Full Text of HB4920 100th General Assembly
HB4920enr 100TH GENERAL ASSEMBLY |
| | HB4920 Enrolled | | LRB100 19136 HEP 34401 b |
|
| 1 | | AN ACT concerning civil law.
| 2 | | Be it enacted by the People of the State of Illinois,
| 3 | | represented in the General Assembly:
| 4 | | Section 5. The Principal and Income Act is amended by | 5 | | changing Sections 10 and 15 as follows:
| 6 | | (760 ILCS 15/10) (from Ch. 30, par. 510)
| 7 | | (Text of Section before amendment by P.A. 100-519 )
| 8 | | Sec. 10. Disposition of natural resources.
| 9 | | (a) If any part of the principal consists of a right to | 10 | | receive
royalties, overriding or limited royalties, working | 11 | | interests, production
payments, net profit interests, or other | 12 | | interest in minerals, oil, gas or
other natural resources in, | 13 | | on or under land, except timber, water, soil,
sod, dirt, peat, | 14 | | turf or mosses, the receipts from taking the natural
resources | 15 | | from the land shall be allocated as follows:
| 16 | | (1) if received as rent on a lease or extension | 17 | | payments on a lease, the
receipts are income;
| 18 | | (2) if received from a production payment, the receipts | 19 | | are income to
the extent of any factor for interest or its | 20 | | equivalent provided in the
governing instrument. There | 21 | | shall be allocated to principal the fraction
of the balance | 22 | | of the receipts which the unrecovered cost of the | 23 | | production
payment bears to the balance owed on the |
| | | HB4920 Enrolled | - 2 - | LRB100 19136 HEP 34401 b |
|
| 1 | | production payment, exclusive of
any factor for interest or | 2 | | its equivalent. The receipts not allocated to
principal are | 3 | | income;
| 4 | | (3) if received as a royalty, overriding or limited | 5 | | royalty, or bonus,
or from a working, net profit, or any | 6 | | other interest in minerals, oil, gas,
or other natural | 7 | | resources, receipts not provided for in the preceding
| 8 | | paragraphs of this Section shall be apportioned on a yearly | 9 | | basis in
accordance with this paragraph whether or not any | 10 | | natural resource was
being taken from the land at the time | 11 | | the trust was established. The
trustee shall allocate to | 12 | | principal as an allowance for depletion the
greater of (i) | 13 | | that portion, if any, of the gross receipts that is allowed
| 14 | | as a depletion deduction for federal income tax purposes | 15 | | and (ii) 10% of
the gross receipts, except that that | 16 | | allocation shall not exceed 50% of the
net receipts | 17 | | remaining after payment of all expenses, direct and | 18 | | indirect,
computed without the allowance for depletion. | 19 | | The trustee shall allocate
the balance of the gross | 20 | | receipts, after payment therefrom of all expenses,
direct | 21 | | and indirect, to income.
| 22 | | (b) If an item of depletable property of a type specified | 23 | | in this Section
is held on the effective date of this Act, | 24 | | receipts from the property shall
be allocated in the manner | 25 | | used before the effective date of this Act, but
as to all | 26 | | depletable property acquired after the effective date of this
|
| | | HB4920 Enrolled | - 3 - | LRB100 19136 HEP 34401 b |
|
| 1 | | Act by an existing or new trust, the method of allocation | 2 | | provided herein shall be used.
| 3 | | (c) If any part of the principal consists of timber, water, | 4 | | soil, sod,
dirt, peat, turf, or mosses, the receipts from those | 5 | | resources shall be
allocated in accordance with Section 3.
| 6 | | (Source: P.A. 87-714.)
| 7 | | (Text of Section after amendment by P.A. 100-519 )
| 8 | | Sec. 10. Disposition of natural resources.
