Rep. John E. Bradley

Filed: 5/15/2013

 

 


 

 


 
09800SB1715ham001LRB098 08145 MGM 45943 a

1
AMENDMENT TO SENATE BILL 1715

2    AMENDMENT NO. ______. Amend Senate Bill 1715 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

 

 

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1minute) of fresh water to wells, springs, or streams under
2ordinary hydraulic gradients. "Aquifer" is limited to aquifers
3identified as major sand and gravel aquifers in the Illinois
4State Water Survey's Illinois Community Water Supply Wells map,
5Map Series 2006-01.
6    "Base fluid" means the continuous phase fluid type,
7including, but not limited to, water used in a high volume
8horizontal hydraulic fracturing operation.
9    "BTEX" means benzene, toluene, ethylbenzene, and xylene.
10    "Chemical" means any element, chemical compound, or
11mixture of elements or compounds that has its own specific name
12or identity, such as a Chemical Abstracts Service number,
13regardless of whether the chemical is subject to the
14requirements of paragraph (2) of subsection (g) of 29 Code of
15Federal Regulations 1910.1200.
16    "Chemical Abstracts Service" means the division of the
17American Chemical Society that is the globally recognized
18authority for information on chemical substances.
19    "Chemical Abstracts Service number" or "CAS number" means
20the unique identification number assigned to a chemical by the
21Chemical Abstracts Service.
22    "Completion combustion device" means any ignition device,
23installed horizontally or vertically, used in exploration and
24production operations to combust otherwise vented emissions.
25    "Delineation well" means a well drilled in order to
26determine the boundary of a field or producing reservoir.

 

 

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1    "Department" means the Illinois Department of Natural
2Resources.
3    "Diesel" means a substance having any one of the following
4Chemical Abstracts Service Registry numbers: 68334-30-5;
568476-34-6; 68476-30-2; 68476-31-3; 8008-20-6; or 68410-00-4.
6"Diesel" includes any additional substances regulated by the
7United States Environmental Protection Agency as diesel fuel
8used in hydraulic fracturing activities under the federal Safe
9Drinking Water Act.
10    "Director" means the Director of Natural Resources.
11    "Enhanced oil recovery operation" means any secondary or
12tertiary recovery method used in an effort to recover
13hydrocarbons from a pool by injection of fluids, gases or other
14substances to maintain, restore, or augment natural reservoir
15energy, or by introducing gases, chemicals, other substances,
16or heat, or by in-situ combustion, or by any combination
17thereof.
18    "Flare" means a thermal oxidation system using an open,
19enclosed, or semi-enclosed flame. "Flare" does not include
20completion combustion devices as defined in this Section.
21    "Flowback period" means the process of allowing fluids to
22flow from a well following a treatment, either in preparation
23for a subsequent phase of treatment or in preparation for
24cleanup and returning the well to production. "Flowback period"
25begins when the material the hydraulic fracturing fluid returns
26to the surface following hydraulic fracturing or

 

 

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1re-fracturing. "Flowback period" ends with either well shut in
2or when the well is producing continuously to the flow line or
3to a storage vessel for collection, whichever occurs first.
4    "Fresh water" means surface and subsurface water in its
5natural state that is suitable for drinking water for human
6consumption, domestic livestock, irrigation, industrial,
7municipal and recreational purposes, that is capable of
8supporting aquatic life, and contains less than 10,000 ppm
9total dissolved solids.
10    "Gas" means all natural gas, including casinghead gas, and
11all other natural hydrocarbons not defined as oil.
12    "Groundwater" means any water below the land surface that
13is within the saturated zone or geologic materials where the
14fluid pressure in the pore space is equal to or greater than
15atmospheric pressure.
16    "Health professional" means a physician, physician
17assistant, nurse practitioner, a registered professional
18nurse, emergency medical technician, or other individual
19appropriately licensed or registered to provide health care
20services.
21    "High volume horizontal hydraulic fracturing operations"
22means all stages of a stimulation treatment of a horizontal
23well as defined by this Act by the pressurized application of
24more than 80,000 gallons per stage or more than 300,000 gallons
25total of hydraulic fracturing fluid and proppant to initiate or
26propagate fractures in a geologic formation to enhance

 

 

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

 

 

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

 

 

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

 

 

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1            (C) detection of any constituent in 35 Ill. Adm.
2        Code 620.410 (a), (b), (c), (d) or (e) equal to or
3        above the listed standard in any Class I, Class II, or
4        Class III groundwater;
5            (D) detection of any constituent in Class III
6        groundwater equal to or above a standard established
7        under 35 Ill. Adm. Code 620.260; or
8            (E) detection of any constituent in Class I, Class
9        II, or Class III groundwater equal to or above a
10        cleanup objective listed in 35 Ill. Adm. Code 742.
11        (2) in surface water, exceeding any applicable numeric
12    or narrative standard in 35 Ill. Adm. Code Part 302 or Part
13    304.
14    "Produced water" means water, regardless of chloride and
15total dissolved solids content, that is produced in conjunction
16with oil or natural gas production or natural gas storage
17operations, but does not include hydraulic fracturing
18flowback.
19    "Proppant" means sand or any natural or man-made material
20that is used during high volume horizontal hydraulic fracturing
21operations to prop open the artificially created or enhanced
22fractures.
23    "Public water supply" means all mains, pipes, and
24structures through which water is obtained and distributed to
25the public, including wells and well structures, intakes and
26cribs, pumping stations, treatment plants, reservoirs, and

 

 

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1storage tanks and appurtenances, collectively or severally,
2actually used or intended for use for the purpose of furnishing
3water for drinking or general domestic use, and which serves at
4least 15 service connections or which regularly serves at least
525 persons at least 60 days per year.
6    "Register of Land and Water Reserves" means the list of
7areas registered in accordance with Section 16 of the Illinois
8Natural Areas Preservation Act and Part 4010 of Title 17 of the
9Illinois Administrative Code.
10    "Release" means any spilling, leaking, pumping, pouring,
11emitting, emptying, discharging, injecting, escaping,
12leaching, dumping, or disposing into the environment.
13    "Serious violation" means any violation set forth in 62
14Ill. Adm. Code 240.140(c).
15    "Service connection" means the opening, including all
16fittings and appurtenances, at the water main through which
17water is supplied to the user.
18    "Surface water" means all water that is open to the
19atmosphere and subject to surface runoff.
20    "Total water volume" means the total quantity of water from
21all sources used in the high volume horizontal hydraulic
22fracturing operations, including surface water, groundwater,
23produced water, or recycled water.
24    "True vertical depth" or "TVD" means the vertical distance
25from a depth in a planned or existing wellbore or well to a
26point at the surface.

 

 

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1    "Water pollution" means any alteration of the physical,
2thermal, chemical, biological, or radioactive properties of
3any waters of the State, or the discharge of any contaminant
4into any water of the State, as will or is likely to create a
5nuisance or render the waters harmful, detrimental, or
6injurious to public health, safety, or welfare, or to domestic,
7commercial, industrial, agricultural, recreational, or other
8legitimate uses, or to livestock, wild animals, birds, or fish
9or other aquatic life.
10    "Water source" means (1) any existing water well or
11developed spring used for human or domestic animal consumption,
12or (2) any river, perennial stream, aquifer, natural or
13artificial lake, pond, wetland listed on the Register of Land
14and Water Reserves, or reservoir.
15    "Well" means any drill hole required to be permitted under
16the Illinois Oil and Gas Act.
17    "Well site" means surface areas, including the well,
18occupied by all equipment or facilities necessary for or
19incidental to high volume horizontal hydraulic fracturing
20operations, drilling, production, or plugging a well.
21    "Wildcat well" means a well outside known fields or the
22first well drilled in an oil or gas field where no other oil
23and gas production exists.
24    "Wildlife" means any bird or mammal that are by nature wild
25by way of distinction from those that are naturally tame and
26are ordinarily living unconfined in a state of nature without

 

 

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

 

 

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1    (d) For the purpose of determining compliance with the
2provisions of this Act and any orders or rules entered or
3adopted under this Act, the Department shall have the right at
4all times to go upon and inspect properties where high volume
5horizontal hydraulic fracturing operations are being or have
6been conducted.
7    (e) The Department shall make any inquiries as it may deem
8proper to determine whether a violation of this Act or any
9orders or rules entered or adopted under this Act exists or is
10imminent. In the exercise of these powers, the Department shall
11have the authority to collect data; require testing and
12sampling; to make investigation and inspections; to examine
13properties, including records and logs; to examine, check, and
14test hydrocarbon wells; to hold hearings; to adopt
15administrative rules; and to take any action as may be
16reasonably necessary to enforce this Act.
17    (f) Except as otherwise provided, the Department may
18specify the manner in which all information required to be
19submitted under this Act is submitted.
 
20    Section 1-20. Applicability. Except as provided in Section
211-98 of this Act, this Act applies to all wells where high
22volume horizontal hydraulic fracturing operations are planned,
23have occurred, or are occurring in this State. The provisions
24of this Act shall be in addition to the provisions of the
25Illinois Oil and Gas Act. However, if there is a conflict, the

 

 

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

 

 

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1    or reservoir;
2        (5) within 750 feet of a nature preserve or a site on
3    the Register of Land and Water Reserves;
4        (6) within 1,500 feet of a surface water or groundwater
5    intake of a public water supply; the distance from the
6    public water supply as identified by the Department shall
7    be measured as follows:
8            (A) For a surface water intake on a lake or
9        reservoir, the distance shall be measured from the
10        intake point on the lake or reservoir.
11            (B) For a surface water intake on a flowing stream,
12        the distance shall be measured from a semicircular
13        radius extending upstream of the surface water intake.
14            (C) For a groundwater source, the distance shall be
15        measured from the surface location of the wellhead or
16        the ordinary high water mark of the spring.
17    The distance restrictions under this subsection (a) shall
18be determined as conditions exist at the time of the submission
19of the permit application under this Act.
20    (b) Notwithstanding any other provision of this Section,
21the owner of a water source identified in paragraph (4) of
22subsection (a) of this Section that is wholly contained within
23the owner's property may expressly agree in writing to a closer
24well location.
25    (c) It is unlawful to inject or discharge hydraulic
26fracturing fluid, produced water, BTEX, diesel, or petroleum

 

 

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

 

 

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1registration form within 90 days after the effective date of
2this Act. The registration form shall require the following
3information:
4        (1) the name and address of the registrant and any
5    parent, subsidiary, or affiliate thereof;
6        (2) disclosure of all findings of a serious violation
7    or an equivalent violation under federal or state laws or
8    regulations in the development or operation of an oil or
9    gas exploration or production site via hydraulic
10    fracturing by the applicant or any parent, subsidiary, or
11    affiliate thereof within the previous 5 years; and
12        (3) proof of insurance to cover injuries, damages, or
13    loss related to pollution or diminution in the amount of at
14    least $5,000,000, from an insurance carrier authorized,
15    licensed, or permitted to do this insurance business in
16    this State that holds at least an A- rating by A.M. Best &
17    Co. or any comparable rating service.
18    A registrant must notify the Department of any change in
19the information identified in paragraphs (1), (2), or (3) of
20this subsection (a) at least annually or upon request of the
21Department.
22    (b) Every applicant for a permit under this Act must submit
23the following information to the Department on an application
24form provided by the Department:
25        (1) the name and address of the applicant and any
26    parent, subsidiary, or affiliate thereof;

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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1    Identification of the Class II injection well or wells
2    shall be by name, identification number, and specific
3    location and shall include the date of the most recent
4    mechanical integrity test for each Class II injection well;
5        (12) a well site safety plan to address proper safety
6    measures to be employed during high volume horizontal
7    hydraulic fracturing operations for the protection of
8    persons on the site as well as the general public. Within
9    15 calendar days after submitting the permit application to
10    the Department, the applicant must provide a copy of the
11    plan to the county or counties in which hydraulic
12    fracturing operations will occur. Within 5 calendar days of
13    its receipt, the Department shall provide a copy of the
14    well site safety plan to the Office of the State Fire
15    Marshal;
16        (13) a containment plan describing the containment
17    practices and equipment to be used and the area of the well
18    site where containment systems will be employed, and within
19    5 calendar days of its receipt, the Department shall
20    provide a copy of the containment plan to the Office of the
21    State Fire Marshal;
22        (14) a casing and cementing plan that describes the
23    casing and cementing practices to be employed, including
24    the size of each string of pipe, the starting point, and
25    depth to which each string is to be set and the extent to
26    which each string is to be cemented;

 

 

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

 

 

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1    Department may, by rule, require.
2    (c) Where an application is made to conduct high volume
3horizontal fracturing operations at a well site located within
4the limits of any city, village, or incorporated town, the
5application shall state the name of the city, village, or
6incorporated town and be accompanied with a certified copy of
7the official consent for the hydraulic fracturing operations to
8occur from the municipal authorities where the well site is
9proposed to be located. No permit shall be issued unless
10consent is secured and filed with the permit application. In
11the event that an amended location is selected, the original
12permit shall not be valid unless a new certified consent is
13filed for the amended location.
14    (d) The hydraulic fracturing permit application shall be
15accompanied by a bond as required by subsection (a) of Section
161-65 of this Act.
17    (e) Each application for a permit under this Act shall
18include payment of a non-refundable fee of $13,500. Of this
19fee, $11,000 shall be deposited into the Mines and Minerals
20Regulatory Fund for the Department to use to administer and
21enforce this Act and otherwise support the operations and
22programs of the Office of Mines and Minerals. The remaining
23$2,500 shall be deposited into the Illinois Clean Water Fund
24for the Agency to use to carry out its functions under this
25Act. The Department shall not initiate its review of the permit
26application until the applicable fee under this subsection (e)

 

 

09800SB1715ham001- 24 -LRB098 08145 MGM 45943 a

1has been submitted to and received by the Department.
2    (f) Each application submitted under this Act shall be
3signed, under the penalty of perjury, by the applicant or the
4applicant's designee who has been vested with the authority to
5act on behalf of the applicant and has direct knowledge of the
6information contained in the application and its attachments.
7Any person signing an application shall also sign an affidavit
8with the following certification:
9        "I certify, under penalty of perjury as provided by law
10    and under penalty of refusal, suspension, or revocation of
11    a high volume horizontal hydraulic fracturing permit, that
12    this application and all attachments are true, accurate,
13    and complete to the best of my knowledge.".
14    (g) The permit application shall be submitted to the
15Department in both electronic and hard copy format. The
16electronic format shall be searchable.
17    (h) The application for a high volume horizontal hydraulic
18fracturing permit may be submitted as a combined permit
19application with the operator's application to drill on a form
20as the Department shall prescribe. The combined application
21must include the information required in this Section. If the
22operator elects to submit a combined permit application,
23information required by this Section that is duplicative of
24information required for an application to drill is only
25required to be provided once as part of the combined
26application. The submission of a combined permit application

 

 

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

 

 

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

 

 

09800SB1715ham001- 27 -LRB098 08145 MGM 45943 a

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

 

 

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

 

 

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1clear that it pertains to multiple applications and conforms to
2the requirements of this Section. Notice shall not constitute
3standing for purposes of requesting a public hearing or for
4standing to appeal the decision of the Department in accordance
5with the Administrative Review Law.
 
