HB4724 EngrossedLRB100 16404 HLH 31532 b

1    AN ACT concerning revenue.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Hydraulic Fracturing Tax Act is
5amended by changing Section 2-30 as follows:
 
6    (35 ILCS 450/2-30)
7    Sec. 2-30. Payment and collection of tax.
8    (a) For oil and gas removed on or after July 1, 2013, the
9tax incurred under this Act shall be due and payable on or
10before the last day of the month following the end of the month
11in which the oil or gas is removed from the production unit.
12The tax is upon the producers of such oil or gas in the
13proportion to their respective beneficial interests at the time
14of severance. The first purchaser of any oil or gas sold shall
15collect the amount of the tax due from the producers by
16deducting and withholding such amount from any payments made by
17such purchaser to the producers and shall remit the tax in this
18Act.
19    In the event the tax shall be withheld by a purchaser from
20payments due a producer and such purchaser fails to make
21payment of the tax to the State as required herein, the first
22purchaser shall be liable for the tax. However, in the event a
23first purchaser fails to pay the tax withheld from a producer's

 

 

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1payment, the producer's interest remains subject to any lien
2filed pursuant to subsection (c) of this Section. A producer
3shall be entitled to bring an action against such purchaser to
4recover the amount of tax so withheld together with penalties
5and interest which may have accrued by failure to make such
6payment. A producer shall be entitled to all attorney fees and
7court costs incurred in such action. To the extent that a
8producer liable for the tax imposed by this Act collects the
9tax, and any penalties and interest, from a purchaser, such
10tax, penalties, and interest are held in trust by the producer
11for the benefit of the State of Illinois.
12    (b) For all production units permitted, or required to be
13permitted, under this Act that a first purchaser begins to
14purchase oil or gas from on or after July 1, 2013, the first
15purchaser is required to withhold and remit the tax imposed by
16this Act to the Department from the oil and gas purchased from
17the production unit. The changes made by this amendatory Act of
18the 100th General Assembly apply to taxes required to be
19withheld on or after the effective date of this amendatory Act
20of the 100th General Assembly. No exemption certificate issued
21prior to the effective date of this amendatory Act of the 100th
22General Assembly shall be valid on or after the effective date
23of this amendatory Act of the 100th General Assembly. unless
24the first purchaser obtains from the operator an exemption
25certificate signed by the operator stating that the production
26unit is not subject to the tax imposed by this Act. The

 

 

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1exemption certificate must include the following information:
2        (1) name and address of the operator;
3        (2) name of the production unit;
4        (3) number assigned to the production unit by the first
5    purchaser, if available;
6        (4) legal description of the production unit; and
7        (5) a statement by the operator that the production
8    unit is exempt from the tax imposed by the Illinois
9    Hydraulic Fracturing Tax Act.
10    If a first purchaser obtains an exemption certificate that
11contains the required information and reasonably relies on the
12exemption certificate and it is subsequently determined by the
13Department that the production unit is subject to the tax
14imposed by this Act, the Department will collect any tax that
15is due from the operator and producers, and the first purchaser
16is relieved of any liability.
17    (c) Notwithstanding subsection (a) of this Section, the tax
18is a lien on the oil and gas from the time of severance from the
19land or under the water until the tax and all penalties and
20interest are fully paid, and the State shall have a lien on all
21the oil or gas severed from the production unit in this State
22in the hands of the operator, any producer or the first or any
23subsequent purchaser thereof to secure the payment of the tax.
24If a lien is filed by the Department, the purchaser shall
25withhold from producers or operators the amount of tax, penalty
26and interest identified in the lien.

 

 

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1(Source: P.A. 98-22, eff. 6-17-13.)