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| Public Act 099-0129 | ||||
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AN ACT concerning civil law.
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Be it enacted by the People of the State of Illinois,
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represented in the General Assembly:
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Section 5. The Oil and Gas Rights Act is amended by | ||||
changing Section 10 as follows:
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(765 ILCS 520/10) (from Ch. 96 1/2, par. 4910)
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Sec. 10. (1) in this Section:
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(a) "Payee" means any person or persons legally entitled to | ||||
payment from
the proceeds derived from the sale of oil or gas | ||||
from an oil or gas well
located in this State.
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(b) "Payor" means the first purchaser of production of oil | ||||
or gas from
an oil or gas well, but the owner of the right to | ||||
produce under an oil or
gas lease or pooling order is deemed to | ||||
be the payor if the owner of the
right to produce and the first | ||||
purchaser have entered into arrangements
providing that the | ||||
proceeds derived from the sale of oil or gas have been
paid by | ||||
the first purchaser to the owner who assumes the responsibility | ||||
of
paying those proceeds to the payee.
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(2) (a) the proceeds derived from the sale of oil or gas | ||||
production from an
oil or gas well must be paid to each payee | ||||
on or before 150 days after the
end of the month of first | ||||
purchase by a payor. After that time, payments
must be made to | ||||
each payee on a timely basis according to the frequency of
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payment specified in a lease or other written agreement between | ||
payee and
payor. If the lease or other agreement does not | ||
specify the time for
payment, subsequent proceeds must be paid | ||
no later than:
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(1) 60 days after the end of the calendar month in which | ||
subsequent oil
production is sold; or
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(2) 90 days after the end of the calendar month in which | ||
subsequent gas
production is sold.
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(b) Payments may be remitted to payees annually for the | ||
aggregate of up to
12 months' accumulation of proceeds, if the | ||
total amount owed is $100 $25 or less.
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(3) (a) If payment has not been made for any reason in the | ||
time limits
specified in subsection (2)(a) of this Act, the | ||
payor must pay interest to
a payee beginning at the expiration | ||
of those time limits at the rate
charged on loans to depository | ||
institutions by the New York Federal Reserve
Bank, unless a | ||
different rate of interest is specified in a written
agreement | ||
between payor and payee.
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(b) Subsection (a) of this Section does not apply where | ||
payments are
withheld or suspended by a payor beyond the time | ||
limits specified in
subsection (2)(a) of this Act because there | ||
is:
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(1) a dispute concerning title that would affect | ||
distribution of payments;
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(2) a reasonable doubt that the payee does not have clear
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title to the interest in the proceeds of production; or
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(3) a requirement in a title opinion that places in issue | ||
the title,
identity, or whereabouts of the payee and that has | ||
not been satisfied by
the payee after a reasonable request for | ||
curative information has been
made by the payor.
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(4) (a) If a payee seeks relief for the failure of a payor | ||
to make
timely payment of proceeds from the sale of oil or gas | ||
or an interest in
oil or gas as required under Section (2) or | ||
(3) of this Act, the payee
must give the payor written notice | ||
by mail of that failure as a
prerequisite to beginning judicial | ||
action against the payor for nonpayment.
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(b) The payor has 30 days after receipt of the required | ||
notice from the
payee in which to pay the proceeds due, or to | ||
respond by stating in writing
a reasonable cause for | ||
nonpayment.
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(c) A payee has a cause of action for nonpayment of oil or | ||
gas proceeds
or interest on those proceeds as required in | ||
Section (2) or (3) of this
Act in any court of competent | ||
jurisdiction in the county in which the oil
or gas well is | ||
located.
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(Source: P.A. 84-872.)
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