6    Section 1-45. Public comment periods.
7    (a) The public comment period shall begin 7 calendar days
8after the Department's receipt of the permit application and
9last for 30 calendar days.
10    (b) Where a public hearing is conducted under Section 1-50
11of this Act, the Department may provide for an additional
12public comment period of 15 days as necessary to allow for
13comments in response to evidence and testimony presented at the
14hearing. The additional public comment period shall begin on
15the day after the public hearing.
16    (c) During any public comment period, any person may file
17written comments to the Department concerning any portion of
18the permit application and any issue relating to the
19applicant's compliance with the requirements of the Act and any
20other applicable laws.
21    (d) The Department may request that the applicant respond
22to any substantive public comments obtained during the public
23comment period.
 
24    Section 1-50. High volume horizontal hydraulic fracturing

 

 

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

 

 

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

 

 

09800SB1715ham001- 32 -LRB098 08145 MGM 45943 a

1be maintained and shall be accessible to the public on the
2Department's website until final release of the applicant's
3performance bond.
4    (d) At least 10 calendar days before the date of the public
5hearing, the Department shall publish notice of the public
6hearing in a newspaper of general circulation published in the
7county where the proposed well site will be located.
 
8    Section 1-53. High volume horizontal hydraulic fracturing
9permit; determination; judicial review.
10    (a) The Department shall issue a high volume horizontal
11hydraulic fracturing permit, with any conditions the
12Department may find necessary, only if the record of decision
13demonstrates that:
14        (1) the well location restrictions of Section 1-25 of
15    this Act have been satisfied;
16        (2) the application meets the requirements of Section
17    1-35 of this Act;
18        (3) the plans required to be submitted with the
19    application under Section 1-35 of this Act are adequate and
20    effective;
21        (4) the proposed hydraulic fracturing operations will
22    be conducted in a manner that will protect the public
23    health and safety and prevent pollution or diminution of
24    any water source;
25        (5) the work plan required under Section 1-80 of this

 

 

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

 

 

09800SB1715ham001- 34 -LRB098 08145 MGM 45943 a

1    not limited to, inspections of the proposed well site as
2    necessary to ensure adequate review of the application.
3    (c) The Department shall, by U.S. Mail and electronic
4transmission, provide the applicant with a copy of the high
5volume horizontal hydraulic fracturing permit as issued or its
6final administrative decision denying the permit to the
7applicant and shall, by U.S. Mail or electronic transmission,
8provide a copy of the permit as issued or the final
9administrative decision to any person or unit of local
10government who received specific public notice under Section
111-40 of this Act or submitted comments or participated in any
12public hearing under Section 1-50 of this Act.
13    (d) The Department's decision to approve or deny a high
14volume horizontal hydraulic fracturing permit shall be
15considered a final administrative decision subject to judicial
16review under the Administrative Review Law and the rules
17adopted under that Law.
18    (e) Following completion of the Department's review and
19approval process, the Department's website shall indicate
20whether an individual high volume horizontal hydraulic
21fracturing permit was approved or denied and provide a copy of
22the approval or denial.
 
23    Section 1-55. High volume horizontal hydraulic fracturing
24permit; conditions; restriction; modifications.
25    (a) Each permit issued by the Department under this Act

 

 

09800SB1715ham001- 35 -LRB098 08145 MGM 45943 a

1shall require the permittee to comply with all provisions of
2this Act and all other applicable local, State, and federal
3laws, rules, and regulations in effect at the time the permit
4is issued. All plans submitted with the application under
5Section 1-35 shall be conditions of the permit.
6    (b) A permit issued under this Act shall continue in effect
7until plugging and restoration in compliance with this Act and
8the Illinois Oil and Gas Act are completed to the Department's
9satisfaction. No permit may be transferred to another person
10without approval of the Department.
11    (c) No permit issued under this Act may be modified without
12approval of the Department. If the Department determines that
13the proposed modifications constitute a significant deviation
14from the terms of the original application and permit approval,
15or presents a serious risk to public health, life, property,
16aquatic life, or wildlife, the Department shall provide the
17opportunities for notice, comment, and hearing required under
18Sections 1-45 and 1-50 of this Act. The Department shall
19provide notice of the proposed modification and opportunity for
20comment and hearing to the persons who received specific public
21notice under Section 1-40 of this Act and shall publish the
22notice and the proposed modification on its website. The
23Department shall adopt rules regarding procedures for a permit
24modification.
 
25    Section 1-60. High volume horizontal hydraulic fracturing

 

 

09800SB1715ham001- 36 -LRB098 08145 MGM 45943 a

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

 

 

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

 

 

09800SB1715ham001- 38 -LRB098 08145 MGM 45943 a

1    Section 1-65. Hydraulic fracturing permit; bonds.
2    (a) An applicant for a high volume horizontal hydraulic
3fracturing permit under this Act shall provide a bond, executed
4by a surety authorized to transact business in this State. The
5bond shall be in the amount of $50,000 per permit or a blanket
6bond of $500,000 for all permits. If the applicant is required
7to submit a bond to the Department under the Illinois Oil and
8Gas Act, the applicant's submission of a bond under this
9Section shall satisfy the bonding requirements provided for in
10the Illinois Oil and Gas Act. In lieu of a bond, the applicant
11may provide other collateral securities such as cash,
12certificates of deposit, or irrevocable letters of credit under
13the terms and conditions as the Department may provide by rule.
14    (b) The bond or other collateral securities shall remain in
15force until the well is plugged and abandoned. Upon abandoning
16a well to the satisfaction of the Department and in accordance
17with the Illinois Oil and Gas Act, the bond or other collateral
18securities shall be promptly released by the Department. Upon
19the release by the Department of the bond or other collateral
20securities, any cash or collateral securities deposited shall
21be returned by the Department to the applicant who deposited
22it.
23    (c) If, after notice and hearing, the Department determines
24that any of the requirements of this Act or rules adopted under
25this Act or the orders of the Department have not been complied

 

 

09800SB1715ham001- 39 -LRB098 08145 MGM 45943 a

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

 

 

09800SB1715ham001- 40 -LRB098 08145 MGM 45943 a

1        (1) The access road to the well site must be located in
2    accordance with access rights identified in the Illinois
3    Oil and Gas Act and located as far as practical from
4    occupied structures, places of assembly, and property
5    lines of unleased property.
6        (2) Unless otherwise approved or directed by the
7    Department, all topsoil stripped to facilitate the
8    construction of the well pad and access roads must be
9    stockpiled, stabilized, and remain on site for use in
10    either partial or final reclamation. In the event it is
11    anticipated that the final reclamation shall take place in
12    excess of one year from drilling the well the topsoil may
13    be disposed of in any lawful manner provided the operator
14    reclaims the site with topsoil of similar characteristics
15    of the topsoil removed.
16        (3) Piping, conveyances, valves, and tanks in contact
17    with hydraulic fracturing fluid, hydraulic fracturing
18    flowback, or produced water must be constructed of
19    materials compatible with the composition of the hydraulic
20    fracturing fluid, hydraulic fracturing flowback, and
21    produced water.
22        (4) The improvement, construction, or repair of a
23    publicly owned highway or roadway, if undertaken by the
24    owner, operator, permittee, or any other private entity,
25    shall be performed using bidding procedures outlined in the
26    Illinois Department of Transportation rules governing

 

 

09800SB1715ham001- 41 -LRB098 08145 MGM 45943 a

1    local roads and streets or applicable bidding requirements
2    outlined in the Illinois Procurement Code as though the
3    project were publicly funded.
4    (c) Site maintenance standards shall be as follows:
5        (1) Secondary containment is required for all fueling
6    tanks.
7        (2) Fueling tanks shall be subject to Section 1-25 of
8    this Act.
9        (3) Fueling tank filling operations shall be
10    supervised at the fueling truck and at the tank if the tank
11    is not visible to the fueling operator from the truck.
12        (4) Troughs, drip pads, or drip pans are required
13    beneath the fill port of a fueling tank during filling
14    operations if the fill port is not within the secondary
15    containment required by paragraph (1) of this subsection.
16    (d) All wells shall be constructed, and casing and
17cementing activities shall be conducted, in a manner that shall
18provide for control of the well at all times, prevent the
19migration of oil, gas, and other fluids into the fresh water
20and coal seams, and prevent pollution or diminution of fresh
21water. In addition to any of the Department's casing and
22cementing requirements, the following shall apply:
23        (1) All casings must conform to the current industry
24    standards published by the American Petroleum Institute.
25        (2) Casing thread compound and its use must conform to
26    the current industry standards published by the American

 

 

09800SB1715ham001- 42 -LRB098 08145 MGM 45943 a

1    Petroleum Institute.
2        (3) Surface casing shall be centralized at the shoe,
3    above and below a stage collar or diverting tool, if run,
4    and through usable-quality water zones. In non-deviated
5    holes, pipe centralization as follows is required: a
6    centralizer shall be placed every fourth joint from the
7    cement shoe to the ground surface or to the bottom of the
8    cellar. All centralizers shall meet specifications in, or
9    equivalent to, API spec 10D, Specification for Bow-Spring
10    Casing Centralizers; API Spec 10 TR4, Technical Report on
11    Considerations Regarding Selection of Centralizers for
12    Primary Cementing Operations; and API RP 10D-2,
13    Recommended Practice for Centralizer Placement and Stop
14    Collar Testing. The Department may require additional
15    centralization as necessary to ensure the integrity of the
16    well design is adequate. All centralizers must conform to
17    the current industry standards published by the American
18    Petroleum Institute.
19        (4) Cement must conform to current industry standards
20    published by the American Petroleum Institute and the
21    cement slurry must be prepared to minimize its free water
22    content in accordance with the current industry standards
23    published by the American Petroleum Institute; the cement
24    must also:
25            (A) secure the casing in the wellbore;
26            (B) isolate and protect fresh groundwater;

 

 

09800SB1715ham001- 43 -LRB098 08145 MGM 45943 a

1            (C) isolate abnormally pressured zones, lost
2        circulation zones, and any potential flow zones
3        including hydrocarbon and fluid-bearing zones;
4            (D) properly control formation pressure and any
5        pressure from drilling, completion and production;
6            (E) protect the casing from corrosion and
7        degradation; and
8            (F) prevent gas flow in the annulus.
9        (5) Prior to cementing any casing string, the borehole
10    must be circulated and conditioned to ensure an adequate
11    cement bond.
12        (6) A pre-flush or spacer must be pumped ahead of the
13    cement.
14        (7) The cement must be pumped at a rate and in a flow
15    regime that inhibits channeling of the cement in the
16    annulus.
17        (8) Cement compressive strength tests must be
18    performed on all surface, intermediate, and production
19    casing strings; after the cement is placed behind the
20    casing, the operator shall wait on cement to set until the
21    cement achieves a calculated compressive strength of at
22    least 500 pounds per square inch, and a minimum of 8 hours
23    before the casing is disturbed in any way, including
24    installation of a blowout preventer. The cement shall have
25    a 72-hour compressive strength of at least 1,200 psi, and
26    the free water separation shall be no more than 6

 

 

09800SB1715ham001- 44 -LRB098 08145 MGM 45943 a

1    milliliters per 250 milliliters of cement, tested in
2    accordance with current American petroleum Institute
3    standards.
4        (9) A copy of the cement job log for any cemented
5    casing string in the well shall be maintained in the well
6    file and available to the Department upon request.
7        (10) Surface casing shall be used and set to a depth of
8    at least 200 feet, or 100 feet below the base of the
9    deepest fresh water, whichever is deeper, but no more than
10    200 feet below the base of the deepest fresh water and
11    prior to encountering any hydrocarbon-bearing zones. The
12    surface casing must be run and cemented as soon as
13    practicable after the hole has been adequately circulated
14    and conditioned.
15        (11) The Department must be notified at least 24 hours
16    prior to surface casing cementing operations. Surface
17    casing must be fully cemented to the surface with excess
18    cements. Cementing must be by the pump and plug method with
19    a minimum of 25% excess cement with appropriate lost
20    circulation material, unless another amount of excess
21    cement is approved by the Department. If cement returns are
22    not observed at the surface, the operator must perform
23    remedial actions as appropriate.
24        (12) Intermediate casing must be installed when
25    necessary to isolate fresh water not isolated by surface
26    casing and to seal off potential flow zones, anomalous

 

 

09800SB1715ham001- 45 -LRB098 08145 MGM 45943 a

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

 

 

09800SB1715ham001- 46 -LRB098 08145 MGM 45943 a

1        In the case that intermediate casing was set for a
2    reason other than to protect strata that contains fresh
3    water, the intermediate casing string shall be cemented
4    from the shoe to a point at least 600 true vertical feet
5    above the shoe. If there is a hydrocarbon bearing zone
6    capable of producing exposed above the intermediate casing
7    shoe, the casing shall be cemented from the shoe to a point
8    at least 600 true vertical feet above the shallowest
9    hydrocarbon bearing zone or to a point at least 200 feet
10    above the shoe of the next shallower casing string that was
11    set and cemented in the well (or to the surface if less
12    than 200 feet).
13        (13) The Department must be notified prior to
14    intermediate casing cementing operations. Cementing must
15    be by the pump and plug method with a minimum of 25% excess
16    cement. A radial cement bond evaluation log, or other
17    evaluation approved by the Department, must be run to
18    verify the cement bond on the intermediate casing. Remedial
19    cementing is required if the cement bond is not adequate
20    for drilling ahead.
21        (14) Production casing must be run and fully cemented
22    to 500 feet above the top perforated zone, if possible. The
23    Department must be notified at least 24 hours prior to
24    production casing cementing operations. Cementing must be
25    by the pump and plug method with a minimum of 25% excess
26    cement.

