Sen. Michael W. Frerichs

Filed: 3/25/2014

 

 


 

 


 
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1
AMENDMENT TO SENATE BILL 3424

2    AMENDMENT NO. ______. Amend Senate Bill 3424 by replacing
3everything after the enacting clause with the following:
 
4    "Section 5. The Oil and Gas Wells on Public Lands Act is
5amended by changing Sections 1, 2, 3, 5, 7, 8, 12, 13, 14, 16,
619, 20, and 22 as follows:
 
7    (5 ILCS 615/1)  (from Ch. 96 1/2, par. 5001)
8    Sec. 1. Whenever used in this Act, unless the context
9otherwise requires, words and terms shall have the meaning
10attributed to them herein:
11    (1) "Commence to drill a well": The institution of work in
12good faith with drilling equipment adequate for the drilling of
13a well to a depth that will reasonably test the oil and gas
14productiveness of the public lands where such well is
15commenced.
16    (2) "Petroleum": Any liquid or gaseous hydrocarbon

 

 

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1occurring in nature beneath the surface of the earth.
2    (3) "Proven territory": Territory so situated with
3reference to known producing wells as to establish the general
4opinion that, because of its relation to them, petroleum is
5contained in it.
6    (4) "Public lands": Lands and areas belonging to, or
7subsequently acquired by the State or the United States,
8including lands of every kind and nature.
9    (5) "Gross value": The value of petroleum at the well
10produced and saved, without deduction for expense of
11production.
12    (6) "Person": Any citizen of the United States or person
13who has, in good faith, declared his intention of becoming a
14citizen of the United States, or any such association of such
15persons, or any corporation organized and existing under and by
16virtue of the laws of any state or territory of the United
17States and authorized to do business in this State.
18    (7) "Department": The Department of Natural Resources.
19    (8) "United States": Lands and areas belonging to, or
20subsequently acquired by, the federal government within the
21State of Illinois.
22(Source: P.A. 89-445, eff. 2-7-96.)
 
23    (5 ILCS 615/2)  (from Ch. 96 1/2, par. 5002)
24    Sec. 2. State issuance of extraction permits; prohibited
25activities. On and after the effective date of this amendatory

 

 

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1Act of the 98th General Assembly:
2    (a) No permits shall be issued for The Department of
3Natural Resources shall be empowered with respect to public
4lands to grant permits and leases in the name of the State of
5Illinois, with the approval of the Governor in writing, for the
6extraction of oil, gas and other petroleum deposits, except
7that no surface extraction activities shall be performed nor
8production equipment located on lands owned by the Department
9of Natural Resources if the State owns 100% of the underlying
10mineral interests of those lands.
11    (b) No permits shall be issued for surface extraction
12activities on lands owned by the United States government.
13    (c) Extraction activities underlying lands owned by the
14Department of Natural Resources or the United States that
15utilize directional drilling techniques shall be prohibited.
16may be permitted at the discretion of the Department. However,
17the
18    (d) The Department shall not grant permits on leases for
19the extraction of oil, gas, and other petroleum deposits from
20State or federal public lands, including, but not limited to,
21the following classifications of lands of if the State or
22federal government owns 100% of the underlying mineral
23interests: (1) lands where threatened or endangered species
24occur, as determined pursuant to the federal Endangered Species
25Act or the Illinois Endangered Species Protection Act, (2)
26Illinois Natural Area Inventory sites, (3) nature preserves

 

 

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1dedicated under the Illinois Natural Areas Preservation Act,
2(4) lands containing a wild and scenic river as designated
3under the Wild and Scenic River Area Act, (5) lands registered
4under the Register of Land and Water Reserves under Part 4010
5of Title 17 of the Illinois Administrative Code, and (6) lands
6on which federal or State laws or regulations prohibit the
7surface extraction or production facility activity, (7) State
8parks, recreation areas, fish and wildlife areas, forests, and
9historic sites, and (8) national forests, national grasslands,
10and national wildlife refuges.
11    (e) The grant of such permits or leases shall be subject to
12the terms and conditions hereinafter set forth in this Act.
13(Source: P.A. 89-445, eff. 2-7-96; 90-490, eff. 8-17-97.)
 
14    (5 ILCS 615/3)  (from Ch. 96 1/2, par. 5003)
15    Sec. 3. The Department shall not is hereby authorized to
16enter into contracts in writing designating any person as the
17permittee of the State of Illinois with the exclusive right to
18prospect and explore not to exceed three sections, or an
19equivalent area, of the public lands of the State of Illinois
20for the occurrence of petroleum therein; such contract to
21contain such conditions as may be prescribed by the rules and
22regulations adopted by the Department in accordance with the
23terms of this Act. Such permit shall be for a period of one (1)
24year or less, in the discretion of the Department, and shall be
25granted free of any monetary consideration whatsoever, except

 

 

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1as provided in Section 13 of this Act, and except that if more
2than one application for a permit is received with respect to
3the same public lands the Department shall grant such permit to
4the person offering the highest cash bonus therefor, and such
5permittee, pursuant to such contract, shall have the right to
6enter in and upon such lands and prospect and explore the same
7to determine the occurrence of petroleum therein.
8(Source: Laws 1951, p. 1167.)
 
