Rep. John E. Bradley

Filed: 3/14/2013

 

 


 

 


 
09800HB2615ham001LRB098 10864 MGM 43076 a

1
AMENDMENT TO HOUSE BILL 2615

2    AMENDMENT NO. ______. Amend House Bill 2615 by replacing
3everything after the enacting clause with the following:
 
4
"ARTICLE 1.

 
5    Section 1-1. Short title. This Act may be cited as the
6Hydraulic Fracturing Regulatory Act.
 
7    Section 1-5. Definitions. For the purposes of this Act,
8unless the context otherwise requires:
9    "Agency" means the Illinois Environmental Protection
10Agency.
11    "Aquatic life" means all fish, reptiles, amphibians,
12crayfish, and mussels.
13    "Aquifer" means saturated (with groundwater) soils and
14geologic materials that are sufficiently permeable to readily
15yield economically useful quantities (at least 70 gallons per

 

 

09800HB2615ham001- 2 -LRB098 10864 MGM 43076 a

1minute) of fresh water to wells, springs, or streams under
2ordinary hydraulic gradients.
3    "Base fluid" means the continuous phase fluid type,
4including, but not limited to, water used in a high volume
5horizontal hydraulic fracturing operation.
6    "BTEX" means benzene, toluene, ethylbenzene, and xylene.
7    "Chemical" means any element, chemical compound, or
8mixture of elements or compounds that has its own specific name
9or identity, such as a Chemical Abstracts Service number,
10regardless of whether the chemical is subject to the
11requirements of paragraph (2) of subsection (g) of 29 Code of
12Federal Regulations 1910.1200.
13    "Chemical Abstracts Service" means the division of the
14American Chemical Society that is the globally recognized
15authority for information on chemical substances.
16    "Chemical Abstracts Service number" or "CAS number" means
17the unique identification number assigned to a chemical by the
18Chemical Abstracts Service.
19    "Completion combustion device" means any ignition device,
20installed horizontally or vertically, used in exploration and
21production operations to combust otherwise vented emissions.
22    "Delineation well" means a well drilled in order to
23determine the boundary of a field or producing reservoir.
24    "Department" means the Illinois Department of Natural
25Resources.
26    "Diesel" means a substance having any one of the following

 

 

09800HB2615ham001- 3 -LRB098 10864 MGM 43076 a

1Chemical Abstracts Service Registry numbers: 68334-30-5;
268476-34-6; 68476-30-2; 68476-31-3; 8008-20-6; or 68410-00-4.
3"Diesel" includes any additional substances regulated by the
4United States Environmental Protection Agency as diesel fuel
5used in hydraulic fracturing activities under the federal Safe
6Drinking Water Act.
7    "Director" means the Director of Natural Resources.
8    "Enhanced oil recovery operation" means any secondary or
9tertiary recovery method used in an effort to recover
10hydrocarbons from a pool by injection of fluids, gases or other
11substances to maintain, restore, or augment natural reservoir
12energy, or by introducing gases, chemicals, other substances,
13or heat, or by in-situ combustion, or by any combination
14thereof.
15    "Flare" means a thermal oxidation system using an open,
16enclosed, or semi-enclosed flame. "Flare" does not include
17completion combustion devices as defined in this Section.
18    "Flowback period" means the process of allowing fluids to
19flow from a well following a treatment, either in preparation
20for a subsequent phase of treatment or in preparation for
21cleanup and returning the well to production. "Flowback period"
22begins when the material the hydraulic fracturing fluid returns
23to the surface following hydraulic fracturing or
24re-fracturing. "Flowback period" ends with either well shut in
25or when the well is producing continuously to the flow line or
26to a storage vessel for collection, whichever occurs first.

 

 

09800HB2615ham001- 4 -LRB098 10864 MGM 43076 a

1    "Fresh water" means surface and subsurface water in its
2natural state that is suitable for drinking water for human
3consumption, domestic livestock, irrigation, industrial,
4municipal and recreational purposes, that is capable of
5supporting aquatic life, and contains less than 10,000 ppm
6total dissolved solids.
7    "Gas" means all natural gas, including casinghead gas, and
8all other natural hydrocarbons not defined as oil.
9    "Groundwater" means any water below the land surface that
10is within the saturated zone or geologic materials where the
11fluid pressure in the pore space is equal to or greater than
12atmospheric pressure.
13    "Health professional" means a physician, physician
14assistant, nurse practitioner, a registered professional
15nurse, emergency medical technician, or other individual
16appropriately licensed or registered to provide health care
17services.
18    "High volume horizontal hydraulic fracturing operations"
19means all stages of a stimulation treatment of a horizontal
20well as defined by this Act by the pressurized application of
21more than 80,000 gallons per stage of hydraulic fracturing
22fluid and proppant to initiate or propagate fractures in a
23geologic formation to enhance extraction or production of oil
24or gas.
25    "High volume horizontal hydraulic fracturing permit" means
26the permit issued by the Department under this Act allowing

 

 

09800HB2615ham001- 5 -LRB098 10864 MGM 43076 a

1high volume horizontal hydraulic fracturing operations to
2occur at a well site.
3    "High volume horizontal hydraulic fracturing treatment"
4shall have the same definition as "High volume horizontal
5hydraulic fracturing operations".
6    "Horizontal well" means a well with a wellbore drilled
7laterally at an angle of at least 80 degrees to the vertical
8and with a horizontal projection exceeding 100 feet measured
9from the initial point of penetration into the productive
10formation through the terminus of the lateral in the same
11common source of hydrocarbon supply.
12    "Hydraulic fracturing additive" means any chemical
13substance or combination of chemicals, including, but not
14limited to, any chemical or proppant that is added to a base
15fluid for the purposes of preparing a hydraulic fracturing
16fluid for a high volume horizontal hydraulic fracturing
17operation.
18    "Hydraulic fracturing flowback" means all hydraulic
19fracturing fluid and other fluids that return to the surface
20after a stage of high volume horizontal hydraulic fracturing
21operations has been completed and prior to the well being
22placed in production.
23    "Hydraulic fracturing fluid" means the mixture of the base
24fluid and all the hydraulic fracturing additives, used to
25perform high volume horizontal hydraulic fracturing.
26    "Hydraulic fracturing string" means any pipe or casing

 

 

09800HB2615ham001- 6 -LRB098 10864 MGM 43076 a

1string used for the transport of hydraulic fracturing fluids
2during the conduct of the high volume horizontal hydraulic
3fracturing operations.
4    "Intake" means a pipe or other means to withdraw raw water
5from a water source.
6    "Landowner" means the legal title holder or owner of real
7property and includes an owner of an undivided interest, a life
8tenant, a remainderman, a public or private corporation, a
9trustee under an active trust, and the holder of the beneficial
10interest under a land trust. "Landowner" does not include a
11mortgagee, a trustee under a trust deed in the nature of a
12mortgage, a lien holder, or a lessee.
13    "Low pressure well" means a well with reservoir pressure
14and vertical well depth such that 0.445 times the reservoir
15pressure (in psia) minus 0.038 times the vertical well depth
16(in feet) minus 67.578 psia is less than the flow line pressure
17at the sales meter.
18    "Nature preserve" shall have the same meaning as provided
19in Section 3.11 of the Illinois Natural Areas Preservation Act.
20    "Oil" means natural crude oil or petroleum and other
21hydrocarbons, regardless of gravity, which are produced at the
22well in liquid form by ordinary production methods or by the
23use of an oil and gas separator and which are not the result of
24condensation of gas after it leaves the underground reservoir.
25    "Operator" means the individual or entity controlling the
26right to drill or produce a horizontal well in accordance with

 

 

09800HB2615ham001- 7 -LRB098 10864 MGM 43076 a

1the requirements of the Illinois Oil and Gas Act.
2    "Owner" shall have the same meaning as provided in Section
31 of the Illinois Oil and Gas Act.
4    "Perennial stream" means a stream that has continuous flow
5in its stream bed during all of the calendar year.
6    "Permit" means a high volume horizontal hydraulic
7fracturing permit.
8    "Permittee" means a person holding a high volume horizontal
9hydraulic fracturing permit under this Act.
10    "Person" means any individual, partnership,
11co-partnership, firm, company, limited liability company,
12corporation, association, joint stock company, trust, estate,
13political subdivision, state agency, or any other legal entity
14or their legal representative, agent, or assigns.
15    "Pollution or diminution" means:
16        (1) in groundwater, any of the following:
17            (A) detection of benzene or any other carcinogen in
18        any Class I, Class II, or Class III groundwater;
19            (B) detection of any constituent in item (i) of
20        subparagraph (A) of paragraph (3) of subsection (a) of
21        35 Ill. Adm. Code 620.310 equal to or above the listed
22        preventive response criteria in any Class I, Class II,
23        or Class III groundwater;
24            (C) detection of any constituent in 35 Ill. Adm.
25        Code 620.410 (a), (b), (c), (d) or (e) equal to or
26        above the listed standard in any Class I, Class II, or

 

 

09800HB2615ham001- 8 -LRB098 10864 MGM 43076 a

1        Class III groundwater;
2            (D) detection of any constituent in Class III
3        groundwater equal to or above a standard established
4        under 35 Ill. Adm. Code 620.260; or
5            (E) detection of any constituent in Class I, Class
6        II, or Class III groundwater equal to or above a
7        cleanup objective listed in 35 Ill. Adm. Code 742.
8        (2) in surface water, exceeding any applicable numeric
9    or narrative standard in 35 Ill. Adm. Code Part 302 or Part
10    304.
11    "Produced water" means water, regardless of chloride and
12total dissolved solids content, that is produced in conjunction
13with oil or natural gas production or natural gas storage
14operations, but does not include hydraulic fracturing
15flowback.
16    "Proppant" means sand or any natural or man-made material
17that is used during high volume horizontal hydraulic fracturing
18operations to prop open the artificially created or enhanced
19fractures.
20    "Public water supply" means all mains, pipes, and
21structures through which water is obtained and distributed to
22the public, including wells and well structures, intakes and
23cribs, pumping stations, treatment plants, reservoirs, and
24storage tanks and appurtenances, collectively or severally,
25actually used or intended for use for the purpose of furnishing
26water for drinking or general domestic use, and which serves at

 

 

09800HB2615ham001- 9 -LRB098 10864 MGM 43076 a

1least 15 service connections or which regularly serves at least
225 persons at least 60 days per year.
3    "Register of Land and Water Reserves" means the list of
4areas registered in accordance with Section 16 of the Illinois
5Natural Areas Preservation Act and Part 4010 of Title 17 of the
6Illinois Administrative Code.
7    "Release" means any spilling, leaking, pumping, pouring,
8emitting, emptying, discharging, injecting, escaping,
9leaching, dumping, or disposing into the environment.
10    "Serious violation" means any violation set forth in 62
11Ill. Adm. Code 240.140(c).
12    "Service connection" means the opening, including all
13fittings and appurtenances, at the water main through which
14water is supplied to the user.
15    "Surface water" means all water that is open to the
16atmosphere and subject to surface runoff.
17    "Total water volume" means the total quantity of water from
18all sources used in the high volume horizontal hydraulic
19fracturing operations, including surface water, groundwater,
20produced water, or recycled water.
21    "True vertical depth" or "TVD" means the vertical distance
22from a depth in a planned or existing wellbore or well to a
23point at the surface.
24    "Water pollution" means any alteration of the physical,
25thermal, chemical, biological, or radioactive properties of
26any waters of the State, or the discharge of any contaminant

 

 

09800HB2615ham001- 10 -LRB098 10864 MGM 43076 a

1into any water of the State, as will or is likely to create a
2nuisance or render the waters harmful, detrimental, or
3injurious to public health, safety, or welfare, or to domestic,
4commercial, industrial, agricultural, recreational, or other
5legitimate uses, or to livestock, wild animals, birds, or fish
6or other aquatic life.
7    "Water source" means (1) any existing water well or
8developed spring used for human or domestic animal consumption,
9or (2) any river, perennial stream, aquifer, natural or
10artificial lake, pond, wetland listed on the Register of Land
11and Water Reserves, or reservoir.
12    "Well" means any drill hole required to be permitted under
13the Illinois Oil and Gas Act.
14    "Well site" means surface areas, including the well,
15occupied by all equipment or facilities necessary for or
16incidental to high volume horizontal hydraulic fracturing
17operations, drilling, production, or plugging a well.
18    "Wildcat well" means a well outside known fields or the
19first well drilled in an oil or gas field where no other oil
20and gas production exists.
21    "Wildlife" means any bird or mammal that are by nature wild
22by way of distinction from those that are naturally tame and
23are ordinarily living unconfined in a state of nature without
24the care of man.
 
25    Section 1-10. Intergovernmental cooperation. The

 

 

09800HB2615ham001- 11 -LRB098 10864 MGM 43076 a

1Department shall have the primary authority to administer the
2provisions of this Act. The Illinois State Geological Survey,
3the Illinois State Water Survey, the Office of the State Fire
4Marshal, and the Agency shall be advised of high volume
5horizontal hydraulic fracturing permit applications received
6by the Department and lend assistance as required by the
7provisions of this Act.
 
8    Section 1-15. Powers and duties.
9    (a) Except as otherwise provided, the Department shall
10enforce this Act and all rules and orders adopted in accordance
11with this Act.
12    (b) Except as otherwise provided, the Department shall have
13jurisdiction and authority over all persons and property
14necessary to enforce the provisions of this Act effectively. In
15aid of this jurisdiction, the Director, or anyone designated in
16writing by the Director, shall have the authority to administer
17oaths and to issue subpoenas for the production of records or
18other documents and for the attendance of witnesses at any
19proceedings of the Department.
20    (c) The Department may authorize any employee of the
21Department, qualified by training and experience, to perform
22the powers and duties set forth in this Act.
23    (d) For the purpose of determining compliance with the
24provisions of this Act and any orders or rules entered or
25adopted under this Act, the Department shall have the right at

 

 

09800HB2615ham001- 12 -LRB098 10864 MGM 43076 a

1all times to go upon and inspect properties where high volume
2horizontal hydraulic fracturing operations are being or have
3been conducted.
4    (e) Except as otherwise provided, the Department shall make
5any inquiries as it may deem proper to determine whether a
6violation of this Act or any orders or rules entered or adopted
7under this Act exists or is imminent. In the exercise of these
8powers, the Department shall have the authority to collect
9data; require testing and sampling; to make investigation and
10inspections; to examine properties, including records and
11logs; to examine, check, and test hydrocarbon wells; to hold
12hearings; to adopt administrative rules; and to take any action
13as may be reasonably necessary to enforce this Act.
14    (f) The Department may specify the manner in which all
15information required to be submitted under this Act is
16submitted.
 
17    Section 1-20. Applicability. This Act applies to all wells
18where high volume horizontal hydraulic fracturing operations
19are planned, have occurred, or are occurring in this State. The
20provisions of this Act shall be in addition to the provisions
21of the Illinois Oil and Gas Act. However, if there is a
22conflict, the provisions of the Illinois Oil and Gas Act are
23superseded by this Act.
 
24    Section 1-25. Setbacks and prohibitions.

 

 

09800HB2615ham001- 13 -LRB098 10864 MGM 43076 a

1    (a) Except as otherwise provided in this Section, no well
2site where high volume horizontal hydraulic fracturing
3operations are proposed, planned, or occurring may be located
4as follows. Unless specified otherwise, all distances shall be
5measured from the closest edge of the well site:
6        (1) within 500 feet measured horizontally from any
7    residence or place of worship unless the owner of the
8    residence or the governing body of the place of worship
9    otherwise expressly agrees in writing to a closer well
10    location;
11        (2) within 500 feet measured horizontally from the edge
12    of the property line from any school, hospital, or licensed
13    nursing home facility;
14        (3) within 500 feet measured horizontally from the
15    surface location of any existing water well or developed
16    spring used for human or domestic animal consumption,
17    unless the owner or owners of the well or developed spring
18    otherwise expressly agrees or agree in writing to a closer
19    well location;
20        (4) within 300 feet measured horizontally from the
21    center of a perennial stream or from the ordinary high
22    water mark of any river, natural or artificial lake, pond,
23    or reservoir;
24        (5) within 750 feet of a nature preserve or a site on
25    the Register of Land and Water Reserves;
26        (6) within 1,500 feet of a surface water or groundwater

 

 

09800HB2615ham001- 14 -LRB098 10864 MGM 43076 a

1    intake of a public water supply; the distance from the
2    public water supply as identified by the Department shall
3    be measured as follows:
4            (A) For a surface water intake on a lake or
5        reservoir, the distance shall be measured from the
6        intake point on the lake or reservoir.
7            (B) For a surface water intake on a flowing stream,
8        the distance shall be measured from a semicircular
9        radius extending upstream of the surface water intake.
10            (C) For a groundwater source, the distance shall be
11        measured from the surface location of the wellhead or
12        the ordinary high water mark of the spring.
13    The distance restrictions under this subsection (a) shall
14be determined as conditions exist at the time of the submission
15of the permit application under this Act.
16    (b) Notwithstanding any other provision of this Section,
17the owner of a water source identified in paragraph (4) of
18subsection (a) of this Section that is wholly contained within
19the owner's property may expressly agree in writing to a closer
20well location.
21    (c) It is unlawful to inject or discharge hydraulic
22fracturing fluid, produced water, BTEX, diesel, or petroleum
23distillates into fresh water.
24    (d) It is unlawful to perform any high volume horizontal
25hydraulic fracturing operations by knowingly or recklessly
26injecting diesel.
 