 

 

09800SB1715ham001- 47 -LRB098 08145 MGM 45943 a

1        (15) At any time, the Department, as it deems
2    necessary, may require installation of an additional
3    cemented casing string or strings in the well.
4        (16) After the setting and cementing of a casing
5    string, except the conductor casing, and prior to further
6    drilling, the casing string shall be tested with fresh
7    water, mud, or brine to no less than 0.22 psi per foot of
8    casing string length or 1,500 psi, whichever is greater but
9    not to exceed 70% of the minimum internal yield, for at
10    least 30 minutes with less than a 5% pressure loss, except
11    that any casing string that will have pressure exerted on
12    it during stimulation of the well shall be tested to at
13    least the maximum anticipated treatment pressure. If the
14    pressure declines more than 5% or if there are other
15    indications of a leak, corrective action shall be taken
16    before conducting further drilling and high volume
17    horizontal hydraulic fracturing operations. The operator
18    shall contact the Department's District Office for any
19    county in which the well is located at least 24 hours prior
20    to conducting a pressure test to enable an inspector to be
21    present when the test is done. A record of the pressure
22    test must be maintained by the operator and must be
23    submitted to the Department on a form prescribed by the
24    Department prior to conducting high volume horizontal
25    hydraulic fracturing operations. The actual pressure must
26    not exceed the test pressure at any time during high volume

 

 

09800SB1715ham001- 48 -LRB098 08145 MGM 45943 a

1    horizontal hydraulic fracturing operations.
2        (17) Any hydraulic fracturing string used in the high
3    volume horizontal hydraulic fracturing operations must be
4    either strung into a production liner or run with a packer
5    set at least 100 feet below the deepest cement top and must
6    be tested to not less than the maximum anticipated treating
7    pressure minus the annulus pressure applied between the
8    fracturing string and the production or immediate casing.
9    The pressure test shall be considered successful if the
10    pressure applied has been held for 30 minutes with no more
11    than 5% pressure loss. A function-tested relief valve and
12    diversion line must be installed and used to divert flow
13    from the hydraulic fracturing string-casing annulus to a
14    covered watertight steel tank in case of hydraulic
15    fracturing string failure. The relief valve must be set to
16    limit the annular pressure to no more than 95% of the
17    working pressure rating of the casings forming the annulus.
18    The annulus between the hydraulic fracturing string and
19    casing must be pressurized to at least 250 psi and
20    monitored.
21        (18) After a successful pressure test under paragraph
22    (16) of this subsection, a formation pressure integrity
23    test must be conducted below the surface casing and below
24    all intermediate casing. The operator shall notify the
25    Department's District Office for any county in which the
26    well is located at least 24 hours prior to conducting a

 

 

09800SB1715ham001- 49 -LRB098 08145 MGM 45943 a

1    formation pressure integrity test to enable an inspector to
2    be present when the test is done. A record of the pressure
3    test must be maintained by the operator and must be
4    submitted to the Department on a form prescribed by the
5    Department prior to conducting high volume horizontal
6    hydraulic fracturing operations. The actual hydraulic
7    fracturing treatment pressure must not exceed the test
8    pressure at any time during high volume horizontal
9    hydraulic fracturing operations.
10    (e) Blowout prevention standards shall be set as follows:
11            (1) The operator shall use blowout prevention
12        equipment after setting casing with a competent casing
13        seat. Blowout prevention equipment shall be in good
14        working condition at all times.
15            (2) The operator shall use pipe fittings, valves,
16        and unions placed on or connected to the blow-out
17        prevention systems that have a working pressure
18        capability that exceeds the anticipated pressures.
19            (3) During all drilling and completion operations
20        when a blowout preventer is installed, tested, or in
21        use, the operator or operator's designated
22        representative shall be present at the well site and
23        that person or personnel shall have a current well
24        control certification from an accredited training
25        program that is acceptable to the Department. The
26        certification shall be available at the well site and

 

 

09800SB1715ham001- 50 -LRB098 08145 MGM 45943 a

1        provided to the Department upon request.
2            (4) Appropriate pressure control procedures and
3        equipment in proper working order must be properly
4        installed and employed while conducting drilling and
5        completion operations including tripping, logging,
6        running casing into the well, and drilling out
7        solid-core stage plugs.
8            (5) Pressure testing of the blowout preventer and
9        related equipment for any drilling or completion
10        operation must be performed. Testing must be conducted
11        in accordance with current industry standards
12        published by the American Petroleum Institute. Testing
13        of the blowout preventer shall include testing after
14        the blowout preventer is installed on the well but
15        prior to drilling below the last cemented casing seat.
16        Pressure control equipment, including the blowout
17        preventer, that fails any pressure test shall not be
18        used until it is repaired and passes the pressure test.
19            (6) A remote blowout preventer actuator, that is
20        powered by a source other than rig hydraulics, shall be
21        located at least 50 feet from the wellhead and have an
22        appropriate rated working pressure.
 
23    Section 1-75. High volume horizontal hydraulic fracturing
24operations.
25    (a) General.

 

 

09800SB1715ham001- 51 -LRB098 08145 MGM 45943 a

1        (1) During all phases of high volume horizontal
2    hydraulic fracturing operations, the permittee shall
3    comply with all terms of the permit.
4        (2) All phases of high volume horizontal hydraulic
5    fracturing operations shall be conducted in a manner that
6    shall not pose a significant risk to public health, life,
7    property, aquatic life, or wildlife.
8        (3) The permittee shall notify the Department by phone,
9    electronic communication, or letter, at least 48 hours
10    prior to the commencement of high volume horizontal
11    hydraulic fracturing operations.
12    (b) Integrity tests and monitoring.
13        (1) Before the commencement of high volume horizontal
14    hydraulic fracturing operations, all mechanical integrity
15    tests required under subsection (d) of Section 1-70 and
16    this subsection must be successfully completed.
17        (2) Prior to commencing high volume horizontal
18    hydraulic fracturing operations and pumping of hydraulic
19    fracturing fluid, the injection lines and manifold,
20    associated valves, fracture head or tree and any other
21    wellhead component or connection not previously tested
22    must be tested with fresh water, mud, or brine to at least
23    the maximum anticipated treatment pressure for at least 30
24    minutes with less than a 5% pressure loss. A record of the
25    pressure test must be maintained by the operator and made
26    available to the Department upon request. The actual high

 

 

09800SB1715ham001- 52 -LRB098 08145 MGM 45943 a

1    volume horizontal hydraulic fracturing treatment pressure
2    must not exceed the test pressure at any time during high
3    volume horizontal hydraulic fracturing operations.
4        (3) The pressure exerted on treating equipment
5    including valves, lines, manifolds, hydraulic fracturing
6    head or tree, casing and hydraulic fracturing string, if
7    used, must not exceed 95% of the working pressure rating of
8    the weakest component. The high volume horizontal
9    hydraulic fracturing treatment pressure must not exceed
10    the test pressure of any given component at any time during
11    high volume horizontal hydraulic fracturing operations.
12        (4) During high volume horizontal hydraulic fracturing
13    operations, all annulus pressures, the injection pressure,
14    and the rate of injection shall be continuously monitored
15    and recorded. The records of the monitoring shall be
16    maintained by the operator and shall be provided to the
17    Department upon request at any time during the period up to
18    and including 5 years after the well is permanently plugged
19    or abandoned.
20        (5) High volume horizontal hydraulic fracturing
21    operations must be immediately suspended if any anomalous
22    pressure or flow condition or any other anticipated
23    pressure or flow condition is occurring in a way that
24    indicates the mechanical integrity of the well has been
25    compromised and continued operations pose a risk to the
26    environment. Remedial action shall be undertaken

 

 

09800SB1715ham001- 53 -LRB098 08145 MGM 45943 a

1    immediately prior to recommencing high volume horizontal
2    hydraulic fracturing operations. The permittee shall
3    notify the Department within 1 hour of suspending
4    operations for any matters relating to the mechanical
5    integrity of the well or risk to the environment.
6    (c) Fluid and waste management.
7        (1) For the purposes of storage at the well site and
8    except as provided in paragraph (2) of this subsection,
9    hydraulic fracturing additives, hydraulic fracturing
10    fluid, hydraulic fracturing flowback, and produced water
11    shall be stored in above-ground tanks during all phases of
12    drilling, high volume horizontal hydraulic fracturing, and
13    production operations until removed for proper disposal.
14    For the purposes of centralized storage off site for
15    potential reuse prior to disposal, hydraulic fracturing
16    additives, hydraulic fracturing fluid, hydraulic
17    fracturing flowback, and produced water shall be stored in
18    above-ground tanks.
19        (2) In accordance with the plan required by paragraph
20    (11) of subsection (b) of Section 1-35 of this Act and as
21    approved by the Department, the use of a reserve pit is
22    allowed for the temporary storage of hydraulic fracturing
23    flowback. The reserve pit shall be used only in the event
24    of a lack of capacity for tank storage due to higher than
25    expected volume or rate of hydraulic fracturing flowback,
26    or other unanticipated flowback occurrence. Any reserve

 

 

09800SB1715ham001- 54 -LRB098 08145 MGM 45943 a

1    pit must comply with the following construction standards
2    and liner specifications:
3            (A) the synthetic liner material shall have a
4        minimum thickness of 24 mils with high puncture and
5        tear strength and be impervious and resistant to
6        deterioration;
7            (B) the pit lining system shall be designed to have
8        a capacity at least equivalent to 110% of the maximum
9        volume of hydraulic fracturing flowback anticipated to
10        be recovered;
11            (C) the lined pit shall be constructed, installed,
12        and maintained in accordance with the manufacturers'
13        specifications and good engineering practices to
14        prevent overflow during any use;
15            (D) the liner shall have sufficient elongation to
16        cover the bottom and interior sides of the pit with the
17        edges secured with at least a 12 inch deep anchor
18        trench around the pit perimeter to prevent any slippage
19        or destruction of the liner materials; and
20            (E) the foundation for the liner shall be free of
21        rock and constructed with soil having a minimum
22        thickness of 12 inches after compaction covering the
23        entire bottom and interior sides of the pit.
24        (3) Fresh water may be stored in tanks or pits at the
25    election of the operator.
26        (4) Tanks required under this subsection must be

 

 

09800SB1715ham001- 55 -LRB098 08145 MGM 45943 a

1    above-ground tanks that are closed, watertight, and will
2    resist corrosion. The permittee shall routinely inspect
3    the tanks for corrosion.
4        (5) Hydraulic fracturing fluids and hydraulic
5    fracturing flowback must be removed from the well site
6    within 60 days after completion of high volume horizontal
7    fracturing operations, except that any excess hydraulic
8    fracturing flowback captured for temporary storage in a
9    reserve pit as provided in paragraph (2) of this subsection
10    must be removed from the well site within 7 days.
11        (6) Tanks, piping, and conveyances, including valves,
12    must be constructed of suitable materials, be of sufficient
13    pressure rating, be able to resist corrosion, and be
14    maintained in a leak-free condition. Fluid transfer
15    operations from tanks to tanker trucks must be supervised
16    at the truck and at the tank if the tank is not visible to
17    the truck operator from the truck. During transfer
18    operations, all interconnecting piping must be supervised
19    if not visible to transfer personnel at the truck and tank.
20        (7) Hydraulic fracturing flowback must be tested for
21    volatile organic chemicals, semi-volatile organic
22    chemicals, inorganic chemicals, heavy metals, and
23    naturally occurring radioactive material prior to removal
24    from the site. Testing shall occur once per well site and
25    the analytical results shall be filed with the Department
26    and the Agency, and provided to the liquid oilfield waste

 

 

