SB3246 100TH GENERAL ASSEMBLY

LRB100 18756 XWW 33990 b

100TH GENERAL ASSEMBLY
State of Illinois
2017 and 2018
SB3246

Introduced 2/15/2018, by Sen. Dale Fowler

SYNOPSIS AS INTRODUCED:

225 ILCS 725/19.6	from Ch. 96 1/2, par. 5430.1
225 ILCS 728/15
225 ILCS 728/60 new
225 ILCS 728/65 new

Amends the Illinois Oil and Gas Act, and the Illinois Petroleum Education and Marketing Act. Transfers the administration of the Landowner Grant Program from the Department of Natural Resources to the Illinois Petroleum Resources Board. Provides that the Department has the power to transfer an amount not to exceed $250,000 per fiscal year from the Plugging and Restoration Fund to the Board for the sole purpose of implementing the Landowner Grant Program. Provides that the Board shall keep accurate records of all financial transactions regarding such funds. Establishes the Board's specific powers and duties in administering the Landowner Grant Program and utilizing the funds.

FISCAL NOTE ACT MAY APPLY

A BILL FOR

AN ACT concerning regulation.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The Illinois Oil and Gas Act is amended by changing Section 19.6 as follows:

(225 ILCS 725/19.6) (from Ch. 96 1/2, par. 5430.1)

Sec. 19.6. The Department has the following specific powers and duties in administering the Oil and Gas Well Site Plugging and Restoration Program, Landowner Grant Program, and the Plugging and Restoration Fund:

(a) To adopt rules in conformity with this Act, including rules establishing priorities for well site plugging, repair, and restoration consistent with this Act.

(b) To adopt rules necessary to implement the Oil and Gas Well Site Plugging and Restoration Program and Landowner Grant Program.

(c) To collect the fees assessed by the Department under this Act and to make deposits into the Plugging and Restoration Fund.

(d) To deposit the amount of any forfeited surety bond or other security in the Plugging and Restoration Fund.

(e) To recover well site plugging, repair, and restoration costs from permittees who fail to reimburse the Plugging and Restoration Fund for expenses attributable to those permittees and to deposit any amounts reimbursed or collected into the Plugging and Restoration Fund.

(f) To accept, receive, and deposit into the Plugging and Restoration Fund any grants, gifts, or other funds that may be made available from public or private sources.

(g) To make expenditures of amounts appropriated from the Plugging and Restoration Fund, as it may deem appropriate in its sole discretion, for the sole purposes of plugging, replugging, or repairing any well, restoring the site of any well, including but not limited to removal of well site equipment or production facilities, and for reimbursement to landowners for plugging a well and restoring the site of a well, including but not limited to removal of well site equipment located on the landowner's property, for which the landowner has no legal obligation to plug the wells or remove the well site equipment, if the well is determined by the Department to be abandoned or ordered by the Department to be plugged, replugged, repaired, or restored under Section 8a, 19, 19.1, or 19.8 of this Act including the costs of administering the Oil and Gas Well Site Plugging and Restoration Program and , the Plugging and Restoration Fund, and the Landowner Grant Program.

(h) To sell or assign any lien arising under Section 19.5 of this Act to the highest and best bidder who may agree to perform the necessary plugging or corrective work as prescribed by the Department and to deposit the proceeds of such sale in the Plugging and Restoration Fund or to offset Department plugging costs.

(i) To enter into contracts in accordance with the Illinois Purchasing Act and to administer the Landowner Grant Program. In contracts or grants for the plugging, replugging, repairing or restoration of a well, well site, or an associated tank battery or production facility, the consideration paid by the Department may include the sale and assignment of any lien arising under Section 19.5 of this Act.

(j) To dispose in a commercially reasonable manner, at generally recognized market value, well site equipment, including an associated tank battery and production facility equipment, and any amount of hydrocarbons from the well that is stored on the lease, by either or both of the following methods after it has been determined to be abandoned by the Department through inclusion of the well in the Oil and Gas Well Site Plugging and Restoration Program:

(1) a plugging contract may provide that the person plugging the well or remediating oil field waste pollution, or both, will have clear title, subject to any perfected, prior legal or equitable claim, on all well site equipment and hydrocarbons from the well that are stored on the lease, or hydrocarbons recovered during the plugging operation in exchange for a sum of money deducted as a credit from the contract price; or

(2) the well site equipment, including but not limited to an associated tank battery and production facility equipment, hydrocarbons from the well that are stored on the lease, and hydrocarbons recovered during the plugging operation may be sold at a public auction or a public or private sale. All well site equipment and hydrocarbons acquired by a person by sale shall be acquired under clear title, subject to any perfected prior legal or equitable claims.

