing that:
20 (1) the department:
21 (A) has made the findings described in subsection (a)(4); and
22 (B) has approved the application; or
23 (2) the department:
24 (A) has determined that the department is unable to make the
25 findings described in subsection (a)(4); and
26 (B) has disapproved the application.
27 (f) The department shall process a corrected application that is filed
28 as permitted under subsection (b) in the same manner the department
29 processes an initially filed application under subsection (a).
30 (g) If the department fails to act under subsection (e) not later than
31 ninety (90) days after the public information meeting held under
32 subsection (d), the application is considered to be approved by the
33 department.
34 (h) If:
35 (1) the department approves the application under subsection
36 (e)(1); or
37 (2) the application is considered to be approved as described in
38 subsection (g);
39 the department shall issue to the applicant a carbon dioxide
40 transmission pipeline certificate of authority.
41 SECTION 3. IC 14-39-1-9, AS AMENDED BY P.L.291-2019,
42 SECTION 8, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
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1 JULY 1, 2025]: Sec. 9. (a) A carbon dioxide transmission pipeline
2 company that exercises the authority set forth in section 7(a) of this
3 chapter shall:
4 (1) compensate the property owner by making a payment to the
5 owner equal to:
6 (A) one hundred twenty-five percent (125%) of the fair market
7 value of the interest in the property acquired, if the
8 right-of-way or easement involves agricultural land; or
9 (B) one hundred fifty percent (150%) of the fair market value
10 of the interest in the property acquired, if the right-of-way or
11 easement involves a parcel of property occupied by the owner
12 as a residence; and
13 (2) pay to the property owner:
14 (A) any damages determined under IC 32-24-1; and
15 (B) any loss incurred in a trade or business;
16 that are attributable to the exercise of eminent domain.
17 (b) In determining the compensation to be paid to the owner of
18 property condemned under this chapter, proof may be offered and
19 consideration must be given to the present day diminution in value
20 of the residue of the property, if any, caused by the perceived risk
21 of a hazardous condition related to the carbon sequestration pilot
22 project.
23 SECTION 4. IC 14-39-1-11.5 IS ADDED TO THE INDIANA
24 CODE AS A NEW SECTION TO READ AS FOLLOWS
25 [EFFECTIVE JULY 1, 2025]: Sec. 11.5. (a) An operator of a carbon
26 sequestration pilot project shall pay the department a fee for every
27 ton of carbon dioxide injected into underground strata and
28 formations.
29 (b) An operator of a carbon sequestration pilot project shall pay
30 annually to the department a fee of eight cents ($0.08) per ton of
31 carbon dioxide estimated to be injected into underground strata
32 and formations by:
33 (1) the estimate provided under section 4(a)(6) of this chapter;
34 or
35 (2) another document provided to the department by the
36 operator.
37 (c) An operator of a carbon sequestration pilot project shall
38 reconcile the previous calendar year's payment with the volume of
39 carbon dioxide actually injected into underground strata and
40 formations in the previous calendar year. The operator of the
41 carbon sequestration pilot project shall submit payment for the
42 amount of carbon dioxide injected into underground strata and
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1 formations less the amount paid the previous calendar year.
2 (d) The department shall refund an operator of a carbon
3 sequestration pilot project any overpayment in the current year
4 from the previous calendar year.
5 SECTION 5. IC 14-39-1-12, AS ADDED BY P.L.150-2011,
6 SECTION 18, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
7 JULY 1, 2025]: Sec. 12. (a) The department shall deposit fee revenue
8 received under section sections 4(a)(1) and 11.5 of this chapter in the
9 oil and gas environmental fund established by IC 14-37-10-2.
10 (b) Fee revenue collected under section 11.5 of this chapter:
11 (1) may only be used to monitor or manage carbon
12 sequestration pilot projects approved under this chapter; and
13 (2) may not be considered for purposes of calculating the total
14 amount of money in the oil and gas environmental fund under
15 IC 14-37-10-4(b).
16 SECTION 6. IC 14-39-1-14, AS ADDED BY P.L.291-2019,
17 SECTION 10, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
18 JULY 1, 2025]: Sec. 14. (a) Because the public interest would be
19 served by the state of Indiana succeeding to the rights of a person that
20 has conducted the underground storage of carbon dioxide, the state of
21 Indiana, upon the recommendation of the director of the department
22 and review by the state budget committee, may obtain ownership of:
23 (1) the carbon dioxide stored in underground strata and
24 formations; and
25 (2) the underground strata and formations in which the carbon
26 dioxide is stored;
27 from the operator of the carbon sequestration pilot project.