09800SB1715ham001- 56 -LRB098 08145 MGM 45943 a

1    transportation and disposal operators. Prior to plugging
2    and site restoration, the ground adjacent to the storage
3    tanks and any hydraulic fracturing flowback reserve pit
4    must be measured for radioactivity.
5        (8) Hydraulic fracturing flowback may only be disposed
6    of by injection into a Class II injection well that is
7    below interface between fresh water and naturally
8    occurring Class IV groundwater. Produced water may be
9    disposed of by injection in a permitted enhanced oil
10    recovery operation. Hydraulic fracturing flowback and
11    produced water may be treated and recycled for use in
12    hydraulic fracturing fluid for high volume horizontal
13    hydraulic fracturing operations.
14        (9) Discharge of hydraulic fracturing fluids,
15    hydraulic fracturing flowback, and produced water into any
16    surface water or water drainage way is prohibited.
17        (10) Transport of all hydraulic fracturing fluids,
18    hydraulic fracturing flowback, and produced water by
19    vehicle for disposal must be undertaken by a liquid
20    oilfield waste hauler permitted by the Department under
21    Section 8c of the Illinois Oil and Gas Act. The liquid
22    oilfield waste hauler transporting hydraulic fracturing
23    fluids, hydraulic fracturing flowback, or produced water
24    under this Act shall comply with all laws, rules, and
25    regulations concerning liquid oilfield waste.
26        (11) Drill cuttings, drilling fluids, and drilling

 

 

09800SB1715ham001- 57 -LRB098 08145 MGM 45943 a

1    wastes not containing oil-based mud or polymer-based mud
2    may be stored in tanks or pits. Pits used to store
3    cuttings, fluids, and drilling wastes from wells not using
4    fresh water mud shall be subject to the construction
5    standards identified in (2) of this Section. Drill cuttings
6    not contaminated with oil-based mud or polymer-based mud
7    may be disposed of onsite subject to the approval of the
8    Department. Drill cuttings contaminated with oil-based mud
9    or polymer-based mud shall not be disposed of on site.
10    Annular disposal of drill cuttings or fluid is prohibited.
11        (12) Any release of hydraulic fracturing fluid,
12    hydraulic fracturing additive, or hydraulic fracturing
13    flowback, used or generated during or after high volume
14    horizontal hydraulic fracturing operations shall be
15    immediately cleaned up and remediated pursuant to
16    Department requirements. Any release of hydraulic
17    fracturing fluid or hydraulic fracturing flowback in
18    excess of 1 barrel, shall be reported to the Department.
19    Any release of a hydraulic fracturing additive shall be
20    reported to the Department in accordance with the
21    appropriate reportable quantity thresholds established
22    under the federal Emergency Planning and Community
23    Right-to-Know Act as published in the Code of Federal
24    Regulations (CFR), 40 CFR Parts 355, 370, and 372, the
25    federal Comprehensive Environmental Response,
26    Compensation, and Liability Act as published in 40 CFR Part

 

 

09800SB1715ham001- 58 -LRB098 08145 MGM 45943 a

1    302, and subsection (r) of Section 112 of the Federal Clean
2    Air Act as published in 40 CFR Part 68. Any release of
3    produced water in excess of 5 barrels shall be cleaned up,
4    remediated, and reported pursuant to Department
5    requirements.
6        (13) Secondary containment for tanks required under
7    this subsection and additive staging areas is required.
8    Secondary containment measures may include, as deemed
9    appropriate by the Department, one or a combination of the
10    following: dikes, liners, pads, impoundments, curbs,
11    sumps, or other structures or equipment capable of
12    containing the substance. Any secondary containment must
13    be sufficient to contain 110% of the total capacity of the
14    single largest container or tank within a common
15    containment area. No more than one hour before initiating
16    any stage of the high volume horizontal hydraulic
17    fracturing operations, all secondary containment must be
18    visually inspected to ensure all structures and equipment
19    are in place and in proper working order. The results of
20    this inspection must be recorded and documented by the
21    operator, and available to the Department upon request.
22        (14) A report on the transportation and disposal of the
23    hydraulic fracturing fluids and hydraulic fracturing
24    flowback shall be prepared and included in the well file.
25    The report must include the amount of fluids transported,
26    identification of the company that transported the fluids,

 

 

09800SB1715ham001- 59 -LRB098 08145 MGM 45943 a

1    the destination of the fluids, and the method of disposal.
2        (15) Operators operating wells permitted under this
3    Act must submit an annual report to the Department
4    detailing the management of any produced water associated
5    with the permitted well. The report shall be due to the
6    Department no later than April 30th of each year and shall
7    provide information on the operator's management of any
8    produced water for the prior calendar year. The report
9    shall contain information relative to the amount of
10    produced water the well permitted under this Act produced,
11    the method by which the produced water was disposed, and
12    the destination where the produced water was disposed in
13    addition to any other information the Department
14    determines is necessary by rule.
15    (d) Hydraulic fracturing fluid shall be confined to the
16targeted formation designated in the permit. If the hydraulic
17fracturing fluid or hydraulic fracturing flowback are
18migrating into the freshwater zone or to the surface from the
19well in question or from other wells, the permittee shall
20immediately notify the Department and shut in the well until
21remedial action that prevents the fluid migration is completed.
22The permittee shall obtain the approval of the Department prior
23to resuming operations.
24    (e) Emissions controls.
25        (1) This subsection applies to all horizontal wells
26    that are completed with high volume horizontal hydraulic

 

 

09800SB1715ham001- 60 -LRB098 08145 MGM 45943 a

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

 

 

09800SB1715ham001- 61 -LRB098 08145 MGM 45943 a

1    minimizing the emissions associated with venting of
2    hydrocarbon fluids and natural gas during the production
3    phase by:
4            (A) routing the recovered fluids into storage
5        vessels and (i) routing the recovered gas into a gas
6        gathering line, collection system, or to a generator
7        for onsite energy generation, providing that gas to the
8        surface owner of the well site for use for heat or
9        energy generation, or (ii) using another method other
10        than venting or flaring; and
11            (B) employing sand traps, surge vessels,
12        separators, and tanks as soon as practicable during
13        cleanout operations to safely maximize resource
14        recovery and minimize releases to the environment.
15        (5) If the permittee establishes that it is technically
16    infeasible or economically unreasonable to minimize
17    emissions associated with the venting of hydrocarbon
18    fluids and natural gas during production using the methods
19    specified in paragraph (4) of this subsection (e), the
20    Department shall require the permittee to capture and
21    direct any natural gas produced during the production phase
22    to a flare. Any flare used pursuant to this paragraph shall
23    be equipped with a reliable continuous ignition source over
24    the duration of production. In order to establish technical
25    infeasibility or economic unreasonableness under this
26    paragraph (5), the permittee must demonstrate, for each

 

 

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1    well site on an annual basis, that taking the actions
2    listed in paragraph (4) of this subsection (e) are not cost
3    effective based on a site-specific analysis. Permittees
4    that use a flare during the production phase for operations
5    other than emergency conditions shall file an updated
6    site-specific analysis annually with the Department. The
7    analysis shall be due one year from the date of the
8    previous submission and shall detail whether any changes
9    have occurred that alter the technical infeasibility or
10    economic unreasonableness of the permittee to reduce their
11    emissions in accordance with paragraph (4) of this
12    subsection (e).
13        (6) Uncontrolled emissions exceeding 6 tons per year
14    from storage tanks shall be recovered and routed to a flare
15    that is designed in accordance with 40 CFR 60.18 and is
16    certified by the manufacturer of the device. The permittee
17    shall maintain and operate the flare in accordance with
18    manufacturer specifications. Any flare used under this
19    paragraph must be equipped with a reliable continuous
20    ignition source over the duration of production.
21        (7) The Department may approve an exemption that waives
22    the flaring requirements of paragraphs (5) and (6) of this
23    subsection (e) only if the permittee demonstrates that the
24    use of the flare will pose a significant risk of injury or
25    property damage and that alternative methods of collection
26    will not threaten harm to the environment. In determining

 

 

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1    whether to approve a waiver, the Department shall consider
2    the quantity of casinghead gas produced, the topographical
3    and climatological features at the well site, and the
4    proximity of agricultural structures, crops, inhabited
5    structures, public buildings, and public roads and
6    railways.
7        (8) For each wildcat well, delineation well, or low
8    pressure well, permittees shall be responsible for
9    minimizing the emissions associated with venting of
10    hydrocarbon fluids and natural gas during the flowback
11    period and production phase by capturing and directing the
12    emissions to a completion combustion device during the
13    flowback period and to a flare during the production phase,
14    except in conditions that may result in a fire hazard or
15    explosion, or where high heat emissions from a completion
16    combustion device or flare may negatively impact
17    waterways. Completion combustion devices and flares shall
18    be equipped with a reliable continuous ignition source over
19    the duration of the flowback period and the production
20    phase, as applicable.
21        (9) On or after July 1, 2015, all flares used under
22    paragraphs (5) and (8) of this subsection (e) shall (i)
23    operate with a combustion efficiency of at least 98% and in
24    accordance with 40 CFR 60.18; and (ii) be certified by the
25    manufacturer of the device. The permittee shall maintain
26    and operate the flare in accordance with manufacturer

 

 

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1    specifications.
2        (10) Permittees shall employ practices for control of
3    fugitive dust related to their operations. These practices
4    shall include, but are not limited to, the use of speed
5    restrictions, regular road maintenance, and restriction of
6    construction activity during high-wind days. Additional
7    management practices such as road surfacing, wind breaks
8    and barriers, or automation of wells to reduce truck
9    traffic may also be required by the Department if
10    technologically feasible and economically reasonable to
11    minimize fugitive dust emissions.
12        (11) Permittees shall record and report to the
13    Department on an annual basis the amount of gas flared or
14    vented from each high volume horizontal hydraulic
15    fracturing well. Three years after the effective date of
16    the first high-volume horizontal hydraulic fracturing well
17    permit issued by the Department, and every 3 years
18    thereafter, the Department shall prepare a report that
19    analyzes the amount of gas that has been flared or vented
20    and make recommendations to the General Assembly on whether
21    steps should be taken to reduce the amount of gas that is
22    being flared or vented in this State.
23    (f) High volume horizontal hydraulic fracturing operations
24completion report. Within 60 calendar days after the conclusion
25of high volume horizontal hydraulic fracturing operations, the
26operator shall file a high volume horizontal hydraulic

 

 

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1fracturing operations completion report with the Department. A
2copy of each completion report submitted to the Department
3shall be provided by the Department to the Illinois State
4Geological Survey. The completion reports required by this
5Section shall be considered public information and shall be
6made available on the Department's website. The high volume
7horizontal hydraulic fracturing operations completion report
8shall contain the following information:
9        (1) the permittee name as listed in the permit
10    application;
11        (2) the dates of the high volume horizontal hydraulic
12    fracturing operations;
13        (3) the county where the well is located;
14        (4) the well name and Department reference number;
15        (5) the total water volume used in the high volume
16    horizontal hydraulic fracturing operations of the well,
17    and the type and total volume of the base fluid used if
18    something other than water;
19        (6) each source from which the water used in the high
20    volume horizontal hydraulic fracturing operations was
21    drawn, and the specific location of each source, including,
22    but not limited to, the name of the county and latitude and
23    longitude coordinates;
24        (7) the quantity of hydraulic fracturing flowback
25    recovered from the well;
26        (8) a description of how hydraulic fracturing flowback

 

 

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1    recovered from the well was disposed and, if applicable,
2    reused;
3        (9) a chemical disclosure report identifying each
4    chemical and proppant used in hydraulic fracturing fluid
5    for each stage of the hydraulic fracturing operations
6    including the following:
7            (A) the total volume of water used in the hydraulic
8        fracturing treatment of the well or the type and total
9        volume of the base fluid used in the hydraulic
10        fracturing treatment, if something other than water;
11            (B) each hydraulic fracturing additive used in the
12        hydraulic fracturing fluid, including the trade name,
13        vendor, a brief descriptor of the intended use or
14        function of each hydraulic fracturing additive, and
15        the Material Safety Data Sheet (MSDS), if applicable;
16            (C) each chemical intentionally added to the base
17        fluid, including for each chemical, the Chemical
18        Abstracts Service number, if applicable; and
19            (D) the actual concentration in the base fluid, in
20        percent by mass, of each chemical intentionally added
21        to the base fluid;
22        (10) all pressures recorded during the high volume
23    horizontal hydraulic fracturing operations; and
24        (11) any other reasonable or pertinent information
25    related to the conduct of the high volume horizontal
26    hydraulic fracturing operations the Department may request

 

 

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1    or require by administrative rule.
 