 

 

09800HB2615ham001- 15 -LRB098 10864 MGM 43076 a

1    Section 1-30. High volume horizontal hydraulic fracturing
2permit required.
3    (a) Notwithstanding any other provision of law, a person
4may not drill, deepen, or convert a horizontal well where high
5volume horizontal hydraulic fracturing operations are planned
6or occurring or convert a vertical well into a horizontal well
7where high volume horizontal hydraulic fracturing operations
8are planned in this State, unless the person has been issued a
9permit by the Department under this Act and has obtained all
10applicable authorizations required by the Illinois Oil and Gas
11Act.
12    (b) If multiple wells are to be stimulated using high
13volume horizontal hydraulic fracturing operations from a
14single well site, then a separate permit shall be obtained for
15each well at the site.
 
16    Section 1-35. High volume horizontal hydraulic fracturing
17permit application.
18    (a) Every applicant for a permit under this Act shall first
19register with the Department at least 30 days before applying
20for a permit. The Department shall make available a
21registration form within 90 days after the effective date of
22this Act. The registration form shall require the following
23information:
24        (1) the name and address of the registrant and any

 

 

09800HB2615ham001- 16 -LRB098 10864 MGM 43076 a

1    parent, subsidiary, or affiliate thereof;
2        (2) disclosure of all findings of a serious violation
3    or an equivalent violation under federal or state laws or
4    regulations in the development or operation of an oil or
5    gas exploration or production site via hydraulic
6    fracturing by the applicant or any parent, subsidiary, or
7    affiliate thereof within the previous 5 years; and
8        (3) proof of insurance to cover injuries, damages, or
9    loss related to pollution or diminution in the amount of at
10    least $5,000,0000, from an insurance carrier authorized,
11    licensed, or permitted to do this insurance business in
12    this State that holds at least an A- rating by A.M. Best &
13    Co. or any comparable rating service.
14    A registrant must notify the Department of any change in
15the information identified in paragraphs (1), (2), or (3) of
16this subsection (a) at least annually or upon request of the
17Department.
18    (b) Every applicant for a permit under this Act must submit
19the following information to the Department on an application
20form provided by the Department:
21        (1) the name and address of the applicant and any
22    parent, subsidiary, or affiliate thereof;
23        (2) the proposed well name and address and legal
24    description of the well site and its unit area;
25        (3) a statement whether the proposed location of the
26    well site is in compliance with the requirements of Section

 

 

09800HB2615ham001- 17 -LRB098 10864 MGM 43076 a

1    1-25 of this Act and a plat, which shows the proposed
2    surface location of the well site, providing the distance
3    in feet, from the surface location of the well site to the
4    features described in subsection (a) of Section 1-25 of
5    this Act;
6        (4) a detailed description of the proposed well to be
7    used for the high volume horizontal hydraulic fracturing
8    operations including, but not limited to, the following
9    information:
10            (A) the approximate total depth to which the well
11        is to be drilled or deepened;
12            (B) the proposed angle and direction of the well;
13            (C) the actual depth or the approximate depth at
14        which the well to be drilled deviates from vertical;
15            (D) the angle and direction of any nonvertical
16        portion of the wellbore until the well reaches its
17        total target depth or its actual final depth; and
18            (E) the estimated length and direction of the
19        proposed horizontal lateral or wellbore;
20        (5) the estimated depth and elevation, according to the
21    most recent publication of the Illinois State Geological
22    Survey of Groundwater for the location of the well, of the
23    lowest potential fresh water along the entire length of the
24    proposed wellbore;
25        (6) a detailed description of the proposed high volume
26    horizontal hydraulic fracturing operations, including, but

 

 

09800HB2615ham001- 18 -LRB098 10864 MGM 43076 a

1    not limited to, the following:
2            (A) the formation affected by the high volume
3        horizontal hydraulic fracturing operations, including,
4        but not limited to, geologic name and geologic
5        description of the formation that will be stimulated by
6        the operation;
7            (B) the anticipated surface treating pressure
8        range;
9            (C) the maximum anticipated injection treating
10        pressure;
11            (D) the estimated or calculated fracture pressure
12        of the producing and confining zones; and
13            (E) the planned depth of all proposed perforations
14        or depth to the top of the open hole section;
15        (7) plat showing all known previous well bores within
16    750 feet of any part of the horizontal well bore that
17    penetrated within 400 vertical feet of the formation that
18    will be stimulated as part of the high volume horizontal
19    hydraulic fracturing operations;
20        (8) unless the applicant documents why the information
21    is not available at the time the application is submitted,
22    a chemical disclosure report identifying each chemical and
23    proppant anticipated to be used in hydraulic fracturing
24    fluid for each stage of the hydraulic fracturing operations
25    including the following:
26            (A) the total volume of water anticipated to be

 

 

09800HB2615ham001- 19 -LRB098 10864 MGM 43076 a

1        used in the hydraulic fracturing treatment of the well
2        or the type and total volume of the base fluid
3        anticipated to be used in the hydraulic fracturing
4        treatment, if something other than water;
5            (B) each hydraulic fracturing additive anticipated
6        to be used in the hydraulic fracturing fluid, including
7        the trade name, vendor, a brief descriptor of the
8        intended use or function of each hydraulic fracturing
9        additive, and the Material Safety Data Sheet (MSDS), if
10        applicable;
11            (C) each chemical anticipated to be intentionally
12        added to the base fluid, including for each chemical,
13        the Chemical Abstracts Service number, if applicable;
14        and
15            (D) the anticipated concentration in the base
16        fluid, in percent by mass, of each chemical to be
17        intentionally added to the base fluid;
18        (9) a certification of compliance with the Water Use
19    Act of 1983 and applicable regional water supply plans;
20        (10) a fresh water withdrawal and management plan that
21    shall include the following information:
22            (A) the source of the water, such as surface or
23        groundwater, anticipated to be used for water
24        withdrawals, and the anticipated withdrawal location;
25            (B) the anticipated volume and rate of each water
26        withdrawal from each withdrawal location;

 

 

09800HB2615ham001- 20 -LRB098 10864 MGM 43076 a

1            (C) the anticipated months when water withdrawals
2        shall be made from each withdrawal location;
3            (D) the methods to be used to minimize water
4        withdrawals as much as feasible; and
5            (E) the methods to be used for surface water
6        withdrawals to minimize adverse impact to aquatic
7        life.
8            Where a surface water source is wholly contained
9        within a single property, and the owner of the property
10        expressly agrees in writing to its use for water
11        withdrawals, the applicant is not required to include
12        this surface water source in the fresh water withdrawal
13        and management plan.
14        (11) a plan for the handling, storage, transportation,
15    and disposal or reuse of hydraulic fracturing fluids and
16    hydraulic fracturing flowback. The plan shall identify the
17    specific Class II injection well or wells that will be used
18    to dispose of the hydraulic fracturing flowback. The plan
19    shall describe the capacity of the tanks to be used for the
20    capture and storage of flowback and of the lined reserve
21    pit to be used, if necessary, to temporarily store any
22    flowback in excess of the capacity of the tanks.
23    Identification of the Class II injection well or wells
24    shall be by name, identification number, and specific
25    location and shall include the date of the most recent
26    mechanical integrity test for each Class II injection well;

 

 

09800HB2615ham001- 21 -LRB098 10864 MGM 43076 a

1        (12) a well site safety plan to address proper safety
2    measures to be employed during high volume horizontal
3    hydraulic fracturing operations for the protection of
4    persons on the site as well as the general public. Within
5    15 calendar days after submitting the permit application to
6    the Department, the applicant must provide a copy of the
7    plan to the county or counties in which hydraulic
8    fracturing operations will occur. Within 5 calendar days of
9    its receipt, the Department shall provide a copy of the
10    well site safety plan to the Office of the State Fire
11    Marshal;
12        (13) a containment plan describing the containment
13    practices and equipment to be used and the area of the well
14    site where containment systems will be employed, and within
15    5 calendar days of its receipt, the Department shall
16    provide a copy of the containment plan to the Office of the
17    State Fire Marshal;
18        (14) a casing and cementing plan that describes the
19    casing and cementing practices to be employed, including
20    the size of each string of pipe, the starting point, and
21    depth to which each string is to be set and the extent to
22    which each string is to be cemented;
23        (15) a traffic management plan that identifies the
24    anticipated roads, streets, and highways that will be used
25    for access to and egress from the well site. The traffic
26    management plan will include a point of contact to discuss

 

 

09800HB2615ham001- 22 -LRB098 10864 MGM 43076 a

1    issues related to traffic management. Within 15 calendar
2    days after submitting the permit application to the
3    Department, the applicant must provide a copy of the
4    traffic management plan to the county or counties in which
5    the well site is located, and within 5 calendar days of its
6    receipt, the Department shall provide a copy of the traffic
7    management plan to the Office of the State Fire Marshal;
8        (16) the names and addresses of all owners of any real
9    property within 1,500 feet of the proposed well site, as
10    disclosed by the records in the office of the recorder of
11    the county or counties;
12        (17) drafts of the specific public notice and general
13    public notice as required by Section 1-40 of this Act;
14        (18) statement that the well site at which the high
15    volume horizontal hydraulic fracturing operation will be
16    conducted will be restored in compliance with Section
17    240.1181 of Title 62 of the Illinois Administrative Code
18    and Section 1-95 of this Act;
19        (19) proof of insurance to cover injuries, damages, or
20    loss related to pollution in the amount of at least
21    $5,000,0000; and
22        (20) any other relevant information which the
23    Department may, by rule, require.
24    (c) Where an application is made to conduct high volume
25horizontal fracturing operations at a well site located within
26the limits of any city, village, or incorporated town, the

 

 

09800HB2615ham001- 23 -LRB098 10864 MGM 43076 a

1application shall state the name of the city, village, or
2incorporated town and be accompanied with a certified copy of
3the official consent for the hydraulic fracturing operations to
4occur from the municipal authorities where the well site is
5proposed to be located. No permit shall be issued unless
6consent is secured and filed with the permit application. In
7the event that an amended location is selected, the original
8permit shall not be valid unless a new certified consent is
9filed for the amended location.
10    (d) The hydraulic fracturing permit application shall be
11accompanied by a bond as required by subsection (a) of Section
121-65 of this Act.
13    (e) Each application for a permit under this Act shall
14include payment of a non-refundable fee of $13,500. Of this
15fee, $11,000 shall be deposited into the Mines and Minerals
16Regulatory Fund for the Department to use to administer and
17enforce this Act and otherwise support the operations and
18programs of the Office of Mines and Minerals. The remaining
19$2,500 shall be deposited into the Illinois Clean Water Fund
20for the Agency to use to carry out its functions under this
21Act. The Department shall not initiate its review of the permit
22application until the applicable fee under this subsection (e)
23has been submitted to and received by the Department.
24    (f) Each application submitted under this Act shall be
25signed, under the penalty of perjury, by the applicant or the
26applicant's designee who has been vested with the authority to

 

 

09800HB2615ham001- 24 -LRB098 10864 MGM 43076 a

1act on behalf of the applicant and has direct knowledge of the
2information contained in the application and its attachments.
3Any person signing an application shall also sign an affidavit
4with the following certification:
5        "I certify, under penalty of perjury as provided by law
6    and under penalty of refusal, suspension, or revocation of
7    a high volume horizontal hydraulic fracturing permit, that
8    this application and all attachments are true, accurate,
9    and complete to the best of my knowledge.".
10    (g) The permit application shall be submitted to the
11Department in both electronic and hard copy format. The
12electronic format shall be searchable.
13    (h) The application for a high volume horizontal hydraulic
14fracturing permit may be submitted as a combined permit
15application with the operator's application to drill on a form
16as the Department shall prescribe. The combined application
17must include the information required in this Section. If the
18operator elects to submit a combined permit application,
19information required by this Section that is duplicative of
20information required for an application to drill is only
21required to be provided once as part of the combined
22application. The submission of a combined permit application
23under this subsection shall not be interpreted to relieve the
24applicant or the Department from complying with the
25requirements of this Act or the Illinois Oil and Gas Act.
26    (i) Upon receipt of a permit application, the Department

 

 

09800HB2615ham001- 25 -LRB098 10864 MGM 43076 a

1shall have no more than 60 calendar days from the date it
2receives the permit application to approve, with any conditions
3the Department may find necessary, or reject the application
4for the high volume horizontal hydraulic fracturing permit. The
5applicant may waive, in writing, the 60-day deadline upon its
6own initiative or in response to a request by the Department.
7    (j) If at any time during the review period the Department
8determines that the permit application is not complete under
9this Act, does not meet the requirements of this Section, or
10requires additional information, the Department shall notify
11the applicant in writing of the application's deficiencies and
12allow the applicant to correct the deficiencies and provide the
13Department any information requested to complete the
14application. If the applicant fails to provide adequate
15supplemental information within the review period, the
16Department may reject the application.
 
17    Section 1-40. Public notice.
18    (a) Within 5 calendar days after the Department's receipt
19of the high volume horizontal hydraulic fracturing
20application, the Department shall post notice of its receipt
21and a copy of the permit application on its website. The notice
22shall include the dates of the public comment period and
23directions for interested parties to submit comments.
24    (b) Within 5 calendar days after the Department's receipt
25of the permit application and notice to the applicant that the

 

 

09800HB2615ham001- 26 -LRB098 10864 MGM 43076 a

1high volume horizontal hydraulic fracturing permit application
2was received, the Department shall provide the Agency, the
3Office of the State Fire Marshal, Illinois State Water Survey,
4and Illinois State Geological Survey with notice of the
5application.
6    (c) Within 3 calendar days of submittal of the high volume
7horizontal hydraulic fracturing permit application to the
8Department, the applicant shall provide the following public
9notice:
10        (1) Applicants shall mail specific public notice by
11    U.S. Postal Service certified mail, return receipt
12    requested to all, within 5 calendar days after notification
13    by the Department that the permit application was received,
14    to all persons identified as owners of real property within
15    1,500 feet of the proposed well site, as disclosed by the
16    records in the office of the recorder of the county or
17    counties, and to each municipality and county in which the
18    well site is proposed to be located.
19        (2) Except as otherwise provided in this paragraph (2)
20    of subsection (c), applicants shall provide general public
21    notice by publication, once each week for 2 consecutive
22    weeks, beginning no later than 3 calendar days after
23    submittal of the high volume hydraulic fracturing permit
24    application to the Department, in a newspaper of general
25    circulation published in each county where the well
26    proposed for high volume hydraulic fracturing operations

 

 

09800HB2615ham001- 27 -LRB098 10864 MGM 43076 a

1    is proposed to be located.
2        If a well is proposed for high volume hydraulic
3    fracturing operations in a county where there is no daily
4    newspaper of general circulation, applicant shall provide
5    general public notice, by publication, once each week for 2
6    consecutive weeks, in a weekly newspaper of general
7    circulation in that county beginning as soon as the
8    publication schedule of the weekly newspaper permits, but
9    in no case later than 10 days after submittal of the high
10    volume hydraulic fracturing permit application to the
11    Department.
12        (3) The specific and general public notices required
13    under this subsection shall contain the following
14    information:
15            (A) the name and address of the applicant;
16            (B) the date the application for high volume
17        horizontal hydraulic fracturing permit was filed;
18            (C) the dates for the public comment period and a
19        statement that anyone may file written comments about
20        any portion of the applicant's submitted high volume
21        horizontal hydraulic fracturing permit application
22        with the Department during the public comment period;
23            (D) the proposed well name, reference number
24        assigned by the Department, and the address and legal
25        description of the well site and its unit area;
26            (E) a statement that the information filed by the

 

 

09800HB2615ham001- 28 -LRB098 10864 MGM 43076 a

1        applicant in their application for a high volume
2        horizontal hydraulic fracturing permit is available
3        from the Department through its website;
4            (F) the Department's website and the address and
5        telephone number for the Department's Oil and Gas
6        Division;
7            (G) a statement that any person having an interest
8        that is or may be adversely affected, any government
9        agency that is or may be affected, or the county board
10        of a county to be affected under a proposed permit, may
11        file written objections to a permit application and may
12        request a public hearing.
13    (d) After providing the public notice as required under
14paragraph (2) of subsection (c) of this Section, the applicant
15shall supplement its permit application by providing the
16Department with a certification and documentation that the
17applicant fulfilled the public notice requirements of this
18Section. The Department shall not issue a permit until the
19applicant has provided the supplemental material required
20under this subsection.
21    (e) If multiple applications are submitted at the same time
22for wells located on the same well site, the applicant may use
23one public notice for all applications provided the notice is
24clear that it pertains to multiple applications and conforms to
25the requirements of this Section. Notice shall not constitute
26standing for purposes of requesting a public hearing or for

 

 

09800HB2615ham001- 29 -LRB098 10864 MGM 43076 a

1standing to appeal the decision of the Department in accordance
2with the Administrative Review Law.
 
3    Section 1-45. Public comment periods.
4    (a) The public comment period shall begin 7 calendar days
5after the Department's receipt of the permit application and
6last for 30 calendar days.
7    (b) Where a public hearing is conducted under Section 1-50
8of this Act, the Department may provide for an additional
9public comment period of 15 days as necessary to allow for
10comments in response to evidence and testimony presented at the
11hearing. The additional public comment period shall begin on
12the day after the public hearing.
13    (c) During any public comment period, any person may file
14written comments to the Department concerning any portion of
15the permit application and any issue relating to the
16applicant's compliance with the requirements of the Act and any
17other applicable laws.
18    (d) The Department may request that the applicant respond
19to any substantive public comments obtained during the public
20comment period.
 
