State of Illinois
90th General Assembly
Legislation

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90_HB0771

      225 ILCS 725/19.6         from Ch. 96 1/2, par. 5430.1
          Amends the Illinois Oil and Gas Act to provide  that  the
      Department   of   Natural  Resources  has  the  authority  to
      administer the Landowner Grant Program. Allows the Department
      to expend funds in the Plugging and Restoration Fund for  the
      removal  of well site equipment and associated tank batteries
      and production facilities when the landowners are not legally
      responsible for the removal. Provides for the proper disposal
      of well site equipment, including an associated tank battery,
      production facility equipment,  and  hydrocarbons.  Effective
      July 1, 1997.
                                                     LRB9002948DPcc
                                               LRB9002948DPcc
 1        AN  ACT to amend the Illinois Oil and Gas Act by changing
 2    Section 19.6.
 3        Be it enacted by the People of  the  State  of  Illinois,
 4    represented in the General Assembly:
 5        Section  5.   The  Illinois Oil and Gas Act is amended by
 6    changing Section 19.6 as follows:
 7        (225 ILCS 725/19.6) (from Ch. 96 1/2, par. 5430.1)
 8        Sec. 19.6.  The Department  has  the  following  specific
 9    powers  and duties in administering the Oil and Gas Well Site
10    Plugging and Restoration Program,  Landowner  Grant  Program,
11    and the Plugging and Restoration Fund:
12        (a)  To   adopt   rules  in  conformity  with  this  Act,
13    including  rules  establishing  priorities  for   well   site
14    plugging, repair, and restoration consistent with this Act.
15        (b)  To   adopt   any  transitional  rules  necessary  to
16    implement the Oil and Gas Well Site Plugging and  Restoration
17    Program and Landowner Grant Program.
18        (c)  To collect the fees assessed by the Department under
19    this   Act  and  to  make  deposits  into  the  Plugging  and
20    Restoration Fund.
21        (d)  To deposit the amount of any forfeited  surety  bond
22    or other security in the Plugging and Restoration Fund.
23        (e)  To   recover   well   site   plugging,  repair,  and
24    restoration costs from permittees who fail to  reimburse  the
25    Plugging  and  Restoration  Fund for expenses attributable to
26    those permittees and to deposit  any  amounts  reimbursed  or
27    collected into the Plugging and Restoration Fund.
28        (f)  To  accept,  receive,  and deposit into the Plugging
29    and Restoration Fund any grants, gifts, or other  funds  that
30    may be made available from public or private sources.
31        (g)  To  make  expenditures  of amounts appropriated from
                            -2-                LRB9002948DPcc
 1    the Plugging and Restoration Fund, as it may deem appropriate
 2    in its sole discretion, for the sole  purposes  of  plugging,
 3    replugging,  or repairing any well, and restoring the site of
 4    any well, including but not limited to removal of  well  site
 5    equipment  or production facilities, and for reimbursement to
 6    landowners for plugging a well and restoring the  site  of  a
 7    well,  including  but  not  limited  to  removal of well site
 8    equipment located on the landowner's property, for which  the
 9    landowner has no legal obligation to plug the wells or remove
10    the  well  site  equipment,  if the well is determined by the
11    Department to be abandoned or ordered by the Department to be
12    plugged, replugged, repaired, or restored under  Section  8a,
13    19,  19.1,  or  19.8  of  this  Act  including  the  costs of
14    administering  the  Oil  and  Gas  Well  Site  Plugging   and
15    Restoration  Program,  and the Plugging and Restoration Fund,
16    and the Landowner Grant Program.
17        (h)  To sell or assign any  lien  arising  under  Section
18    19.5 of this Act to the highest and best bidder who may agree
19    to become the permittee and as the permittee agree to perform
20    the  necessary  plugging  or corrective work as prescribed by
21    the Department and to deposit the proceeds of  such  sale  in
22    the  Plugging  and  Restoration  Fund or to offset Department
23    plugging costs.
24        (i)  To enter  into  contracts  in  accordance  with  the
25    Illinois Purchasing Act and to administer the Landowner Grant
26    Program. In contracts or grants for the plugging, replugging,
27    repairing  or  restoration  of  a  well,  well  site,  or  an
28    associated   tank   battery   or   production  facility,  the
29    consideration paid by the Department may include the sale and
30    assignment of any lien arising under  Section  19.5  of  this
31    Act.
32        (j)  To  dispose  in a commercially reasonable manner, at
33    generally  recognized  market  value,  well  site  equipment,
34    including an associated tank battery and production  facility
                            -3-                LRB9002948DPcc
 1    equipment,  and any amount of hydrocarbons from the well that
 2    is stored on the lease, by either or both  of  the  following
 3    methods  after  it has been determined to be abandoned by the
 4    Department through inclusion of the well in the Oil  and  Gas
 5    Well Site Plugging and Restoration Program:
 6             (1)  a plugging contract may provide that the person
 7        plugging   the   well   or   remediating  oilfield  waste
 8        pollution, or both, will have clear title, subject to any
 9        perfected, prior legal or equitable claim,  on  all  well
10        site  equipment  and  hydrocarbons from the well that are
11        stored on the lease, or hydrocarbons recovered during the
12        plugging  operation  in  exchange  for  a  sum  of  money
13        deducted as a credit from the contract price; or
14             (2)  the well  site  equipment,  including  but  not
15        limited  to  an  associated  tank  battery and production
16        facility equipment, hydrocarbons from the well  that  are
17        stored  on  the  lease, and hydrocarbons recovered during
18        the plugging operation may be sold at a public auction or
19        a public or private sale. All  well  site  equipment  and
20        hydrocarbons  acquired  by  a  person  by  sale  shall be
21        acquired under clear  title,  subject  to  any  perfected
22        prior legal or equitable claims.
23    (Source: P.A. 87-744.)
24        Section  99.  Effective date.  This Act takes effect July
25    1, 1997.

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