| 9 | | (a) If any part of the principal consists of a right to | 10 | | receive
royalties, overriding or limited royalties, working | 11 | | interests, production
payments, net profit interests, or other | 12 | | interest in minerals, oil, gas or
other natural resources in, | 13 | | on or under land, except timber, water, soil,
sod, dirt, peat, | 14 | | turf or mosses, the receipts from taking the natural
resources | 15 | | from the land shall be allocated as follows:
| 16 | | (1) if received as rent on a lease or extension | 17 | | payments on a lease, the
receipts are income;
| 18 | | (2) if received from a production payment, the receipts | 19 | | are income to
the extent of any factor for interest or its | 20 | | equivalent provided in the
governing instrument. There | 21 | | shall be allocated to principal the fraction
of the balance | 22 | | of the receipts which the unrecovered cost of the | 23 | | production
payment bears to the balance owed on the | 24 | | production payment, exclusive of
any factor for interest or | 25 | | its equivalent. The receipts not allocated to
principal are |
| | | HB4920 Enrolled | - 4 - | LRB100 19136 HEP 34401 b |
|
| 1 | | income;
| 2 | | (3) except for oil or gas from non-coal formations held | 3 | | in nontrust estates and by legal tenants and remaindermen | 4 | | as described in Section 15 of this Act , if received as a | 5 | | royalty, overriding or limited royalty, or bonus,
or from a | 6 | | working, net profit, or any other interest in minerals,
| 7 | | oil, gas, or other natural resources, receipts not provided | 8 | | for in the preceding
paragraphs of this Section shall be | 9 | | apportioned on a yearly basis in
accordance with this | 10 | | paragraph whether or not any natural resource was
being | 11 | | taken from the land at the time the trust was established. | 12 | | The
trustee shall allocate to principal as an allowance for | 13 | | depletion the
greater of (i) that portion, if any, of the | 14 | | gross receipts that is allowed
as a depletion deduction for | 15 | | federal income tax purposes and (ii) 10% of
the gross | 16 | | receipts, except that that allocation shall not exceed 50% | 17 | | of the
net receipts remaining after payment of all | 18 | | expenses, direct and indirect,
computed without the | 19 | | allowance for depletion. The trustee shall allocate
the | 20 | | balance of the gross receipts, after payment therefrom of | 21 | | all expenses,
direct and indirect, to income; | 22 | | (4) Only for oil or gas from non-coal formations held | 23 | | in nontrust estates and by legal tenants and remaindermen | 24 | | as described in Section 15 of this Act, proceeds from the | 25 | | sale of such minerals produced and received as royalty, | 26 | | overriding royalty, limited royalty, working interest, net |
| | | HB4920 Enrolled | - 5 - | LRB100 19136 HEP 34401 b |
|
| 1 | | profit interest, time-limited interest or term interest, | 2 | | or lease bonus shall be deemed income with respect only to | 3 | | nontrust estates described in Section 15 of this Act, for | 4 | | oil or gas from non-coal formations, proceeds from the sale | 5 | | of such minerals produced and received as royalty, | 6 | | overriding royalty, limited royalty, working interest, net | 7 | | profit interest, time-limited interest or term interest, | 8 | | or lease bonus shall be deemed income .
| 9 | | (b) If an item of depletable property of a type specified | 10 | | in this Section
is held on the effective date of this Act, | 11 | | receipts from the property shall
be allocated in the manner | 12 | | used before the effective date of this Act, but
as to all | 13 | | depletable property acquired after the effective date of this
| 14 | | Act by an existing or new trust, the method of allocation | 15 | | provided herein shall be used.
| 16 | | (c) If any part of the principal consists of timber, water, | 17 | | soil, sod,
dirt, peat, turf, or mosses, the receipts from those | 18 | | resources shall be
allocated in accordance with Section 3.
| 19 | | (Source: P.A. 100-519, eff. 6-1-18.)
| 20 | | (760 ILCS 15/15) (from Ch. 30, par. 515)
| 21 | | (Text of Section before amendment by P.A. 100-519 )
| 22 | | Sec. 15. Non-trust estates.
