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Public Act 100-0761
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| HB4920 Enrolled | LRB100 19136 HEP 34401 b |
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AN ACT concerning civil law.
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Be it enacted by the People of the State of Illinois,
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represented in the General Assembly:
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Section 5. The Principal and Income Act is amended by |
changing Sections 10 and 15 as follows:
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(760 ILCS 15/10) (from Ch. 30, par. 510)
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(Text of Section before amendment by P.A. 100-519)
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Sec. 10. Disposition of natural resources.
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(a) If any part of the principal consists of a right to |
receive
royalties, overriding or limited royalties, working |
interests, production
payments, net profit interests, or other |
interest in minerals, oil, gas or
other natural resources in, |
on or under land, except timber, water, soil,
sod, dirt, peat, |
turf or mosses, the receipts from taking the natural
resources |
from the land shall be allocated as follows:
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(1) if received as rent on a lease or extension |
payments on a lease, the
receipts are income;
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(2) if received from a production payment, the receipts |
are income to
the extent of any factor for interest or its |
equivalent provided in the
governing instrument. There |
shall be allocated to principal the fraction
of the balance |
of the receipts which the unrecovered cost of the |
production
payment bears to the balance owed on the |
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production payment, exclusive of
any factor for interest or |
its equivalent. The receipts not allocated to
principal are |
income;
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(3) if received as a royalty, overriding or limited |
royalty, or bonus,
or from a working, net profit, or any |
other interest in minerals, oil, gas,
or other natural |
resources, receipts not provided for in the preceding
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paragraphs of this Section shall be apportioned on a yearly |
basis in
accordance with this paragraph whether or not any |
natural resource was
being taken from the land at the time |
the trust was established. The
trustee shall allocate to |
principal as an allowance for depletion the
greater of (i) |
that portion, if any, of the gross receipts that is allowed
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as a depletion deduction for federal income tax purposes |
and (ii) 10% of
the gross receipts, except that that |
allocation shall not exceed 50% of the
net receipts |
remaining after payment of all expenses, direct and |
indirect,
computed without the allowance for depletion. |
The trustee shall allocate
the balance of the gross |
receipts, after payment therefrom of all expenses,
direct |
and indirect, to income.
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(b) If an item of depletable property of a type specified |
in this Section
is held on the effective date of this Act, |
receipts from the property shall
be allocated in the manner |
used before the effective date of this Act, but
as to all |
depletable property acquired after the effective date of this
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Act by an existing or new trust, the method of allocation |
provided herein shall be used.
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(c) If any part of the principal consists of timber, water, |
soil, sod,
dirt, peat, turf, or mosses, the receipts from those |
resources shall be
allocated in accordance with Section 3.
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(Source: P.A. 87-714.)
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(Text of Section after amendment by P.A. 100-519)
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Sec. 10. Disposition of natural resources.
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(a) If any part of the principal consists of a right to |
receive
royalties, overriding or limited royalties, working |
interests, production
payments, net profit interests, or other |
interest in minerals, oil, gas or
other natural resources in, |
on or under land, except timber, water, soil,
sod, dirt, peat, |
turf or mosses, the receipts from taking the natural
resources |
from the land shall be allocated as follows:
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(1) if received as rent on a lease or extension |
payments on a lease, the
receipts are income;
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(2) if received from a production payment, the receipts |
are income to
the extent of any factor for interest or its |
equivalent provided in the
governing instrument. There |
shall be allocated to principal the fraction
of the balance |
of the receipts which the unrecovered cost of the |
production
payment bears to the balance owed on the |
production payment, exclusive of
any factor for interest or |
its equivalent. The receipts not allocated to
principal are |
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income;
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(3) except for oil or gas from non-coal formations held |
in nontrust estates and by legal tenants and remaindermen |
as described in Section 15 of this Act, if received as a |