21    Section 1-50. High volume horizontal hydraulic fracturing
22permit; hearing.
23    (a) When a permit application is submitted to conduct high
24volume horizontal hydraulic fracturing operations for the

 

 

09800HB2615ham001- 30 -LRB098 10864 MGM 43076 a

1first time at a particular well site, any person having an
2interest that is or may be adversely affected, any government
3agency that is or may be affected, or the county board of a
4county to be affected under a proposed permit, may file written
5objections to the permit application and may request a public
6hearing during the public comment period established under
7subsection (a) of Section 1-45 of this Act. The request for
8hearing shall contain a short and plain statement identifying
9the person and stating facts demonstrating that the person has
10an interest that is or may be adversely affected. The
11Department shall hold a public hearing upon a request under
12this subsection, unless the request is determined by the
13Department to (i) lack an adequate factual statement that the
14person is or may be adversely affected or (ii) be frivolous.
15    (b) Prior to the commencement of a public hearing under
16this Section, any person who could have requested the hearing
17under subsection (a) of this Section may petition the
18Department to participate in the hearing in the same manner as
19the party requesting the hearing. The petition shall contain a
20short and plain statement identifying the petitioner and
21stating facts demonstrating that the petitioner is a person
22having an interest that is or may be adversely affected. The
23petitioner shall serve the petition upon the Department. Unless
24the Department determines that the petition is frivolous, or
25that the petitioner has failed to allege facts in support of an
26interest that is or may be adversely affected, the petitioner

 

 

09800HB2615ham001- 31 -LRB098 10864 MGM 43076 a

1shall be allowed to participate in the hearing in the same
2manner as the party requesting the hearing.
3    (c) The public hearing to be conducted under this Section
4shall comply with the contested case requirements of the
5Illinois Administrative Procedure Act. The Department shall
6establish rules and procedures to determine whether any request
7for a public hearing may be granted in accordance with
8subsection (a) of this Section, and for the notice and conduct
9of the public hearing. These procedural rules shall include
10provisions for reasonable notice to (i) the public and (ii) all
11parties to the proceeding, which include the applicant, the
12persons requesting the hearing, and the persons granted the
13right to participate in the hearing pursuant to subsection (b)
14of this Section, for the qualifications, powers, and
15obligations of the hearing officer, and for reasonable
16opportunity for all the parties to provide evidence and
17argument, to respond by oral or written testimony to statements
18and objections made at the public hearing, and for reasonable
19cross-examination of witnesses. County boards and the public
20may present their written objections or recommendations at the
21public hearing. A complete record of the hearings and all
22testimony shall be made by the Department and recorded
23stenographically or electronically. The complete record shall
24be maintained and shall be accessible to the public on the
25Department's website until final release of the applicant's
26performance bond.

 

 

09800HB2615ham001- 32 -LRB098 10864 MGM 43076 a

1    (d) At least 10 calendar days before the date of the public
2hearing, the Department shall publish notice of the public
3hearing in a newspaper of general circulation published in the
4county where the proposed well site will be located.
 
5    Section 1-53. High volume horizontal hydraulic fracturing
6permit; determination; judicial review.
7    (a) The Department shall issue a high volume horizontal
8hydraulic fracturing permit, with any conditions the
9Department may find necessary, only if the record of decision
10demonstrates that:
11        (1) the well location restrictions of Section 1-25 of
12    this Act have been satisfied;
13        (2) the application meets the requirements of Section
14    1-35 of this Act;
15        (3) the plans required to be submitted with the
16    application under Section 1-35 of this Act are adequate and
17    effective;
18        (4) the proposed hydraulic fracturing operations will
19    be conducted in a manner that will protect the public
20    health and safety and prevent pollution or diminution of
21    any water source;
22        (5) the work plan required under Section 1-80 of this
23    Act has been submitted to the Department;
24        (6) the applicant or any parent, subsidiary, or
25    affiliate thereof has not failed to abate a violation of

 

 

09800HB2615ham001- 33 -LRB098 10864 MGM 43076 a

1    this Act or the Illinois Oil and Gas Act;
2        (7) the Class II injection wells to be used for
3    disposal of hydraulic fracturing flowback comply with all
4    applicable requirements for mechanical integrity testing,
5    including that the well has been tested within the previous
6    5 years; and
7        (8) there is no good cause to deny the permit under
8    subsection (a) of Section 1-60 of this Act.
9    (b) For the purpose of determining whether to issue a
10permit, the Department shall consider and the Department's
11record of decision shall include:
12        (1) the application for the high volume horizontal
13    hydraulic fracturing permit, including all documentation
14    required by Section 1-35 of this Act;
15        (2) all written comments received during the public
16    comment periods and, if applicable, the complete record
17    from the public hearing held under Section 1-50 of this
18    Act;
19        (3) all information provided by the applicant in
20    response to any public comments; and
21        (4) any information known to the Department as the
22    public entity responsible for regulating high volume
23    horizontal hydraulic fracturing operations, including, but
24    not limited to, inspections of the proposed well site as
25    necessary to ensure adequate review of the application.
26    (c) The Department shall, by U.S. Mail and electronic

 

 

09800HB2615ham001- 34 -LRB098 10864 MGM 43076 a

1transmission, provide the applicant with a copy of the high
2volume horizontal hydraulic fracturing permit as issued or its
3final administrative decision denying the permit to the
4applicant and shall, by U.S. Mail or electronic transmission,
5provide a copy of the permit as issued or the final
6administrative decision to any person or unit of local
7government who received specific public notice under Section
81-40 of this Act or submitted comments or participated in any
9public hearing under Section 1-50 of this Act.
10    (d) The Department's decision to approve or deny a high
11volume horizontal hydraulic fracturing permit shall be
12considered a final administrative decision subject to judicial
13review under the Administrative Review Law and the rules
14adopted under that Law.
15    (e) Following completion of the Department's review and
16approval process, the Department's website shall indicate
17whether an individual high volume horizontal hydraulic
18fracturing permit was approved or denied and provide a copy of
19the approval or denial.
 
20    Section 1-55. High volume horizontal hydraulic fracturing
21permit; conditions; restriction; modifications.
22    (a) Each permit issued by the Department under this Act
23shall require the permittee to comply with all provisions of
24this Act and all other applicable local, State, and federal
25laws, rules, and regulations in effect at the time the permit

 

 

09800HB2615ham001- 35 -LRB098 10864 MGM 43076 a

1is issued. All plans submitted with the application under
2Section 1-35 shall be conditions of the permit.
3    (b) A permit issued under this Act shall continue in effect
4until plugging and restoration in compliance with this Act and
5the Illinois Oil and Gas Act are completed to the Department's
6satisfaction. No permit may be transferred to another person
7without approval of the Department.
8    (c) No permit issued under this Act may be modified without
9approval of the Department. If the Department determines that
10the proposed modifications constitute a significant deviation
11from the terms of the original application and permit approval,
12or presents a serious risk to public health, life, property,
13aquatic life, or wildlife, the Department shall provide the
14opportunities for notice, comment, and hearing required under
15Sections 1-45 and 1-50 of this Act. The Department shall
16provide notice of the proposed modification and opportunity for
17comment and hearing to the persons who received specific public
18notice under Section 1-40 of this Act and shall publish the
19notice and the proposed modification on its website. The
20Department shall adopt rules regarding procedures for a permit
21modification. When applying for a modified permit, the
22permittee shall submit a modification fee to the Department.
23The fee shall be deposited into the Mines and Minerals
24Regulatory Fund. The Department shall adopt rules regarding
25procedures for a permit modification.
 

 

 

09800HB2615ham001- 36 -LRB098 10864 MGM 43076 a

1    Section 1-60. High volume horizontal hydraulic fracturing
2permit; denial, suspension, or revocation.
3    (a) The Department may suspend, revoke, or refuse to issue
4a high volume horizontal hydraulic fracturing permit under this
5Act for one or more of the following causes:
6        (1) providing incorrect, misleading, incomplete, or
7    materially untrue information in a permit application or
8    any document required to be filed with the Department;
9        (2) violating any condition of the permit;
10        (3) violating any provision of or any regulation
11    adopted under this Act or the Illinois Oil and Gas Act;
12        (4) using fraudulent, coercive, or dishonest
13    practices, or demonstrating incompetence,
14    untrustworthiness, or financial irresponsibility in the
15    conduct of business in this State or elsewhere;
16        (5) having a high volume horizontal hydraulic
17    fracturing permit, or its equivalent, revoked in any other
18    state, province, district, or territory for incurring a
19    material or major violation or using fraudulent or
20    dishonest practices; or
21        (6) an emergency condition exists under which conduct
22    of the high volume horizontal hydraulic fracturing
23    operations would pose a significant hazard to public
24    health, aquatic life, wildlife, or the environment.
25    (b) In every case in which a permit is suspended or
26revoked, the Department shall serve notice of its action,

 

 

09800HB2615ham001- 37 -LRB098 10864 MGM 43076 a

1including a statement of the reasons for the action, either
2personally or by certified mail, receipt return requested, to
3the permittee.
4    (c) The order of suspension or revocation of a permit shall
5take effect upon issuance of the order. The permittee may
6request, in writing, within 30 days after the date of receiving
7the notice, a hearing. Except as provided under subsection (d)
8of this Section, in the event a hearing is requested, the order
9shall remain in effect until a final order is entered pursuant
10to the hearing.
11    (d) The order of suspension or revocation of a permit may
12be stayed if requested by the permittee and evidence is
13submitted demonstrating that there is no significant threat to
14the public health, aquatic life, wildlife, or the environment
15if the operation is allowed to continue.
16    (e) The hearing shall be held at a time and place
17designated by the Department. The Director of the Department or
18any administrative law judge designated by him or her have the
19power to administer oaths and affirmations, subpoena witnesses
20and compel their attendance, take evidence, and require the
21production of books, papers, correspondence, and other records
22or information that he or she considers relevant or material.
23    (f) The costs of the administrative hearing shall be set by
24rule and shall be borne by the permittee.
25    (g) The Department's decision to suspend or revoke a high
26volume horizontal hydraulic fracturing permit is subject to

 

 

09800HB2615ham001- 38 -LRB098 10864 MGM 43076 a

1judicial review under the Administrative Review Law.
 
2    Section 1-65. Hydraulic fracturing permit; bonds.
3    (a) An applicant for a high volume horizontal hydraulic
4fracturing permit under this Act shall provide a bond, executed
5by a surety authorized to transact business in this State. The
6bond shall be in the amount of $50,000 per permit or a blanket
7bond of $500,000 for all permits. If the applicant is required
8to submit a bond to the Department under the Illinois Oil and
9Gas Act, the applicant's submission of a bond under this
10Section shall satisfy the bonding requirements provided for in
11the Illinois Oil and Gas Act. In lieu of a bond, the applicant
12may provide other collateral securities such as cash,
13certificates of deposit, or irrevocable letters of credit under
14the terms and conditions as the Department may provide by rule.
15    (b) The bond or other collateral securities shall remain in
16force until the well is plugged and abandoned. Upon abandoning
17a well to the satisfaction of the Department and in accordance
18with the Illinois Oil and Gas Act, the bond or other collateral
19securities shall be promptly released by the Department. Upon
20the release by the Department of the bond or other collateral
21securities, any cash or collateral securities deposited shall
22be returned by the Department to the applicant who deposited
23it.
24    (c) If, after notice and hearing, the Department determines
25that any of the requirements of this Act or rules adopted under

 

 

09800HB2615ham001- 39 -LRB098 10864 MGM 43076 a

1this Act or the orders of the Department have not been complied
2with within the time limit set by any notice of violation
3issued under this Act, the permittee's bond or other collateral
4securities shall be forfeited. Forfeiture under this
5subsection shall not limit any duty of the permittee to
6mitigate or remediate harms or foreclose enforcement by the
7Department or the Agency. In no way will payment under this
8bond exceed the aggregate penalty as specified.
9    (d) When any bond or other collateral security is forfeited
10under the provisions of this Act or rules adopted under this
11Act, the Department shall collect the forfeiture without delay.
12The surety shall have 30 days to submit payment for the bond
13after receipt of notice by the permittee of the forfeiture.
14    (e) All forfeitures shall be deposited in the Mines and
15Minerals Regulatory Fund to be used, as necessary, to mitigate
16or remediate violations of this Act or rules adopted under this
17Act.
 
18    Section 1-70. Well preparation, construction, and
19drilling.
20    (a) This Section shall apply to all horizontal wells that
21are to be completed using high volume horizontal hydraulic
22fracturing operations under a high volume horizontal hydraulic
23fracturing permit. The requirements of this Section shall be in
24addition to any other laws or rules regarding wells and well
25sites.

 

 

09800HB2615ham001- 40 -LRB098 10864 MGM 43076 a

1    (b) Site preparation standards shall be as follows:
2        (1) The access road to the well site must be located in
3    accordance with access rights identified in the Illinois
4    Oil and Gas Act and located as far as practical from
5    occupied structures, places of assembly, and property
6    lines of unleased property.
7        (2) Unless otherwise approved or directed by the
8    Department, all topsoil stripped to facilitate the
9    construction of the well pad and access roads must be
10    stockpiled, stabilized, and remain on site for use in
11    either partial or final reclamation. In the event it is
12    anticipated that the final reclamation shall take place in
13    excess of one year from drilling the well the topsoil may
14    be disposed of in any lawful manner provided the operator
15    reclaims the site with topsoil of similar characteristics
16    of the topsoil removed.
17        (3) Piping, conveyances, valves, and tanks in contact
18    with hydraulic fracturing fluid, hydraulic fracturing
19    flowback, or produced water must be constructed of
20    materials compatible with the composition of the hydraulic
21    fracturing fluid, hydraulic fracturing flowback, and
22    produced water.
23    (c) Site maintenance standards shall be as follows:
24        (1) Secondary containment is required for all fueling
25    tanks.
26        (2) Fueling tanks shall be subject to Section 1-25 of

 

 

09800HB2615ham001- 41 -LRB098 10864 MGM 43076 a

1    this Act.
2        (3) Fueling tank filling operations shall be
3    supervised at the fueling truck and at the tank if the tank
4    is not visible to the fueling operator from the truck.
5        (4) Troughs, drip pads, or drip pans are required
6    beneath the fill port of a fueling tank during filling
7    operations if the fill port is not within the secondary
8    containment required by paragraph (1) of this subsection.
9    (d) All wells shall be constructed, and casing and
10cementing activities shall be conducted, in a manner that shall
11provide for control of the well at all times, prevent the
12migration of oil, gas, and other fluids into the fresh water
13and coal seams, and prevent pollution or diminution of fresh
14water. In addition to any of the Department's casing and
15cementing requirements, the following shall apply:
16        (1) All casings must conform to the current industry
17    standards published by the American Petroleum Institute.
18        (2) Casing thread compound and its use must conform to
19    the current industry standards published by the American
20    Petroleum Institute.
21        (3) Surface casing shall be centralized at the shoe,
22    above and below a stage collar or diverting tool, if run,
23    and through usable-quality water zones. In non-deviated
24    holes, pipe centralization as follows is required: a
25    centralizer shall be placed every fourth joint from the
26    cement shoe to the ground surface or to the bottom of the

 

 

09800HB2615ham001- 42 -LRB098 10864 MGM 43076 a

1    cellar. All centralizers shall meet specifications in, or
2    equivalent to, API spec 10D, Specification for Bow-Spring
3    Casing Centralizers; API Spec 10 TR4, Technical Report on
4    Considerations Regarding Selection of Centralizers for
5    Primary Cementing Operations; and API RP 10D-2,
6    Recommended Practice for Centralizer Placement and Stop
7    Collar Testing. The Department may require additional
8    centralization as necessary to ensure the integrity of the
9    well design is adequate. All centralizers must conform to
10    the current industry standards published by the American
11    Petroleum Institute.
12        (4) Cement must conform to current industry standards
13    published by the American Petroleum Institute and the
14    cement slurry must be prepared to minimize its free water
15    content in accordance with the current industry standards
16    published by the American Petroleum Institute; the cement
17    must also:
18            (A) secure the casing in the wellbore;
19            (B) isolate and protect fresh groundwater;
20            (C) isolate abnormally pressured zones, lost
21        circulation zones, and any potential flow zones
22        including hydrocarbon and fluid-bearing zones;
23            (D) properly control formation pressure and any
24        pressure from drilling, completion and production;
25            (E) protect the casing from corrosion and
26        degradation; and

 

 

09800HB2615ham001- 43 -LRB098 10864 MGM 43076 a

1            (F) prevent gas flow in the annulus.
2        (5) Prior to cementing any casing string, the borehole
3    must be circulated and conditioned to ensure an adequate
4    cement bond.
5        (6) A pre-flush or spacer must be pumped ahead of the
6    cement.
7        (7) The cement must be pumped at a rate and in a flow
8    regime that inhibits channeling of the cement in the
9    annulus.
10        (8) Cement compressive strength tests must be
11    performed on all surface, intermediate, and production
12    casing strings; after the cement is placed behind the
13    casing, the operator shall wait on cement to set until the
14    cement achieves a calculated compressive strength of at
15    least 500 pounds per square inch, and a minimum of 8 hours
16    before the casing is disturbed in any way, including
17    installation of a blowout preventer. The cement shall have
18    a 72-hour compressive strength of at least 1,200 psi, and
19    the free water separation shall be no more than 6
20    milliliters per 250 milliliters of cement, tested in
21    accordance with current American petroleum Institute
22    standards.
23        (9) A copy of the cement job log for any cemented
24    casing string in the well shall be maintained in the well
25    file and available to the Department upon request.
26        (10) Surface casing shall be used and set to a depth of

 

 