9    (5 ILCS 615/5)  (from Ch. 96 1/2, par. 5005)
10    Sec. 5. For existing permits in effect prior to the
11effective date of this amendatory Act of the 98th General
12Assembly, no No permittee shall commence any operation upon
13lands covered by his permit until he has compensated the owners
14of private rights therein according to law and has compensated
15the State of Illinois for damage to the surface rights of the
16State in accordance with the rules and regulations adopted by
17the Department.
18(Source: Laws 1951, p. 1167.)
 
19    (5 ILCS 615/7)  (from Ch. 96 1/2, par. 5007)
20    Sec. 7. Every permittee with an existing permit in effect
21prior to the effective date of this amendatory Act of the 98th
22General Assembly shall have the option of surrendering his
23permit at any time and shall be relieved of all liability
24thereunder except for physical damage to the premises embraced

 

 

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1by his permit which have been occasioned by his operations.
2(Source: Laws 1941, vol. 1, p. 943.)
 
3    (5 ILCS 615/8)  (from Ch. 96 1/2, par. 5008)
4    Sec. 8. A permittee with an existing permit in effect prior
5to the effective date of this amendatory Act of the 98th
6General Assembly, at any time during the life of the permit or
7upon the termination thereof, shall be entitled to a lease for
8the extraction of petroleum from not to exceed one section, or
9an equivalent area, of such land to be selected by such
10permittee. Such lease shall be at a royalty of not more than
11twelve and one-half (12 1/2%) per centum of all petroleum
12produced and saved therefrom or the market value of such
13petroleum at the option of the Department, and shall provide
14for an annual rental, payable in advance, of from one ($1.00)
15dollar to ten ($10.00) dollars per acre, as the Department may
16determine, which rentals shall be credited against future
17royalties. Such leases shall be for a primary term of ten (10)
18years and as long thereafter as oil in commercial quality and
19commercial quantity can be produced from the lands embraced in
20the lease. The form and terms of such leases shall be the same
21as the standard commercial petroleum lease generally in use in
22the territory in which the oil, gas or other petroleum deposits
23are located, with the addition thereto of such terms as in this
24Act and the rules and regulations of the Department are
25provided. Whenever the conditions contained in such standard

 

 

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1commercial lease are in conflict with the provisions of this
2Act, the provisions of this Act shall control.
3(Source: Laws 1951, p. 1167.)
 
4    (5 ILCS 615/12)  (from Ch. 96 1/2, par. 5012)
5    Sec. 12. For existing permits prior to the effective date
6of this amendatory Act of the 98th General Assembly, the The
7Department is hereby authorized to cancel any permit or lease
8issued as provided herein for nonpayment of royalties or
9nonperformance by the permittee or lessee of any provision or
10requirement of the permit or lease: Provided, that before any
11such cancellation shall be made, the Department shall mail to
12the permittee or lessee by registered mail, addressed to the
13post office address of such permittee or lessee shown by the
14records of the office of the Department, a notice of intention
15to cancel such permit or lease specifying the default for which
16the permit or lease is subject to cancellation, and if, within
17thirty (30) days after the mailing of said notice to the
18permittee or lessee, he shall remedy the default specified in
19such notice, then no cancellation of the permit or lease shall
20be entered by the Department, but otherwise, the said
21cancellation shall be made and all rights of the permittee or
22lessee under the permit or lease shall thereupon automatically
23terminate: Provided, further, that failure to pay fees required
24under permits within the time prescribed therein shall
25automatically and without notice work a forfeiture of such

 

 

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1permits and of all rights thereunder.
2(Source: Laws 1951, p. 1167.)
 
3    (5 ILCS 615/13)  (from Ch. 96 1/2, par. 5013)
4    Sec. 13. Upon the expiration or forfeiture of any existing
5permit prior to the effective date of this amendatory Act of
6the 98th General Assembly, no new permit covering the lands, or
7any of them, embraced by such expired or forfeited permit shall
8be issued for a period of thirty (30) days following the date
9of such expiration or forfeiture. If more than one application
10for a permit covering such lands, or any of them, shall be made
11during such thirty-day period, the Department shall issue a
12permit to such lands, or any of them, to the person offering
13the greatest cash bonus for such permit at a public auction to
14be held at the time and place and in the manner as the
15Department shall by regulation prescribe. Such auction shall be
16held at any time after the expiration of such thirty-day period
17and the only notice thereof shall be by entering in a book kept
18at the office of the Department for the purpose, which book
19shall be a public record, the date, place and hour of the
20holding of such auction.
21(Source: Laws 1951, p. 1167.)
 
