Public Act 100-0761
 
HB4920 EnrolledLRB100 19136 HEP 34401 b


  
    AN ACT concerning civil law.
  
 
    Be it enacted by the People of the State of Illinois,
 
represented in the General Assembly:
  
 
 
    Section 5. The Principal and Income Act is amended  by 
changing Sections 10 and 15 as follows:
 


    (760 ILCS 15/10)  (from Ch. 30, par. 510)



    (Text of Section before amendment by P.A. 100-519)

    Sec. 10. Disposition of natural resources. 

    (a) If any part of the principal consists of a right to 
receive
royalties, overriding or limited royalties, working 
interests, production
payments, net profit interests, or other 
interest in minerals, oil, gas or
other natural resources in, 
on or under land, except timber, water, soil,
sod, dirt, peat, 
turf or mosses, the receipts from taking the natural
resources 
from the land shall be allocated as follows:

        (1) if received as rent on a lease or extension 
    payments on a lease, the
receipts are income;

        (2) if received from a production payment, the receipts 
    are income to
the extent of any factor for interest or its 
    equivalent provided in the
governing instrument. There 
    shall be allocated to principal the fraction
of the balance 
    of the receipts which the unrecovered cost of the 
    production
payment bears to the balance owed on the 
    production payment, exclusive of
any factor for interest or 
    its equivalent. The receipts not allocated to
principal are 
    income;

        (3) if received as a royalty, overriding or limited 
    royalty, or bonus,
or from a working, net profit, or any 
    other interest in minerals, oil, gas,
or other natural 
    resources, receipts not provided for in the preceding

    paragraphs of this Section shall be apportioned on a yearly 
    basis in
accordance with this paragraph whether or not any 
    natural resource was
being taken from the land at the time 
    the trust was established.  The
trustee shall allocate to 
    principal as an allowance for depletion the
greater of (i) 
    that portion, if any, of the gross receipts that is allowed

    as a depletion deduction for federal income tax purposes 
    and (ii) 10% of
the gross receipts, except that that 
    allocation shall not exceed 50% of the
net receipts 
    remaining after payment of all expenses, direct and 
    indirect,
computed without the allowance for depletion.  
    The trustee shall allocate
the balance of the gross 
    receipts, after payment therefrom of all expenses,
direct 
    and indirect, to income.

    (b) If an item of depletable property of a type specified 
in this Section
is held on the effective date of this Act, 
receipts from the property shall
be allocated in the manner 
used before the effective date of this Act, but
as to all 
depletable property acquired after the effective date of this

Act by an existing or new trust, the method of allocation 
provided herein shall be used.

    (c) If any part of the principal consists of timber, water, 
soil, sod,
dirt, peat, turf, or mosses, the receipts from those 
resources shall be
allocated in accordance with Section 3.

(Source: P.A. 87-714.)

 
    (Text of Section after amendment by P.A. 100-519)

    Sec. 10. Disposition of natural resources. 

    (a) If any part of the principal consists of a right to 
receive
royalties, overriding or limited royalties, working 
interests, production
payments, net profit interests, or other 
interest in minerals, oil, gas or
other natural resources in, 
on or under land, except timber, water, soil,
sod, dirt, peat, 
turf or mosses, the receipts from taking the natural
resources 
from the land shall be allocated as follows:

        (1) if received as rent on a lease or extension 
    payments on a lease, the
receipts are income;

        (2) if received from a production payment, the receipts 
    are income to
the extent of any factor for interest or its 
    equivalent provided in the
governing instrument. There 
    shall be allocated to principal the fraction
of the balance 
    of the receipts which the unrecovered cost of the 
    production
payment bears to the balance owed on the 
    production payment, exclusive of
any factor for interest or 
    its equivalent. The receipts not allocated to
principal are 
    income;