09800HB2615ham001- 44 -LRB098 10864 MGM 43076 a

1    at least 200 feet, or 100 feet below the base of the
2    deepest fresh water, whichever is deeper, but no more than
3    200 feet below the base of the deepest fresh water and
4    prior to encountering any hydrocarbon-bearing zones. The
5    surface casing must be run and cemented as soon as
6    practicable after the hole has been adequately circulated
7    and conditioned.
8        (11) The Department must be notified at least 24 hours
9    prior to surface casing cementing operations. Surface
10    casing must be fully cemented to the surface with excess
11    cements. Cementing must be by the pump and plug method with
12    a minimum of 25% excess cement with appropriate lost
13    circulation material, unless another amount of excess
14    cement is approved by the Department. If cement returns are
15    not observed at the surface, the operator must perform
16    remedial actions as appropriate.
17        (12) Intermediate casing must be installed when
18    necessary to isolate fresh water not isolated by surface
19    casing and to seal off potential flow zones, anomalous
20    pressure zones, lost circulation zones and other drilling
21    hazards.
22        Intermediate casing must be set to protect fresh water
23    if surface casing was set above the base of the deepest
24    fresh water, if additional fresh water was found below the
25    surface casing shoe, or both. Intermediate casing used to
26    isolate fresh water must not be used as the production

 

 

09800HB2615ham001- 45 -LRB098 10864 MGM 43076 a

1    string in the well in which it is installed, and may not be
2    perforated for purposes of conducting a hydraulic fracture
3    treatment through it.
4        When intermediate casing is installed to protect fresh
5    water, the operator shall set a full string of new
6    intermediate casing at least 100 feet below the base of the
7    deepest fresh water and bring cement to the surface. In
8    instances where intermediate casing was set solely to
9    protect fresh water encountered below the surface casing
10    shoe, and cementing to the surface is technically
11    infeasible, would result in lost circulation, or both,
12    cement must be brought to a minimum of 600 feet above the
13    shallowest fresh water zone encountered below the surface
14    casing shoe or to the surface if the fresh water zone is
15    less than 600 feet from the surface. The location and
16    depths of any hydrocarbon-bearing zones or fresh water
17    zones that are open to the wellbore above the casing shoe
18    must be confirmed by coring, electric logs, or testing and
19    must be reported to the Department.
20        In the case that intermediate casing was set for a
21    reason other than to protect strata that contains fresh
22    water, the intermediate casing string shall be cemented
23    from the shoe to a point at least 600 true vertical feet
24    above the shoe. If there is a hydrocarbon bearing zone
25    capable of producing exposed above the intermediate casing
26    shoe, the casing shall be cemented from the shoe to a point

 

 

09800HB2615ham001- 46 -LRB098 10864 MGM 43076 a

1    at least 600 true vertical feet above the shallowest
2    hydrocarbon bearing zone or to a point at least 200 feet
3    above the shoe of the next shallower casing string that was
4    set and cemented in the well (or to the surface if less
5    than 200 feet).
6        (13) The Department must be notified prior to
7    intermediate casing cementing operations. Cementing must
8    be by the pump and plug method with a minimum of 25% excess
9    cement. A radial cement bond evaluation log, or other
10    evaluation approved by the Department, must be run to
11    verify the cement bond on the intermediate casing. Remedial
12    cementing is required if the cement bond is not adequate
13    for drilling ahead.
14        (14) Production casing must be run and fully cemented
15    to 500 feet above the top perforated zone, if possible. The
16    Department must be notified at least 24 hours prior to
17    production casing cementing operations. Cementing must be
18    by the pump and plug method with a minimum of 25% excess
19    cement.
20        (15) At any time, the Department, as it deems
21    necessary, may require installation of an additional
22    cemented casing string or strings in the well.
23        (16) After the setting and cementing of a casing
24    string, except the conductor casing, and prior to further
25    drilling, the casing string shall be tested with fresh
26    water, mud, or brine to at least the maximum anticipated

 

 

09800HB2615ham001- 47 -LRB098 10864 MGM 43076 a

1    treatment pressure but no less than 0.22 psi per foot of
2    casing string length or 1,500 psi, whichever is greater,
3    for at least 30 minutes with less than a 5% pressure loss.
4    The pressure test shall not exceed 70% of the minimum
5    internal yield. If the pressure declines more than 5% or if
6    there are other indications of a leak, corrective action
7    shall be taken before conducting further drilling and high
8    volume horizontal hydraulic fracturing operations. The
9    operator shall contact the Department's District Office
10    for any county in which the well is located at least 24
11    hours prior to conducting a pressure test to enable an
12    inspector to be present when the test is done. A record of
13    the pressure test must be maintained by the operator and
14    must be submitted to the Department on a form prescribed by
15    the Department prior to conducting high volume horizontal
16    hydraulic fracturing operations. The actual pressure must
17    not exceed the test pressure at any time during high volume
18    horizontal hydraulic fracturing operations.
19        (17) Any hydraulic fracturing string used in the high
20    volume horizontal hydraulic fracturing operations must be
21    either strung into a production liner or run with a packer
22    set at least 100 feet below the deepest cement top and must
23    be tested to not less than the maximum anticipated treating
24    pressure minus the annulus pressure applied between the
25    fracturing string and the production or immediate casing.
26    The pressure test shall be considered successful if the

 

 

09800HB2615ham001- 48 -LRB098 10864 MGM 43076 a

1    pressure applied has been held for 30 minutes with no more
2    than 5% pressure loss. A function-tested relief valve and
3    diversion line must be installed and used to divert flow
4    from the hydraulic fracturing string-casing annulus to a
5    covered watertight steel tank in case of hydraulic
6    fracturing string failure. The relief valve must be set to
7    limit the annular pressure to no more than 95% of the
8    working pressure rating of the casings forming the annulus.
9    The annulus between the hydraulic fracturing string and
10    casing must be pressurized to at least 250 psi and
11    monitored.
12        (18) After a successful pressure test under paragraph
13    (16) of this subsection, a formation pressure integrity
14    test must be conducted below the surface casing and below
15    all intermediate casing. The operator shall notify the
16    Department's District Office for any county in which the
17    well is located at least 24 hours prior to conducting a
18    formation pressure integrity test to enable an inspector to
19    be present when the test is done. A record of the pressure
20    test must be maintained by the operator and must be
21    submitted to the Department on a form prescribed by the
22    Department prior to conducting high volume horizontal
23    hydraulic fracturing operations. The actual hydraulic
24    fracturing treatment pressure must not exceed the test
25    pressure at any time during high volume horizontal
26    hydraulic fracturing operations.

 

 

09800HB2615ham001- 49 -LRB098 10864 MGM 43076 a

1    (e) Blowout prevention standards shall be set as follows:
2            (1) The operator shall use blowout prevention
3        equipment after setting casing with a competent casing
4        seat. Blowout prevention equipment shall be in good
5        working condition at all times.
6            (2) The operator shall use pipe fittings, valves,
7        and unions placed on or connected to the blow-out
8        prevention systems that have a working pressure
9        capability that exceeds the anticipated pressures.
10            (3) During all drilling and completion operations
11        when a blowout preventer is installed, tested, or in
12        use, the operator or operator's designated
13        representative shall be present at the well site and
14        that person or personnel shall have a current well
15        control certification from an accredited training
16        program that is acceptable to the Department. The
17        certification shall be available at the well site and
18        provided to the Department upon request.
19            (4) Appropriate pressure control procedures and
20        equipment in proper working order must be properly
21        installed and employed while conducting drilling and
22        completion operations including tripping, logging,
23        running casing into the well, and drilling out
24        solid-core stage plugs.
25            (5) Pressure testing of the blowout preventer and
26        related equipment for any drilling or completion

 

 

09800HB2615ham001- 50 -LRB098 10864 MGM 43076 a

1        operation must be performed. Testing must be conducted
2        in accordance with current industry standards
3        published by the American Petroleum Institute. Testing
4        of the blowout preventer shall include testing after
5        the blowout preventer is installed on the well but
6        prior to drilling below the last cemented casing seat.
7        Pressure control equipment, including the blowout
8        preventer, that fails any pressure test shall not be
9        used until it is repaired and passes the pressure test.
10            (6) A remote blowout preventer actuator, that is
11        powered by a source other than rig hydraulics, shall be
12        located at least 50 feet from the wellhead and have an
13        appropriate rated working pressure.
 
14    Section 1-75. High volume horizontal hydraulic fracturing
15operations.
16    (a) General.
17        (1) During all phases of high volume horizontal
18    hydraulic fracturing operations, the permittee shall
19    comply with all terms of the permit.
20        (2) All phases of high volume horizontal hydraulic
21    fracturing operations shall be conducted in a manner that
22    shall not pose a significant risk to public health, life,
23    property, aquatic life, or wildlife.
24        (3) The permittee shall notify the Department by phone,
25    electronic communication, or letter, at least 48 hours

 

 

09800HB2615ham001- 51 -LRB098 10864 MGM 43076 a

1    prior to the commencement of high volume horizontal
2    hydraulic fracturing operations.
3    (b) Integrity tests and monitoring.
4        (1) Before the commencement of high volume horizontal
5    hydraulic fracturing operations, all mechanical integrity
6    tests required under subsection (d) of Section 1-70 and
7    this subsection must be successfully completed.
8        (2) Prior to commencing high volume horizontal
9    hydraulic fracturing operations and pumping of hydraulic
10    fracturing fluid, the injection lines and manifold,
11    associated valves, fracture head or tree and any other
12    wellhead component or connection not previously tested
13    must be tested with fresh water, mud, or brine to at least
14    the maximum anticipated treatment pressure for at least 30
15    minutes with less than a 5% pressure loss. A record of the
16    pressure test must be maintained by the operator and made
17    available to the Department upon request. The actual high
18    volume horizontal hydraulic fracturing treatment pressure
19    must not exceed the test pressure at any time during high
20    volume horizontal hydraulic fracturing operations.
21        (3) The pressure exerted on treating equipment
22    including valves, lines, manifolds, hydraulic fracturing
23    head or tree, casing and hydraulic fracturing string, if
24    used, must not exceed 95% of the working pressure rating of
25    the weakest component. The high volume horizontal
26    hydraulic fracturing treatment pressure must not exceed

 

 

09800HB2615ham001- 52 -LRB098 10864 MGM 43076 a

1    the test pressure of any given component at any time during
2    high volume horizontal hydraulic fracturing operations.
3        (4) During high volume horizontal hydraulic fracturing
4    operations, all annulus pressures, the injection pressure,
5    and the rate of injection shall be continuously monitored
6    and recorded. The records of the monitoring shall be
7    maintained by the operator and shall be provided to the
8    Department upon request at any time during the period up to
9    and including 5 years after the well is permanently plugged
10    or abandoned.
11        (5) High volume horizontal hydraulic fracturing
12    operations must be immediately suspended if any anomalous
13    pressure or flow condition or any other anticipated
14    pressure or flow condition is occurring in a way that
15    indicates the mechanical integrity of the well has been
16    compromised and continued operations pose a risk to the
17    environment. Remedial action shall be undertaken
18    immediately prior to recommencing high volume horizontal
19    hydraulic fracturing operations. The permittee shall
20    notify the Department within 1 hour of suspending
21    operations for any matters relating to the mechanical
22    integrity of the well or risk to the environment.
23    (c) Fluid and waste management.
24        (1) For the purposes of storage at the well site and
25    except as provided in paragraph (2) of this subsection,
26    hydraulic fracturing additives, hydraulic fracturing

 

 

09800HB2615ham001- 53 -LRB098 10864 MGM 43076 a

1    fluid, hydraulic fracturing flowback, and produced water
2    shall be stored in above-ground tanks during all phases of
3    drilling, high volume horizontal hydraulic fracturing, and
4    production operations until removed for proper disposal.
5    For the purposes of centralized storage off site for
6    potential reuse prior to disposal, hydraulic fracturing
7    additives, hydraulic fracturing fluid, hydraulic
8    fracturing flowback, and produced water shall be stored in
9    above-ground tanks.
10        (2) In accordance with the plan required by paragraph
11    (11) of subsection (b) of Section 1-35 of this Act and as
12    approved by the Department, the use of a reserve pit is
13    allowed for the temporary storage of hydraulic fracturing
14    flowback. The reserve pit shall be used only in the event
15    of a lack of capacity for tank storage due to higher than
16    expected volume or rate of hydraulic fracturing flowback,
17    or other unanticipated flowback occurrence. Any reserve
18    pit must comply with the following construction standards
19    and liner specifications:
20            (A) the synthetic liner material shall have a
21        minimum thickness of 24 mils with high puncture and
22        tear strength and be impervious and resistant to
23        deterioration;
24            (B) the pit lining system shall be designed to have
25        a capacity at least equivalent to 110% of the maximum
26        volume of hydraulic fracturing flowback anticipated to

 

 

09800HB2615ham001- 54 -LRB098 10864 MGM 43076 a

1        be recovered;
2            (C) the lined pit shall be constructed, installed,
3        and maintained in accordance with the manufacturers'
4        specifications and good engineering practices to
5        prevent overflow during any use;
6            (D) the liner shall have sufficient elongation to
7        cover the bottom and interior sides of the pit with the
8        edges secured with at least a 12 inch deep anchor
9        trench around the pit perimeter to prevent any slippage
10        or destruction of the liner materials; and
11            (E) the foundation for the liner shall be free of
12        rock and constructed with soil having a minimum
13        thickness of 12 inches after compaction covering the
14        entire bottom and interior sides of the pit.
15        (3) Fresh water may be stored in tanks or pits at the
16    election of the operator.
17        (4) Tanks required under this subsection must be
18    above-ground tanks that are closed, watertight, and will
19    resist corrosion. The permittee shall routinely inspect
20    the tanks for corrosion.
21        (5) Hydraulic fracturing fluids and hydraulic
22    fracturing flowback must be removed from the well site
23    within 60 days after completion of high volume horizontal
24    fracturing operations, except that any excess hydraulic
25    fracturing flowback captured for temporary storage in a
26    reserve pit as provided in paragraph (2) of this subsection

 

 

09800HB2615ham001- 55 -LRB098 10864 MGM 43076 a

1    must be removed from the well site within 7 days.
2        (6) Tanks, piping, and conveyances, including valves,
3    must be constructed of suitable materials, be of sufficient
4    pressure rating, be able to resist corrosion, and be
5    maintained in a leak-free condition. Fluid transfer
6    operations from tanks to tanker trucks must be supervised
7    at the truck and at the tank if the tank is not visible to
8    the truck operator from the truck. During transfer
9    operations, all interconnecting piping must be supervised
10    if not visible to transfer personnel at the truck and tank.
11        (7) Hydraulic fracturing flowback must be tested for
12    volatile organic chemicals, semi-volatile organic
13    chemicals, inorganic chemicals, heavy metals, and
14    naturally occurring radioactive material prior to removal
15    from the site. Testing shall occur once per well site and
16    the analytical results shall be filed with the Department
17    and the Agency, and provided to the liquid oilfield waste
18    transportation and disposal operators. Prior to plugging
19    and site restoration, the ground adjacent to the storage
20    tanks and any hydraulic fracturing flowback reserve pit
21    must be measured for radioactivity.
22        (8) Hydraulic fracturing flowback may only be disposed
23    of by injection into a Class II injection well that is
24    below interface between fresh water and naturally
25    occurring Class IV groundwater. Produced water may be
26    disposed of by injection in a permitted enhanced oil

 

 

09800HB2615ham001- 56 -LRB098 10864 MGM 43076 a

1    recovery operation. Hydraulic fracturing flowback and
2    produced water may be treated and recycled for use in
3    hydraulic fracturing fluid for high volume horizontal
4    hydraulic fracturing operations.
5        (9) Discharge of hydraulic fracturing fluids,
6    hydraulic fracturing flowback, and produced water into any
7    surface water or water drainage way is prohibited.
8        (10) Transport of all hydraulic fracturing fluids,
9    hydraulic fracturing flowback, and produced water by
10    vehicle for disposal must be undertaken by a liquid
11    oilfield waste hauler permitted by the Department under
12    Section 8c of the Illinois Oil and Gas Act. The liquid
13    oilfield waste hauler transporting hydraulic fracturing
14    fluids, hydraulic fracturing flowback, or produced water
15    under this Act shall comply with all laws, rules, and
16    regulations concerning liquid oilfield waste.
17        (11) Drill cuttings, drilling fluids, and drilling
18    wastes not containing oil-based mud or polymer-based mud
19    may be stored in tanks or pits. Pits used to store
20    cuttings, fluids, and drilling wastes from wells not using
21    fresh water mud shall be subject to the construction
22    standards identified in (2) of this Section. Drill cuttings
23    not contaminated with oil-based mud or polymer-based mud
24    may be disposed of onsite subject to the approval of the
25    Department. Drill cuttings contaminated with oil-based mud
26    or polymer-based mud shall not be disposed of on site.