| 23 | | (a) The provisions of this Act, as far as applicable, shall | 24 | | apply to
nontrust estates subject to any agreement of the | 25 | | parties or any specific
direction by statute or otherwise, and |
| | | HB4920 Enrolled | - 6 - | LRB100 19136 HEP 34401 b |
|
| 1 | | the references to trusts and
trustees shall be read as applying | 2 | | to nontrust estates and to legal tenants
(including life | 3 | | tenants, tenants for terms of years, or any other period of
| 4 | | tenancy) and remaindermen as the context requires; except that | 5 | | if either a
legal tenant or a remainderman has incurred a | 6 | | charge for his benefit
without the consent or agreement of the | 7 | | other, he shall pay that charge
in full.
| 8 | | (b) If the costs of an improvement, including special taxes | 9 | | or
assessments, representing an addition to value of property | 10 | | forming part of
the principal cannot reasonably be expected to | 11 | | outlast the legal tenancy,
the costs shall be paid by the legal | 12 | | tenant. If the improvement can
reasonably be expected to | 13 | | outlast the legal tenancy, only a portion of the
costs shall be | 14 | | paid by the legal tenant and the balance by the
remainderman. | 15 | | The portion payable by the legal tenant shall be that
fraction | 16 | | of the total found by dividing the present value of the legal
| 17 | | tenancy by the present value of an estate of the same form as | 18 | | that of the
legal tenancy but limited to a period corresponding | 19 | | to the reasonably
expected duration of the improvement. The | 20 | | computation of present value of
the legal tenancy shall be | 21 | | computed on the basis of two-thirds of the value
determined by | 22 | | use of the tables set forth under Section 7520 of the
Internal | 23 | | Revenue Code of 1986 and the regulations thereunder for the
| 24 | | calculation of the values of annuities, life estates, and terms | 25 | | for years,
and no other evidence of duration or expectancy | 26 | | shall be considered, except
that any legal tenancy or remainder |
| | | HB4920 Enrolled | - 7 - | LRB100 19136 HEP 34401 b |
|
| 1 | | interest acquired for consideration
based on those tables shall | 2 | | be computed on the basis of the tables in
effect at the time | 3 | | acquired. The method of computing the present value of
a legal | 4 | | tenancy established in this subsection shall apply to all legal
| 5 | | tenancies and remainders created after January 1, 1992 and to | 6 | | all legal
tenancies and remainders which were acquired for | 7 | | consideration if the
amount of the consideration was based on | 8 | | the tables set forth under Section
2031 or 7520 of the Internal | 9 | | Revenue Code then in effect.
| 10 | | (c) If a legal tenant has leased any lands for agricultural | 11 | | or farming
operations and his legal tenancy terminates on or | 12 | | after the day any rent
has become due and payable, he or his | 13 | | representative is entitled to recover
that rent from the | 14 | | lessee; and if a legal tenancy terminates before the
rent under | 15 | | the lease is fully paid, the legal tenant or his representative
| 16 | | is entitled to recover from the lessee:
| 17 | | (1) that portion of the rent not due which the number | 18 | | of days from
the beginning of the period for which the rent | 19 | | is not due to the date of
the termination of the legal | 20 | | tenancy bears to the total number of days in
the period for | 21 | | which the rent is unpaid; and
| 22 | | (2) that portion of the landlord's share of actual | 23 | | expenses paid
before the termination of the legal tenancy | 24 | | and not previously recovered by
him, which the number of | 25 | | days in the lease period on and after the
termination bears | 26 | | to the total number of days in the lease period.
|
| | | HB4920 Enrolled | - 8 - | LRB100 19136 HEP 34401 b |
|
| 1 | | (Source: P.A. 82-390; 87-714.)
| 2 | | (Text of Section after amendment by P.A. 100-519 )
| 3 | | Sec. 15. Non-trust estates.
