Full Text of SB3424 98th General Assembly
SB3424sam001 98TH GENERAL ASSEMBLY | 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 | 3 | | everything after the enacting clause with the following:
| 4 | | "Section 5. The Oil and Gas Wells on Public Lands Act is | 5 | | amended by changing Sections 1, 2, 3, 5, 7, 8, 12, 13, 14, 16, | 6 | | 19, 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 | 9 | | otherwise requires,
words and terms shall have the meaning | 10 | | attributed to them herein:
| 11 | | (1) "Commence to drill a well": The institution of work in | 12 | | good faith
with drilling equipment adequate for the drilling of | 13 | | a well to a depth that
will reasonably test the oil and gas | 14 | | productiveness of the public lands
where such well is | 15 | | commenced.
| 16 | | (2) "Petroleum": Any liquid or gaseous hydrocarbon |
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| 1 | | occurring in nature
beneath the surface of the earth.
| 2 | | (3) "Proven territory": Territory so situated with | 3 | | reference to known
producing wells as to establish the general | 4 | | opinion that, because of its
relation to them, petroleum is | 5 | | contained in it.
| 6 | | (4) "Public lands": Lands and areas belonging to, or | 7 | | subsequently
acquired by the State or the United States , | 8 | | including lands of every kind and nature.
| 9 | | (5) "Gross value": The value of petroleum at the well | 10 | | produced and
saved, without deduction for expense of | 11 | | production.
| 12 | | (6) "Person": Any citizen of the United States or person | 13 | | who has, in
good faith, declared his intention of becoming a | 14 | | citizen of the United
States, or any such association of such | 15 | | persons, or any corporation
organized and existing under and by | 16 | | virtue of the laws of any state or
territory of the United | 17 | | States 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 | 20 | | subsequently acquired by, the federal government within the | 21 | | State 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 | 25 | | activities. On and after the effective date of this amendatory |
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| 1 | | Act of the 98th General Assembly: | 2 | | (a) No permits shall be issued for The
Department of | 3 | | Natural Resources
shall be empowered with
respect to public | 4 | | lands to grant permits and leases in the name of the
State of | 5 | | Illinois, with the approval of the Governor in writing, for the
| 6 | | extraction of oil, gas and other petroleum deposits, except | 7 | | that no surface
extraction activities shall be performed nor | 8 | | production equipment located on
lands owned by the Department | 9 | | of Natural Resources if the State owns 100% of
the underlying | 10 | | mineral interests of those lands . | 11 | | (b) No permits shall be issued for surface extraction | 12 | | activities on lands owned by the United States government. | 13 | | (c) Extraction activities
underlying lands owned by the | 14 | | Department of Natural Resources or the United States that | 15 | | utilize
directional drilling techniques shall be prohibited. | 16 | | may be permitted at the discretion of the
Department. However,
| 17 | | the | 18 | | (d) The Department shall not grant permits on leases for | 19 | | the extraction of oil,
gas, and other petroleum deposits from | 20 | | State or federal public lands, including, but not limited to, | 21 | | the following
classifications of lands of if the State or | 22 | | federal government owns 100% of the underlying mineral
| 23 | | interests : (1) lands where threatened or endangered species | 24 | | occur, as
determined pursuant to the federal Endangered Species | 25 | | Act or the Illinois
Endangered Species Protection Act, (2) | 26 | | Illinois Natural Area Inventory sites,
(3) nature preserves |
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| 1 | | dedicated under the Illinois Natural Areas Preservation
Act,
| 2 | | (4) lands containing a
wild and scenic river as designated | 3 | | under the Wild and Scenic River Area Act,
(5) lands registered | 4 | | under the Register of Land and Water Reserves under Part
4010 | 5 | | of Title 17 of the Illinois Administrative Code, and (6) lands | 6 | | on which
federal or State laws or regulations prohibit the | 7 | | surface extraction or
production facility activity , (7) State | 8 | | parks, recreation areas, fish and wildlife areas, forests, and | 9 | | historic sites, and (8) national forests, national grasslands, | 10 | | and national wildlife refuges . | 11 | | (e) The grant of such
permits or leases shall be subject to | 12 | | the 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 | 16 | | enter into contracts in
writing designating any person as the | 17 | | permittee of the State of Illinois
with the exclusive right to | 18 | | prospect and explore not to exceed three
sections, or an | 19 | | equivalent area, of the public lands of the State of
Illinois | 20 | | for the occurrence of petroleum therein ; such contract to | 21 | | contain
such conditions as may be prescribed by the rules and | 22 | | regulations adopted
by the Department in accordance with the | 23 | | terms of this Act. Such permit
shall be for a period of one (1) | 24 | | year or less, in the discretion of the
Department, and shall be | 25 | | granted free of any monetary consideration
whatsoever, except |
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| 1 | | as provided in Section 13 of this Act, and except that
if more | 2 | | than one application for a permit is received with respect to | 3 | | the
same public lands the Department shall grant such permit to | 4 | | the person