 

 

09800HB2615ham001- 57 -LRB098 10864 MGM 43076 a

1    Annular disposal of drill cuttings or fluid is prohibited.
2        (12) Any release of hydraulic fracturing fluid,
3    hydraulic fracturing additive, or hydraulic fracturing
4    flowback, used or generated during or after high volume
5    horizontal hydraulic fracturing operations shall be
6    immediately cleaned up and remediated pursuant to
7    Department requirements. Any release of hydraulic
8    fracturing fluid or hydraulic fracturing flowback in
9    excess of 1 barrel, shall be reported to the Department.
10    Any release of a hydraulic fracturing additive shall be
11    reported to the Department in accordance with the
12    appropriate reportable quantity thresholds established
13    under the federal Emergency Planning and Community
14    Right-to-Know Act as published in the Code of Federal
15    Regulations (CFR), 40 CFR Parts 355, 370, and 372, the
16    federal Comprehensive Environmental Response,
17    Compensation, and Liability Act as published in 40 CFR Part
18    302, and subsection (r) of Section 112 of the Federal Clean
19    Air Act as published in 40 CFR Part 68. Any release of
20    produced water in excess of 5 barrels shall be cleaned up,
21    remediated, and reported pursuant to Department
22    requirements.
23        (13) Secondary containment for tanks required under
24    this subsection and additive staging areas is required.
25    Secondary containment measures may include, as deemed
26    appropriate by the Department, one or a combination of the

 

 

09800HB2615ham001- 58 -LRB098 10864 MGM 43076 a

1    following: dikes, liners, pads, impoundments, curbs,
2    sumps, or other structures or equipment capable of
3    containing the substance. Any secondary containment must
4    be sufficient to contain 110% of the total capacity of the
5    single largest container or tank within a common
6    containment area. No more than one hour before initiating
7    any stage of the high volume horizontal hydraulic
8    fracturing operations, all secondary containment must be
9    visually inspected to ensure all structures and equipment
10    are in place and in proper working order. The results of
11    this inspection must be recorded and documented by the
12    operator, and available to the Department upon request.
13        (14) A report on the transportation and disposal of the
14    hydraulic fracturing fluids and hydraulic fracturing
15    flowback shall be prepared and included in the well file.
16    The report must include the amount of fluids transported,
17    identification of the company that transported the fluids,
18    the destination of the fluids, and the method of disposal.
19        (15) Operators operating wells permitted under this
20    Act must submit an annual report to the Department
21    detailing the management of any produced water associated
22    with the permitted well. The report shall be due to the
23    Department no later than April 30th of each year and shall
24    provide information on the operator's management of any
25    produced water for the prior calendar year. The report
26    shall contain information relative to the amount of

 

 

09800HB2615ham001- 59 -LRB098 10864 MGM 43076 a

1    produced water the well permitted under this Act produced,
2    the method by which the produced water was disposed, and
3    the destination where the produced water was disposed in
4    addition to any other information the Department
5    determines is necessary by rule.
6    (d) Hydraulic fracturing fluid shall be confined to the
7targeted formation designated in the permit. If the hydraulic
8fracturing fluid or hydraulic fracturing flowback are
9migrating into the freshwater zone or to the surface from the
10well in question or from other wells, the permittee shall
11immediately notify the Department and shut in the well until
12remedial action that prevents the fluid migration is completed.
13The permittee shall obtain the approval of the Department prior
14to resuming operations.
15    (e) Emissions controls.
16        (1) This subsection applies to all horizontal wells
17    that are completed with high volume horizontal hydraulic
18    fracturing.
19        (2) Except as otherwise provided in paragraph (8) of
20    this subsection (e), permittees shall be responsible for
21    managing gas and hydrocarbon fluids produced during the
22    flowback period by routing recovered hydrocarbon fluids to
23    one or more storage vessels or re-injecting into the well
24    or another well, and routing recovered natural gas into a
25    flow line or collection system, re-injecting the gas into
26    the well or another well, using the gas as an on-site fuel

 

 

09800HB2615ham001- 60 -LRB098 10864 MGM 43076 a

1    source, or using the gas for another useful purpose that a
2    purchased fuel or raw material would serve, with no direct
3    release to the atmosphere.
4        (3) If it is technically infeasible or economically
5    unreasonable to minimize emissions associated with the
6    venting of hydrocarbon fluids and natural gas during the
7    flowback period using the methods specified in paragraph
8    (2) of this subsection (e), the permittee shall capture and
9    direct the emissions to a completion combustion device,
10    except in conditions that may result in a fire hazard or
11    explosion, or where high heat emissions from a completion
12    combustion device may negatively impact waterways.
13    Completion combustion devices must be equipped with a
14    reliable continuous ignition source over the duration of
15    the flowback period.
16        (4) Except as otherwise provided in paragraph (8) of
17    this subsection (e), permittees shall be responsible for
18    minimizing the emissions associated with venting of
19    hydrocarbon fluids and natural gas during the production
20    phase by:
21            (A) routing the recovered fluids into storage
22        vessels and (i) routing the recovered gas into a gas
23        gathering line, collection system, or to a generator
24        for onsite energy generation, providing that gas to the
25        surface owner of the well site for use for heat or
26        energy generation, or (ii) using another method other

 

 

09800HB2615ham001- 61 -LRB098 10864 MGM 43076 a

1        than venting; and
2            (B) employing sand traps, surge vessels,
3        separators, and tanks as soon as practicable during
4        cleanout operations to safely maximize resource
5        recovery and minimize releases to the environment.
6        (5) If the permittee establishes that it is technically
7    infeasible or economically unreasonable to minimize
8    emissions associated with the venting of hydrocarbon
9    fluids and natural gas during production using the methods
10    specified in paragraph (4) of this subsection (e), the
11    Department shall require the permittee to capture and
12    direct any natural gas produced during the production phase
13    to a flare. Any flare used pursuant to this paragraph shall
14    be equipped with a reliable continuous ignition source over
15    the duration of production. In order to establish technical
16    infeasibility or economic unreasonableness under this
17    paragraph (5), the permittee must demonstrate, for each
18    well site on an annual basis, that taking the actions
19    listed in paragraph (4) of this subsection (e) are not cost
20    effective based on a site-specific analysis. Permittees
21    that use a flare during the production phase for operations
22    other than emergency conditions shall file an updated
23    site-specific analysis annually with the Department. The
24    analysis shall be due one year from the date of the
25    previous submission and shall detail whether any changes
26    have occurred that alter the technical infeasibility or

 

 

09800HB2615ham001- 62 -LRB098 10864 MGM 43076 a

1    economic unreasonableness of the permittee to reduce their
2    emissions in accordance with paragraph (4) of this
3    subsection (e).
4        (6) Uncontrolled emissions exceeding 6 tons per year
5    from storage tanks shall be recovered and routed to a flare
6    that is designed in accordance with 40 CFR 60.18 and is
7    certified by the manufacturer of the device. The permittee
8    shall maintain and operate the flare in accordance with
9    manufacturer specifications. Any flare used under this
10    paragraph must be equipped with a reliable continuous
11    ignition source over the duration of production.
12        (7) The Department may approve an exemption that waives
13    the flaring requirements of paragraphs (5) and (6) of this
14    subsection (e) only if the permittee demonstrates that the
15    use of the flare will pose a significant risk of injury or
16    property damage and that alternative methods of collection
17    will not threaten harm to the environment. In determining
18    whether to approve a waiver, the Department shall consider
19    the quantity of casinghead gas produced, the topographical
20    and climatological features at the well site, and the
21    proximity of agricultural structures, crops, inhabited
22    structures, public buildings, and public roads and
23    railways.
24        (8) For each wildcat well, delineation well, or low
25    pressure well, permittees shall be responsible for
26    minimizing the emissions associated with venting of

 

 

09800HB2615ham001- 63 -LRB098 10864 MGM 43076 a

1    hydrocarbon fluids and natural gas during the flowback
2    period and production phase by capturing and directing the
3    emissions to a completion combustion device during the
4    flowback period and to a flare during the production phase,
5    except in conditions that may result in a fire hazard or
6    explosion, or where high heat emissions from a completion
7    combustion device or flare may negatively impact
8    waterways. Completion combustion devices and flares shall
9    be equipped with a reliable continuous ignition source over
10    the duration of the flowback period and the production
11    phase, as applicable.
12        (9) On or after July 1, 2015, all flares used under
13    paragraphs (5) and (8) of this subsection (e) shall (i)
14    operate with a combustion efficiency of at least 98%, in
15    accordance with 40 CFR 60.18; and (ii) be certified by the
16    manufacturer of the device. The permittee shall maintain
17    and operate the flare in accordance with manufacturer
18    specifications.
19        (10) Permittees shall employ practices for control of
20    fugitive dust related to their operations. These practices
21    shall include, but are not limited to, the use of speed
22    restrictions, regular road maintenance, and restriction of
23    construction activity during high-wind days. Additional
24    management practices such as road surfacing, wind breaks
25    and barriers, or automation of wells to reduce truck
26    traffic may also be required by the Department if

 

 

09800HB2615ham001- 64 -LRB098 10864 MGM 43076 a

1    technologically feasible and economically reasonable to
2    minimize fugitive dust emissions.
3        (11) Permittees shall record and report to the
4    Department on an annual basis the amount of gas flared or
5    vented from each high volume horizontal hydraulic
6    fracturing well. Three years after the effective date of
7    the first high-volume horizontal hydraulic fracturing well
8    permit issued by the Department, and every 3 years
9    thereafter, the Department shall prepare a report that
10    analyzes the amount of gas that has been flared or vented
11    and make recommendations to the General Assembly on whether
12    steps should be taken to reduce the amount of gas that is
13    being flared or vented in this State.
14    (f) High volume horizontal hydraulic fracturing operations
15completion report. Within 60 calendar days after the conclusion
16of high volume horizontal hydraulic fracturing operations, the
17operator shall file a high volume horizontal hydraulic
18fracturing operations completion report with the Department. A
19copy of each completion report submitted to the Department
20shall be provided by the Department to the Illinois State
21Geological Survey. The completion reports required by this
22Section shall be considered public information and shall be
23made available on the Department's website. The high volume
24horizontal hydraulic fracturing operations completion report
25shall contain the following information:
26        (1) the permittee name as listed in the permit

 

 

09800HB2615ham001- 65 -LRB098 10864 MGM 43076 a

1    application;
2        (2) the dates of the high volume horizontal hydraulic
3    fracturing operations;
4        (3) the county where the well is located;
5        (4) the well name and Department reference number;
6        (5) the total water volume used in the high volume
7    horizontal hydraulic fracturing operations of the well,
8    and the type and total volume of the base fluid used if
9    something other than water;
10        (6) each source from which the water used in the high
11    volume horizontal hydraulic fracturing operations was
12    drawn, and the specific location of each source, including,
13    but not limited to, the name of the county and latitude and
14    longitude coordinates;
15        (7) the quantity of hydraulic fracturing flowback
16    recovered from the well;
17        (8) a description of how hydraulic fracturing flowback
18    recovered from the well was disposed and, if applicable,
19    reused;
20        (9) a chemical disclosure report identifying each
21    chemical and proppant used in hydraulic fracturing fluid
22    for each stage of the hydraulic fracturing operations
23    including the following:
24            (A) the total volume of water used in the hydraulic
25        fracturing treatment of the well or the type and total
26        volume of the base fluid used in the hydraulic

 

 

09800HB2615ham001- 66 -LRB098 10864 MGM 43076 a

1        fracturing treatment, if something other than water;
2            (B) each hydraulic fracturing additive used in the
3        hydraulic fracturing fluid, including the trade name,
4        vendor, a brief descriptor of the intended use or
5        function of each hydraulic fracturing additive, and
6        the Material Safety Data Sheet (MSDS), if applicable;
7            (C) each chemical intentionally added to the base
8        fluid, including for each chemical, the Chemical
9        Abstracts Service number, if applicable; and
10            (D) the actual concentration, in percent by mass,
11        of each chemical intentionally added to the base fluid;
12        (10) all pressures recorded during the high volume
13    horizontal hydraulic fracturing operations; and
14        (11) any other reasonable or pertinent information
15    related to the conduct of the high volume horizontal
16    hydraulic fracturing operations the Department may request
17    or require by administrative rule.
 
18    Section 1-77. Chemical disclosure; trade secret
19protection.
20    (a) If the chemical disclosure information required by
21paragraph (8) of subsection (b) of Section 1-35 of this Act is
22not submitted at the time of permit application, then the
23permittee, applicant, or person who will perform high volume
24horizontal hydraulic fracturing operations at the well shall
25submit this information to the Department in electronic format

 

 

09800HB2615ham001- 67 -LRB098 10864 MGM 43076 a

1no less than 21 calendar days prior to performing the high
2volume horizontal hydraulic fracturing operations. The
3permittee shall not cause or allow any stimulation of the well
4if it is not in compliance with this Section. Nothing in this
5Section shall prohibit the person performing high volume
6horizontal hydraulic fracturing operations from adjusting or
7altering the contents of the fluid during the treatment process
8to respond to unexpected conditions, as long as the permittee
9or the person performing the high volume horizontal hydraulic
10fracturing operations notifies the Department by electronic
11mail within 24 hours of the departure from the initial
12treatment design and includes a brief explanation of the reason
13for the departure.
14    (b) No permittee shall use the services of another person
15to perform high volume horizontal hydraulic fracturing
16operations unless the person is in compliance with this
17Section.
18    (c) Any person performing high volume horizontal hydraulic
19fracturing operations within this State shall:
20        (1) be authorized to do business in this State; and
21        (2) maintain and disclose to the Department separate
22    and up-to-date master lists of:
23            (A) the base fluid to be used during any high
24        volume horizontal hydraulic fracturing operations
25        within this State;
26            (B) all hydraulic fracturing additives to be used

 

 

09800HB2615ham001- 68 -LRB098 10864 MGM 43076 a

1        during any high volume horizontal hydraulic fracturing
2        operations within this State; and
3            (C) all chemicals and associated Chemical Abstract
4        Service numbers to be used in any high volume
5        horizontal hydraulic fracturing operations within this
6        State.
7    (d) Persons performing high volume horizontal hydraulic
8fracturing operations are prohibited from using any base fluid,
9hydraulic fracturing additive, or chemical not listed on their
10master lists disclosed under paragraph (2) of subsection (c) of
11this Section.
12    (e) The Department shall assemble and post up-to-date
13copies of the master lists it receives under paragraph (2) of
14subsection (c) of this Section on its website in accordance
15with Section 1-110 of this Act.
16    (f) Where an applicant, permittee, or the person performing
17high volume horizontal hydraulic fracturing operations
18furnishes chemical disclosure information to the Department
19under this Section, Section 1-35, or Section 1-75 of this Act
20under a claim of trade secret, the applicant, permittee, or
21person performing high volume horizontal hydraulic fracturing
22operations shall submit redacted and un-redacted copies of the
23documents containing the information to the Department and the
24Department shall use the redacted copies when posting materials
25on its website.
26    (g) Upon submission or within 5 calendar days of submission

 

 

09800HB2615ham001- 69 -LRB098 10864 MGM 43076 a

1of chemical disclosure information to the Department under this
2Section, Section 1-35, or Section 1-75 of this Act under a
3claim of trade secret, the person that claimed trade secret
4protection shall provide a justification of the claim
5containing the following: a detailed description of the
6procedures used by the person to safeguard the information from
7becoming available to persons other than those selected by the
8person to have access to the information for limited purposes;
9a detailed statement identifying the persons or class of
10persons to whom the information has been disclosed; a
11certification that the person has no knowledge that the
12information has ever been published or disseminated or has
13otherwise become a matter of general public knowledge; a
14detailed discussion of why the person believes the information
15to be of competitive value; and any other information that
16shall support the claim.
17    (h) Chemical disclosure information furnished under this
18Section, Section 1-35, or Section 1-75 of this Act under a
19claim of trade secret shall be protected from disclosure as a
20trade secret if the Department determines that the statement of
21justification demonstrates that:
22        (1) the information has not been published,
23    disseminated, or otherwise become a matter of general
24    public knowledge; and
25        (2) the information has competitive value.
26    There is a rebuttable presumption that the information has

 

 

09800HB2615ham001- 70 -LRB098 10864 MGM 43076 a

1not been published, disseminated, or otherwise become a matter
2of general public knowledge if the person has taken reasonable
3measures to prevent the information from becoming available to
4persons other than those selected by the person to have access
5to the information for limited purposes and the statement of
6justification contains a certification that the person has no
7knowledge that the information has ever been published,
8disseminated, or otherwise become a matter of general public
9knowledge.
10    (i) Denial of a trade secret request under this Section
11shall be appealable under the Administrative Review Law.
12    (j) A person whose request to inspect or copy a public
13record is denied, in whole or in part, because of a grant of
14trade secret protection may file a request for review with the
15Public Access Counselor under Section 9.5 of the Freedom of
16Information Act or for injunctive or declaratory relief under
17Section 11 of the Freedom of Information Act for the purpose of
18reviewing whether the Department properly determined that the
19trade secret protection should be granted.
20    (k) Except as otherwise provided in subsections (l) and (m)
21of this Section, the Department must maintain the
22confidentiality of chemical disclosure information furnished
23under this Section, Section 1-35, or Section 1-75 of this Act
24under a claim of trade secret, until the Department receives
25official notification of a final order by a reviewing body with
26proper jurisdiction that is not subject to further appeal

 

 

09800HB2615ham001- 71 -LRB098 10864 MGM 43076 a

1rejecting a grant of trade secret protection for that
2information.
3    (l) The Department shall adopt rules for the provision of
4information furnished under a claim of trade secret to a health
5professional who states a need for the information and
6articulates why the information is needed. The health
7professional may share that information with other persons as
8may be professionally necessary, including, but not limited to,
9the affected patient, other health professionals involved in
10the treatment of the affected patient, the affected patient's
11family members if the affected patient is unconscious, unable
12to make medical decisions, or is a minor, the Centers for
13Disease Control, and other government public health agencies.
14Except as otherwise provided in this Section, any recipient of
15the information shall not use the information for purposes
16other than the health needs asserted in the request and shall
17otherwise maintain the information as confidential.
18Information so disclosed to a health professional shall in no
19way be construed as publicly available. The holder of the trade
20secret may request a confidentiality agreement consistent with
21the requirements of this Section from all health professionals
22to whom the information is disclosed as soon as circumstances
23permit. The rules adopted by the Department shall also
24establish procedures for providing the information in both
25emergency and non-emergency situations.
26    (m) In the event of a release of hydraulic fracturing

 

 

09800HB2615ham001- 72 -LRB098 10864 MGM 43076 a

1fluid, a hydraulic fracturing additive, or hydraulic
2fracturing flowback, and when necessary to protect public
3health or the environment, the Department may disclose
4information furnished under a claim of trade secret to the
5relevant county public health director or emergency manager,
6the relevant fire department chief, the Director of the
7Illinois Department of Public Health, the Director of the
8Illinois Department of Agriculture, and the Director of the
9Illinois Environmental Protection Agency upon request by that
10individual. The Director of the Illinois Department of Public
11Health, and the Director of the Illinois Environmental
12Protection Agency, and the Director of the Illinois Department
13of Agriculture may disclose this information to staff members
14under the same terms and conditions as apply to the Director of
15Natural Resources. Except as otherwise provided in this
16Section, any recipient of the information shall not use the
17information for purposes other than to protect public health or
18the environment and shall otherwise maintain the information as
19confidential. Information disclosed to staff shall in no way be
20construed as publicly available. The holder of the trade secret
21information may request a confidentiality agreement consistent
22with the requirements of this Section from all persons to whom
23the information is disclosed as soon as circumstances permit.
 
