Full Text of SB3356 97th General Assembly
SB3356 97TH GENERAL ASSEMBLY |
| | 97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012 SB3356 Introduced 2/7/2012, by Sen. Kwame Raoul SYNOPSIS AS INTRODUCED: |
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Creates the Dormant Mineral Interests Act. Provides a statement of public policy and definitions. Describes mineral interests to which the Act does not apply. Describes the process for and the limitations on the termination of a dormant mineral interest. Provides for the preservation of a mineral interest through a recorded notice process. Allows for late recording of a mineral interest by the mineral owner in specified circumstances. Describes the effect of a court termination of a mineral interest. Provides for the implementation of the Act, limitations on actions under the Act, and uniformity of application and construction of the Act. Contains a severability provision.
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| | A BILL FOR |
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| 1 | | AN ACT concerning mineral interests.
| 2 | | Be it enacted by the People of the State of Illinois,
| 3 | | represented in the General Assembly:
| 4 | | Section 0.1. Short title. This Act may be cited as the | 5 | | Dormant Mineral Interests Act. | 6 | | Section 1. Statement of policy. | 7 | | (a) The public policy of this State is to enable and | 8 | | encourage marketability of real property and to mitigate the | 9 | | adverse effect of dormant mineral interests on the full use and | 10 | | development of both surface estate and mineral interests in | 11 | | real property. | 12 | | (b) This Act shall be construed to effectuate its purpose | 13 | | to provide a means for termination of dormant mineral interests | 14 | | that impair marketability of real property.
| 15 | | Section 2. Definitions. As used in this Act: | 16 | | (1) "Mineral interest" means an interest in a mineral | 17 | | estate, however created and regardless of form, whether | 18 | | absolute or fractional, divided or undivided, corporeal or | 19 | | incorporeal, including a fee simple or any lesser interest or | 20 | | any kind of royalty, production payment, executive right, | 21 | | nonexecutive right, leasehold, or lien, in minerals, | 22 | | regardless of character.
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| 1 | | (2) "Minerals" includes gas, oil, coal, other gaseous, | 2 | | liquid, and solid hydrocarbons, oil shale, cement material, | 3 | | sand and gravel, road material, building stone, chemical | 4 | | substance, gemstone, metallic, fissionable, and nonfissionable | 5 | | ores, colloidal and other clay, steam and other geothermal | 6 | | resource, and any other substance defined as a mineral by the | 7 | | law of this State.
| 8 | | Section 3. Exclusions. | 9 | | (a) This Act does not apply to: | 10 | | (1) a mineral interest of the United States or an | 11 | | Indian tribe, except to the extent permitted by federal | 12 | | law; or
| 13 | | (2) a mineral interest of this State or an agency or | 14 | | political subdivision of this
State, except to the extent | 15 | | permitted by State law other than this Act.
| 16 | | (b) This Act does not affect water rights.
| 17 | | Section 4. Termination of dormant mineral interest. | 18 | | (a) The surface owner of real property subject to a mineral | 19 | | interest may maintain an action to terminate a dormant mineral | 20 | | interest. A mineral interest is dormant for the purpose of this | 21 | | Act if the interest is unused within the meaning of subsection | 22 | | (b) for a period of 20 or more years next preceding | 23 | | commencement of the action and has not been preserved pursuant | 24 | | to Section 5. The action must be in the nature of and requires |
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| 1 | | the same notice as is required in Section 5 of the Severed | 2 | | Mineral Interest Act. The action may be maintained whether or | 3 | | not the owner of the mineral interest or the owner's | 4 | | whereabouts is known or unknown. Disability or lack of | 5 | | knowledge of any kind on the part of any person does not | 6 | | suspend the running of the 20-year period.
| 7 | | (b) For the purpose of this Section, any of the following | 8 | | actions taken by or under authority of the owner of a mineral | 9 | | interest in relation to any mineral that is part of the mineral | 10 | | interest constitutes use of the entire mineral interest:
| 11 | | (1) Active mineral operations on or below the surface | 12 | | of the real
property or other property unitized or pooled | 13 | | with the real property, including production, geophysical | 14 | | exploration, exploratory or developmental drilling, | 15 | | mining, exploitation, and development, but not including | 16 | | injection of substances for purposes of disposal or | 17 | | storage. Active mineral operations constitute use of any | 18 | | mineral interest owned by any person in any mineral that is | 19 | | the object of the operations.
| 20 | | (2) Payment of taxes on a separate assessment of the | 21 | | mineral interest or of a
transfer or severance tax relating | 22 | | to the mineral interest.
| 23 | | (3) Recordation of an instrument that creates, | 24 | | reserves, or otherwise
evidences a claim to or the | 25 | | continued existence of the mineral interest, including an | 26 | | instrument that transfers, leases, or divides the |
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| 1 | | interest. Recordation of an instrument constitutes use of | 2 | | (i) any recorded interest owned by any person in any | 3 | | mineral that is the subject of the instrument, and (ii) any | 4 | | recorded mineral interest in the property owned by any | 5 | | party to the instrument.
| 6 | | (4) Recordation of a judgment or decree that makes | 7 | | specific reference to the
mineral interest.
| 8 | | (c) This Section applies notwithstanding any provision to | 9 | | the contrary in the instrument that creates, reserves, | 10 | | transfers, leases, divides, or otherwise evidences the claim to | 11 | | or the continued existence of the mineral interest or in | 12 | | another recorded document unless the instrument or other | 13 | | recorded document provides an earlier termination date.