royalty, overriding or limited royalty, or bonus,
or from a |
working, net profit, or any other interest in minerals,
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oil, gas, or other natural resources, receipts not provided |
for in the preceding
paragraphs of this Section shall be |
apportioned on a yearly basis in
accordance with this |
paragraph whether or not any natural resource was
being |
taken from the land at the time the trust was established. |
The
trustee shall allocate to principal as an allowance for |
depletion the
greater of (i) that portion, if any, of the |
gross receipts that is allowed
as a depletion deduction for |
federal income tax purposes and (ii) 10% of
the gross |
receipts, except that that allocation shall not exceed 50% |
of the
net receipts remaining after payment of all |
expenses, direct and indirect,
computed without the |
allowance for depletion. The trustee shall allocate
the |
balance of the gross receipts, after payment therefrom of |
all expenses,
direct and indirect, to income; |
(4) Only for oil or gas from non-coal formations held |
in nontrust estates and by legal tenants and remaindermen |
as described in Section 15 of this Act, proceeds from the |
sale of such minerals produced and received as royalty, |
overriding royalty, limited royalty, working interest, net |
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profit interest, time-limited interest or term interest, |
or lease bonus shall be deemed income with respect only to |
nontrust estates described in Section 15 of this Act, for |
oil or gas from non-coal formations, proceeds from the sale |
of such minerals produced and received as royalty, |
overriding royalty, limited royalty, working interest, net |
profit interest, time-limited interest or term interest, |
or lease bonus shall be deemed income.
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(b) If an item of depletable property of a type specified |
in this Section
is held on the effective date of this Act, |
receipts from the property shall
be allocated in the manner |
used before the effective date of this Act, but
as to all |
depletable property acquired after the effective date of this
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Act by an existing or new trust, the method of allocation |
provided herein shall be used.
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(c) If any part of the principal consists of timber, water, |
soil, sod,
dirt, peat, turf, or mosses, the receipts from those |
resources shall be
allocated in accordance with Section 3.
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(Source: P.A. 100-519, eff. 6-1-18.)
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(760 ILCS 15/15) (from Ch. 30, par. 515)
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(Text of Section before amendment by P.A. 100-519)
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Sec. 15. Non-trust estates.
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(a) The provisions of this Act, as far as applicable, shall |
apply to
nontrust estates subject to any agreement of the |
parties or any specific
direction by statute or otherwise, and |
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the references to trusts and
trustees shall be read as applying |
to nontrust estates and to legal tenants
(including life |
tenants, tenants for terms of years, or any other period of
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tenancy) and remaindermen as the context requires; except that |
if either a
legal tenant or a remainderman has incurred a |
charge for his benefit
without the consent or agreement of the |
other, he shall pay that charge
in full.
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(b) If the costs of an improvement, including special taxes |
or
assessments, representing an addition to value of property |
forming part of
the principal cannot reasonably be expected to |
outlast the legal tenancy,
the costs shall be paid by the legal |
tenant. If the improvement can
reasonably be expected to |
outlast the legal tenancy, only a portion of the
costs shall be |
paid by the legal tenant and the balance by the
remainderman. |
The portion payable by the legal tenant shall be that
fraction |
of the total found by dividing the present value of the legal
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tenancy by the present value of an estate of the same form as |
that of the
legal tenancy but limited to a period corresponding |
to the reasonably
expected duration of the improvement. The |
computation of present value of
the legal tenancy shall be |
computed on the basis of two-thirds of the value
determined by |
use of the tables set forth under Section 7520 of the
Internal |
Revenue Code of 1986 and the regulations thereunder for the
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calculation of the values of annuities, life estates, and terms |
for years,
and no other evidence of duration or expectancy |
shall be considered, except
that any legal tenancy or remainder |
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interest acquired for consideration
based on those tables shall |
be computed on the basis of the tables in
effect at the time |
acquired. The method of computing the present value of
a legal |
tenancy established in this subsection shall apply to all legal
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tenancies and remainders created after January 1, 1992 and to |
all legal
tenancies and remainders which were acquired for |
consideration if the
amount of the consideration was based on |
the tables set forth under Section
2031 or 7520 of the Internal |
Revenue Code then in effect.