24    Section 1-80. Water quality monitoring.
25    (a) Each application for a high volume horizontal hydraulic

 

 

09800HB2615ham001- 73 -LRB098 10864 MGM 43076 a

1fracturing permit shall provide the Department with a work plan
2to ensure accurate and complete sampling and testing as
3required under this Section. The work plan shall ensure
4compliance with the requirements of this Section and include,
5at a minimum, the following:
6        (1) information identifying all water sources within
7    the range of testing under this Section;
8        (2) a sampling plan and protocol, including
9    notification to the Department at least 7 calendar days
10    prior to sample collection;
11        (3) the name and contact information of an independent
12    third party under the supervision of a professional
13    engineer or professional geologist that shall be
14    designated to conduct sampling to establish a baseline as
15    provided for under subsection (b) of this Section;
16        (4) the name and contact information of an independent
17    third party under the supervision of a professional
18    engineer or professional geologist that shall be
19    designated to conduct sampling to establish compliance
20    with monitoring as provided within subsection (c) of this
21    Section;
22        (5) the name and contact information of an independent
23    testing laboratory, certified to perform the required
24    laboratory method, to conduct the analysis required under
25    subsections (b) and (c) of this Section;
26        (6) proof of access and the right to test within the

 

 

09800HB2615ham001- 74 -LRB098 10864 MGM 43076 a

1    area for testing prescribed within subsection (b) of this
2    Section during the duration of high volume horizontal
3    hydraulic fracturing operations covered under the permit
4    application, and copies of any non-disclosure agreements
5    made under subsection (d) of this Section; and
6        (7) identification of practicable contingency
7    measures, including provision for alternative drinking
8    water supplies, which could be implemented in the event of
9    pollution or diminution of a water source as provided for
10    in Section 1-83.
11    (b) Prior to conducting high volume horizontal hydraulic
12fracturing operations on a well, a permittee shall retain an
13independent third party, as required within paragraph (3) of
14subsection (a) of this Section, and shall conduct baseline
15water quality sampling of all water sources within 1,500 feet
16of the well site prior to any fracturing activities. Where (i)
17there are no groundwater wells within 1,500 feet of a well
18site, or access to groundwater wells within 1,500 feet of the
19well site has been denied under subsection (d) of this Section,
20and (ii) the proposed well site is located within 1,500 feet
21from any portion of an aquifer, the permittee shall conduct
22sampling of the aquifer at the closest groundwater well with
23access to the aquifer to which the permittee has not been
24denied access under subsection (d) of this Section.
25Installation of a groundwater monitoring well is not required
26to satisfy the sampling requirements of this Section. The

 

 

09800HB2615ham001- 75 -LRB098 10864 MGM 43076 a

1samples collected by the independent third party, under the
2supervision of a professional engineer or professional
3geologist, shall be analyzed by an independent testing
4laboratory in accordance with paragraph (4) of subsection (a)
5of this Section. Testing shall be done by collection of a
6minimum of 3 samples for each water source required to be
7tested under this Section. The permittee shall, within 7
8calendar days after receipt of results of tests conducted under
9this subsection, submit the results to the Department or to the
10owner of the water source under a non-disclosure agreement
11under subsection (d) of this Section. The Department shall post
12the results on its website within 7 calendar days after
13receipt. The results shall, at a minimum, include a detailed
14description of the sampling and testing conducted under this
15subsection, the chain of custody of the samples, and quality
16control of the testing.
17    (c) After baseline tests are conducted under subsection (b)
18of this Section and following issuance of a permit by the
19Department, the permittee shall have all water sources
20subjected to sampling under subsection (b) of this Section. All
21water sources shall be sampled and tested in the same manner 6
22months, 18 months, and 30 months after the high volume
23horizontal hydraulic fracturing operations have been
24completed. Sampling of a water source under this subsection is
25not required if the water source was sampled under this
26subsection or subsection (b) within the previous month. The

 

 

09800HB2615ham001- 76 -LRB098 10864 MGM 43076 a

1permittee shall notify the Department at least 7 calendar days
2prior to taking the sample. The permittee shall, within 7
3calendar days after receipt of results of tests conducted under
4this subsection (c), submit the results to the Department or to
5the owner of the water source pursuant to a non-disclosure
6agreement under subsection (d) of this Section. The results
7shall include, at a minimum, a detailed description of the
8sampling and testing conducted under this subsection, the chain
9of custody of the samples, and quality control of the testing.
10    (d) Sampling of private water wells or ponds wholly
11contained within private property shall not be required where
12the owner of the private property declines, expressly and in
13writing, to provide access or permission for sampling. If the
14owner of the private property declines to provide proof of his
15or her refusal to allow access in writing, the operator shall
16provide the Department evidence as to the good faith efforts
17that were made to secure the required documentation. Permits
18issued under this Act cannot be denied if the owner of the
19private property declines to provide proof of his or her
20refusal to allow access in writing and the permittee provides
21evidence that good faith efforts were made to gain access for
22the purposes of conducting tests. The owners of private
23property may condition access or permission for sampling of a
24private water well or pond wholly within the property or a
25portion of any perennial stream or river that flows through the
26property under a non-disclosure agreement, which must include

 

 

09800HB2615ham001- 77 -LRB098 10864 MGM 43076 a

1the following terms and conditions:
2        (1) the permittee shall provide the results of the
3    water quality testing to the property owners;
4        (2) the permittee shall retain the results of the water
5    quality testing until at least one year after completion of
6    all monitoring under this Section for review by the
7    Department upon request;
8        (3) the permittee shall not file with the Department
9    the results of the water quality testing, except under
10    paragraph (4) of subsection (d) of this Section; and
11        (4) the permittee shall notify the Department within 7
12    calendar days of its receipt of the water quality data
13    where any testing under subsection (c) of this Section
14    indicates that concentrations exceed the standards or
15    criteria referenced in the definition of pollution or
16    diminution under Section 1-5 of this Act.
17    (e) Each set of samples collected under subsections (b) and
18(c) of this Section shall include analyses for:
19        (1) pH;
20        (2) total dissolved solids, dissolved methane,
21    dissolved propane, dissolved ethane, alkalinity, and
22    specific conductance;
23        (3) chloride, sulfate, arsenic, barium, calcium,
24    chromium, iron, magnesium, selenium, cadmium, lead,
25    manganese, mercury, and silver;
26        (4) BTEX; and

 

 

09800HB2615ham001- 78 -LRB098 10864 MGM 43076 a

1        (5) gross alpha and beta particles to determine the
2    presence of any naturally occurring radioactive materials.
3    Sampling shall, at a minimum, be consistent with the work
4plan and allow for a determination of whether any hydraulic
5fracturing additive or other contaminant has caused pollution
6or diminution for purposes of Sections 1-83 and 1-85 of this
7Act.
 
8    Section 1-83. Order authority.
9    (a) Any person who has reason to believe they have incurred
10pollution or diminution of a water source as a result of a high
11volume horizontal hydraulic fracturing treatment of a well may
12notify the Department and request that an investigation be
13conducted.
14    (b) Within 30 calendar days after notification, the
15Department shall initiate the investigation of the claim and
16make a reasonable effort to reach a determination within 180
17calendar days after notification. The Department may contact
18the Agency to seek the Agency's assistance in water quality
19sampling. The Agency may seek cost recovery under subsection
20(e) of Section 1-87 of this Act and recover all costs for
21samples taken for the investigation under this Section.
22    (c) Any person conducting or who has conducted high volume
23horizontal hydraulic fracturing operations shall supply any
24information requested by the Department to assist the
25Department. The Department shall give due consideration to any

 

 

09800HB2615ham001- 79 -LRB098 10864 MGM 43076 a

1information submitted during the course of the investigation.
2    (d) If sampling results or other information obtained as
3part of the investigation or the results of tests conducted
4under subsection (c) of Section 1-80 of this Act indicate that
5concentrations exceed the standards or criteria referenced by
6pollution or diminution under Section 1-5 of this Act, the
7Department shall issue an order to the permittee as necessary
8to require permanent or temporary replacement of a water
9source. In addition to any other penalty available under the
10law and consistent with the Department's order, the permittee
11shall restore or replace the affected supply with an
12alternative source of water adequate in quantity and quality
13for the purposes served by the water source. The quality of a
14restored or replaced water source shall meet or exceed the
15quality of the original water source based upon the results of
16the baseline test results under subsection (b) of Section 1-80
17for that water source, or other available information. The
18Department may require the permittee to take immediate action,
19including but not limited to, repair, replacement, alteration,
20or prohibition of operation of equipment permitted by the
21Department. The Department may issue conditions within any
22order to protect the public health or welfare or the
23environment.
24    (e) Within 15 calendar days after a determination has been
25made regarding the pollution or diminution, the Department
26shall provide notice of its findings and the orders, if any, to

 

 

09800HB2615ham001- 80 -LRB098 10864 MGM 43076 a

1all persons that use the water source for domestic,
2agricultural, industrial, or any other legitimate beneficial
3uses.
4    (f) Upon issuance of an Order or a finding of pollution or
5diminution under subsection (d) of this Section, the Department
6shall contact the Agency and forward all information from the
7investigation to the Agency. The Agency shall investigate the
8potential for violations as designated within Section 1-87 of
9this Act.
10    (g) Reports of potential cases of water pollution that may
11be associated with high volume horizontal hydraulic fracturing
12operations may be submitted electronically. The Department
13shall establish a format for these reports to be submitted
14through the website developed under Section 1-110 of this Act.
15The Department shall electronically provide these reports to
16the Agency.
17    (h) The Department shall publish, on its website, lists of
18confirmed cases of pollution or diminution that result from
19high volume horizontal hydraulic fracturing operations. This
20information shall be searchable by county.
21    (i) Nothing in this Section shall prevent the Department
22from issuing a cessation order under Section 8a of the Illinois
23Oil and Gas Act.
 
24    Section 1-85. Presumption of pollution or diminution.
25    (a) This Section establishes a rebuttable presumption for

 

 

09800HB2615ham001- 81 -LRB098 10864 MGM 43076 a

1the purposes of evidence and liability under State law
2regarding claims of pollution or diminution of a water source
3and for use regarding the investigation and order authority
4under Section 1-83.
5    (b) Unless rebutted by a defense established in subsection
6(c) of this Section, it shall be presumed that any person
7conducting or who has conducted high volume horizontal
8hydraulic fracturing operations shall be liable for pollution
9or diminution of a water supply if:
10        (1) the water source is within 1,500 feet of the well
11    site;
12        (2) water quality data showed no pollution or
13    diminution prior to the start of high volume horizontal
14    hydraulic fracturing operations; and
15        (3) the pollution or diminution occurred during high
16    volume horizontal hydraulic fracturing operations or no
17    more than 30 months after the completion of the high volume
18    horizontal hydraulic fracturing operations.
19    (c) To rebut the presumption established under this
20Section, a person presumed responsible must affirmatively
21prove by clear and convincing evidence any of the following:
22        (1) the water source is not within 1,500 feet of the
23    well site;
24        (2) the pollution or diminution occurred prior to high
25    volume horizontal hydraulic fracturing operations or more
26    than 30 months after the completion of the high volume

 

 

09800HB2615ham001- 82 -LRB098 10864 MGM 43076 a

1    horizontal hydraulic fracturing operations; or
2        (3) the pollution or diminution occurred as the result
3    of an identifiable cause other than the high volume
4    horizontal hydraulic fracturing operations.
 
5    Section 1-87. Water quality investigation and enforcement.
6    (a) No person shall cause or allow high volume horizontal
7hydraulic fracturing operations permitted under this Act to
8violate Section 12 of the Illinois Environmental Protection Act
9or surface water or groundwater regulations adopted under the
10Illinois Environmental Protection Act.
11    (b) The Agency shall have the duty to investigate
12complaints that activities under this Act have caused a
13violation of Section 12 of the Illinois Environmental
14Protection Act or surface or groundwater rules adopted under
15the Illinois Environmental Protection Act. Any action taken by
16the Agency in enforcing these violations shall be taken under
17and consistent with the Illinois Environmental Protection Act,
18including but not limited to, the Agency's authority to seek a
19civil or criminal cause of action under that Act. The test
20results under subsections (b) and (c) of Section 1-80 of this
21Act may be considered by the Agency during an investigation
22under this Section.
23    (c) A person who has reason to believe they have incurred
24contamination of a water source as a result of high volume
25horizontal hydraulic fracturing may notify the Agency and

 

 

09800HB2615ham001- 83 -LRB098 10864 MGM 43076 a

1request an investigation be conducted. The Agency shall forward
2this request to the Department for consideration of an
3investigation under Section 1-83 of this Act. If the Agency is
4provided with notice under subsection (f) of Section 1-83, the
5Agency shall conduct an investigation to determine whether
6pollution or diminution is continuing to occur at the location
7subject to the order, as well as locations identified by the
8Department or at any other water source within 1,500 feet of
9the well site. Any person conducting or who has conducted high
10volume horizontal hydraulic fracturing operations shall supply
11any information requested to assist the Agency in its
12investigation. The Agency shall give due consideration to any
13information submitted during the course of the investigation.
14    (d) Pollution or diminution is a violation of this Act and
15may be pursued by the Department subject to the procedures and
16remedies under Sections 1-100 and 1-105 of this Act.
17    (e) If an Agency investigation under Section 1-83 or
18subsection (c) of this Section confirms that the cause of the
19pollution, diminution, or water pollution is attributable to
20high volume horizontal hydraulic fracturing operations, in
21addition to any other relief available under law, the permittee
22shall be required to reimburse the costs and reasonable
23expenses incurred by the Agency for all activities related to
24the investigation and cleanup. These costs shall include, but
25not be limited to, inspections, investigations, analyses,
26personnel, direct and indirect costs, studies, assessments,

 

 

09800HB2615ham001- 84 -LRB098 10864 MGM 43076 a

1reports, and review and evaluation of that data, as well as
2costs under the Agency's review of whether the quality of a
3restored or replaced water supply meets or exceeds the quality
4of the water supply before it was affected by the permittee.
5Costs shall be reimbursed to the Agency by the permittee within
630 calendar days after receipt of a written request for
7reimbursement by the Agency. For all costs that remain unpaid
8following 30 calendar days after receipt of a written request
9for reimbursement, the Agency may institute a civil action for
10cost recovery under subsection (e) of Section 1-101 of this
11Act. Failure to reimburse the Agency within 30 calendar days
12after receipt of the written request for reimbursement is a
13violation of this Act. Reimbursement of costs collected under
14this subsection shall be deposited by the Agency into the
15Illinois Clean Water Fund.
 
16    Section 1-95. Plugging; restoration.
17    (a) The permittee shall perform and complete plugging of
18the well and restoration of the well site in accordance with
19the Illinois Oil and Gas Act and any and all rules adopted
20thereunder. The permittee shall bear all costs related to
21plugging of the well and reclamation of the well site. If the
22permittee fails to plug the well in accordance with this
23Section, the owner of the well shall be responsible for
24complying with this Section.
25    (b) Prior to conducting high volume horizontal hydraulic

 

 

09800HB2615ham001- 85 -LRB098 10864 MGM 43076 a

1fracturing operations at a well site, the permittee shall cause
2to be plugged all previously unplugged well bores within 750
3feet of any part of the horizontal well bore that penetrated
4within 400 vertical feet of the formation that will be
5stimulated as part of the high volume horizontal hydraulic
6fracturing operations.
7    (c) For well sites where high volume horizontal hydraulic
8fracturing operations were permitted to occur, the operator
9shall restore any lands used by the operator other than the
10well site and production facility to a condition as closely
11approximating the pre-drilling conditions that existed before
12the land was disturbed for any stage of site preparation
13activities, drilling, and high volume horizontal hydraulic
14fracturing operations. Restoration shall be commenced within 6
15months of completion of the well site and completed within 12
16months. Restoration shall include, but is not limited to,
17repair of tile lines, repair of fences and barriers, mitigation
18of soil compaction and rutting, application of fertilizer or
19lime to restore the fertility of disturbed soil, and repair of
20soil conservation practices such as terraces and grassed
21waterways.
22    (d) Unless contractually agreed to the contrary by the
23permittee and surface owner, the permittee shall restore the
24well site and production facility in accordance with the
25applicable restoration requirements in subsection (c) of this
26Section and shall remove all equipment and materials involved

 

 

09800HB2615ham001- 86 -LRB098 10864 MGM 43076 a

1in site preparation, drilling, and high volume horizontal
2hydraulic fracturing operations, including tank batteries,
3rock and concrete pads, oil field debris, injection and flow
4lines at or above the surface, electric power lines and poles
5extending on or above the surface, tanks, fluids, pipes at or
6above the surface, secondary containment measures, rock or
7concrete bases, drilling equipment and supplies, and any and
8all other equipment, facilities, or materials used during any
9stage of site preparation work, drilling, or hydraulic
10fracturing operations at the well site. Work on the removal of
11equipment and materials at the well site shall begin within 6
12months after plugging the final well on the well site and be
13completed no later than 12 months after the last producing well
14on the well site has been plugged. Roads installed as part of
15the oil and gas operation may be left in place if provided in
16the lease or pursuant to agreement with the surface owner, as
17applicable.
 