        (3) except for oil or gas from non-coal formations held 
    in nontrust estates and by legal tenants and remaindermen 
    as described in Section 15 of this Act, if received as a 
    royalty, overriding or limited royalty, or bonus,
or from a 
    working, net profit, or any other interest in minerals,

    oil, gas, or other natural resources, receipts not provided 
    for in the preceding
paragraphs of this Section shall be 
    apportioned on a yearly basis in
accordance with this 
    paragraph whether or not any natural resource was
being 
    taken from the land at the time the trust was established.  
    The
trustee shall allocate to principal as an allowance for 
    depletion the
greater of (i) that portion, if any, of the 
    gross receipts that is allowed
as a depletion deduction for 
    federal income tax purposes and (ii) 10% of
the gross 
    receipts, except that that allocation shall not exceed 50% 
    of the
net receipts remaining after payment of all 
    expenses, direct and indirect,
computed without the 
    allowance for depletion.  The trustee shall allocate
the 
    balance of the gross receipts, after payment therefrom of 
    all expenses,
direct and indirect, to income;
        (4) Only for oil or gas from non-coal formations held 
    in nontrust estates and by legal tenants and remaindermen 
    as described in Section 15 of this Act, proceeds from the 
    sale of such minerals produced and received as royalty, 
    overriding royalty, limited royalty, working interest, net 
    profit interest, time-limited interest or term interest, 
    or lease bonus shall be deemed income with respect only to 
    nontrust estates described in Section 15 of this Act, for 
    oil or gas from non-coal formations, proceeds from the sale 
    of such minerals produced and received as royalty, 
    overriding royalty, limited royalty, working interest, net 
    profit interest, time-limited interest or term interest, 
    or lease bonus shall be deemed income. 

    (b) If an item of depletable property of a type specified 
in this Section
is held on the effective date of this Act, 
receipts from the property shall
be allocated in the manner 
used before the effective date of this Act, but
as to all 
depletable property acquired after the effective date of this

Act by an existing or new trust, the method of allocation 
provided herein shall be used.

    (c) If any part of the principal consists of timber, water, 
soil, sod,
dirt, peat, turf, or mosses, the receipts from those 
resources shall be
allocated in accordance with Section 3.

(Source: P.A. 100-519, eff. 6-1-18.)

 


    (760 ILCS 15/15)  (from Ch. 30, par. 515)



    (Text of Section before amendment by P.A. 100-519)

    Sec. 15. Non-trust estates. 

    (a) The provisions of this Act, as far as applicable, shall 
apply to
nontrust estates subject to any agreement of the 
parties or any specific
direction by statute or otherwise, and 
the references to trusts and
trustees shall be read as applying 
to nontrust estates and to legal tenants
(including life 
tenants, tenants for terms of years, or any other period of

tenancy) and remaindermen as the context requires; except that 
if either a
legal tenant or a remainderman has incurred a 
charge for his benefit
without the consent or agreement of the 
other, he shall pay that charge
in full.

    (b) If the costs of an improvement, including  special taxes 
or
assessments, representing an addition to value of property 
forming part of
the principal cannot reasonably be expected to 
outlast the legal tenancy,
the costs shall be paid by the legal 
tenant.  If the improvement can
reasonably be expected to 
outlast the legal tenancy, only a portion of the
costs shall be 
paid by the legal tenant and the balance by the
remainderman.  
The portion payable by the legal tenant shall be that
fraction 
of the total found by dividing the present value of the legal

tenancy by the present value of an estate of the same form as 
that of the
legal tenancy but limited to a period corresponding 
to the reasonably
expected duration of the improvement. The 
computation of present value of
the legal tenancy shall be 
computed on the basis of two-thirds of the value
determined by 
use of the tables set forth under Section 7520 of the
Internal 
Revenue Code of 1986 and the regulations thereunder for the

calculation of the values of annuities, life estates, and terms 
for years,
and no other evidence of duration or expectancy 
shall be considered, except
that any legal tenancy or remainder 
interest acquired for consideration
based on those tables shall 
be computed on the basis of the tables in
effect at the time 
acquired.  The method of computing the present value of
a legal 
tenancy established in this subsection shall apply to all legal

tenancies and remainders created after January 1, 1992 and to 
all legal
tenancies and remainders which were acquired for 
consideration if the
amount of the consideration was based on 
the tables set forth under Section
2031 or 7520 of the Internal 
Revenue Code then in effect.

