HB4724 EnrolledLRB100 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

 

 

HB4724 Enrolled- 2 -LRB100 16404 HLH 31532 b

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 a first purchaser begins to
13purchase oil or gas from on or after July 1, 2013, the first
14purchaser is required to withhold and remit the tax imposed by
15this Act to the Department from the oil and gas purchased from
16the production unit unless the first purchaser obtains from the
17operator an exemption certificate signed by the operator
18stating that the production unit is not subject to the tax
19imposed by this Act. The exemption certificate must include the
20following information:
21        (1) name and address of the operator;
22        (2) name of the production unit;
23        (3) number assigned to the production unit by the first
24    purchaser, if available;
25        (4) legal description of the production unit; and
26        (5) a statement by the operator that the production

 

 

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1    unit is exempt from the tax imposed by the Illinois
2    Hydraulic Fracturing Tax Act.
3    If a first purchaser obtains an exemption certificate that
4contains the required information and reasonably relies on the
5exemption certificate and it is subsequently determined by the
6Department that the production unit is subject to the tax
7imposed by this Act, the Department will collect any tax that
8is due from the operator and producers, and the first purchaser
9is relieved of any liability.
10    First purchasers shall not be required to obtain exemption
11certificates from the operator until the first high volume
12horizontal hydraulic fracturing permit has been approved by the
13Department of Natural Resources after the effective date of
14this amendatory Act of the 100th General Assembly.
15    (c) Notwithstanding subsection (a) of this Section, the tax
16is a lien on the oil and gas from the time of severance from the
17land or under the water until the tax and all penalties and
18interest are fully paid, and the State shall have a lien on all
19the oil or gas severed from the production unit in this State
20in the hands of the operator, any producer or the first or any
21subsequent purchaser thereof to secure the payment of the tax.
22If a lien is filed by the Department, the purchaser shall
23withhold from producers or operators the amount of tax, penalty
24and interest identified in the lien.
25(Source: P.A. 98-22, eff. 6-17-13.)