Illinois General Assembly - Full Text of HB3096
Illinois General Assembly

Previous General Assemblies

Full Text of HB3096  99th General Assembly




State of Illinois
2015 and 2016


Introduced , by Rep. Deborah Conroy


5 ILCS 615/1  from Ch. 96 1/2, par. 5001
5 ILCS 615/2  from Ch. 96 1/2, par. 5002
5 ILCS 615/3  from Ch. 96 1/2, par. 5003
5 ILCS 615/5  from Ch. 96 1/2, par. 5005
5 ILCS 615/7  from Ch. 96 1/2, par. 5007
5 ILCS 615/8  from Ch. 96 1/2, par. 5008
5 ILCS 615/12  from Ch. 96 1/2, par. 5012
5 ILCS 615/13  from Ch. 96 1/2, par. 5013
5 ILCS 615/14  from Ch. 96 1/2, par. 5014
5 ILCS 615/16  from Ch. 96 1/2, par. 5016
5 ILCS 615/19  from Ch. 96 1/2, par. 5019
5 ILCS 615/20  from Ch. 96 1/2, par. 5020
5 ILCS 615/22  from Ch. 96 1/2, par. 5022
5 ILCS 615/6 rep.
5 ILCS 615/9 rep.
5 ILCS 615/11 rep.
5 ILCS 615/17 rep.
5 ILCS 615/18 rep.
5 ILCS 615/21 rep.

    Amends the Oil and Gas Wells on Public Lands Act. Provides that on and after the effective date of the amendatory Act, no new permits shall be issued for surface extraction activities on lands owned by the Department of Natural Resources or the federal government. Prohibits the Department of Natural Resources from entering into contracts in writing designating any person as the permittee of the State of Illinois with the exclusive right to prospect and explore public lands of the State of Illinois for the occurrence of petroleum. Repeals provisions governing certain petroleum leases, right of way over public lands, and preferential rights to prospecting permits. Effective immediately.

LRB099 06573 JLK 26646 b





HB3096LRB099 06573 JLK 26646 b

1    AN ACT concerning government.
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4    Section 5. The Oil and Gas Wells on Public Lands Act is
5amended by changing Sections 1, 2, 3, 5, 7, 8, 12, 13, 14, 16,
619, 20, and 22 as follows:
7    (5 ILCS 615/1)  (from Ch. 96 1/2, par. 5001)
8    Sec. 1. Whenever used in this Act, unless the context
9otherwise requires, words and terms shall have the meaning
10attributed to them herein:
11    (1) "Commence to drill a well": The institution of work in
12good faith with drilling equipment adequate for the drilling of
13a well to a depth that will reasonably test the oil and gas
14productiveness of the public lands where such well is
16    (2) "Petroleum": Any liquid or gaseous hydrocarbon
17occurring in nature beneath the surface of the earth.
18    (3) "Proven territory": Territory so situated with
19reference to known producing wells as to establish the general
20opinion that, because of its relation to them, petroleum is
21contained in it.
22    (4) "Public lands": Lands and areas belonging to, or
23subsequently acquired by the State or the United States,



HB3096- 2 -LRB099 06573 JLK 26646 b

1including lands of every kind and nature.
2    (5) "Gross value": The value of petroleum at the well
3produced and saved, without deduction for expense of
5    (6) "Person": Any citizen of the United States or person
6who has, in good faith, declared his intention of becoming a
7citizen of the United States, or any such association of such
8persons, or any corporation organized and existing under and by
9virtue of the laws of any state or territory of the United
10States and authorized to do business in this State.
11    (7) "Department": The Department of Natural Resources.
12    (8) "United States": Lands and areas belonging to, or
13subsequently acquired by, the federal government within the
14State of Illinois.
15(Source: P.A. 89-445, eff. 2-7-96.)
16    (5 ILCS 615/2)  (from Ch. 96 1/2, par. 5002)
17    Sec. 2. State issuance of extraction permits; prohibited
18activities. On and after the effective date of this amendatory
19Act of the 99th General Assembly:
20    (a) No permits shall be issued for The Department of
21Natural Resources shall be empowered with respect to public
22lands to grant permits and leases in the name of the State of
23Illinois, with the approval of the Governor in writing, for the
24extraction of oil, gas and other petroleum deposits, except
25that no surface extraction activities shall be performed nor



