Sen. Dale Fowler

Filed: 5/18/2018

 

 


 

 


 
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1
AMENDMENT TO HOUSE BILL 4724

2    AMENDMENT NO. ______. Amend House Bill 4724 by replacing
3everything after the enacting clause with the following:
 
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

 

 

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1such purchaser to the producers and shall remit the tax in this
2Act.
3    In the event the tax shall be withheld by a purchaser from
4payments due a producer and such purchaser fails to make
5payment of the tax to the State as required herein, the first
6purchaser shall be liable for the tax. However, in the event a
7first purchaser fails to pay the tax withheld from a producer's
8payment, the producer's interest remains subject to any lien
9filed pursuant to subsection (c) of this Section. A producer
10shall be entitled to bring an action against such purchaser to
11recover the amount of tax so withheld together with penalties
12and interest which may have accrued by failure to make such
13payment. A producer shall be entitled to all attorney fees and
14court costs incurred in such action. To the extent that a
15producer liable for the tax imposed by this Act collects the
16tax, and any penalties and interest, from a purchaser, such
17tax, penalties, and interest are held in trust by the producer
18for the benefit of the State of Illinois.
19    (b) For all production units a first purchaser begins to
20purchase oil or gas from on or after July 1, 2013, the first
21purchaser is required to withhold and remit the tax imposed by
22this Act to the Department from the oil and gas purchased from
23the production unit unless the first purchaser obtains from the
24operator an exemption certificate signed by the operator
25stating that the production unit is not subject to the tax
26imposed by this Act. The exemption certificate must include the

 

 

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1following 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    First purchasers shall not be required to obtain exemption
18certificates from the producer until the first high volume
19horizontal hydraulic fracturing permit has been approved by the
20Department of Natural Resources.
21    (c) Notwithstanding subsection (a) of this Section, the tax
22is a lien on the oil and gas from the time of severance from the
23land or under the water until the tax and all penalties and
24interest are fully paid, and the State shall have a lien on all
25the oil or gas severed from the production unit in this State
26in the hands of the operator, any producer or the first or any

 

 

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1subsequent purchaser thereof to secure the payment of the tax.
2If a lien is filed by the Department, the purchaser shall
3withhold from producers or operators the amount of tax, penalty
4and interest identified in the lien.
5(Source: P.A. 98-22, eff. 6-17-13.)".