offering the highest cash bonus therefor, and such | 5 | | permittee, pursuant to
such contract, shall have the right to | 6 | | enter in and upon such lands and
prospect and explore the same | 7 | | to 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 | 11 | | effective date of this amendatory Act of the 98th General | 12 | | Assembly, no No permittee shall commence any operation upon | 13 | | lands covered by his
permit until he has compensated the owners | 14 | | of private rights therein
according to law and has compensated | 15 | | the State of Illinois for damage to
the surface rights of the | 16 | | State in accordance with the rules and
regulations adopted by | 17 | | the 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 | 21 | | prior to the effective date of this amendatory Act of the 98th | 22 | | General Assembly shall have the option of surrendering his | 23 | | permit at
any time and shall be relieved of all liability | 24 | | thereunder except for
physical damage to the premises embraced |
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| 1 | | by 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 | 5 | | to the effective date of this amendatory Act of the 98th | 6 | | General Assembly , at any time during the life of the permit or | 7 | | upon the
termination thereof, shall be entitled to a lease for | 8 | | the extraction of
petroleum from not to exceed one section, or | 9 | | an equivalent area, of such
land to be selected by such | 10 | | permittee. Such lease shall be at a royalty of
not more than | 11 | | twelve and one-half (12 1/2%) per centum of all petroleum
| 12 | | produced and saved therefrom or the market value of such | 13 | | petroleum at the
option of the Department, and shall provide | 14 | | for an annual rental, payable
in advance, of from one ($1.00) | 15 | | dollar to ten ($10.00) dollars per acre, as
the Department may | 16 | | determine, which rentals shall be credited against
future | 17 | | royalties. Such leases shall be for a primary term of ten (10) | 18 | | years
and as long thereafter as oil in commercial quality and | 19 | | commercial quantity
can be produced from the lands embraced in | 20 | | the lease. The form and terms of
such leases shall be the same | 21 | | as the standard commercial petroleum lease
generally in use in | 22 | | the territory in which the oil, gas or other petroleum
deposits | 23 | | are located, with the addition thereto of such terms as in this
| 24 | | Act and the rules and regulations of the Department are | 25 | | provided. Whenever
the conditions contained in such standard |
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| 1 | | commercial lease are in conflict
with the provisions of this | 2 | | Act, 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 | 6 | | of this amendatory Act of the 98th General Assembly, the The | 7 | | Department is hereby authorized to cancel any permit or lease
| 8 | | issued as provided herein for nonpayment of royalties or | 9 | | nonperformance by
the permittee or lessee of any provision or | 10 | | requirement of the permit or
lease: Provided, that before any | 11 | | such cancellation shall be made, the
Department shall mail to | 12 | | the permittee or lessee by registered mail,
addressed to the | 13 | | post office address of such permittee or lessee shown by
the | 14 | | records of the office of the Department, a notice of intention | 15 | | to
cancel such permit or lease specifying the default for which | 16 | | the permit or
lease is subject to cancellation, and if, within | 17 | | thirty (30) days after the
mailing of said notice to the | 18 | | permittee or lessee, he shall remedy the
default specified in | 19 | | such notice, then no cancellation of the permit or
lease shall | 20 | | be entered by the Department, but otherwise, the said
| 21 | | cancellation shall be made and all rights of the permittee or | 22 | | lessee under
the permit or lease shall thereupon automatically | 23 | | terminate: Provided,
further, that failure to pay fees required | 24 | | under permits within the time
prescribed therein shall | 25 | | automatically and without notice work a forfeiture
of such |
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| 1 | | permits 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 | 5 | | permit prior to the effective date of this amendatory Act of | 6 | | the 98th General Assembly, no new permit
covering the lands, or | 7 | | any of them, embraced by such expired or forfeited
permit shall | 8 | | be issued for a period of thirty (30) days following the date
| 9 | | of such expiration or forfeiture. If more than one application | 10 | | for a permit
covering such lands, or any of them, shall be made | 11 | | during such thirty-day
period, the Department shall issue a | 12 | | permit to such lands, or any of them,
to the person offering | 13 | | the greatest cash bonus for such permit at a public
auction to | 14 | | be held at the time and place and in the manner as the
| 15 | | Department shall by regulation prescribe. Such auction shall be | 16 | | held at any
time after the expiration of such thirty-day period | 17 | | and the only notice
thereof shall be by entering in a book kept | 18 | | at the office of the Department
for the purpose, which book | 19 | | shall be a public record, the date, place and
hour of the | 20 | | holding 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 | 24 | | best interest of
the State and of the production of petroleum, |
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| 1 | | it is declared to be lawful
for the State, the permittees, | 2 | | lessees, operator or any person owning or
controlling royalty | 3 | | or other interest in separate properties of the same
