Illinois General Assembly - Full Text of HB0313
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Full Text of HB0313  99th General Assembly




HB0313 EnrolledLRB099 06177 HEP 26235 b

1    AN ACT concerning civil law.
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4    Section 5. The Oil and Gas Rights Act is amended by
5changing Section 10 as follows:
6    (765 ILCS 520/10)  (from Ch. 96 1/2, par. 4910)
7    Sec. 10. (1) in this Section:
8    (a) "Payee" means any person or persons legally entitled to
9payment from the proceeds derived from the sale of oil or gas
10from an oil or gas well located in this State.
11    (b) "Payor" means the first purchaser of production of oil
12or gas from an oil or gas well, but the owner of the right to
13produce under an oil or gas lease or pooling order is deemed to
14be the payor if the owner of the right to produce and the first
15purchaser have entered into arrangements providing that the
16proceeds derived from the sale of oil or gas have been paid by
17the first purchaser to the owner who assumes the responsibility
18of paying those proceeds to the payee.
19    (2) (a) the proceeds derived from the sale of oil or gas
20production from an oil or gas well must be paid to each payee
21on or before 150 days after the end of the month of first
22purchase by a payor. After that time, payments must be made to
23each payee on a timely basis according to the frequency of



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1payment specified in a lease or other written agreement between
2payee and payor. If the lease or other agreement does not
3specify the time for payment, subsequent proceeds must be paid
4no later than:
5    (1) 60 days after the end of the calendar month in which
6subsequent oil production is sold; or
7    (2) 90 days after the end of the calendar month in which
8subsequent gas production is sold.
9    (b) Payments may be remitted to payees annually for the
10aggregate of up to 12 months' accumulation of proceeds, if the
11total amount owed is $100 $25 or less.
12    (3) (a) If payment has not been made for any reason in the
13time limits specified in subsection (2)(a) of this Act, the
14payor must pay interest to a payee beginning at the expiration
15of those time limits at the rate charged on loans to depository
16institutions by the New York Federal Reserve Bank, unless a
17different rate of interest is specified in a written agreement
18between payor and payee.
19    (b) Subsection (a) of this Section does not apply where
20payments are withheld or suspended by a payor beyond the time
21limits specified in subsection (2)(a) of this Act because there
23    (1) a dispute concerning title that would affect
24distribution of payments;
25    (2) a reasonable doubt that the payee does not have clear
26title to the interest in the proceeds of production; or



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1    (3) a requirement in a title opinion that places in issue
2the title, identity, or whereabouts of the payee and that has
3not been satisfied by the payee after a reasonable request for
4curative information has been made by the payor.
5    (4) (a) If a payee seeks relief for the failure of a payor
6to make timely payment of proceeds from the sale of oil or gas
7or an interest in oil or gas as required under Section (2) or
8(3) of this Act, the payee must give the payor written notice
9by mail of that failure as a prerequisite to beginning judicial
10action against the payor for nonpayment.
11    (b) The payor has 30 days after receipt of the required
12notice from the payee in which to pay the proceeds due, or to
13respond by stating in writing a reasonable cause for
15    (c) A payee has a cause of action for nonpayment of oil or
16gas proceeds or interest on those proceeds as required in
17Section (2) or (3) of this Act in any court of competent
18jurisdiction in the county in which the oil or gas well is
20(Source: P.A. 84-872.)