18    Section 1-97. Seismicity.
19    (a) For purposes of this Section, "induced seismicity"
20means an earthquake event that is felt, recorded by the
21national seismic network, and attributable to a Class II
22injection well used for disposal of flow-back and produced
23fluid from hydraulic fracturing operations.
24    (b) The Department shall adopt rules, in consultation with
25the Illinois State Geological Survey, establishing a protocol

 

 

09800HB2615ham001- 87 -LRB098 10864 MGM 43076 a

1for controlling operational activity of Class II injection
2wells in an instance of induced seismicity.
3    (c) The rules adopted by the Department under this Section
4shall employ a "traffic light" control system allowing for low
5levels of seismicity while including additional monitoring and
6mitigation requirements when seismic events are of sufficient
7intensity to result in a concern for public health and safety.
8    (d) The additional mitigation requirements referenced in
9subsection (c) of this Section shall provide for either the
10scaling back of injection operations with monitoring for
11establishment of a potentially safe operation level or the
12immediate cessation of injection operations.
 
13    Section 1-98. Department mapping. On or before February 1,
142014, the Department shall, with the assistance of the Illinois
15State Geological Survey, submit a report to the General
16Assembly and Governor identifying the following in Illinois and
17include any recommendations for additional legislative or
18administrative action on these items:
19    (a) the location of resources of shale gas and oil,
20conventional gas and oil, and process materials, including sand
21and other naturally occurring geologic materials used in high
22volume horizontal hydraulic fracturing operations;
23    (b) the potential impacts of high volume horizontal
24hydraulic fracturing operations on:
25        (1) sites owned, managed or leased by the Department;

 

 

09800HB2615ham001- 88 -LRB098 10864 MGM 43076 a

1        (2) nature preserves;
2        (3) sites on the Register of Land and Water Reserves;
3        (4) the availability of water for human consumption and
4    general domestic use; and
5        (5) the potential for influencing natural seismic
6    activity.
 
7    Section 1-99. Department report. Two years after the
8effective date of the first high volume horizontal hydraulic
9fracturing permit issued by the Department, and every 3 years
10thereafter, the Department shall prepare a report that examines
11the following:
12        (1) the number of high volume horizontal hydraulic
13    fracturing permits issued by the Department, on an annual
14    basis;
15        (2) a map showing the locations in this State where
16    high volume horizontal hydraulic fracturing operations
17    have been permitted by the Department;
18        (3) identification of the latest scientific research,
19    best practices, and technological improvements related to
20    high volume horizontal hydraulic fracturing operations and
21    methods to protect the environment and public health;
22        (4) any confirmed environmental impacts in this State
23    due to high volume horizontal hydraulic fracturing
24    operations, including, but not limited to, any reportable
25    release of hydraulic fracturing flowback, hydraulic

 

 

09800HB2615ham001- 89 -LRB098 10864 MGM 43076 a

1    fracturing fluid, and hydraulic fracturing additive;
2        (5) confirmed public health impacts in this State due
3    to high volume horizontal hydraulic fracturing operations;
4        (6) a comparison of the revenues generated under
5    subsection (e) of Section 1-35 of this Act to the
6    Department's costs associated with implementing and
7    administering provisions of this Act;
8        (7) a comparison of the revenues generated under
9    subsection (e) of Section 1-87 of this Act to the Agency's
10    costs associated with implementing and administering
11    provisions of this Act;
12        (7.5) a summary of revenues generated annually from
13    income, ad valorem, sales, and any other State and local
14    taxes applicable to activity permitted under this Act by
15    the Department, including an estimate of the income tax
16    generated from lease payments and royalty payments;
17        (8) a description of any modifications to existing
18    programs, practices, or rules related to high volume
19    horizontal hydraulic fracturing operations made by the
20    Department;
21        (9) any problems or issues the Department identifies as
22    it implements and administers the provisions of this Act;
23        (10) any recommendations for legislative action by the
24    General Assembly to address the findings in the report; and
25        (11) any other information the Department deems
26    relevant regarding its specific experiences implementing

 

 

09800HB2615ham001- 90 -LRB098 10864 MGM 43076 a

1    and administering the provisions of this Act and,
2    generally, high volume horizontal hydraulic fracturing
3    operations.
4    The first report shall also examine any studies issued by
5the United States Environmental Protection Agency regarding
6high volume horizontal hydraulic fracturing operations. The
7report required by this Section shall be provided to the
8General Assembly and Governor.
 
9    Section 1-100. Criminal offenses; penalties.
10    (a) Except as otherwise provided in this Section, it shall
11be a Class A misdemeanor to knowingly violate this Act, its
12rules, or any permit or term or condition thereof, or knowingly
13to submit any false information under this Act or regulations
14adopted thereunder, or under any permit or term or condition
15thereof. A person convicted or sentenced under this subsection
16(a) shall be subject to a fine of not to exceed $10,000 for
17each day of violation.
18    (b) It is unlawful for a person knowingly to violate:
19        (1) subsection (c) of Section 1-25 of this Act;
20        (2) subsection (d) of Section 1-25 of this Act;
21        (3) subsection (a) of Section 1-30 of this Act;
22        (4) paragraph (9) of subsection (c) of Section 1-75 of
23    this Act; or
24        (5) subsection (a) of Section 1-87 of this Act.
25    A person convicted or sentenced for any knowing violation

 

 

09800HB2615ham001- 91 -LRB098 10864 MGM 43076 a

1of the requirements or prohibitions listed in this subsection
2(b) commits a Class 4 felony, and in addition to any other
3penalty prescribed by law is subject to a fine not to exceed
4$25,000 for each day of violation. A person who commits a
5second or subsequent knowing violation of the requirements or
6prohibitions listed in this subsection (b) commits a Class 3
7felony and, in addition to any other penalties provided by law,
8is subject to a fine not to exceed $50,000 for each day of
9violation.
10    (c) Any person who knowingly makes a false, fictitious, or
11fraudulent material statement, orally or in writing, to the
12Department or Agency as required by this Act, its rules, or any
13permit, term, or condition of a permit, commits a Class 4
14felony, and each false, fictitious, or fraudulent statement or
15writing shall be considered a separate violation. In addition
16to any other penalty prescribed by law, persons in violation of
17this subsection (c) is subject to a fine of not to exceed
18$25,000 for each day of violation. A person who commits a
19second or subsequent knowing violation of this subsection (c)
20commits a Class 3 felony and, in addition to any other
21penalties provided by law, is subject to a fine not to exceed
22$50,000 for each day of violation.
23    (d) Any criminal action provided for under this Section
24shall be brought by the State's Attorney of the county in which
25the violation occurred or by the Attorney General and shall be
26conducted in accordance with the applicable provision of the

 

 

09800HB2615ham001- 92 -LRB098 10864 MGM 43076 a

1Code of Criminal Procedure of 1963. For criminal conduct in
2this Section, the period for commencing prosecution shall not
3begin to run until the offense is discovered by or reported to
4a State or local agency having authority to investigate
5violations of this Act.
 
6    Section 1-101. Violations; civil penalties and
7injunctions.
8    (a) Except as otherwise provided in this Section, any
9person who violates any provision of this Act or any rule or
10order adopted under this Act or any permit issued under this
11Act shall be liable for a civil penalty not to exceed $50,000
12for the violation and an additional civil penalty not to exceed
13$10,000 for each day during which the violation continues.
14    (b) Any person who violates any requirements or
15prohibitions of provisions listed in this subsection (b) is
16subject to a civil penalty not to exceed $100,000 for the
17violation and an additional civil penalty not to exceed $20,000
18for each day during which the violation continues. The
19following are violations are subject to the penalties of this
20subsection (b):
21        (1) subsection (c) of Section 1-25 of this Act;
22        (2) subsection (d) of Section 1-25 of this Act;
23        (3) subsection (a) of Section 1-30 of this Act;
24        (4) paragraph (9) of subsection (c) of Section 1-75 of
25    this Act; or

 

 

09800HB2615ham001- 93 -LRB098 10864 MGM 43076 a

1        (5) subsection (a) of Section 1-87 of this Act.
2    (c) Any person who knowingly makes, submits, causes to be
3made, or causes to be submitted a false report of pollution,
4diminution, or water pollution attributable to high volume
5horizontal hydraulic fracturing operations that results in an
6investigation by the Department or Agency under this Act shall
7be liable for a civil penalty not to exceed $1,000 for the
8violation.
9    (d) The penalty shall be recovered by a civil action before
10the circuit court of the county in which the well site is
11located or in the circuit court of Sangamon County. Venue shall
12be considered proper in either court. These penalties may, upon
13the order of a court of competent jurisdiction, be made payable
14to the Environmental Protection Trust Fund, to be used in
15accordance with the provisions of the Environmental Protection
16Trust Fund Act.
17    (e) The State's Attorney of the county in which the
18violation occurred, or the Attorney General, may, at the
19request of the Department or on his or her own motion,
20institute a civil action for the recovery of costs, an
21injunction, prohibitory or mandatory, to restrain violations
22of this Act, any rule adopted under this Act, the permit or
23term or condition of the permit, or to require other actions as
24may be necessary to address violations of this Act, any rule
25adopted under this Act, the permit or term or condition of the
26permit.

 

 

09800HB2615ham001- 94 -LRB098 10864 MGM 43076 a

1    (f) The State's Attorney of the county in which the
2violation occurred, or the Attorney General, shall bring
3actions under this Section in the name of the People of the
4State of Illinois. Without limiting any other authority that
5may exist for the awarding of attorney's fees and costs, a
6court of competent jurisdiction may award costs and reasonable
7attorney's fees, including the reasonable costs of expert
8witnesses and consultants, to the State's Attorney or the
9Attorney General in a case where he or she has prevailed
10against a person who has committed a knowing or repeated
11violation of this Act, any rule adopted under this Act, or the
12permit or term or condition of the permit.
13    (g) All final orders imposing civil penalties under this
14Section shall prescribe the time for payment of those
15penalties. If any penalty is not paid within the time
16prescribed, interest on penalty at the rate set forth in
17subsection (a) of Section 1003 of the Illinois Income Tax Act,
18shall be paid for the period from the date payment is due until
19the date payment is received. However, if the time for payment
20is stayed during the pendency of an appeal, interest shall not
21accrue during stay.
 
22    Section 1-102. Other relief.
23    (a) Any person having an interest that is or may be
24adversely affected may commence a civil action on his or her
25own behalf to compel compliance with this Act against any

 

 

09800HB2615ham001- 95 -LRB098 10864 MGM 43076 a

1governmental instrumentality or agency which is alleged to be
2in violation of the provisions of this Act or of any rule,
3order, or permit issued under this Act, or against any other
4person who is alleged to be in violation of this Act or of any
5rule, order, or permit issued under this Act. No action may be
6commenced under this subsection (a): (i) prior to 60 days after
7the plaintiff has given notice in writing of the alleged
8violation to the Department and to any alleged violator or (ii)
9if the State has commenced and is diligently prosecuting a
10civil action to require compliance with the provisions of this
11Act, or any rule, order, or permit issued under this Act.
12    (b) Any person having an interest that is or may be
13adversely affected may commence a civil action against the
14Department on his or her own behalf to compel compliance with
15this Act where there is alleged a failure of the Department to
16perform any act or duty under this Act that is not
17discretionary with the Department. No action may be commenced
18under this subsection (b) prior to 60 days after the plaintiff
19has given notice in writing of the action to the Department,
20except that such action may be brought immediately after the
21notification in the case where the violation or order
22complained of constitutes an imminent threat to the health or
23safety of the plaintiff or would immediately affect a legal
24interest of the plaintiff.
25    (c) The court, in issuing any final order in any action
26brought under this Section, may award costs of litigation

 

 

09800HB2615ham001- 96 -LRB098 10864 MGM 43076 a

1(including attorney and expert witness fees) to any party, on
2the basis of the importance of the proceeding and the
3participation of the parties to the efficient and effective
4enforcement of this Act. The court may, if a temporary
5restraining order or preliminary injunction is sought, require
6the filing of a bond or equivalent security in accordance with
7Part 1 of Article XI of the Code of Civil Procedure.
8    (d) Any person who is injured in his or her person or
9property through the violation by any operator of any rule,
10order, or permit issued under this Act may bring an action for
11damages (including reasonable attorney and expert witness
12fees). Nothing in this subsection (d) shall affect any of the
13rights established by or limits imposed under the Workers'
14Compensation Act.
15    (e) Any action brought under this Section may be brought
16only in the county in which the high volume horizontal
17hydraulic fracturing operation complained of is located.
18    (f) In any action under this Section, the Department shall
19have an unconditional right to intervene.
20    (g) No existing civil or criminal remedy for any wrongful
21action shall be excluded or impaired by this Act.
22    (h) Nothing in this Section shall restrict any right that
23any person (or class of persons) may have under any statute or
24common law to seek enforcement of any of the provisions of this
25Act and the rules adopted under this Act, or to seek any other
26relief (and including relief against the United States or the

 

 

09800HB2615ham001- 97 -LRB098 10864 MGM 43076 a

1Department).
 
2    Section 1-105. Violations, complaints, and notice;
3website.
4    The Department shall maintain a detailed database that is
5readily accessible to the public on the Department's website.
6The database shall show each violation found by the Department
7regarding high volume horizontal hydraulic fracturing
8operations and the associated well owners, operators, and
9subcontractors. When the Department determines that any person
10has violated this Act, the Department shall provide notice by
11U.S. Postal Service certified mail, return receipt requested,
12of the Department's determination to all persons required to
13receive specific public notice under Section 1-40 of this Act
14within 7 calendar days after the determination. The Department
15shall also post the notice on the Department's website. The
16notice shall include a detailed, plain language description of
17the violation and a detailed, plain language description of all
18known risks to public health, life, property, aquatic life, and
19wildlife resulting from the violation.
 
20    Section 1-110. Public information; website.
21    (a) All information submitted to the Department under this
22Act is deemed public information, except information deemed to
23constitute a trade secret under Section 1-77 of this Act and
24private information and personal information as defined in the

 

 

09800HB2615ham001- 98 -LRB098 10864 MGM 43076 a

1Freedom of Information Act.
2    (b) To provide the public and concerned citizens with a
3centralized repository of information, the Department shall
4create and maintain a comprehensive website dedicated to
5providing information concerning high volume horizontal
6hydraulic fracturing operations. The website shall contain,
7assemble, and link the documents and information required by
8this Act to be posted on the Department's or other agencies'
9websites. The Department shall also create and maintain an
10online searchable database that provides information related
11to high volume horizontal hydraulic fracturing operations on
12wells that, at a minimum, include, for each well it permits,
13the identity of its operators, its waste disposal, its chemical
14disclosure information, and any complaints or violations under
15this Act. The website created under this Section shall allow
16users to search for completion reports by well name and
17location, dates of fracturing and drilling operations,
18operator, and by chemical additives.
 
19    Section 1-120. Applicable federal, State, and local laws.
20Compliance with this Act does not relieve responsibility for
21compliance with the Illinois Oil and Gas Act, the Illinois
22Environmental Protection Act, and other applicable federal,
23State, and local laws.
 
24    Section 1-125. Administrative review. All final

 

 

09800HB2615ham001- 99 -LRB098 10864 MGM 43076 a

1administrative decisions, including issuance or denial of a
2permit, made by the Department under this Act are subject to
3judicial review under the Administrative Review Law and its
4rules.
 
5    Section 1-130. Rules. The Department shall have the
6authority to adopt rules as may be necessary to accomplish the
7purposes of this Act. Any and all rules adopted under this Act
8by the Department are not subject to the review, consultation,
9or advisement of the Oil and Gas Board.
 
10    Section 1-135. The Mines and Minerals Regulatory Fund. The
11Mines and Minerals Regulatory Fund is created as a special fund
12in the State treasury. All moneys required by this Act to be
13deposited into the Fund shall be used by the Department to
14administer and enforce this Act and otherwise support the
15operations and programs of the Office of Mines and Minerals.
 
16    Section 1-140. Severability. The provisions of this Act are
17severable under Section 1.31 of the Statute on Statutes.
 