HB3096- 3 -LRB099 06573 JLK 26646 b

1production equipment located on lands owned by the Department
2of Natural Resources if the State owns 100% of the underlying
3mineral interests of those lands.
4    (b) No permits shall be issued for surface extraction
5activities on lands owned by the United States government.
6    (c) Extraction activities underlying lands owned by the
7Department of Natural Resources or the United States that
8utilize directional drilling techniques shall be prohibited.
9may be permitted at the discretion of the Department. However,
11    (d) The Department shall not grant permits on leases for
12the extraction of oil, gas, and other petroleum deposits from
13State or federal public lands, including, but not limited to,
14the following classifications of lands of if the State or
15federal government owns 100% of the underlying mineral
16interests: (1) lands where threatened or endangered species
17occur, as determined pursuant to the federal Endangered Species
18Act or the Illinois Endangered Species Protection Act, (2)
19Illinois Natural Area Inventory sites, (3) nature preserves
20dedicated under the Illinois Natural Areas Preservation Act,
21(4) lands containing a wild and scenic river as designated
22under the Wild and Scenic River Area Act, (5) lands registered
23under the Register of Land and Water Reserves under Part 4010
24of Title 17 of the Illinois Administrative Code, and (6) lands
25on which federal or State laws or regulations prohibit the
26surface extraction or production facility activity, (7) State



HB3096- 4 -LRB099 06573 JLK 26646 b

1parks, recreation areas, fish and wildlife areas, forests, and
2historic sites, and (8) national forests, national grasslands,
3and national wildlife refuges.
4    (e) The grant of such permits or leases shall be subject to
5the terms and conditions hereinafter set forth in this Act.
6(Source: P.A. 89-445, eff. 2-7-96; 90-490, eff. 8-17-97.)
7    (5 ILCS 615/3)  (from Ch. 96 1/2, par. 5003)
8    Sec. 3. The Department shall not is hereby authorized to
9enter into contracts in writing designating any person as the
10permittee of the State of Illinois with the exclusive right to
11prospect and explore not to exceed three sections, or an
12equivalent area, of the public lands of the State of Illinois
13for the occurrence of petroleum therein; such contract to
14contain such conditions as may be prescribed by the rules and
15regulations adopted by the Department in accordance with the
16terms of this Act. Such permit shall be for a period of one (1)
17year or less, in the discretion of the Department, and shall be
18granted free of any monetary consideration whatsoever, except
19as provided in Section 13 of this Act, and except that if more
20than one application for a permit is received with respect to
21the same public lands the Department shall grant such permit to
22the person offering the highest cash bonus therefor, and such
23permittee, pursuant to such contract, shall have the right to
24enter in and upon such lands and prospect and explore the same
25to determine the occurrence of petroleum therein.



HB3096- 5 -LRB099 06573 JLK 26646 b

1(Source: Laws 1951, p. 1167.)
2    (5 ILCS 615/5)  (from Ch. 96 1/2, par. 5005)
3    Sec. 5. For existing permits in effect prior to the
4effective date of this amendatory Act of the 99th General
5Assembly, no No permittee shall commence any operation upon
6lands covered by his permit until he has compensated the owners
7of private rights therein according to law and has compensated
8the State of Illinois for damage to the surface rights of the
9State in accordance with the rules and regulations adopted by
10the Department.
11(Source: Laws 1951, p. 1167.)
12    (5 ILCS 615/7)  (from Ch. 96 1/2, par. 5007)
13    Sec. 7. Every permittee with an existing permit in effect
14prior to the effective date of this amendatory Act of the 99th
15General Assembly shall have the option of surrendering his
16permit at any time and shall be relieved of all liability
17thereunder except for physical damage to the premises embraced
18by his permit which have been occasioned by his operations.
19(Source: Laws 1941, vol. 1, p. 943.)
20    (5 ILCS 615/8)  (from Ch. 96 1/2, par. 5008)
21    Sec. 8. A permittee with an existing permit in effect prior
22to the effective date of this amendatory Act of the 99th
23General Assembly, at any time during the life of the permit or



