Public Act 099-0129
 
HB0313 EnrolledLRB099 06177 HEP 26235 b

    AN ACT concerning civil law.
 
    Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
 
    Section 5. The Oil and Gas Rights Act is amended by
changing Section 10 as follows:
 
    (765 ILCS 520/10)  (from Ch. 96 1/2, par. 4910)
    Sec. 10. (1) in this Section:
    (a) "Payee" means any person or persons legally entitled to
payment from the proceeds derived from the sale of oil or gas
from an oil or gas well located in this State.
    (b) "Payor" means the first purchaser of production of oil
or gas from an oil or gas well, but the owner of the right to
produce under an oil or gas lease or pooling order is deemed to
be the payor if the owner of the right to produce and the first
purchaser have entered into arrangements providing that the
proceeds derived from the sale of oil or gas have been paid by
the first purchaser to the owner who assumes the responsibility
of paying those proceeds to the payee.
    (2) (a) the proceeds derived from the sale of oil or gas
production from an oil or gas well must be paid to each payee
on or before 150 days after the end of the month of first
purchase by a payor. After that time, payments must be made to
each payee on a timely basis according to the frequency of
payment specified in a lease or other written agreement between
payee and payor. If the lease or other agreement does not
specify the time for payment, subsequent proceeds must be paid
no later than:
    (1) 60 days after the end of the calendar month in which
subsequent oil production is sold; or
    (2) 90 days after the end of the calendar month in which
subsequent gas production is sold.
    (b) Payments may be remitted to payees annually for the
aggregate of up to 12 months' accumulation of proceeds, if the
total amount owed is $100 $25 or less.
    (3) (a) If payment has not been made for any reason in the
time limits specified in subsection (2)(a) of this Act, the
payor must pay interest to a payee beginning at the expiration
of those time limits at the rate charged on loans to depository
institutions by the New York Federal Reserve Bank, unless a
different rate of interest is specified in a written agreement
between payor and payee.
    (b) Subsection (a) of this Section does not apply where
payments are withheld or suspended by a payor beyond the time
limits specified in subsection (2)(a) of this Act because there
is:
    (1) a dispute concerning title that would affect
distribution of payments;
    (2) a reasonable doubt that the payee does not have clear
title to the interest in the proceeds of production; or
    (3) a requirement in a title opinion that places in issue
the title, identity, or whereabouts of the payee and that has
not been satisfied by the payee after a reasonable request for
curative information has been made by the payor.
    (4) (a) If a payee seeks relief for the failure of a payor
to make timely payment of proceeds from the sale of oil or gas
or an interest in oil or gas as required under Section (2) or
(3) of this Act, the payee must give the payor written notice
by mail of that failure as a prerequisite to beginning judicial
action against the payor for nonpayment.
    (b) The payor has 30 days after receipt of the required
notice from the payee in which to pay the proceeds due, or to
respond by stating in writing a reasonable cause for
nonpayment.
    (c) A payee has a cause of action for nonpayment of oil or
gas proceeds or interest on those proceeds as required in
Section (2) or (3) of this Act in any court of competent
jurisdiction in the county in which the oil or gas well is
located.
(Source: P.A. 84-872.)