2    Section 1-77. Chemical disclosure; trade secret
3protection.
4    (a) If the chemical disclosure information required by
5paragraph (8) of subsection (b) of Section 1-35 of this Act is
6not submitted at the time of permit application, then the
7permittee, applicant, or person who will perform high volume
8horizontal hydraulic fracturing operations at the well shall
9submit this information to the Department in electronic format
10no less than 21 calendar days prior to performing the high
11volume horizontal hydraulic fracturing operations. The
12permittee shall not cause or allow any stimulation of the well
13if it is not in compliance with this Section. Nothing in this
14Section shall prohibit the person performing high volume
15horizontal hydraulic fracturing operations from adjusting or
16altering the contents of the fluid during the treatment process
17to respond to unexpected conditions, as long as the permittee
18or the person performing the high volume horizontal hydraulic
19fracturing operations notifies the Department by electronic
20mail within 24 hours of the departure from the initial
21treatment design and includes a brief explanation of the reason
22for the departure.
23    (b) No permittee shall use the services of another person
24to perform high volume horizontal hydraulic fracturing
25operations unless the person is in compliance with this

 

 

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1Section.
2    (c) Any person performing high volume horizontal hydraulic
3fracturing operations within this State shall:
4        (1) be authorized to do business in this State; and
5        (2) maintain and disclose to the Department separate
6    and up-to-date master lists of:
7            (A) the base fluid to be used during any high
8        volume horizontal hydraulic fracturing operations
9        within this State;
10            (B) all hydraulic fracturing additives to be used
11        during any high volume horizontal hydraulic fracturing
12        operations within this State; and
13            (C) all chemicals and associated Chemical Abstract
14        Service numbers to be used in any high volume
15        horizontal hydraulic fracturing operations within this
16        State.
17    (d) Persons performing high volume horizontal hydraulic
18fracturing operations are prohibited from using any base fluid,
19hydraulic fracturing additive, or chemical not listed on their
20master lists disclosed under paragraph (2) of subsection (c) of
21this Section.
22    (e) The Department shall assemble and post up-to-date
23copies of the master lists it receives under paragraph (2) of
24subsection (c) of this Section on its website in accordance
25with Section 1-110 of this Act.
26    (f) Where an applicant, permittee, or the person performing

 

 

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1high volume horizontal hydraulic fracturing operations
2furnishes chemical disclosure information to the Department
3under this Section, Section 1-35, or Section 1-75 of this Act
4under a claim of trade secret, the applicant, permittee, or
5person performing high volume horizontal hydraulic fracturing
6operations shall submit redacted and un-redacted copies of the
7documents containing the information to the Department and the
8Department shall use the redacted copies when posting materials
9on its website.
10    (g) Upon submission or within 5 calendar days of submission
11of chemical disclosure information to the Department under this
12Section, Section 1-35, or Section 1-75 of this Act under a
13claim of trade secret, the person that claimed trade secret
14protection shall provide a justification of the claim
15containing the following: a detailed description of the
16procedures used by the person to safeguard the information from
17becoming available to persons other than those selected by the
18person to have access to the information for limited purposes;
19a detailed statement identifying the persons or class of
20persons to whom the information has been disclosed; a
21certification that the person has no knowledge that the
22information has ever been published or disseminated or has
23otherwise become a matter of general public knowledge; a
24detailed discussion of why the person believes the information
25to be of competitive value; and any other information that
26shall support the claim.

 

 

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1    (h) Chemical disclosure information furnished under this
2Section, Section 1-35, or Section 1-75 of this Act under a
3claim of trade secret shall be protected from disclosure as a
4trade secret if the Department determines that the statement of
5justification demonstrates that:
6        (1) the information has not been published,
7    disseminated, or otherwise become a matter of general
8    public knowledge; and
9        (2) the information has competitive value.
10    There is a rebuttable presumption that the information has
11not been published, disseminated, or otherwise become a matter
12of general public knowledge if the person has taken reasonable
13measures to prevent the information from becoming available to
14persons other than those selected by the person to have access
15to the information for limited purposes and the statement of
16justification contains a certification that the person has no
17knowledge that the information has ever been published,
18disseminated, or otherwise become a matter of general public
19knowledge.
20    (i) Denial of a trade secret request under this Section
21shall be appealable under the Administrative Review Law.
22    (j) A person whose request to inspect or copy a public
23record is denied, in whole or in part, because of a grant of
24trade secret protection may file a request for review with the
25Public Access Counselor under Section 9.5 of the Freedom of
26Information Act or for injunctive or declaratory relief under

 

 

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1Section 11 of the Freedom of Information Act for the purpose of
2reviewing whether the Department properly determined that the
3trade secret protection should be granted.
4    (k) Except as otherwise provided in subsections (l) and (m)
5of this Section, the Department must maintain the
6confidentiality of chemical disclosure information furnished
7under this Section, Section 1-35, or Section 1-75 of this Act
8under a claim of trade secret, until the Department receives
9official notification of a final order by a reviewing body with
10proper jurisdiction that is not subject to further appeal
11rejecting a grant of trade secret protection for that
12information.
13    (l) The Department shall adopt rules for the provision of
14information furnished under a claim of trade secret to a health
15professional who states a need for the information and
16articulates why the information is needed. The health
17professional may share that information with other persons as
18may be professionally necessary, including, but not limited to,
19the affected patient, other health professionals involved in
20the treatment of the affected patient, the affected patient's
21family members if the affected patient is unconscious, unable
22to make medical decisions, or is a minor, the Centers for
23Disease Control, and other government public health agencies.
24Except as otherwise provided in this Section, any recipient of
25the information shall not use the information for purposes
26other than the health needs asserted in the request and shall

 

 

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1otherwise maintain the information as confidential.
2Information so disclosed to a health professional shall in no
3way be construed as publicly available. The holder of the trade
4secret may request a confidentiality agreement consistent with
5the requirements of this Section from all health professionals
6to whom the information is disclosed as soon as circumstances
7permit. The rules adopted by the Department shall also
8establish procedures for providing the information in both
9emergency and non-emergency situations.
10    (m) In the event of a release of hydraulic fracturing
11fluid, a hydraulic fracturing additive, or hydraulic
12fracturing flowback, and when necessary to protect public
13health or the environment, the Department may disclose
14information furnished under a claim of trade secret to the
15relevant county public health director or emergency manager,
16the relevant fire department chief, the Director of the
17Illinois Department of Public Health, the Director of the
18Illinois Department of Agriculture, and the Director of the
19Illinois Environmental Protection Agency upon request by that
20individual. The Director of the Illinois Department of Public
21Health, and the Director of the Illinois Environmental
22Protection Agency, and the Director of the Illinois Department
23of Agriculture may disclose this information to staff members
24under the same terms and conditions as apply to the Director of
25Natural Resources. Except as otherwise provided in this
26Section, any recipient of the information shall not use the

 

 

09800SB1715ham001- 73 -LRB098 08145 MGM 45943 a

1information for purposes other than to protect public health or
2the environment and shall otherwise maintain the information as
3confidential. Information disclosed to staff shall in no way be
4construed as publicly available. The holder of the trade secret
5information may request a confidentiality agreement consistent
6with the requirements of this Section from all persons to whom
7the information is disclosed as soon as circumstances permit.
 
8    Section 1-80. Water quality monitoring.
9    (a) Each applicant for a high volume horizontal hydraulic
10fracturing permit shall provide the Department with a work plan
11to ensure accurate and complete sampling and testing as
12required under this Section. The work plan shall ensure
13compliance with the requirements of this Section and include,
14at a minimum, the following:
15        (1) information identifying all water sources within
16    the range of testing under this Section;
17        (2) a sampling plan and protocol, including
18    notification to the Department at least 7 calendar days
19    prior to sample collection;
20        (3) the name and contact information of an independent
21    third party under the supervision of a professional
22    engineer or professional geologist that shall be
23    designated to conduct sampling to establish a baseline as
24    provided for under subsection (b) of this Section;
25        (4) the name and contact information of an independent

 

 

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1    third party under the supervision of a professional
2    engineer or professional geologist that shall be
3    designated to conduct sampling to establish compliance
4    with monitoring as provided within subsection (c) of this
5    Section;
6        (5) the name and contact information of an independent
7    testing laboratory, certified to perform the required
8    laboratory method, to conduct the analysis required under
9    subsections (b) and (c) of this Section;
10        (6) proof of access and the right to test within the
11    area for testing prescribed within subsection (b) of this
12    Section during the duration of high volume horizontal
13    hydraulic fracturing operations covered under the permit
14    application, and copies of any non-disclosure agreements
15    made under subsection (d) of this Section; and
16        (7) identification of practicable contingency
17    measures, including provision for alternative drinking
18    water supplies, which could be implemented in the event of
19    pollution or diminution of a water source as provided for
20    in Section 1-83.
21    (b) Prior to conducting high volume horizontal hydraulic
22fracturing operations on a well, a permittee shall retain an
23independent third party, as required within paragraph (3) of
24subsection (a) of this Section, and shall conduct baseline
25water quality sampling of all water sources within 1,500 feet
26of the well site prior to any fracturing activities. Where (i)

 

 

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1there are no groundwater wells within 1,500 feet of a well
2site, or access to groundwater wells within 1,500 feet of the
3well site has been denied under subsection (d) of this Section,
4and (ii) the proposed well site is located within 1,500 feet
5horizontally from any portion of an aquifer, the permittee
6shall conduct sampling of the aquifer at the closest
7groundwater well with access to the aquifer to which the
8permittee has not been denied access under subsection (d) of
9this Section. Installation of a groundwater monitoring well is
10not required to satisfy the sampling requirements of this
11Section. The samples collected by the independent third party,
12under the supervision of a professional engineer or
13professional geologist, shall be analyzed by an independent
14testing laboratory in accordance with paragraph (4) of
15subsection (a) of this Section. Testing shall be done by
16collection of a minimum of 3 samples for each water source
17required to be tested under this Section. The permittee shall,
18within 7 calendar days after receipt of results of tests
19conducted under this subsection, submit the results to the
20Department or to the owner of the water source under a
21non-disclosure agreement under subsection (d) of this Section.
22The Department shall post the results on its website within 7
23calendar days after receipt. The results shall, at a minimum,
24include a detailed description of the sampling and testing
25conducted under this subsection, the chain of custody of the
26samples, and quality control of the testing.

 

 

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1    (c) After baseline tests are conducted under subsection (b)
2of this Section and following issuance of a permit by the
3Department, the permittee shall have all water sources which
4are subjected to sampling under subsection (b) of this Section
5sampled and tested in the same manner 6 months, 18 months, and
630 months after the high volume horizontal hydraulic fracturing
7operations have been completed. Sampling of a water source
8under this subsection is not required if the water source was
9sampled under this subsection or subsection (b) within the
10previous month. The permittee shall notify the Department at
11least 7 calendar days prior to taking the sample. The permittee
12shall, within 7 calendar days after receipt of results of tests
13conducted under this subsection (c), submit the results to the
14Department or to the owner of the water source pursuant to a
15non-disclosure agreement under subsection (d) of this Section.
16The results shall include, at a minimum, a detailed description
17of the sampling and testing conducted under this subsection,
18the chain of custody of the samples, and quality control of the
19testing.
20    (d) Sampling of private water wells or ponds wholly
21contained within private property shall not be required where
22the owner of the private property declines, expressly and in
23writing, to provide access or permission for sampling. If the
24owner of the private property declines to provide proof of his
25or her refusal to allow access in writing, the operator shall
26provide the Department evidence as to the good faith efforts

 

 

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1that were made to secure the required documentation. Permits
2issued under this Act cannot be denied if the owner of the
3private property declines to provide proof of his or her
4refusal to allow access in writing and the permittee provides
5evidence that good faith efforts were made to gain access for
6the purposes of conducting tests. The owners of private
7property may condition access or permission for sampling of a
8private water well or pond wholly within the property or a
9portion of any perennial stream or river that flows through the
10property under a non-disclosure agreement, which must include
11the following terms and conditions:
12        (1) the permittee shall provide the results of the
13    water quality testing to the property owners;
14        (2) the permittee shall retain the results of the water
15    quality testing until at least one year after completion of
16    all monitoring under this Section for review by the
17    Department upon request;
18        (3) the permittee shall not file with the Department
19    the results of the water quality testing, except under
20    paragraph (4) of subsection (d) of this Section; and
21        (4) the permittee shall notify the Department within 7
22    calendar days of its receipt of the water quality data
23    where any testing under subsection (c) of this Section
24    indicates that concentrations exceed the standards or
25    criteria referenced in the definition of pollution or
26    diminution under Section 1-5 of this Act.

 

 

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1    (e) Each set of samples collected under subsections (b) and
2(c) of this Section shall include analyses for:
3        (1) pH;
4        (2) total dissolved solids, dissolved methane,
5    dissolved propane, dissolved ethane, alkalinity, and
6    specific conductance;
7        (3) chloride, sulfate, arsenic, barium, calcium,
8    chromium, iron, magnesium, selenium, cadmium, lead,
9    manganese, mercury, and silver;
10        (4) BTEX; and
11        (5) gross alpha and beta particles to determine the
12    presence of any naturally occurring radioactive materials.
13    Sampling shall, at a minimum, be consistent with the work
14plan and allow for a determination of whether any hydraulic
15fracturing additive or other contaminant has caused pollution
16or diminution for purposes of Sections 1-83 and 1-85 of this
17Act.
 