28 (b) The state of Indiana may obtain ownership of the carbon dioxide
29 stored in underground strata and formations and the underground strata
30 and formations in which the carbon dioxide is stored under this section:
31 (1) after the operator, through the carbon sequestration pilot
32 project, has injected carbon dioxide into underground strata and
33 formations for at least twelve (12) years; or
34 (2) after the operator of the carbon sequestration pilot project
35 ceases to inject carbon dioxide into underground strata and
36 formations, if the injection ceases less than twelve (12) years after
37 it began.
38 (c) A transfer of ownership under this section does not relieve
39 the operator of the carbon sequestration pilot project from liability
40 for any negligence or willful misconduct related to the carbon
41 sequestration pilot project that occurred before the transfer.
42 SECTION 7. IC 14-39-1-19 IS ADDED TO THE INDIANA CODE
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1 AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY
2 1, 2025]: Sec. 19. The department shall inspect the carbon
3 sequestration pilot project at reasonable times and to the extent
4 reasonably necessary to ensure the safety of the carbon
5 sequestration pilot project.
6 SECTION 8. IC 14-39-2-4, AS ADDED BY P.L.163-2022,
7 SECTION 2, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
8 JULY 1, 2025]: Sec. 4. (a) If at least two (2) pore space owners own
9 pore space located within a proposed carbon dioxide storage area of a
10 storage facility, the owners may agree to integrate their interests to
11 develop the pore space as a proposed storage facility for the
12 underground storage of carbon dioxide.
13 (b) If all of the owners of the pore space under subsection (a) do not
14 agree to integrate their interests, the department may issue an order
15 requiring the owners to integrate their interests and to develop the pore
16 space as a proposed storage facility for the underground storage of
17 carbon dioxide to serve the public interest subject to the findings under
18 subsection (c).
19 (c) Before issuing an order under subsection (b), the department
20 must make the following findings:
21 (1) That a storage operator has been issued a UIC Class VI permit
22 or an amended UIC Class VI permit.
23 (2) That the storage operator has made a good faith effort to
24 obtain the consent of all pore space owners located within the
25 proposed storage facility.
26 (3) That the storage operator has obtained the consent of the
27 owners of the pore space underlying at least seventy percent
28 (70%) of the surface area above the proposed storage facility or
29 amended proposed storage facility.
30 (3) That the storage operator has obtained both the consent
31 required under STEP THREE (i) and the consent required
32 under STEP THREE (ii) of the following formula:
33 STEP ONE: Determine the total amount of pore space
34 located within the proposed storage facility or amended
35 proposed storage facility.
36 STEP TWO: Determine the amount of pore space that is:
37 (i) located within the proposed storage facility or
38 amended proposed storage facility; and
39 (ii) owned by a resident of the county in which the
40 proposed storage facility or amended proposed storage
41 facility is located.
42 STEP THREE: The storage operator must obtain both of
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1 the following:
2 (i) Consent from county resident owners of at least
3 seventy percent (70%) of the pore space determined
4 under STEP TWO.
5 (ii) Consent from the owners of at least seventy percent
6 (70%) of the total amount of pore space determined
7 under STEP ONE.
8 (4) That all pore space owners who do not agree to integrate their
9 interests to develop the pore space as a proposed storage facility
10 for the underground storage of carbon dioxide are equitably
11 compensated.
12 (d) A right to pore space granted by this section does not confer a
13 right to enter upon, or otherwise use, the surface of the land which is
14 integrated under this section unless provided in an order requiring the
15 owners to integrate their interests and to develop the pore space as a
16 proposed storage facility for the underground storage of carbon
17 dioxide.
18 SECTION 9. IC 32-24-5-2, AS AMENDED BY P.L.291-2019,
19 SECTION 13, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
20 JULY 1, 2025]: Sec. 2. (a) As used in this section, "favored
21 proceeding" means a proceeding under this chapter to:
22 (1) acquire the right to explore and examine a subsurface
23 stratum or formation in land; and
24 (2) create the right of ingress and egress for operations
25 connected to the acquisition.
26 (a) (b) A person, firm, limited liability company, municipal
27 corporation, or other corporation authorized to do business in Indiana
28 and engaged in the business of transporting or distributing gas by
29 means of pipelines into, within, or through Indiana for ultimate public
30 use may condemn:
31 (1) land subsurface strata or formations;
32 (2) other necessary land rights;
33 (3) land improvements and fixtures, in or on land, except
34 buildings of any nature; and
35 (4) the use and occupation of land subsurface strata or formations;
36 for constructing, maintaining, drilling, utilizing, and operating an
37 underground gas storage reservoir.