22    (5 ILCS 615/14)  (from Ch. 96 1/2, par. 5014)
23    Sec. 14. Whenever the Department shall find it is in the
24best interest of the State and of the production of petroleum,

 

 

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1it is declared to be lawful for the State, the permittees,
2lessees, operator or any person owning or controlling royalty
3or other interest in separate properties of the same producing
4or prospective petroleum field, to enter into agreements with
5themselves or among each other, subject to the approval of the
6Department, for the purpose of cooperative exploration,
7development and operation of all or a part or parts of such
8field, or for the purpose of the exploration, development or
9operation of all or part or parts of such field as a pool or
10unit, and for the purpose of fixing the time, location and
11manner of drilling and for the purpose of drilling and for the
12purpose of regulating the location, sequence and number of
13exploratory wells required in the case of permits under unit
14operations and leases, and operating of wells for the
15exploration of petroleum on State and private lands and for the
16apportionment and division of the petroleum between the State
17and the several owners of land embraced within the field so
18placed in such pool, taking into consideration the relative
19character and geological showing in respect of said several
20tracts of land so far as the same is reasonably ascertainable,
21the apparent probability of producing petroleum from the whole
22or any part thereof and any and all other apparent factors that
23may tend to aid in arriving at a fair, just and equitable
24participation by the State and the several owners in the
25apportionment and distribution of all the petroleum that shall
26be recovered and saved therefrom. The purpose of this section

 

 

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1is to prohibit encourage the development and exploration of
2petroleum upon State and federal lands by and through the unit
3plan of development. When it is in the best interests of the
4State, the Department shall compel the adoption of unit plans
5of operation in so far as State lands are included in any
6productive pool or pools if the permittees or lessees of such
7lands shall fail to agree upon a plan of unit operation
8acceptable to the Department, the Department is empowered to
9fix the terms of such unit plan or plans and any permittees or
10lessees affected who fail to abide by such plan shall suffer
11forfeiture of their permits or leases upon notice as herein
12provided.
13(Source: Laws 1951, p. 1167.)
 
14    (5 ILCS 615/16)  (from Ch. 96 1/2, par. 5016)
15    Sec. 16. The Department is hereby required to prescribe and
16publish, for the information of the public, all reasonable
17rules and regulations necessary for carrying out the provisions
18of this Act, and it may amend or rescind any rule or regulation
19promulgated by it under the authority contained herein:
20Provided, that no rule or regulation or amendment of the same
21or any order rescinding any rule or regulation shall become
22effective until after fifteen (15) days from the promulgation
23of the same by publication in a newspaper of general
24circulation published at the State capital and shall take
25effect and be in force at times specified therein. All rules

 

 

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1and regulations of the Department and all amendments or
2revocations of existing rules and regulations shall be recorded
3in an appropriate book or books, shall be adequately indexed
4and shall be kept in the office of the Department and shall be
5and constitute a public record. Such rules and regulations of
6the Department shall be printed in pamphlet form and furnished
7to the public free of cost on the Department's website.
8(Source: Laws 1951, p. 1167.)
 
9    (5 ILCS 615/19)  (from Ch. 96 1/2, par. 5019)
10    Sec. 19. For After the issuance of any petroleum lease in
11effect before the effective date of this amendatory Act of the
1298th General Assembly, the lessee shall proceed to develop the
13petroleum in the lands covered thereby through the drilling of
14such wells as will efficiently extract the petroleum therefrom
15and such development shall take into account the productiveness
16of the producing horizon, the depth at which it occurs, the
17average cost of wells, the market requirements obtaining at any
18given time, and the maintenance of proper oil and gas ratios.
19The Department shall determine, either by rule or regulation,
20or by inclusion in the terms of any lease, the rapidity and
21extent of development of the oil, gas or other petroleum field
22embraced by such lease.
23(Source: Laws 1951, p. 1167.)
 
24    (5 ILCS 615/20)  (from Ch. 96 1/2, par. 5020)

 

 

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1    Sec. 20. All existing leases prior to the effective date of
2this amendatory Act of the 98th General Assembly shall provide
3that the lessee shall drill an offset well to any well on
4adjoining land which is within three hundred fifty (350) feet
5of any outer boundary of the land covered by the lease, and
6which well on adjoining lands is producing petroleum in paying
7quantities and draining the lands covered by the lease, such
8offset to be begun within ninety (90) days from the completion
9of the adjoining well and drilled with due diligence to
10completion.
11(Source: Laws 1941, vol. 1, p. 943.)
 
12    (5 ILCS 615/22)  (from Ch. 96 1/2, par. 5022)
13    Sec. 22. Nothing contained in this Act shall be construed
14as requiring the Department to offer any tract or tracts of
15land for prospecting or lease, but the Department shall have
16power to withhold any tract or tracts from prospecting or
17leasing for petroleum purposes, if in its judgment the best
18interest of the State will be served by so doing.
19(Source: Laws 1951, p. 1167.)
 
20    (5 ILCS 615/6 rep.)
21    (5 ILCS 615/9 rep.)
22    (5 ILCS 615/11 rep.)
23    (5 ILCS 615/17 rep.)
24    (5 ILCS 615/18 rep.)

 

 

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1    (5 ILCS 615/21 rep.)
2    Section 10. The Oil and Gas Wells on Public Lands Act is
3amended by repealing Sections 6, 9, 11, 17, 18, and 21.
 
4    Section 99. Effective date. This Act takes effect upon
5becoming law.".