18    Section 1-83. Order authority.
19    (a) Any person who has reason to believe they have incurred
20pollution or diminution of a water source as a result of a high
21volume horizontal hydraulic fracturing treatment of a well may
22notify the Department and request that an investigation be
23conducted.
24    (b) Within 30 calendar days after notification, the
25Department shall initiate the investigation of the claim and

 

 

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1make a reasonable effort to reach a determination within 180
2calendar days after notification. The Department may contact
3the Agency to seek the Agency's assistance in water quality
4sampling. The Agency may seek cost recovery under subsection
5(e) of Section 1-87 of this Act and recover all costs for
6samples taken for the investigation under this Section.
7    (c) Any person conducting or who has conducted high volume
8horizontal hydraulic fracturing operations shall supply any
9information requested by the Department to assist the
10Department. The Department shall give due consideration to any
11information submitted during the course of the investigation.
12    (d) If sampling results or other information obtained as
13part of the investigation or the results of tests conducted
14under subsection (c) of Section 1-80 of this Act indicate that
15concentrations exceed the standards or criteria referenced by
16pollution or diminution under Section 1-5 of this Act, the
17Department shall issue an order to the permittee as necessary
18to require permanent or temporary replacement of a water
19source. In addition to any other penalty available under the
20law and consistent with the Department's order, the permittee
21shall restore or replace the affected supply with an
22alternative source of water adequate in quantity and quality
23for the purposes served by the water source. The quality of a
24restored or replaced water source shall meet or exceed the
25quality of the original water source based upon the results of
26the baseline test results under subsection (b) of Section 1-80

 

 

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1for that water source, or other available information. The
2Department may require the permittee to take immediate action,
3including but not limited to, repair, replacement, alteration,
4or prohibition of operation of equipment permitted by the
5Department. The Department may issue conditions within any
6order to protect the public health or welfare or the
7environment.
8    (e) Within 15 calendar days after a determination has been
9made regarding the pollution or diminution, the Department
10shall provide notice of its findings and the orders, if any, to
11all persons that use the water source for domestic,
12agricultural, industrial, or any other legitimate beneficial
13uses.
14    (f) Upon issuance of an Order or a finding of pollution or
15diminution under subsection (d) of this Section, the Department
16shall contact the Agency and forward all information from the
17investigation to the Agency. The Agency shall investigate the
18potential for violations as designated within Section 1-87 of
19this Act.
20    (g) Reports of potential cases of water pollution that may
21be associated with high volume horizontal hydraulic fracturing
22operations may be submitted electronically. The Department
23shall establish a format for these reports to be submitted
24through the website developed under Section 1-110 of this Act.
25The Department shall electronically provide these reports to
26the Agency.

 

 

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1    (h) The Department shall publish, on its website, lists of
2confirmed cases of pollution or diminution that result from
3high volume horizontal hydraulic fracturing operations. This
4information shall be searchable by county.
5    (i) Nothing in this Section shall prevent the Department
6from issuing a cessation order under Section 8a of the Illinois
7Oil and Gas Act.
 
8    Section 1-85. Presumption of pollution or diminution.
9    (a) This Section establishes a rebuttable presumption for
10the purposes of evidence and liability under State law
11regarding claims of pollution or diminution of a water source
12and for use regarding the investigation and order authority
13under Section 1-83.
14    (b) Unless rebutted by a defense established in subsection
15(c) of this Section, it shall be presumed that any person
16conducting or who has conducted high volume horizontal
17hydraulic fracturing operations shall be liable for pollution
18or diminution of a water supply if:
19        (1) the water source is within 1,500 feet of the well
20    site;
21        (2) water quality data showed no pollution or
22    diminution prior to the start of high volume horizontal
23    hydraulic fracturing operations; and
24        (3) the pollution or diminution occurred during high
25    volume horizontal hydraulic fracturing operations or no

 

 

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1    more than 30 months after the completion of the high volume
2    horizontal hydraulic fracturing operations.
3    (c) To rebut the presumption established under this
4Section, a person presumed responsible must affirmatively
5prove by clear and convincing evidence any of the following:
6        (1) the water source is not within 1,500 feet of the
7    well site;
8        (2) the pollution or diminution occurred prior to high
9    volume horizontal hydraulic fracturing operations or more
10    than 30 months after the completion of the high volume
11    horizontal hydraulic fracturing operations; or
12        (3) the pollution or diminution occurred as the result
13    of an identifiable cause other than the high volume
14    horizontal hydraulic fracturing operations.
 
15    Section 1-87. Water quality investigation and enforcement.
16    (a) No person shall cause or allow high volume horizontal
17hydraulic fracturing operations permitted under this Act to
18violate Section 12 of the Illinois Environmental Protection Act
19or surface water or groundwater regulations adopted under the
20Illinois Environmental Protection Act.
21    (b) The Agency shall have the duty to investigate
22complaints that activities under this Act have caused a
23violation of Section 12 of the Illinois Environmental
24Protection Act or surface or groundwater rules adopted under
25the Illinois Environmental Protection Act. Any action taken by

 

 

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1the Agency in enforcing these violations shall be taken under
2and consistent with the Illinois Environmental Protection Act,
3including but not limited to, the Agency's authority to seek a
4civil or criminal cause of action under that Act. The test
5results under subsections (b) and (c) of Section 1-80 of this
6Act may be considered by the Agency during an investigation
7under this Section.
8    (c) A person who has reason to believe they have incurred
9contamination of a water source as a result of high volume
10horizontal hydraulic fracturing may notify the Agency and
11request an investigation be conducted. The Agency shall forward
12this request to the Department for consideration of an
13investigation under Section 1-83 of this Act. If the Agency is
14provided with notice under subsection (f) of Section 1-83, the
15Agency shall conduct an investigation to determine whether
16pollution or diminution is continuing to occur at the location
17subject to the order, as well as locations identified by the
18Department or at any other water source within 1,500 feet of
19the well site. Any person conducting or who has conducted high
20volume horizontal hydraulic fracturing operations shall supply
21any information requested to assist the Agency in its
22investigation. The Agency shall give due consideration to any
23information submitted during the course of the investigation.
24    (d) Pollution or diminution is a violation of this Act and
25may be pursued by the Department subject to the procedures and
26remedies under Sections 1-100 and 1-105 of this Act.

 

 

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1    (e) If an Agency investigation under Section 1-83 or
2subsection (c) of this Section confirms that the cause of the
3pollution, diminution, or water pollution is attributable to
4high volume horizontal hydraulic fracturing operations, in
5addition to any other relief available under law, the permittee
6shall be required to reimburse the costs and reasonable
7expenses incurred by the Agency for all activities related to
8the investigation and cleanup. These costs shall include, but
9not be limited to, inspections, investigations, analyses,
10personnel, direct and indirect costs, studies, assessments,
11reports, and review and evaluation of that data, as well as
12costs under the Agency's review of whether the quality of a
13restored or replaced water supply meets or exceeds the quality
14of the water supply before it was affected by the permittee.
15Costs shall be reimbursed to the Agency by the permittee within
1630 calendar days after receipt of a written request for
17reimbursement by the Agency. For all costs that remain unpaid
18following 30 calendar days after receipt of a written request
19for reimbursement, the Agency may institute a civil action for
20cost recovery under subsection (e) of Section 1-101 of this
21Act. Failure to reimburse the Agency within 30 calendar days
22after receipt of the written request for reimbursement is a
23violation of this Act. Reimbursement of costs collected under
24this subsection shall be deposited by the Agency into the
25Illinois Clean Water Fund.
 

 

 

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1    Section 1-95. Plugging; restoration.
2    (a) The permittee shall perform and complete plugging of
3the well and restoration of the well site in accordance with
4the Illinois Oil and Gas Act and any and all rules adopted
5thereunder. The permittee shall bear all costs related to
6plugging of the well and reclamation of the well site. If the
7permittee fails to plug the well in accordance with this
8Section, the owner of the well shall be responsible for
9complying with this Section.
10    (b) Prior to conducting high volume horizontal hydraulic
11fracturing operations at a well site, the permittee shall cause
12to be plugged all previously unplugged well bores within 750
13feet of any part of the horizontal well bore that penetrated
14within 400 vertical feet of the formation that will be
15stimulated as part of the high volume horizontal hydraulic
16fracturing operations.
17    (c) For well sites where high volume horizontal hydraulic
18fracturing operations were permitted to occur, the operator
19shall restore any lands used by the operator other than the
20well site and production facility to a condition as closely
21approximating the pre-drilling conditions that existed before
22the land was disturbed for any stage of site preparation
23activities, drilling, and high volume horizontal hydraulic
24fracturing operations. Restoration shall be commenced within 6
25months of completion of the well site and completed within 12
26months. Restoration shall include, but is not limited to,

 

 

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1repair of tile lines, repair of fences and barriers, mitigation
2of soil compaction and rutting, application of fertilizer or
3lime to restore the fertility of disturbed soil, and repair of
4soil conservation practices such as terraces and grassed
5waterways.
6    (d) Unless contractually agreed to the contrary by the
7permittee and surface owner, the permittee shall restore the
8well site and production facility in accordance with the
9applicable restoration requirements in subsection (c) of this
10Section and shall remove all equipment and materials involved
11in site preparation, drilling, and high volume horizontal
12hydraulic fracturing operations, including tank batteries,
13rock and concrete pads, oil field debris, injection and flow
14lines at or above the surface, electric power lines and poles
15extending on or above the surface, tanks, fluids, pipes at or
16above the surface, secondary containment measures, rock or
17concrete bases, drilling equipment and supplies, and any and
18all other equipment, facilities, or materials used during any
19stage of site preparation work, drilling, or hydraulic
20fracturing operations at the well site. Work on the removal of
21equipment and materials at the well site shall begin within 6
22months after plugging the final well on the well site and be
23completed no later than 12 months after the last producing well
24on the well site has been plugged. Roads installed as part of
25the oil and gas operation may be left in place if provided in
26the lease or pursuant to agreement with the surface owner, as

 

 

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1applicable.
 
2    Section 1-96. Seismicity.
3    (a) For purposes of this Section, "induced seismicity"
4means an earthquake event that is felt, recorded by the
5national seismic network, and attributable to a Class II
6injection well used for disposal of flow-back and produced
7fluid from hydraulic fracturing operations.
8    (b) The Department shall adopt rules, in consultation with
9the Illinois State Geological Survey, establishing a protocol
10for controlling operational activity of Class II injection
11wells in an instance of induced seismicity.
12    (c) The rules adopted by the Department under this Section
13shall employ a "traffic light" control system allowing for low
14levels of seismicity while including additional monitoring and
15mitigation requirements when seismic events are of sufficient
16intensity to result in a concern for public health and safety.
17    (d) The additional mitigation requirements referenced in
18subsection (c) of this Section shall provide for either the
19scaling back of injection operations with monitoring for
20establishment of a potentially safe operation level or the
21immediate cessation of injection operations.
 
22    Section 1-97. Department mapping and reporting. On or
23before February 1, 2014, the Department shall, with the
24assistance of the Illinois State Geological Survey, submit a

 

 

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1report to the General Assembly and Governor identifying the
2following in Illinois and include any recommendations for
3additional legislative or administrative action on these
4items:
5    (a) the location of resources of shale gas and oil,
6conventional gas and oil, and process materials, including sand
7and other naturally occurring geologic materials used in high
8volume horizontal hydraulic fracturing operations;
9    (b) the potential impacts of high volume horizontal
10hydraulic fracturing operations on:
11        (1) sites owned, managed or leased by the Department;
12        (2) nature preserves;
13        (3) sites on the Register of Land and Water Reserves;
14        (4) the availability of water for human consumption and
15    general domestic use; and
16        (5) the potential for influencing natural seismic
17    activity.
18    Two years after the effective date of the first high volume
19horizontal hydraulic fracturing permit issued by the
20Department, and every 3 years thereafter, the Department shall
21prepare a report that examines the following:
22        (1) the number of high volume horizontal hydraulic
23    fracturing permits issued by the Department, on an annual
24    basis;
25        (2) a map showing the locations in this State where
26    high volume horizontal hydraulic fracturing operations

 

 

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1    have been permitted by the Department;
2        (3) identification of the latest scientific research,
3    best practices, and technological improvements related to
4    high volume horizontal hydraulic fracturing operations and
5    methods to protect the environment and public health;
6        (4) any confirmed environmental impacts in this State
7    due to high volume horizontal hydraulic fracturing
8    operations, including, but not limited to, any reportable
9    release of hydraulic fracturing flowback, hydraulic
10    fracturing fluid, and hydraulic fracturing additive;
11        (5) confirmed public health impacts in this State due
12    to high volume horizontal hydraulic fracturing operations;
13        (6) a comparison of the revenues generated under
14    subsection (e) of Section 1-35 of this Act to the
15    Department's costs associated with implementing and
16    administering provisions of this Act;
17        (7) a comparison of the revenues generated under
18    subsection (e) of Section 1-87 of this Act to the Agency's
19    costs associated with implementing and administering
20    provisions of this Act;
21        (7.5) a summary of revenues generated annually from
22    income, ad valorem, sales, and any other State and local
23    taxes applicable to activity permitted under this Act by
24    the Department, including an estimate of the income tax
25    generated from lease payments and royalty payments;
26        (8) a description of any modifications to existing

 

 

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1    programs, practices, or rules related to high volume
2    horizontal hydraulic fracturing operations made by the
3    Department;
4        (9) any problems or issues the Department identifies as
5    it implements and administers the provisions of this Act;
6        (10) any recommendations for legislative action by the
7    General Assembly to address the findings in the report; and
8        (11) any other information the Department deems
9    relevant regarding its specific experiences implementing
10    and administering the provisions of this Act and,
11    generally, high volume horizontal hydraulic fracturing
12    operations.
13    The first report shall also examine any studies issued by
14the United States Environmental Protection Agency regarding
15high volume horizontal hydraulic fracturing operations. The
16report required by this Section shall be provided to the
17General Assembly and Governor.
 
18    Section 1-98. Hydraulic fracturing completion reporting.
19    (a) For the purposes of this Section, "hydraulic fracturing
20operations" means all stages of a stimulation treatment of a
21horizontal well as defined by this Act by the pressurized
22application of more than 80,000 gallons but less than 300,001
23gallons of hydraulic fracturing fluid and proppant to initiate
24or propagate fractures in a geologic formation to enhance
25extraction or production of oil or gas.

 

 

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1    (b) Within 60 calendar days after the conclusion of
2hydraulic fracturing operations, the operator shall file a
3hydraulic fracturing operations completion report with the
4Department. The hydraulic fracturing operations completion
5report shall contain the following information:
6        (1) the name and location of the well;
7        (2) the total and per-stage gallons of hydraulic
8    fracturing fluid used at the well;
9        (3) depth of the wellbore (including both total
10    vertical depth and total measured depth);
11        (4) length of horizontal wellbore;
12        (5) the maximum surface treating pressure used;
13        (6) the formation targeted;
14        (7) the number of hydraulic fracturing stages; and
15        (8) total perforated interval and individual
16    perforation intervals.
 