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(c) If a legal tenant has leased any lands for agricultural |
or farming
operations and his legal tenancy terminates on or |
after the day any rent
has become due and payable, he or his |
representative is entitled to recover
that rent from the |
lessee; and if a legal tenancy terminates before the
rent under |
the lease is fully paid, the legal tenant or his representative
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is entitled to recover from the lessee:
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(1) that portion of the rent not due which the number |
of days from
the beginning of the period for which the rent |
is not due to the date of
the termination of the legal |
tenancy bears to the total number of days in
the period for |
which the rent is unpaid; and
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(2) that portion of the landlord's share of actual |
expenses paid
before the termination of the legal tenancy |
and not previously recovered by
him, which the number of |
days in the lease period on and after the
termination bears |
to the total number of days in the lease period.
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(Source: P.A. 82-390; 87-714.)
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(Text of Section after amendment by P.A. 100-519)
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Sec. 15. Non-trust estates.
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(a) The provisions of this Act, as far as applicable, shall |
apply to
nontrust estates subject to any agreement of the |
parties or any specific
direction by statute or otherwise, and |
the references to trusts and
trustees shall be read as applying |
to nontrust estates and to legal tenants
(including life |
tenants, tenants for terms of years, or any other period of
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tenancy) and remaindermen as the context requires; except that |
if either a
legal tenant or a remainderman has incurred a |
charge for his benefit
without the consent or agreement of the |
other, he shall pay that charge
in full.
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(b) If the costs of an improvement, including special taxes |
or
assessments, representing an addition to value of property |
forming part of
the principal cannot reasonably be expected to |
outlast the legal tenancy,
the costs shall be paid by the legal |
tenant. If the improvement can
reasonably be expected to |
outlast the legal tenancy, only a portion of the
costs shall be |
paid by the legal tenant and the balance by the
remainderman. |
The portion payable by the legal tenant shall be that
fraction |
of the total found by dividing the present value of the legal
|
tenancy by the present value of an estate of the same form as |
that of the
legal tenancy but limited to a period corresponding |
to the reasonably
expected duration of the improvement. The |
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computation of present value of
the legal tenancy shall be |
computed on the basis of two-thirds of the value
determined by |
use of the tables set forth under Section 7520 of the
Internal |
Revenue Code of 1986 and the regulations thereunder for the
|
calculation of the values of annuities, life estates, and terms |
for years,
and no other evidence of duration or expectancy |
shall be considered, except
that any legal tenancy or remainder |
interest acquired for consideration
based on those tables shall |
be computed on the basis of the tables in
effect at the time |
acquired. The method of computing the present value of
a legal |
tenancy established in this subsection shall apply to all legal
|
tenancies and remainders created after January 1, 1992 and to |
all legal
tenancies and remainders which were acquired for |
consideration if the
amount of the consideration was based on |
the tables set forth under Section
2031 or 7520 of the Internal |
Revenue Code then in effect.
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(c) If a legal tenant has leased any lands for agricultural |
or farming
operations and his legal tenancy terminates on or |
after the day any rent
has become due and payable, he or his |
representative is entitled to recover
that rent from the |
lessee; and if a legal tenancy terminates before the
rent under |
the lease is fully paid, the legal tenant or his representative
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is entitled to recover from the lessee:
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(1) that portion of the rent not due which the number |
of days from
the beginning of the period for which the rent |
is not due to the date of
the termination of the legal |
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tenancy bears to the total number of days in
the period for |
which the rent is unpaid; and
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(2) that portion of the landlord's share of actual |
expenses paid
before the termination of the legal tenancy |
and not previously recovered by
him, which the number of |
days in the lease period on and after the
termination bears |
to the total number of days in the lease period. |
(d) (Blank). This Section does not apply to life estates |
and remainder interests in oil or gas from non-coal formations, |
or royalties or overriding royalties created under leases of |
such minerals.
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(Source: P.A. 100-519, eff. 6-1-18.)
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Section 95. No acceleration or delay. Where this Act makes |
changes in a statute that is represented in this Act by text |
that is not yet or no longer in effect (for example, a Section |
represented by multiple versions), the use of that text does |
not accelerate or delay the taking effect of (i) the changes |
made by this Act or (ii) provisions derived from any other |
Public Act.
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