producing | 4 | | or prospective petroleum field, to enter into agreements with
| 5 | | themselves or among each other, subject to the approval of the | 6 | | Department,
for the purpose of cooperative exploration, | 7 | | development and operation of
all or a part or parts of such | 8 | | field, or for the purpose of the
exploration, development or | 9 | | operation of all or part or parts of such field
as a pool or | 10 | | unit, and for the purpose of fixing the time, location and
| 11 | | manner of drilling and for the purpose of drilling and for the | 12 | | purpose of
regulating the location, sequence and number of | 13 | | exploratory wells required
in the case of permits under unit | 14 | | operations and leases, and operating of
wells for the | 15 | | exploration of petroleum on State and private lands and for
the | 16 | | apportionment and division of the petroleum between the State | 17 | | and the
several owners of land embraced within the field so | 18 | | placed in such pool,
taking into consideration the relative | 19 | | character and geological showing in
respect of said several | 20 | | tracts of land so far as the same is reasonably
ascertainable, | 21 | | the apparent probability of producing petroleum from the
whole | 22 | | or any part thereof and any and all other apparent factors that | 23 | | may
tend to aid in arriving at a fair, just and equitable | 24 | | participation by the
State and the several owners in the | 25 | | apportionment and distribution of all
the petroleum that shall | 26 | | be recovered and saved therefrom. The purpose of
this section |
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| 1 | | is to prohibit encourage the development and exploration of | 2 | | petroleum
upon State and federal lands by and through the unit | 3 | | plan of development. When it is in
the best interests of the | 4 | | State, the Department shall compel the adoption
of unit plans | 5 | | of operation in so far as State lands are included in any
| 6 | | productive pool or pools if the permittees or lessees of such | 7 | | lands shall
fail to agree upon a plan of unit operation | 8 | | acceptable to the Department,
the Department is empowered to | 9 | | fix the terms of such unit plan or plans and
any permittees or | 10 | | lessees affected who fail to abide by such plan shall
suffer | 11 | | forfeiture of their permits or leases upon notice as herein
| 12 | | provided.
| 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 | 16 | | publish, for
the information of the public, all reasonable | 17 | | rules and regulations
necessary for carrying out the provisions | 18 | | of this Act, and it may amend or
rescind any rule or regulation | 19 | | promulgated by it under the authority
contained herein: | 20 | | Provided, that no rule or regulation or amendment of the
same | 21 | | or any order rescinding any rule or regulation shall become | 22 | | effective
until after fifteen (15) days from the promulgation | 23 | | of the same by
publication in a newspaper of general | 24 | | circulation published at the State
capital and shall take | 25 | | effect and be in force at times specified therein.
All rules |
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| 1 | | and regulations of the Department and all amendments or
| 2 | | revocations of existing rules and regulations shall be recorded | 3 | | in an
appropriate book or books, shall be adequately indexed | 4 | | and shall be kept in
the office of the Department and shall be | 5 | | and constitute a public record.
Such rules and regulations of | 6 | | the Department shall be printed in pamphlet
form and furnished | 7 | | to 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 | 11 | | effect before the effective date of this amendatory Act of the | 12 | | 98th General Assembly, the lessee shall proceed
to develop the | 13 | | petroleum in the lands covered thereby through the drilling
of | 14 | | such wells as will efficiently extract the petroleum therefrom | 15 | | and such
development shall take into account the productiveness | 16 | | of the producing
horizon, the depth at which it occurs, the | 17 | | average cost of wells, the
market requirements obtaining at any | 18 | | given time, and the maintenance of
proper oil and gas ratios. | 19 | | The Department shall determine, either by rule
or regulation, | 20 | | or by inclusion in the terms of any lease, the rapidity and
| 21 | | extent of development of the oil, gas or other petroleum field | 22 | | embraced 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 | 2 | | this amendatory Act of the 98th General Assembly shall provide | 3 | | that the lessee shall drill an offset
well to any well on | 4 | | adjoining land which is within three hundred fifty
(350) feet | 5 | | of any outer boundary of the land covered by the lease, and
| 6 | | which well on adjoining lands is producing petroleum in paying | 7 | | quantities
and draining the lands covered by the lease, such | 8 | | offset to be begun within
ninety (90) days from the completion | 9 | | of the adjoining well and drilled with
due diligence to | 10 | | completion.
| 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 | 14 | | as requiring
the Department to offer any tract or tracts of | 15 | | land for prospecting or
lease , but the Department shall have | 16 | | power to withhold any tract or tracts
from prospecting or | 17 | | leasing for petroleum purposes, if in its judgment the
best | 18 | | interest 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 | 3 | | amended by repealing Sections 6, 9, 11, 17, 18, and 21.
| 4 | | Section 99. Effective date. This Act takes effect upon | 5 | | becoming law.".
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