17    Section 1-99. Task Force on Hydraulic Fracturing
18Regulation.
19    (a) There is hereby created the Task Force on Hydraulic
20Fracturing Regulation.
21    (b) The task force shall consist of the following members
22as follows:
23        (1) Four legislators, appointed one each by the
24    President of the Senate, the Minority Leader of the Senate,
25    the Speaker of the House of Representatives, and the

 

 

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1    Minority Leader of the House of Representatives;
2        (2) The Governor, or his or her representative;
3        (3) The Director of the Illinois Environmental
4    Protection Agency, or his or her representative;
5        (4) The Director of the Illinois Department of Natural
6    Resources, or his or her representative;
7        (5) The Attorney General of the State of Illinois, or
8    his or her representative;
9        (6) The Director of the Illinois State Geological
10    Survey, or his or her representative;
11        (7) Four representatives from environmental
12    organizations, at least one of whom shall be a national
13    environmental organization, at least one of whom shall be a
14    Midwest regional environmental organization, and at least
15    one of whom shall be an Illinois-based environmental
16    organization, appointed by the Director of the Illinois
17    Department of Natural Resources; and
18        (8) Four representatives from entities representing
19    the interests of the oil and gas industry, at least one of
20    whom shall represent companies whose activities are
21    national in scope, at least one of whom shall represent
22    companies whose activities are primarily limited to this
23    State, at least one of whom shall represent an industry
24    trade association, and at least one of whom shall represent
25    a statewide labor federation representing more than one
26    international union, appointed by the Director of the

 

 

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1    Illinois Department of Natural Resources.
2    (c) The Director of the Illinois Department of Natural
3Resources shall serve as chairperson of the task force, and the
4Department shall be responsible for administering its
5operations and ensuring that the requirements of this Section
6are met.
7    (d) The task force may consult with any persons or entities
8it deems necessary to carry out its mandate.
9    (e) Members of the task force shall be appointed no later
10than 90 days after the effective date of this amendatory Act of
11the 98th General Assembly. The members of the task force shall
12receive no compensation for serving as members of the task
13force.
14    (f) The task force shall (1) prepare a report evaluating
15the scope of hydraulic fracturing activity in the State and (2)
16provide recommendations to the General Assembly as to whether
17further legislation is needed to regulate hydraulic fracturing
18in this State. In performing these tasks, the task force shall
19consider, at a minimum, the data collected by the Department
20under Section 1-98 of this Act and the Illinois Oil and Gas
21Act.
22    (g) The task force shall submit its report and
23recommendations specified in subsection (f) of this Section to
24the General Assembly on or before September 15, 2016.
25    (h) The task force, upon issuance of its report and
26recommendations, is dissolved and this Section is repealed.
 

 

 

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1    Section 1-100. Criminal offenses; penalties.
2    (a) Except as otherwise provided in this Section, it shall
3be a Class A misdemeanor to knowingly violate this Act, its
4rules, or any permit or term or condition thereof, or knowingly
5to submit any false information under this Act or regulations
6adopted thereunder, or under any permit or term or condition
7thereof. A person convicted or sentenced under this subsection
8(a) shall be subject to a fine of not to exceed $10,000 for
9each day of violation.
10    (b) It is unlawful for a person knowingly to violate:
11        (1) subsection (c) of Section 1-25 of this Act;
12        (2) subsection (d) of Section 1-25 of this Act;
13        (3) subsection (a) of Section 1-30 of this Act;
14        (4) paragraph (9) of subsection (c) of Section 1-75 of
15    this Act; or
16        (5) subsection (a) of Section 1-87 of this Act.
17    A person convicted or sentenced for any knowing violation
18of the requirements or prohibitions listed in this subsection
19(b) commits a Class 4 felony, and in addition to any other
20penalty prescribed by law is subject to a fine not to exceed
21$25,000 for each day of violation. A person who commits a
22second or subsequent knowing violation of the requirements or
23prohibitions listed in this subsection (b) commits a Class 3
24felony and, in addition to any other penalties provided by law,
25is subject to a fine not to exceed $50,000 for each day of

 

 

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1violation.
2    (c) Any person who knowingly makes a false, fictitious, or
3fraudulent material statement, orally or in writing, to the
4Department or Agency as required by this Act, its rules, or any
5permit, term, or condition of a permit, commits a Class 4
6felony, and each false, fictitious, or fraudulent statement or
7writing shall be considered a separate violation. In addition
8to any other penalty prescribed by law, persons in violation of
9this subsection (c) is subject to a fine of not to exceed
10$25,000 for each day of violation. A person who commits a
11second or subsequent knowing violation of this subsection (c)
12commits a Class 3 felony and, in addition to any other
13penalties provided by law, is subject to a fine not to exceed
14$50,000 for each day of violation.
15    (d) Any criminal action provided for under this Section
16shall be brought by the State's Attorney of the county in which
17the violation occurred or by the Attorney General and shall be
18conducted in accordance with the applicable provision of the
19Code of Criminal Procedure of 1963. For criminal conduct in
20this Section, the period for commencing prosecution shall not
21begin to run until the offense is discovered by or reported to
22a State or local agency having authority to investigate
23violations of this Act.
 
24    Section 1-101. Violations; civil penalties and
25injunctions.

 

 

09800SB1715ham001- 96 -LRB098 08145 MGM 45943 a

1    (a) Except as otherwise provided in this Section, any
2person who violates any provision of this Act or any rule or
3order adopted under this Act or any permit issued under this
4Act shall be liable for a civil penalty not to exceed $50,000
5for the violation and an additional civil penalty not to exceed
6$10,000 for each day during which the violation continues.
7    (b) Any person who violates any requirements or
8prohibitions of provisions listed in this subsection (b) is
9subject to a civil penalty not to exceed $100,000 for the
10violation and an additional civil penalty not to exceed $20,000
11for each day during which the violation continues. The
12following are violations are subject to the penalties of this
13subsection (b):
14        (1) subsection (c) of Section 1-25 of this Act;
15        (2) subsection (d) of Section 1-25 of this Act;
16        (3) subsection (a) of Section 1-30 of this Act;
17        (4) paragraph (9) of subsection (c) of Section 1-75 of
18    this Act; or
19        (5) subsection (a) of Section 1-87 of this Act.
20    (c) Any person who knowingly makes, submits, causes to be
21made, or causes to be submitted a false report of pollution,
22diminution, or water pollution attributable to high volume
23horizontal hydraulic fracturing operations that results in an
24investigation by the Department or Agency under this Act shall
25be liable for a civil penalty not to exceed $1,000 for the
26violation.

 

 

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1    (d) The penalty shall be recovered by a civil action before
2the circuit court of the county in which the well site is
3located or in the circuit court of Sangamon County. Venue shall
4be considered proper in either court. These penalties may, upon
5the order of a court of competent jurisdiction, be made payable
6to the Environmental Protection Trust Fund, to be used in
7accordance with the provisions of the Environmental Protection
8Trust Fund Act.
9    (e) The State's Attorney of the county in which the
10violation occurred, or the Attorney General, may, at the
11request of the Department or on his or her own motion,
12institute a civil action for the recovery of costs, an
13injunction, prohibitory or mandatory, to restrain violations
14of this Act, any rule adopted under this Act, the permit or
15term or condition of the permit, or to require other actions as
16may be necessary to address violations of this Act, any rule
17adopted under this Act, the permit or term or condition of the
18permit.
19    (f) The State's Attorney of the county in which the
20violation occurred, or the Attorney General, shall bring
21actions under this Section in the name of the People of the
22State of Illinois. Without limiting any other authority that
23may exist for the awarding of attorney's fees and costs, a
24court of competent jurisdiction may award costs and reasonable
25attorney's fees, including the reasonable costs of expert
26witnesses and consultants, to the State's Attorney or the

 

 

09800SB1715ham001- 98 -LRB098 08145 MGM 45943 a

1Attorney General in a case where he or she has prevailed
2against a person who has committed a knowing or repeated
3violation of this Act, any rule adopted under this Act, or the
4permit or term or condition of the permit.
5    (g) All final orders imposing civil penalties under this
6Section shall prescribe the time for payment of those
7penalties. If any penalty is not paid within the time
8prescribed, interest on penalty at the rate set forth in
9subsection (a) of Section 1003 of the Illinois Income Tax Act,
10shall be paid for the period from the date payment is due until
11the date payment is received. However, if the time for payment
12is stayed during the pendency of an appeal, interest shall not
13accrue during stay.
 
14    Section 1-102. Other relief.
15    (a) Any person having an interest that is or may be
16adversely affected may commence a civil action on his or her
17own behalf to compel compliance with this Act against any
18governmental instrumentality or agency which is alleged to be
19in violation of the provisions of this Act or of any rule,
20order, or permit issued under this Act, or against any other
21person who is alleged to be in violation of this Act or of any
22rule, order, or permit issued under this Act. No action may be
23commenced under this subsection (a): (i) prior to 60 days after
24the plaintiff has given notice in writing of the alleged
25violation to the Department and to any alleged violator or (ii)

 

 

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1if the State has commenced and is diligently prosecuting a
2civil action to require compliance with the provisions of this
3Act, or any rule, order, or permit issued under this Act.
4    (b) Any person having an interest that is or may be
5adversely affected may commence a civil action against the
6Department on his or her own behalf to compel compliance with
7this Act where there is alleged a failure of the Department to
8perform any act or duty under this Act that is not
9discretionary with the Department. No action may be commenced
10under this subsection (b) prior to 60 days after the plaintiff
11has given notice in writing of the action to the Department,
12except that action may be brought immediately after the
13notification in the case where the violation or order
14complained of constitutes an imminent threat to the health or
15safety of the plaintiff or would immediately affect a legal
16interest of the plaintiff.
17    (c) The court, in issuing any final order in any action
18brought under this Section, may award costs of litigation
19(including attorney and expert witness fees) to any party, on
20the basis of the importance of the proceeding and the
21participation of the parties to the efficient and effective
22enforcement of this Act. The court may, if a temporary
23restraining order or preliminary injunction is sought, require
24the filing of a bond or equivalent security in accordance with
25Part 1 of Article XI of the Code of Civil Procedure.
26    (d) Any person who is injured in his or her person or

 

 

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1property through the violation by any operator of any rule,
2order, or permit issued under this Act may bring an action for
3damages (including reasonable attorney and expert witness
4fees). Nothing in this subsection (d) shall affect any of the
5rights established by or limits imposed under the Workers'
6Compensation Act.
7    (e) Any action brought under this Section may be brought
8only in the county in which the high volume horizontal
9hydraulic fracturing operation complained of is located.
10    (f) In any action under this Section, the Department shall
11have an unconditional right to intervene.
12    (g) No existing civil or criminal remedy for any wrongful
13action shall be excluded or impaired by this Act.
14    (h) Nothing in this Section shall restrict any right that
15any person (or class of persons) may have under any statute or
16common law to seek enforcement of any of the provisions of this
17Act and the rules adopted under this Act, or to seek any other
18relief (and including relief against the United States or the
19Department).
 
20    Section 1-105. Violations, complaints, and notice;
21website.
22    The Department shall maintain a detailed database that is
23readily accessible to the public on the Department's website.
24The database shall show each violation found by the Department
25regarding high volume horizontal hydraulic fracturing

 

 

09800SB1715ham001- 101 -LRB098 08145 MGM 45943 a

1operations and the associated well owners, operators, and
2subcontractors. When the Department determines that any person
3has violated this Act, the Department shall provide notice by
4U.S. Postal Service certified mail, return receipt requested,
5of the Department's determination to all persons required to
6receive specific public notice under Section 1-40 of this Act
7within 7 calendar days after the determination. The Department
8shall also post the notice on the Department's website. The
9notice shall include a detailed, plain language description of
10the violation and a detailed, plain language description of all
11known risks to public health, life, property, aquatic life, and
12wildlife resulting from the violation.
 
13    Section 1-110. Public information; website.
14    (a) All information submitted to the Department under this
15Act is deemed public information, except information deemed to
16constitute a trade secret under Section 1-77 of this Act and
17private information and personal information as defined in the
18Freedom of Information Act.
19    (b) To provide the public and concerned citizens with a
20centralized repository of information, the Department shall
21create and maintain a comprehensive website dedicated to
22providing information concerning high volume horizontal
23hydraulic fracturing operations. The website shall contain,
24assemble, and link the documents and information required by
25this Act to be posted on the Department's or other agencies'

 

 

09800SB1715ham001- 102 -LRB098 08145 MGM 45943 a

1websites. The Department shall also create and maintain an
2online searchable database that provides information related
3to high volume horizontal hydraulic fracturing operations on
4wells that, at a minimum, include, for each well it permits,
5the identity of its operators, its waste disposal, its chemical
6disclosure information, and any complaints or violations under
7this Act. The website created under this Section shall allow
8users to search for completion reports by well name and
9location, dates of fracturing and drilling operations,
10operator, and by chemical additives.
 
11    Section 1-120. Applicable federal, State, and local laws.
12Compliance with this Act does not relieve responsibility for
13compliance with the Illinois Oil and Gas Act, the Illinois
14Environmental Protection Act, and other applicable federal,
15State, and local laws.
 