| 14 | | Section 5. Preservation of mineral interest by notice. | 15 | | (a) An owner of a mineral interest may record at any time a | 16 | | notice of intent to preserve the mineral interest or a part | 17 | | thereof. The mineral interest is preserved in each county in | 18 | | which the notice is recorded. A mineral interest is not dormant | 19 | | if the notice is recorded within 20 years next preceding | 20 | | commencement of the action to terminate the mineral interest or | 21 | | pursuant to Section 6 after commencement of the action.
| 22 | | (b) The notice may be executed by an owner of the mineral | 23 | | interest or by another person acting on behalf of the owner, | 24 | | including an owner who is under a disability or unable to | 25 | | assert a claim on the owner's own behalf or whose identity |
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| 1 | | cannot be established or is uncertain at the time of execution | 2 | | of the notice. The notice may be executed by or on behalf of a | 3 | | co-owner for the benefit of any or all co-owners or by or on | 4 | | behalf of an owner for the benefit of any or all persons | 5 | | claiming under the owner or persons under whom the owner | 6 | | claims.
| 7 | | (c) The notice must contain the name of the owner of the | 8 | | mineral interest or the co-owners or other persons for whom the | 9 | | mineral interest is to be preserved or, if the identity of the | 10 | | owner cannot be established or is uncertain, the name of the | 11 | | class of which the owner is a member, and must identify the | 12 | | mineral interest or part thereof to be preserved by one of the | 13 | | following means:
| 14 | | (1) A reference to the location in the records of the | 15 | | instrument that creates,
reserves, or otherwise evidences | 16 | | the interest or of the judgment or decree that confirms the | 17 | | interest.
| 18 | | (2) A legal description of the mineral interest. If the | 19 | | owner of a mineral interest claims the mineral interest | 20 | | under an instrument that is not of record or claims under a | 21 | | recorded instrument that does not specifically identify | 22 | | that owner, a legal description is not effective to | 23 | | preserve a mineral interest unless accompanied by a | 24 | | reference to the name of the record owner under whom the | 25 | | owner of the mineral interest claims. In such a case, the | 26 | | record of the notice of intent to preserve the mineral |
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| 1 | | interest must be indexed under the name of the record owner | 2 | | as well as
under the name of the owner of the mineral | 3 | | interest.
| 4 | | (3) A reference generally and without specificity to | 5 | | any or all mineral
interests of the owner in any real | 6 | | property situated in the county. The reference is not | 7 | | effective to preserve a particular mineral interest unless | 8 | | there is, in the county, in the name of the person claiming | 9 | | to be the owner of the interest, (i) a previously recorded | 10 | | instrument that creates, reserves, or otherwise evidences | 11 | | that interest or (ii) a judgment or decree that confirms | 12 | | that interest.
| 13 | | Section 6. Late recording by mineral owner. | 14 | | (a) In this Section, "litigation expenses" means costs and | 15 | | expenses that the court determines are reasonably and | 16 | | necessarily incurred in preparing for and prosecuting an | 17 | | action, including reasonable attorney's fees.
| 18 | | (b) In an action to terminate a mineral interest pursuant | 19 | | to this Act, the court shall permit the owner of the mineral | 20 | | interest to record a late notice of intent to preserve the | 21 | | mineral interest as a condition of dismissal of the action, | 22 | | upon payment into court for the benefit of the surface owner of | 23 | | the real property the litigation expenses attributable to the | 24 | | mineral interest or portion thereof as to which the notice is | 25 | | recorded.
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| 1 | | (c) This Section does not apply in an action in which a | 2 | | mineral interest has been unused within the meaning of Section | 3 | | 4(b) for a period of 40 or more years next preceding | 4 | | commencement of the action.
| 5 | | Section 7. Effect of termination. A court order terminating | 6 | | a mineral interest, when recorded, merges the terminated | 7 | | mineral interest, including express and implied appurtenant | 8 | | surface rights and obligations, with the
surface estate in | 9 | | shares proportionate to the ownership of the surface estate, | 10 | | subject
to existing liens for taxes or assessments.
| 11 | | Section 8. Savings and transitional provisions. | 12 | | (a) Except as otherwise provided in this Section, this Act | 13 | | applies to all mineral interests, whether created before, on, | 14 | | or after its effective date.
| 15 | | (b) An action may not be maintained to terminate a mineral | 16 | | interest pursuant to this Act until 2 years after the effective | 17 | | date of the Act.
| 18 | | (c) This Act does not limit or affect any other procedure | 19 | | provided by law for clearing an abandoned mineral interest from | 20 | | title to real property.
| 21 | | (d) This Act does not affect the validity of the | 22 | | termination of any mineral interest made pursuant to any | 23 | | predecessor statute on dormant mineral interests. |
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| 1 | | Section 9. Uniformity of application and construction. | 2 | | This Act shall be applied and construed to effectuate its | 3 | | general purpose to make uniform the law with respect to the | 4 | | subject of this Act among states enacting it. | 5 | | Section 10. Severability clause. If any provision of this | 6 | | Act or its application to any person or circumstance is held | 7 | | invalid, the invalidity does not affect any other provision or | 8 | | application of this Act that can be given effect
without the | 9 | | invalid provision or application, and to this end the | 10 | | provisions of this Act are severable.
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