| 4 | | (a) The provisions of this Act, as far as applicable, shall | 5 | | apply to
nontrust estates subject to any agreement of the | 6 | | parties or any specific
direction by statute or otherwise, and | 7 | | the references to trusts and
trustees shall be read as applying | 8 | | to nontrust estates and to legal tenants
(including life | 9 | | tenants, tenants for terms of years, or any other period of
| 10 | | tenancy) and remaindermen as the context requires; except that | 11 | | if either a
legal tenant or a remainderman has incurred a | 12 | | charge for his benefit
without the consent or agreement of the | 13 | | other, he shall pay that charge
in full.
| 14 | | (b) If the costs of an improvement, including special taxes | 15 | | or
assessments, representing an addition to value of property | 16 | | forming part of
the principal cannot reasonably be expected to | 17 | | outlast the legal tenancy,
the costs shall be paid by the legal | 18 | | tenant. If the improvement can
reasonably be expected to | 19 | | outlast the legal tenancy, only a portion of the
costs shall be | 20 | | paid by the legal tenant and the balance by the
remainderman. | 21 | | The portion payable by the legal tenant shall be that
fraction | 22 | | of the total found by dividing the present value of the legal
| 23 | | tenancy by the present value of an estate of the same form as | 24 | | that of the
legal tenancy but limited to a period corresponding | 25 | | to the reasonably
expected duration of the improvement. The |
| | | HB4920 Enrolled | - 9 - | LRB100 19136 HEP 34401 b |
|
| 1 | | computation of present value of
the legal tenancy shall be | 2 | | computed on the basis of two-thirds of the value
determined by | 3 | | use of the tables set forth under Section 7520 of the
Internal | 4 | | Revenue Code of 1986 and the regulations thereunder for the
| 5 | | calculation of the values of annuities, life estates, and terms | 6 | | for years,
and no other evidence of duration or expectancy | 7 | | shall be considered, except
that any legal tenancy or remainder | 8 | | interest acquired for consideration
based on those tables shall | 9 | | be computed on the basis of the tables in
effect at the time | 10 | | acquired. The method of computing the present value of
a legal | 11 | | tenancy established in this subsection shall apply to all legal
| 12 | | tenancies and remainders created after January 1, 1992 and to | 13 | | all legal
tenancies and remainders which were acquired for | 14 | | consideration if the
amount of the consideration was based on | 15 | | the tables set forth under Section
2031 or 7520 of the Internal | 16 | | Revenue Code then in effect.
| 17 | | (c) If a legal tenant has leased any lands for agricultural | 18 | | or farming
operations and his legal tenancy terminates on or | 19 | | after the day any rent
has become due and payable, he or his | 20 | | representative is entitled to recover
that rent from the | 21 | | lessee; and if a legal tenancy terminates before the
rent under | 22 | | the lease is fully paid, the legal tenant or his representative
| 23 | | is entitled to recover from the lessee:
| 24 | | (1) that portion of the rent not due which the number | 25 | | of days from
the beginning of the period for which the rent | 26 | | is not due to the date of
the termination of the legal |
| | | HB4920 Enrolled | - 10 - | LRB100 19136 HEP 34401 b |
|
| 1 | | tenancy bears to the total number of days in
the period for | 2 | | which the rent is unpaid; and
| 3 | | (2) that portion of the landlord's share of actual | 4 | | expenses paid
before the termination of the legal tenancy | 5 | | and not previously recovered by
him, which the number of | 6 | | days in the lease period on and after the
termination bears | 7 | | to the total number of days in the lease period. | 8 | | (d) (Blank). This Section does not apply to life estates | 9 | | and remainder interests in oil or gas from non-coal formations, | 10 | | or royalties or overriding royalties created under leases of | 11 | | such minerals.
| 12 | | (Source: P.A. 100-519, eff. 6-1-18.)
| 13 | | Section 95. No acceleration or delay. Where this Act makes | 14 | | changes in a statute that is represented in this Act by text | 15 | | that is not yet or no longer in effect (for example, a Section | 16 | | represented by multiple versions), the use of that text does | 17 | | not accelerate or delay the taking effect of (i) the changes | 18 | | made by this Act or (ii) provisions derived from any other | 19 | | Public Act.
|
|