16    Section 1-123. Application of water well laws. Nothing in
17this Act shall be construed to affect the application of the
18Illinois Water Well Construction Code, the Illinois Water Well
19Pump Installation Code, the Water Well and Pump Installation
20Contractor's License Act, or any rules adopted thereunder to
21all water wells, closed loop wells, or monitoring wells, as
22those terms are defined in Section 3 of the Illinois Water Well
23Construction Code, that are located, drilled, constructed, or
24modified in connection with activities regulated by this Act.
 

 

 

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1    Section 1-125. Administrative review. All final
2administrative decisions, including issuance or denial of a
3permit, made by the Department under this Act are subject to
4judicial review under the Administrative Review Law and its
5rules.
 
6    Section 1-130. Rules. The Department shall have the
7authority to adopt rules as may be necessary to accomplish the
8purposes of this Act. Any and all rules adopted under this Act
9by the Department are not subject to the review, consultation,
10or advisement of the Oil and Gas Board.
 
11    Section 1-135. The Mines and Minerals Regulatory Fund. The
12Mines and Minerals Regulatory Fund is created as a special fund
13in the State treasury. All moneys required by this Act to be
14deposited into the Fund shall be used by the Department to
15administer and enforce this Act and otherwise support the
16operations and programs of the Office of Mines and Minerals.
 
17    Section 1-140. Severability. The provisions of this Act are
18severable under Section 1.31 of the Statute on Statutes.
 
19
ARTICLE 2.

 
20    Section 2-5. Short title. This Act may be cited as the

 

 

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1"Illinois Hydraulic Fracturing Tax Act".
 
2    Section 2-10. Definitions. For the purposes of this Act,
3unless the context otherwise requires:
4    "Barrel" for oil measurement means a barrel of 42 U.S.
5gallons of 231 cubic inches per gallon, computed at a
6temperature of 60 degrees Fahrenheit.
7    "Construction" means any constructing, altering,
8reconstructing, repairing, rehabilitating, refinishing,
9refurbishing, remodeling, remediating, renovating, custom
10fabricating, maintaining, landscaping, improving, drilling,
11testing, moving, wrecking, painting, decorating, demolishing,
12and adding to or subtracting from any building, structure,
13highway, roadway, street, bridge, alley, sewer, ditch, water
14works, parking facility, railroad, excavation or other
15structure, project, development, real property or improvement,
16or to do any part thereof, whether or not the performance of
17the construction involves the addition to, or fabrication into,
18any structure, project, development, real property or
19improvement herein described performed or done on behalf of an
20operator in connection with and at the location of a well site
21subject to the tax imposed by this Act.
22    "Construction worker" means a person performing
23construction.
24    "Department" means the Illinois Department of Revenue.
25    "Fracturing" or "hydraulic fracturing" means the

 

 

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1propagation of fractures in a rock layer, by a pressurized
2fluid used to release petroleum or natural gas (including shale
3gas, tight gas, and coal seam gas), for extraction.
4    "Gas" means natural gas taken from below the surface of the
5earth or water in this State, regardless of whether the gas is
6taken from a gas well or from a well also productive of oil or
7any other product.
8    "General prevailing rate of hourly wages" has the meaning
9ascribed to it in Section 2 of the Prevailing Wage Act, as
10determined by the Director of the Department of Labor under
11Section 9 of the Prevailing Wage Act for the county in which
12the construction occurs.
13    "Illinois construction worker" means a construction
14worker, as defined in this Section, domiciled in Illinois for
1524 months prior to the date of the issuance of a high volume
16horizontal hydraulic fracturing permit for the well site on
17which the construction is performed.
18    "Lease number" means the number assigned by the purchaser
19to identify each production unit.
20    "Oil" means petroleum or other crude oil, condensate,
21casinghead gasoline, or other mineral oil that is severed or
22withdrawn from below the surface of the soil or water in this
23State.
24    "Operator" means the person primarily responsible for the
25management and operation of oil or gas productions from a
26production unit.

 

 

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

 

 

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1through extraction or withdrawal of the same, whether such
2extraction or withdrawal is by natural flow, mechanical flow,
3forced flow, pumping, or any other means employed to get the
4oil from below the surface of the soil or water and shall
5include the withdrawal by any means whatsoever of oil upon
6which the tax has not been paid, from any surface reservoir,
7natural or artificial, or from a water surface; and (2) the
8production of gas through the extraction or withdrawal of the
9same by any means whatsoever, from below the surface of the
10earth or water.
11    "Severance" means the taking of oil or gas from below the
12surface of the soil or water in any manner whatsoever.
13    "Total workforce hours" means all hours worked by
14construction workers on a well site, beginning on the date an
15application for a permit to perform high volume horizontal
16hydraulic fracturing operations at the well is filed under
17Section 1-35 of the Hydraulic Fracturing Regulatory Act and
18ending on the date of first production following initial
19drilling or any reworking of the well.
20    "Value" means the sale price of oil or gas at the time of
21removal of the oil or gas from the production unit and if oil
22or gas is exchanged for something other than cash, or if no
23sale occurs at the time of removal, or if the Department
24determines that the relationship between the buyer and the
25seller is such that the consideration paid, if any, is not
26indicative of the true value or market price, then the

 

 

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1Department shall determine the value of the oil or gas subject
2to tax based on the cash price paid to one or more producers
3for the oil or gas or based on the cash price paid to producers
4for like quality oil or gas in the vicinity of the production
5unit at the time of the removal of the oil or gas from the
6production unit.
7    "Well site" has the meaning ascribed to the term in Section
81-5 of the Hydraulic Fracturing Regulatory Act.
9    "Working interest" means any interest in or any right to
10the production of oil and gas, excluding royalty or overriding
11royalty interests.
 
12    Section 2-15. Tax imposed.
13    (a) For oil and gas removed on or after July 1, 2013, there
14is hereby imposed a tax upon the severance and production of
15oil or gas from a well on a production unit in this State
16permitted, or required to be permitted, under the Illinois
17Hydraulic Fracturing Regulatory Act, for sale, transport,
18storage, profit, or commercial use. The tax shall be applied
19equally to all portions of the value of each barrel of oil
20severed and subject to such tax and to the value of the gas
21severed and subject to such tax. For a period of 24 months from
22the month in which oil or gas was first produced from the well,
23the rate of tax shall be 3% of the value of the oil or gas
24severed from the earth or water in this State. Thereafter, the
25rate of the tax shall be as follows:

 

 

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1        (1) For oil:
2            (A) where the average daily production from the
3        well during the month is less than 25 barrels, 3% of
4        the value of the oil severed from the earth or water;
5            (B) where the average daily production from the
6        well during the month is 25 or more barrels but less
7        than 50 barrels, 4% of the value of the oil severed
8        from the earth or water;
9            (C) where the average daily production from the
10        well during the month is 50 or more barrels but less
11        than 100 barrels, 5% of the value of the oil severed
12        from the earth or water; or
13            (D) where the average daily production from the
14        well during the month is 100 or more barrels, 6% of the
15        value of the oil severed from the earth or water.
16        (2) For gas, 6% of the value of the gas severed from
17    the earth or water.
18    If a well is required to be permitted under the Illinois
19Hydraulic Fracturing Regulatory Act, the tax imposed by this
20Section applies, whether or not a permit was obtained.
21    (b) Oil produced from a well whose average daily production
22is 15 barrels or less for the 12-month period immediately
23preceding the production is exempt from the tax imposed by this
24Act.
25    (c) For the purposes of the tax imposed by this Act the
26amount of oil produced shall be measured or determined, in the

 

 

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1case of oil, by tank tables, without deduction for overage or
2losses in handling. Allowance for any reasonable and bona fide
3deduction for basic sediment and water, and for correction of
4temperature to 60 degrees Fahrenheit will be allowed. For the
5purposes of the tax imposed by this Act the amount of gas
6produced shall be measured or determined, by meter readings
7showing 100% of the full volume expressed in cubic feet at a
8standard base and flowing temperature of 60 degrees Fahrenheit,
9and at the absolute pressure at which the gas is sold and
10purchased. Correction shall be made for pressure according to
11Boyle's law, and used for specific gravity according to the
12gravity at which the gas is sold and purchased.
13    (d) The following severance and production of gas shall be
14exempt from the tax imposed by this Act: gas injected into the
15earth for the purpose of lifting oil, recycling, or
16repressuring; gas used for fuel in connection with the
17operation and development for, or production of, oil or gas in
18the production unit where severed; and gas lawfully vented or
19flared; gas inadvertently lost on the production unit by reason
20of leaks, blowouts, or other accidental losses.
21    (e) All oil and gas removed from the premises where severed
22is subject to the tax imposed by this Act unless exempt under
23the terms of this Act.
24    (f) The liability for the tax accrues at the time the oil
25or gas is removed from the production unit.
 

 

 

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1    Section 2-17. Local Workforce Tax Rate Reduction.
2    (a) The rate of tax imposed on working interest owners of a
3well under Section 2-15 of this Act shall be reduced by 0.25%
4for the life of the well when a minimum of 50% of the total
5workforce hours on the well site are performed by Illinois
6construction workers being paid wages equal to or exceeding the
7general prevailing rate of hourly wages.
8    (b) When more than one well is drilled on a well site,
9total workforce hours shall be determined on a well-by-well
10basis.
11    (c) Any operator that intends to claim the reduction
12provided for in this Section on his or her behalf, or on the
13behalf of the working interest owners, shall be responsible for
14obtaining from all construction contractors working on a well
15site, records to document the claim for the reduction in tax
16rate. Operators shall, at a minimum, obtain from construction
17contractors, in writing, the total number of construction
18workers that performed work under the contract, the number of
19Illinois construction workers that performed work under the
20contract, whether oral or written, between the operator and the
21construction contractor, the hours worked by each construction
22worker and the wage paid to each construction worker for the
23hours of work performed on the well site. The operator shall
24obtain and retain any other records the Department determines
25are necessary to verify a claim for a reduction in the tax. The
26operator shall make the records available to the Department

 

 

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1upon request.
2    For the purposes of this Section, each construction
3contractor, upon written request from the operator, shall
4retain the following records: each worker's name, address, and
5telephone number, if available, years of residency in Illinois,
6the type of work the worker performs, the hourly wages paid
7each worker, and the number of hours worked by each worker for
8the term of the contract. The construction contractor shall
9retain any other records the Department determines are
10necessary to verify a claim for a reduction in the tax. The
11construction contractor shall make the records available to the
12operator and Department upon request. The operator and
13construction contractors shall retain the records for 3 years.
14    No later than the 6 months after the date of the first
15purchase of oil or gas from a well, the operator shall file
16with the Department, in the form and manner required by the
17Department, a report and documentation to support that the
18working interest owners qualify for the reduction in the rate
19of tax provided for in this Section. The report shall be signed
20by the operator, or an officer, employee, or agent of the
21contractor, and state under oath that he or she has examined
22the report and documentation and the report and documentation
23are true and accurate. The Department shall keep the records
24submitted in accordance with this subsection for a period of
25not less than 3 years from the date of filing.
26    (d) The Department shall notify the first purchaser and the

 

 

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1operator when the working interest owners qualify for a
2reduction in the tax under this Section and state the amount of
3the reduction. The reduction shall be effective the date of
4first production. The first purchaser or operator may take a
5credit for any retroactive reduction in the tax rate on a
6return filed under Sections 2-45 and 2-50 of this Act.
7    (e) Reports shall be filed on forms furnished and
8prescribed by the Department and shall contain any other
9information as the Department may reasonably require.
 
10    Section 2-20. Taxable value; method of determining. The
11Department may determine the value of products severed from a
12production unit when the operator and purchaser are affiliated
13persons, when the sale and purchase of products is not an arm's
14length transaction, or when products are severed and removed
15from a production unit and a value is not established for those
16products. The value determined by the Department shall be
17commensurate with the actual price received for products of
18like quality, character, and use which are severed in the same
19field or area. If there are no sales of products of like
20quality, character, and use severed in the same field or area,
21then the Department shall establish a reasonable value based on
22sales of products of like quality, character, and use which are
23severed in other areas of the State, taking into consideration
24any other relevant factors.
 

 

 

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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 last 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
25payments due a producer and such purchaser fails to make

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

09800SB1715ham001- 122 -LRB098 08145 MGM 45943 a

1held the amount of the tax imposed and to make remittance
2thereof to the Department as provided in this Act.
 
3    Section 2-60. Transporters. When requested by the
4Department, all transporters of oil or gas out of, within or
5across the State of Illinois shall be required to furnish the
6Department such information relative to the transportation of
7such oil or gas as the Department may require. The Department
8shall have authority to inspect bills of lading, waybills,
9meter, or other charts, documents, books and records as may
10relate to the transportation of oil or gas in the hands of each
11transporter. The Department shall further be empowered to
12demand the production of such bills of lading, waybills,
13charts, documents, books, and records relating to the
14transportation of oil or gas at any point in the State of
15Illinois.
 
16    Section 2-65. Rulemaking. The Department is hereby
17authorized to adopt any rules as may be necessary to administer
18and enforce the provisions of this Act.
 
19    Section 2-70. Incorporation by reference. All of the
20provisions of Sections 4, 5, 5a, 5b, 5c, 5d, 5e, 5f, 5g, 5j, 6,
216a, 6b, 6c, 7, 8, 9, 10, 11, 11a, 12, and 13 of the "Retailers'
22Occupation Tax Act" which are not inconsistent with this Act,
23and all provisions of the Uniform Penalty and Interest Act

 

 

09800SB1715ham001- 123 -LRB098 08145 MGM 45943 a

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

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

 
13    Section 99-999. Effective date. This Act takes effect upon
14becoming law.".