(k) To transfer an amount from the Plugging and Restoration Fund not to exceed $250,000 per fiscal year, subject to appropriation and availability of funds, to the Illinois Petroleum Resources Board, for the sole purpose of implementing the Landowner Grant Program.

(Source: P.A. 90-260, eff. 7-30-97.)

Section 10. The Illinois Petroleum Education and Marketing Act is amended by changing Section 15 and by adding Sections 60 and 65 as follows:

(225 ILCS 728/15)

(Section scheduled to be repealed on January 1, 2028)

Sec. 15. Board powers and duties. The Board shall have the following powers and duties:

(1) To administer and enforce the provisions of this Act.

(2) To establish an office for the Board within the State of Illinois.

(3) To elect a chairperson and any other officers that may be necessary to direct the operations of the Board.

(4) To employ personnel as shall be deemed necessary to carry out the purpose and provisions of this Act and to prescribe their duties and fix their compensation.

(5) To receive and administer all assessments, donations, grants, contributions, and gifts received by the Board pursuant to this Act and to deposit them into accounts maintained by the Board.

(6) To annually establish priorities and approve a prepared budget consistent with estimated resources.

(7) To adopt rules as it deems necessary to carry out the provisions of this Act.

(8) To enter into contracts or agreements for studies, research projects, experimental work, supplies, or other services to carry out the purposes of this Act and to incur those expenses necessary to carry out those purposes. A contract or agreement entered into under this item shall provide that:

(A) the person entering the contract or agreement on behalf of the Board shall develop and submit to the Board a plan or project together with a budget that shows estimated costs to be incurred for the plan or project; and

(B) the person entering the contract or agreement shall keep accurate records of all of its transactions, account for funds received and expended, and make periodic reports to the Board of activities conducted and other reports that the Board may require.

(9) To keep accurate records of all financial transactions performed pursuant to this Act. These records shall include a complete accounting of all funds received by the Board for the Landowner Grant Program, including how much was received, how the money was spent, and any money remaining in a Board account at the end of the fiscal year. These records shall be audited annually by an independent auditor who is a certified public accountant and has been selected by the Board, and an annual report shall be compiled and made available to any interest owner and filed with the Department within 60 days after the close of the Board's fiscal year.

(10) To cooperate with any private, local, state, or national commission, organization, agency, or group and to make contracts and agreements for joint programs beneficial to the oil and gas industry.

(11) To accept donations, grants, contributions, and gifts from any public or private source and deposit them into accounts maintained by the Board.

(12) To keep an accurate record of all assessments collected.

(13) To enter into voluntary agreements with the Department to support oilfield environmental remediation and restoration activities.

(Source: P.A. 100-220, eff. 8-18-17.)

(225 ILCS 728/60 new)

Sec. 60. Landowner Grant Program; powers and duties. The Board has the following specific powers and duties in administering the Landowner Grant Program:

(1) To adopt rules necessary to implement the Landowner Grant Program; the rules of the Department that are in effect on the effective date of this amendatory Act of the 100th General Assembly that pertain to the rights, powers, duties, and functions transferred from the Department under this amendatory Act of the 100th General Assembly shall become the rules of the Board and shall continue in effect until amended or repealed by the Board.

(2) To accept and receive funds from the Department to administer the Landowner Grant Program and to deposit those funds into accounts, operating or reserve, to be used as authorized by Section 65.

(3) To make expenditures as it may deem appropriate in its sole discretion for the sole purposes of providing reimbursement to landowners for plugging a well and restoring the site of a well, including, but not limited to, removal of well site equipment located on the landowner's property, for which the landowner has no legal obligation to plug the wells or remove the well site equipment, if the well is determined by the Department to be abandoned or ordered by the Department to be plugged, replugged, repaired, or restored under Section 8a, 19, 19.1, or 19.8 of the Illinois Oil and Gas Act.

(4) To enter into contracts to administer the Landowner Grant Program.

(5) To expend funds collected under Section 30 of this Act, as it may deem appropriate in its sole discretion, to implement and administer the Landowner Grant Program, in addition to funds received from the Department under this Section.

(225 ILCS 728/65 new)

Sec. 65. Use of Department Landowner Grant Program funds.

(a) The Board shall utilize the funds received from the Department under Section 60 only for the purpose of implementing the Landowner Grant Program.

(b) All interest earned on moneys received by the Board under Section 60 shall be property of the Board and shall be used for the sole purpose of implementing the Landowner Grant Program.