38 (b) (c) The operator of the carbon sequestration pilot project
39 established under IC 14-39-1 may exercise the power of eminent
40 domain to obtain:
41 (1) ownership of such underground strata and formations located
42 under the surface of the owner's property as may be necessary or
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1 useful for underground storage of carbon dioxide in the strata or
2 formations; and
3 (2) ownership or other rights to one (1) or more areas of the
4 surface of the owner's property, including but not limited to one
5 (1) or more rights-of-way or easements, as may be necessary or
6 useful for constructing, maintaining, using, operating, and gaining
7 access to monitoring facilities required by the United States
8 Environmental Protection Agency for the underground storage of
9 carbon dioxide.
10 (c) (d) The following rights in land may be condemned for use in
11 connection with the underground storage of gas:
12 (1) To drill and operate wells in and on land.
13 (2) To install and operate pipelines.
14 (3) To install and operate equipment, machinery, fixtures, and
15 communication facilities.
16 (4) To create ingress and egress to explore and examine
17 subsurface strata or underground formations.
18 (5) To create ingress and egress to construct, alter, repair,
19 maintain, and operate an underground storage reservoir.
20 (6) To exclusively use any subsurface strata condemned.
21 (7) To remove and reinstall pipe and other equipment used in
22 connection with rights condemned under subdivisions (1) through
23 (6).
24 (d) (e) Acquisition of subsurface rights in land for gas storage
25 purposes or for purposes of the carbon sequestration pilot project
26 established under IC 14-39-1 by condemnation under this section must
27 be without prejudice to any subsequent proceedings that may be
28 necessary under this section to acquire additional subsurface rights in
29 the same land for use in connection with the underground storage.
30 Surface rights in land necessary for the accomplishment of the
31 purposes set forth in this section may be condemned.
32 (e) (f) Except with respect to a proceeding under this chapter to:
33 (1) acquire the right to explore and examine a subsurface stratum
34 or formation in land; and
35 (2) create the right of ingress and egress for operations connected
36 to the acquisition;
37 favored proceeding and subject to subsection (f), (h), as a condition
38 precedent to the exercise of the right to condemn any underground
39 stratum, formation, or interest reasonably expected to be used or useful
40 for underground gas storage, or for purposes of the carbon
41 sequestration pilot project established under IC 14-39-1, a condemnor
42 first must have acquired by purchase, option, lease, or other a method
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1 not involving condemnation, the right, or right upon the exercise of an
2 option, if any, to store gas in at least sixty per cent percent (60%) of
3 the stratum or formation. This must be computed in relation to the total
4 surface acreage overlying the entire stratum or formation considered
5 useful for the purpose.
6 (g) Except with respect to a favored proceeding and subject to
7 subsection (h), as a condition precedent to the exercise of the right
8 to condemn any underground stratum, formation, or interest
9 reasonably expected to be used for purposes of the carbon
10 sequestration pilot project established under IC 14-39-1, a
11 condemnor first must have obtained both the consent required
12 under STEP THREE (i) and the consent required under STEP
13 THREE (ii) of the following formula:
14 STEP ONE: Determine the total size of the stratum or
15 formation.
16 STEP TWO: Determine the percentage of stratum or
17 formation that is owned by a resident of the county in which
18 the stratum or formation is located.
19 STEP THREE: The condemnor must obtain both of the
20 following by a method not involving condemnation:
21 (i) Consent from county resident owners of at least sixty
22 percent (60%) of the stratum or formation determined
23 under STEP TWO to store gas in the stratum or
24 formation.
25 (ii) Consent from the owners of at least sixty percent (60%)
26 of the total stratum or formation determined under STEP
27 ONE to store gas in the stratum or formation.
28 In making a calculation under this subsection, the percentage of
29 stratum or formation acquired must be computed in relation to the
30 total surface acreage overlying the entire stratum or formation
31 considered useful for the purpose.
32 (f) (h) A tract under which the stratum or formation sought to be
33 condemned is owned by two (2) or more persons, firms, limited
34 liability companies, or corporations must be credited to the condemnor
35 as acquired by it for the purpose of computing the percentage of
36 acreage acquired by the condemnor in complying with the requirement
37 of subsection (e) subsections (f) and (g) if the condemnor acquires
38 from the owner or owners of an undivided three-fourths (3/4) part or
39 interest or more of the underground stratum or formation, by purchase,
40 option, lease, or other method not involving condemnation, the right,
41 or right upon the exercise of an option, if any, to store gas in the
42 stratum or formation. It is not necessary for the condemnor to have
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1 acquired any interest in the property in which the condemnee has an
2 interest before instituting a proceeding under this chapter.
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