HB3096- 6 -LRB099 06573 JLK 26646 b

1upon the termination thereof, shall be entitled to a lease for
2the extraction of petroleum from not to exceed one section, or
3an equivalent area, of such land to be selected by such
4permittee. Such lease shall be at a royalty of not more than
5twelve and one-half (12 1/2%) per centum of all petroleum
6produced and saved therefrom or the market value of such
7petroleum at the option of the Department, and shall provide
8for an annual rental, payable in advance, of from one ($1.00)
9dollar to ten ($10.00) dollars per acre, as the Department may
10determine, which rentals shall be credited against future
11royalties. Such leases shall be for a primary term of ten (10)
12years and as long thereafter as oil in commercial quality and
13commercial quantity can be produced from the lands embraced in
14the lease. The form and terms of such leases shall be the same
15as the standard commercial petroleum lease generally in use in
16the territory in which the oil, gas or other petroleum deposits
17are located, with the addition thereto of such terms as in this
18Act and the rules and regulations of the Department are
19provided. Whenever the conditions contained in such standard
20commercial lease are in conflict with the provisions of this
21Act, the provisions of this Act shall control.
22(Source: Laws 1951, p. 1167.)
23    (5 ILCS 615/12)  (from Ch. 96 1/2, par. 5012)
24    Sec. 12. For existing permits prior to the effective date
25of this amendatory Act of the 99th General Assembly, the The



HB3096- 7 -LRB099 06573 JLK 26646 b

1Department is hereby authorized to cancel any permit or lease
2issued as provided herein for nonpayment of royalties or
3nonperformance by the permittee or lessee of any provision or
4requirement of the permit or lease: Provided, that before any
5such cancellation shall be made, the Department shall mail to
6the permittee or lessee by registered mail, addressed to the
7post office address of such permittee or lessee shown by the
8records of the office of the Department, a notice of intention
9to cancel such permit or lease specifying the default for which
10the permit or lease is subject to cancellation, and if, within
11thirty (30) days after the mailing of said notice to the
12permittee or lessee, he shall remedy the default specified in
13such notice, then no cancellation of the permit or lease shall
14be entered by the Department, but otherwise, the said
15cancellation shall be made and all rights of the permittee or
16lessee under the permit or lease shall thereupon automatically
17terminate: Provided, further, that failure to pay fees required
18under permits within the time prescribed therein shall
19automatically and without notice work a forfeiture of such
20permits and of all rights thereunder.
21(Source: Laws 1951, p. 1167.)
22    (5 ILCS 615/13)  (from Ch. 96 1/2, par. 5013)
23    Sec. 13. Upon the expiration or forfeiture of any existing
24permit prior to the effective date of this amendatory Act of
25the 99th General Assembly, no new permit covering the lands, or



HB3096- 8 -LRB099 06573 JLK 26646 b

1any of them, embraced by such expired or forfeited permit shall
2be issued for a period of thirty (30) days following the date
3of such expiration or forfeiture. If more than one application
4for a permit covering such lands, or any of them, shall be made
5during such thirty-day period, the Department shall issue a
6permit to such lands, or any of them, to the person offering
7the greatest cash bonus for such permit at a public auction to
8be held at the time and place and in the manner as the
9Department shall by regulation prescribe. Such auction shall be
10held at any time after the expiration of such thirty-day period
11and the only notice thereof shall be by entering in a book kept
12at the office of the Department for the purpose, which book
13shall be a public record, the date, place and hour of the
14holding of such auction.
15(Source: Laws 1951, p. 1167.)
16    (5 ILCS 615/14)  (from Ch. 96 1/2, par. 5014)
17    Sec. 14. Whenever the Department shall find it is in the
18best interest of the State and of the production of petroleum,
19it is declared to be lawful for the State, the permittees,
20lessees, operator or any person owning or controlling royalty
21or other interest in separate properties of the same producing
22or prospective petroleum field, to enter into agreements with
23themselves or among each other, subject to the approval of the
24Department, for the purpose of cooperative exploration,
25development and operation of all or a part or parts of such



HB3096- 9 -LRB099 06573 JLK 26646 b

1field, or for the purpose of the exploration, development or
2operation of all or part or parts of such field as a pool or
3unit, and for the purpose of fixing the time, location and
4manner of drilling and for the purpose of drilling and for the
5purpose of regulating the location, sequence and number of
6exploratory wells required in the case of permits under unit
7operations and leases, and operating of wells for the
8exploration of petroleum on State and private lands and for the
9apportionment and division of the petroleum between the State
10and the several owners of land embraced within the field so
11placed in such pool, taking into consideration the relative
12character and geological showing in respect of said several
13tracts of land so far as the same is reasonably ascertainable,
14the apparent probability of producing petroleum from the whole
15or any part thereof and any and all other apparent factors that
16may tend to aid in arriving at a fair, just and equitable
17participation by the State and the several owners in the
18apportionment and distribution of all the petroleum that shall
19be recovered and saved therefrom. The purpose of this section
20is to prohibit encourage the development and exploration of
21petroleum upon State and federal lands by and through the unit
22plan of development. When it is in the best interests of the
23State, the Department shall compel the adoption of unit plans
24of operation in so far as State lands are included in any
25productive pool or pools if the permittees or lessees of such
26lands shall fail to agree upon a plan of unit operation



