Carbon capture pipelines bring numerous economic benefits to entire regions across the country, however, it’s also important to consider how they affect individual counties. In states like Iowa, Minnesota, South Dakota, and Nebraska, counties receive revenue from taxes paid by pipeline operators. However, in states like Illinois, where no taxation structure currently exists, project economic development agreements (PDAs) provide a fair solution by providing funding that would normally come from taxes.
At Navigator, PDAs show our dedication to community and growth, outlining a clear path to a mutually beneficial partnership. Our goal is to do what’s right and fair the first time around, so our community partners feel valued and respected.
How counties benefit from carbon pipelines
Carbon capture brings counties many opportunities for economic growth, including through investments, job opportunities, and taxation. For example in Illinois, Navigator is prepared to invest $795 million in developing carbon management infrastructure. At peak construction, Heartland Greenway will generate an impressive 3,565 direct and indirect employment opportunities across the state, meaning more jobs and a stronger economy for Illinoisians.
Counties also look to taxes as a way to benefit from carbon pipelines. In states like Iowa, Minnesota, South Dakota, and Nebraska – where the rest of Heartland Greenway will operate – the state will take taxes from the project and give the money to counties.
What about tax benefits for Illinois?
Unlike other states, Illinois does not require taxation on pipeline projects, which means Illinois residents stand to lose out on the money that other states gain during this process. At Navigator, we understand the value of being a good neighbor in the community, which is why we build trust and collaboration in the local areas of our footprint.
We are keeping our promise to help communities in a strong and lasting way, which led to creating Project Development Agreements. These agreements create a local funding model that demonstrates Navigator’s ongoing dedication to helping the communities in which we operate. Navigator makes sure both sides benefit and grow together by using these agreements.
What is a project development agreement (PDA)?
Project Development Agreements (PDAs) are a legal way to provide compensation. These agreements outline the process of providing funds to county governments within the Illinois footprint to imitate the property tax structure seen in the other states the Heartland Greenway project traverses. They also provide assurances that the project scope and regulations will not change during the length of the agreement.
PDAs help divide resources and become especially important when the usual ways to compensate communities fail to fully capture the benefits of a project. PDAs provide clarity and ensure parties have the opportunity for compensation.
How Navigator calculates compensation under PDAs
Through Project Development Agreements (PDAs), Navigator ensures counties have a regular and expected money flow. We determine the amount of money based on two factors: miles of pipeline and injection sites. For each mile of pipeline in a county, we provide approximately $20,000 in compensation. In counties where injection wells will go, the compensation rises to about $200,000 per well.
These agreements last for 30 years, ensuring counties have a stable income from the project.
How PDAs support Illinois Counties
There are a variety of benefits and advantages of PDAs for counties in Illinois, including:
Increased county budgets
Project Development Agreements (PDAs) with Heartland Greenway allow counties and their taxpayers to decide how the money should be used. Counties are able to use these funds where they are needed most, helping them address specific needs like improving infrastructure, supporting essential services like police vehicles and road maintenance, or funding new projects, all without using taxpayer money.
Long-term financial stability
Heartland Greenway’s PDA offers counties a path to long-term financial stability, playing a pivotal role in their growth. Spanning over three decades, the PDA can significantly impact a county’s budget, representing a substantial percentage. Counties receive a predictable flow of funds that allows them to take on projects that financial limitations might otherwise hold back. Thanks to a steady flow of revenue through a PDA with Heartland Greenway, counties can organize and carry out infrastructure-related projects, improving the community and boosting the economy. This sets them up for long-term growth.
Mutually beneficial partnerships
Heartland Greenway’s PDA serves as the foundation for establishing mutually beneficial partnerships between Navigator and counties, embodying a true win-win scenario. As Navigator commits to compensating counties over a span of 30 years, these agreements ensure everyone’s goals align and encourage positive partnerships. The money counties receive not only supports their own growth but also allows for continued progress for Heartland Greenway.
Navigator's commitment to communities
Navigator is committed to boosting the economy in Illinois and all the states where we work. The Heartland Greenway Project Development Agreement (PDA) is another way we go above and beyond to be a good neighbor in Illinois communities. The impact of PDAs on counties offers a path forward for growth that benefits the project and the communities we serve.
We’re encouraging all Illinois counties within our footprint to explore the benefits a PDA would bring to residents. Adams and Schuyler Counties have already agreed to PDAs, while several others are navigating the process. PDAs are powerful tools for community advancement and a testament to Navigator’s commitment to facilitating positive change within our regions.
FAQs
Illinois doesn’t tax pipelines like some other states because tax laws are not currently set up to do so. While that may someday change, a Heartland Greenway PDA is the only means to ensure fairness and support the community’s growth without relying on taxation rules.
While Project Development Agreements (PDAs) aren’t mandatory, Navigator has chosen this approach to ensure fairness and equality while establishing projects in Illinois. By choosing to implement PDAs, Navigator aims to provide the state with the same benefits as other states where they operate. This commitment underscores Navigator’s dedication to fostering equitable growth and contributing positively to Illinois’ development.
Counties can use the Project Development Agreement (PDA) funds without any restrictions. This flexible spending allows taxpayers to decide how to use the money according to their unique county’s needs and priorities. It also empowers local decision-making, ultimately contributing to meaningful and targeted improvements within reach of the communities.
Navigator is committed to its promise of consistent compensation through Project Development Agreements (PDAs). These agreements ensure counties receive payment for 30 years, regardless of the project’s completion timeline. Navigator is dedicated to upholding its word and providing stable financial support to counties over the long term, reinforcing the company’s integrity and partnership with local communities.