18
ARTICLE 2.

 
19    Section 2-5. Short title. This Act may be cited as the
20"Illinois Hydraulic Fracturing Tax Act".
 

 

 

09800HB2615ham001- 100 -LRB098 10864 MGM 43076 a

1    Section 2-10. Definitions. For the purposes of this Act,
2unless the context otherwise requires:
3    "Barrel" for oil measurement means a barrel of 42 U.S.
4gallons of 231 cubic inches per gallon, computed at a
5temperature of 60 degrees Fahrenheit.
6    "Department" means the Illinois Department of Revenue.
7    "Fracturing" or "hydraulic fracturing" means the
8propagation of fractures in a rock layer, by a pressurized
9fluid used to release petroleum or natural gas (including shale
10gas, tight gas, and coal seam gas), for extraction.
11    "Gas" means natural gas taken from below the surface of the
12earth or water in this State, regardless of whether the gas is
13taken from a gas well or from a well also productive of oil or
14any other product.
15    "Lease number" means the number assigned by the purchaser
16to identify each production unit.
17    "Oil" means petroleum or other crude oil, condensate,
18casinghead gasoline, or other mineral oil that is severed or
19withdrawn from below the surface of the soil or water in this
20State.
21    "Operator" means the person primarily responsible for the
22management and operation of oil or gas productions from a
23production unit.
24    "Person" means any natural individual, firm, partnership,
25association, joint stock company, joint adventure, public or
26private corporation, limited liability company, or a receiver,

 

 

09800HB2615ham001- 101 -LRB098 10864 MGM 43076 a

1executor, trustee, guardian, or other representative appointed
2by order of any court.
3    "Producer" means any person owning, controlling, managing,
4or leasing any oil or gas property or oil or gas well, and any
5person who severs in any manner any oil or gas in this State,
6and shall include any person owning any direct and beneficial
7interest in any oil or gas produced, whether severed by such
8person or some other person on their behalf, either by lease,
9contract, or otherwise, including working interest owners,
10overriding royalty owners, or royalty owners.
11    "Production unit" means a unit of property designated by
12the Department of Natural Resources from which oil or gas is
13severed.
14    "Purchaser" means a person who is the first purchaser of a
15product after severance from a production unit.
16    "Remove" or "removal" means the physical transportation of
17oil or gas off of the production unit where severed; and if the
18oil or gas is used on the premises where severed, or if the
19manufacture or conversion of oil or gas into refined products
20occurs on the premises where severed, oil or gas shall be
21deemed to have been removed on the date such use, manufacture,
22or conversion begins.
23    "Severed" or "severing" means: (1) the production of oil
24through extraction or withdrawal of the same, whether such
25extraction or withdrawal is by natural flow, mechanical flow,
26forced flow, pumping, or any other means employed to get the

 

 

09800HB2615ham001- 102 -LRB098 10864 MGM 43076 a

1oil from below the surface of the soil or water and shall
2include the withdrawal by any means whatsoever of oil upon
3which the tax has not been paid, from any surface reservoir,
4natural or artificial, or from a water surface; and (2) the
5production of gas through the extraction or withdrawal of the
6same by any means whatsoever, from below the surface of the
7earth or water.
8    "Severance" means the taking of oil or gas from below the
9surface of the soil or water in any manner whatsoever.
10    "Value" means the sale price of oil or gas at the time of
11removal of the oil or gas from the production unit and if oil
12or gas is exchanged for something other than cash, or if no
13sale occurs at the time of removal, or if the Department
14determines that the relationship between the buyer and the
15seller is such that the consideration paid, if any, is not
16indicative of the true value or market price, then the
17Department shall determine the value of the oil or gas subject
18to tax based on the cash price paid to one or more producers
19for the oil or gas or based on the cash price paid to producers
20for like quality oil or gas in the vicinity of the production
21unit at the time of the removal of the oil or gas from the
22production unit.
 
23    Section 2-15. Tax imposed.
24    (a) For oil and gas removed on or after July 1, 2013, there
25is hereby imposed a tax upon the severance and production of

 

 

09800HB2615ham001- 103 -LRB098 10864 MGM 43076 a

1oil or gas from a well on a production unit in this State
2permitted, or required to be permitted, under the Illinois
3Hydraulic Fracturing Regulatory Act, for sale, transport,
4storage, profit, or commercial use. The tax shall be applied
5equally to all portions of the value of each barrel of oil
6severed and subject to such tax and to the value of the gas
7severed and subject to such tax. For a period of 24 months from
8the month in which oil or gas was first produced from the well,
9the rate of tax shall be 3% of the value of the oil or gas
10severed from the earth or water in this State. Thereafter, the
11rate of the tax shall be as follows:
12        (1) For oil:
13            (A) where the average daily production from the
14        well during the month is less than 25 barrels, 3% of
15        the value of the oil severed from the earth or water;
16            (B) where the average daily production from the
17        well during the month is 15 or more barrels but less
18        than 50 barrels, 4% of the value of the oil severed
19        from the earth or water;
20            (C) where the average daily production from the
21        well during the month is 50 or more barrels but less
22        than 100 barrels, 5% of the value of the oil severed
23        from the earth or water; or
24            (D) where the average daily production from the
25        well during the month is 100 or more barrels, 6% of the
26        value of the oil severed from the earth or water.

 

 

09800HB2615ham001- 104 -LRB098 10864 MGM 43076 a

1        (2) For gas, 6% of the value of the gas severed from
2    the earth or water.
3    If a well is required to be permitted under the Illinois
4Hydraulic Fracturing Regulatory Act, the tax imposed by this
5Section applies, whether or not a permit was obtained.
6    (b) Oil produced from a well whose average daily production
7is 15 barrels or less for the 12-month period immediately
8preceding the production is exempt from the tax imposed by this
9Act.
10    (c) For the purposes of the tax imposed by this Act the
11amount of oil produced shall be measured or determined, in the
12case of oil, by tank tables, without deduction for overage or
13losses in handling. Allowance for any reasonable and bona fide
14deduction for basic sediment and water, and for correction of
15temperature to 60 degrees Fahrenheit will be allowed. For the
16purposes of the tax imposed by this Act the amount of gas
17produced shall be measured or determined, by meter readings
18showing 100% of the full volume expressed in cubic feet at a
19standard base and flowing temperature of 60 degrees Fahrenheit,
20and at the absolute pressure at which the gas is sold and
21purchased. Correction shall be made for pressure according to
22Boyle's law, and used for specific gravity according to the
23gravity at which the gas is sold and purchased.
24    (d) The following severance and production of gas shall be
25exempt from the tax imposed by this Act: gas injected into the
26earth for the purpose of lifting oil, recycling, or

 

 

09800HB2615ham001- 105 -LRB098 10864 MGM 43076 a

1repressuring; gas used for fuel in connection with the
2operation and development for, or production of, oil or gas in
3the production unit where severed; and gas lawfully vented or
4flared; gas inadvertently lost on the production unit by reason
5of leaks, blowouts, or other accidental losses.
6    (e) All oil and gas removed from the premises where severed
7is subject to the tax imposed by this Act unless exempt under
8the terms of this Act.
9    (f) The liability for the tax accrues at the time the oil
10or gas is removed from the production unit.
 
11    Section 2-20. Taxable value; method of determining. The
12Department may determine the value of products severed from a
13production unit when the operator and purchaser are affiliated
14persons, when the sale and purchase of products is not an arm's
15length transaction, or when products are severed and removed
16from a production unit and a value is not established for such
17products. The value determined by the Department shall be
18commensurate with the actual price received for products of
19like quality, character, and use which are severed in the same
20field or area. If there are no sales of products of like
21quality, character, and use severed in the same field or area,
22then the Department shall establish a reasonable value based on
23sales of products of like quality, character, and use which are
24severed in other areas of the State, taking into consideration
25any other relevant factors.
 

 

 

09800HB2615ham001- 106 -LRB098 10864 MGM 43076 a

1    Section 2-25. Withholding of tax. Any purchaser who makes
2a monetary payment to a producer for his or her portion of the
3value of products from a production unit shall withhold from
4such payment the amount of tax due from the producer. Any
5purchaser who pays any tax due from a producer shall be
6entitled to reimbursement from the producer for the tax so paid
7and may take credit for such amount from any monetary payment
8to the producer for the value of products. To the extent that a
9purchaser required to collect the tax imposed by this Act has
10actually collected that tax, such tax is held in trust for the
11benefit of the State of Illinois.
 
12    Section 2-30. Payment and collection of tax.
13    (a) For oil and gas removed on or after July 1, 2013, the
14tax incurred under this Act shall be due and payable on or
15before the 30th day of the month following the end of the month
16in which the oil or gas is removed from the production unit.
17The tax is upon the producers of such oil or gas in the
18proportion to their respective beneficial interests at the time
19of severance. The first purchaser of any oil or gas sold shall
20collect the amount of the tax due from the producers by
21deducting and withholding such amount from any payments made by
22such purchaser to the producers and shall remit the tax in this
23Act.
24    In the event the tax shall be withheld by a purchaser from

 

 

09800HB2615ham001- 107 -LRB098 10864 MGM 43076 a

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

 

 

09800HB2615ham001- 108 -LRB098 10864 MGM 43076 a

1        (3) number assigned to the production unit by the first
2    purchaser, if available;
3        (4) legal description of the production unit; and
4        (5) a statement by the operator that the production
5    unit is exempt from the tax imposed by the Illinois
6    Hydraulic Fracturing Tax Act.
7    If a first purchaser obtains an exemption certificate that
8contains the required information and reasonably relies on the
9exemption certificate and it is subsequently determined by the
10Department that the production unit is subject to the tax
11imposed by this Act, the Department will collect any tax that
12is due from the operator and producers, and the first purchaser
13is relieved of any liability.
14    (c) Notwithstanding subsection (a) of this Section, the tax
15is a lien on the oil and gas from the time of severance from the
16land or under the water until the tax and all penalties and
17interest are fully paid, and the State shall have a lien on all
18the oil or gas severed from the production unit in this State
19in the hands of the operator, any producer or the first or any
20subsequent purchaser thereof to secure the payment of the tax.
21If a lien is filed by the Department, the purchaser shall
22withhold from producers or operators the amount of tax, penalty
23and interest identified in the lien.
 
24    Section 2-35. Registration of purchasers. A person who
25engages in business as a purchaser of oil or gas in this State

 

 

09800HB2615ham001- 109 -LRB098 10864 MGM 43076 a

1shall register with the Department. Application for a
2certificate of registration shall be made to the Department
3upon forms furnished by the Department and shall contain any
4reasonable information the Department may require. Upon
5receipt of the application for a certificate of registration in
6proper form, the Department shall issue to the applicant a
7certificate of registration.
 
8    Section 2-40. Inspection of records by the Department;
9subpoena power, contempt. The Department shall have the power
10to require any operator, producer, transporter, or person
11purchasing any oil or gas severed from the earth or water to
12furnish any additional information deemed to be necessary for
13the purpose of computing the amount of the tax, and for such
14purpose to examine the meter and other charts, books, records,
15and all files of such person, and for such purpose the
16Department shall have the power to issue subpoenas and examine
17witnesses under oath, and if any witness shall fail or refuse
18to appear at the request of the director, or refuses access to
19books, records, and files, the circuit court of the proper
20county, or the judge thereof, on application of the Department,
21shall compel obedience by proceedings for contempt, as in the
22case of disobedience of the requirements of a subpoena issued
23from such court or a refusal to testify therein.
 
24    Section 2-45. Purchaser's return and tax remittance. Each

 

 

09800HB2615ham001- 110 -LRB098 10864 MGM 43076 a

1purchaser shall make a return to the Department showing the
2quantity of oil or gas purchased during the month for which the
3return is filed, the price paid therefore, total value, the
4name and address of the operator or other person from whom the
5same was purchased, a description of the production unit in the
6manner prescribed by the Department from which such oil or gas
7was severed and the amount of tax due from each production unit
8for each calendar month. All taxes due, or to be remitted, by
9the purchaser shall accompany this return. The return shall be
10filed on or before the 30th day of the month after the calendar
11month for which the return is required. The Department may
12require any additional report or information it may deem
13necessary for the proper administration of this Act.
14    Such returns shall be filed electronically in the manner
15prescribed by the Department. Purchasers shall make all
16payments of that tax to the Department by electronic funds
17transfer unless, as provided by rule, the Department grants an
18exception upon petition of a purchaser. Purchasers' returns
19must be accompanied by appropriate computer generated magnetic
20media supporting schedule data in the format required by the
21Department, unless, as provided by rule, the Department grants
22an exception upon petition of a purchaser.
 
23    Section 2-50. Operator returns; payment of tax.
24    (a) If, on or after July 1, 2013, oil or gas is transported
25off the production unit where severed by the operator, used on

 

 

09800HB2615ham001- 111 -LRB098 10864 MGM 43076 a

1the production unit where severed, or if the manufacture and
2conversion of oil and gas into refined products occurs on the
3production unit where severed, the operator is responsible for
4remitting the tax imposed under subsections (a) of Section 15,
5on or before the 30th day of the month following the end of the
6calendar month in which the oil and gas is removed from the
7production unit, and such payment shall be accompanied by a
8return to the Department showing the gross quantity of oil or
9gas removed during the month for which the return is filed, the
10price paid therefore, and if no price is paid therefore, the
11value of the oil and gas, a description of the production unit
12from which such oil or gas was severed, and the amount of tax.
13The Department may require any additional information it may
14deem necessary for the proper administration of this Act.
15    (b) Operators shall file all returns electronically in the
16manner prescribed by the Department unless, as provided by
17rule, the Department grants an exception upon petition of an
18operator. Operators shall make all payments of that tax to the
19Department by electronic funds transfer unless, as provided by
20rule, the Department grants an exception upon petition of an
21operator. Operators' returns must be accompanied by
22appropriate computer generated magnetic media supporting
23schedule data in the format required by the Department, unless,
24as provided by rule, the Department grants an exception upon
25petition of a purchaser.
26    (c) Any operator who makes a monetary payment to a producer

 

 

09800HB2615ham001- 112 -LRB098 10864 MGM 43076 a

1for his or her portion of the value of products from a
2production unit shall withhold from such payment the amount of
3tax due from the producer. Any operator who pays any tax due
4from a producer shall be entitled to reimbursement from the
5producer for the tax so paid and may take credit for such
6amount from any monetary payment to the producer for the value
7of products. To the extent that an operator required to collect
8the tax imposed by this Act has actually collected that tax,
9such tax is held in trust for the benefit of the State of
10Illinois.
11    (d) In the event the operator fails to make payment of the
12tax to the State as required herein, the operator shall be
13liable for the tax. A producer shall be entitled to bring an
14action against such operator to recover the amount of tax so
15withheld together with penalties and interest which may have
16accrued by failure to make such payment. A producer shall be
17entitled to all attorney fees and court costs incurred in such
18action. To the extent that a producer liable for the tax
19imposed by this Act collects the tax, and any penalties and
20interest, from an operator, such tax, penalties, and interest
21are held in trust by the producer for the benefit of the State
22of Illinois.
23    (e) When the title to any oil or gas severed from the earth
24or water is in dispute and the operator of such oil or gas is
25withholding payments on account of litigation, or for any other
26reason, such operator is hereby authorized, empowered and

 

 

09800HB2615ham001- 113 -LRB098 10864 MGM 43076 a

1required to deduct from the gross amount thus held the amount
2of the tax imposed and to make remittance thereof to the
3Department as provided in this Section.
4    (f) An operator required to file a return and pay the tax
5under this Section shall register with the Department.
6Application for a certificate of registration shall be made to
7the Department upon forms furnished by the Department and shall
8contain any reasonable information the Department may require.
9Upon receipt of the application for a certificate of
10registration in proper form, the Department shall issue to the
11applicant a certificate of registration.
12    (g) If oil or gas is transported off the production unit
13where severed by the operator and sold to a purchaser or
14refiner, the State shall have a lien on all the oil or gas
15severed from the production unit in this State in the hands of
16the operator, the first or any subsequent purchaser thereof, or
17refiner to secure the payment of the tax. If a lien is filed by
18the Department, the purchaser or refiner shall withhold from
19the operator the amount of tax, penalty and interest identified
20in the lien.
 
21    Section 2-55. Tax withholding and remittance when title to
22minerals disputed. When the title to any oil or gas severed
23from the earth or water is in dispute and the purchaser of such
24oil or gas is withholding payments on account of litigation, or
25for any other reason, such purchaser is hereby authorized,

 

 

09800HB2615ham001- 114 -LRB098 10864 MGM 43076 a

1empowered and required to deduct from the gross amount thus
2held the amount of the tax imposed and to make remittance
3thereof to the Department as provided in this Act.
 
4    Section 2-60. Transporters. When requested by the
5Department, all transporters of oil or gas out of, within or
6across the State of Illinois shall be required to furnish the
7Department such information relative to the transportation of
8such oil or gas as the Department may require. The Department
9shall have authority to inspect bills of lading, waybills,
10meter, or other charts, documents, books and records as may
11relate to the transportation of oil or gas in the hands of each
12transporter. The Department shall further be empowered to
13demand the production of such bills of lading, waybills,
14charts, documents, books, and records relating to the
15transportation of oil or gas at any point in the State of
16Illinois.
 
17    Section 2-65. Rulemaking. The Department is hereby
18authorized to adopt any rules as may be necessary to administer
19and enforce the provisions of this Act.
 
20    Section 2-70. Incorporation by reference. All of the
21provisions of Sections 4, 5, 5a, 5b, 5c, 5d, 5e, 5f, 5g, 5j, 6,
226a, 6b, 6c, 7, 8, 9, 10, 11, 11a, 12, and 13 of the "Retailers'
23Occupation Tax Act" which are not inconsistent with this Act,

 

 

09800HB2615ham001- 115 -LRB098 10864 MGM 43076 a

1and all provisions of the Uniform Penalty and Interest Act
2shall apply, as far as practicable, to the subject matter of
3this Act to the same extent as if such provisions were included
4herein.
 
5    Section 2-75. Distribution of proceeds. All moneys
6received by the Department under this Act shall be paid into
7the General Revenue Fund in the State Treasury.
 
8
ARTICLE 3.

 
9    Section 3-150. The State Finance Act is amended by adding
10Section 5.826 as follows:
 
11    (30 ILCS 105/5.826 new)
12    Sec. 5.826. The Mines and Minerals Regulatory Fund.
 
13
ARTICLE 9.

 
14    Section 9-999. Effective date. This Act takes effect upon
15becoming law.".