    (c) If a legal tenant has leased any lands for agricultural 
or farming
operations and his legal tenancy terminates on or 
after the day any rent
has become due and payable, he or his 
representative is entitled to recover
that rent from the 
lessee; and if a legal tenancy terminates before the
rent under 
the lease is fully paid, the legal tenant or his representative

is entitled to recover from the lessee:

        (1) that portion of the rent not due which the number 
    of days from
the beginning of the period for which the rent 
    is not due to the date of
the termination of the legal 
    tenancy bears to the total number of days in
the period for 
    which the rent is unpaid; and

        (2) that portion of the landlord's share of actual 
    expenses paid
before the termination of the legal tenancy 
    and not previously recovered by
him, which the number of 
    days in the lease period on and after the
termination bears 
    to the total number of days in the lease period.

(Source: P.A. 82-390; 87-714.)

 
    (Text of Section after amendment by P.A. 100-519)

    Sec. 15. Non-trust estates. 

    (a) The provisions of this Act, as far as applicable, shall 
apply to
nontrust estates subject to any agreement of the 
parties or any specific
direction by statute or otherwise, and 
the references to trusts and
trustees shall be read as applying 
to nontrust estates and to legal tenants
(including life 
tenants, tenants for terms of years, or any other period of

tenancy) and remaindermen as the context requires; except that 
if either a
legal tenant or a remainderman has incurred a 
charge for his benefit
without the consent or agreement of the 
other, he shall pay that charge
in full.

    (b) If the costs of an improvement, including  special taxes 
or
assessments, representing an addition to value of property 
forming part of
the principal cannot reasonably be expected to 
outlast the legal tenancy,
the costs shall be paid by the legal 
tenant.  If the improvement can
reasonably be expected to 
outlast the legal tenancy, only a portion of the
costs shall be 
paid by the legal tenant and the balance by the
remainderman.  
The portion payable by the legal tenant shall be that
fraction 
of the total found by dividing the present value of the legal

tenancy by the present value of an estate of the same form as 
that of the
legal tenancy but limited to a period corresponding 
to the reasonably
expected duration of the improvement. The 
computation of present value of
the legal tenancy shall be 
computed on the basis of two-thirds of the value
determined by 
use of the tables set forth under Section 7520 of the
Internal 
Revenue Code of 1986 and the regulations thereunder for the

calculation of the values of annuities, life estates, and terms 
for years,
and no other evidence of duration or expectancy 
shall be considered, except
that any legal tenancy or remainder 
interest acquired for consideration
based on those tables shall 
be computed on the basis of the tables in
effect at the time 
acquired.  The method of computing the present value of
a legal 
tenancy established in this subsection shall apply to all legal

tenancies and remainders created after January 1, 1992 and to 
all legal
tenancies and remainders which were acquired for 
consideration if the
amount of the consideration was based on 
the tables set forth under Section
2031 or 7520 of the Internal 
Revenue Code then in effect.

    (c) If a legal tenant has leased any lands for agricultural 
or farming
operations and his legal tenancy terminates on or 
after the day any rent
has become due and payable, he or his 
representative is entitled to recover
that rent from the 
lessee; and if a legal tenancy terminates before the
rent under 
the lease is fully paid, the legal tenant or his representative

is entitled to recover from the lessee:

        (1) that portion of the rent not due which the number 
    of days from
the beginning of the period for which the rent 
    is not due to the date of
the termination of the legal 
    tenancy bears to the total number of days in
the period for 
    which the rent is unpaid; and

        (2) that portion of the landlord's share of actual 
    expenses paid
before the termination of the legal tenancy 
    and not previously recovered by
him, which the number of 
    days in the lease period on and after the
termination bears 
    to the total number of days in the lease period.
    (d) (Blank). This Section does not apply to life estates 
and remainder interests in oil or gas from non-coal formations, 
or royalties or overriding royalties created under leases of 
such minerals. 

(Source: P.A. 100-519, eff. 6-1-18.)

  
 
    Section 95. No acceleration or delay. Where this Act makes 
changes in a statute that is represented in this Act by text 
that is not yet or no longer in effect (for example, a Section 
represented by multiple versions), the use of that text does 
not accelerate or delay the taking effect of (i) the changes 
made by this Act or (ii) provisions derived from any other 
Public Act.