HB3096- 10 -LRB099 06573 JLK 26646 b

1acceptable to the Department, the Department is empowered to
2fix the terms of such unit plan or plans and any permittees or
3lessees affected who fail to abide by such plan shall suffer
4forfeiture of their permits or leases upon notice as herein
6(Source: Laws 1951, p. 1167.)
7    (5 ILCS 615/16)  (from Ch. 96 1/2, par. 5016)
8    Sec. 16. The Department is hereby required to prescribe and
9publish, for the information of the public, all reasonable
10rules and regulations necessary for carrying out the provisions
11of this Act, and it may amend or rescind any rule or regulation
12promulgated by it under the authority contained herein:
13Provided, that no rule or regulation or amendment of the same
14or any order rescinding any rule or regulation shall become
15effective until after fifteen (15) days from the promulgation
16of the same by publication in a newspaper of general
17circulation published at the State capital and shall take
18effect and be in force at times specified therein. All rules
19and regulations of the Department and all amendments or
20revocations of existing rules and regulations shall be recorded
21in an appropriate book or books, shall be adequately indexed
22and shall be kept in the office of the Department and shall be
23and constitute a public record. Such rules and regulations of
24the Department shall be printed in pamphlet form and furnished
25to the public free of cost on the Department's website.



HB3096- 11 -LRB099 06573 JLK 26646 b

1(Source: Laws 1951, p. 1167.)
2    (5 ILCS 615/19)  (from Ch. 96 1/2, par. 5019)
3    Sec. 19. For After the issuance of any petroleum lease in
4effect before the effective date of this amendatory Act of the
599th General Assembly, the lessee shall proceed to develop the
6petroleum in the lands covered thereby through the drilling of
7such wells as will efficiently extract the petroleum therefrom
8and such development shall take into account the productiveness
9of the producing horizon, the depth at which it occurs, the
10average cost of wells, the market requirements obtaining at any
11given time, and the maintenance of proper oil and gas ratios.
12The Department shall determine, either by rule or regulation,
13or by inclusion in the terms of any lease, the rapidity and
14extent of development of the oil, gas or other petroleum field
15embraced by such lease.
16(Source: Laws 1951, p. 1167.)
17    (5 ILCS 615/20)  (from Ch. 96 1/2, par. 5020)
18    Sec. 20. All existing leases prior to the effective date of
19this amendatory Act of the 99th General Assembly shall provide
20that the lessee shall drill an offset well to any well on
21adjoining land which is within three hundred fifty (350) feet
22of any outer boundary of the land covered by the lease, and
23which well on adjoining lands is producing petroleum in paying
24quantities and draining the lands covered by the lease, such



HB3096- 12 -LRB099 06573 JLK 26646 b

1offset to be begun within ninety (90) days from the completion
2of the adjoining well and drilled with due diligence to
4(Source: Laws 1941, vol. 1, p. 943.)
5    (5 ILCS 615/22)  (from Ch. 96 1/2, par. 5022)
6    Sec. 22. Nothing contained in this Act shall be construed
7as requiring the Department to offer any tract or tracts of
8land for prospecting or lease, but the Department shall have
9power to withhold any tract or tracts from prospecting or
10leasing for petroleum purposes, if in its judgment the best
11interest of the State will be served by so doing.
12(Source: Laws 1951, p. 1167.)
13    (5 ILCS 615/6 rep.)
14    (5 ILCS 615/9 rep.)
15    (5 ILCS 615/11 rep.)
16    (5 ILCS 615/17 rep.)
17    (5 ILCS 615/18 rep.)
18    (5 ILCS 615/21 rep.)
19    Section 10. The Oil and Gas Wells on Public Lands Act is
20amended by repealing Sections 6, 9, 11, 17, 18, and 21.
21    Section 99. Effective date. This Act takes effect upon
22becoming law.