98TH GENERAL ASSEMBLY
State of Illinois
2013 and 2014
SB3230

 

Introduced 2/11/2014, by Sen. Ira I. Silverstein

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 450/2-15

    Amends the Illinois Hydraulic Fracturing Tax Act. Removes a provision that provides for a different tax calculation for the first 24 months of oil and gas production.


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A BILL FOR

 

SB3230LRB098 19586 HLH 54778 b

1    AN ACT concerning revenue.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Hydraulic Fracturing Tax Act is
5amended by changing Section 2-15 as follows:
 
6    (35 ILCS 450/2-15)
7    Sec. 2-15. Tax imposed.
8    (a) For oil and gas removed on or after July 1, 2013, there
9is hereby imposed a tax upon the severance and production of
10oil or gas from a well on a production unit in this State
11permitted, or required to be permitted, under the Illinois
12Hydraulic Fracturing Regulatory Act, for sale, transport,
13storage, profit, or commercial use. The tax shall be applied
14equally to all portions of the value of each barrel of oil
15severed and subject to such tax and to the value of the gas
16severed and subject to such tax. The For a period of 24 months
17from the month in which oil or gas was first produced from the
18well, the rate of tax shall be 3% of the value of the oil or gas
19severed from the earth or water in this State. Thereafter, the
20rate of the tax shall be as follows:
21        (1) For oil:
22            (A) where the average daily production from the
23        well during the month is less than 25 barrels, 3% of

 

 

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1        the value of the oil severed from the earth or water;
2            (B) where the average daily production from the
3        well during the month is 25 or more barrels but less
4        than 50 barrels, 4% of the value of the oil severed
5        from the earth or water;
6            (C) where the average daily production from the
7        well during the month is 50 or more barrels but less
8        than 100 barrels, 5% of the value of the oil severed
9        from the earth or water; or
10            (D) where the average daily production from the
11        well during the month is 100 or more barrels, 6% of the
12        value of the oil severed from the earth or water.
13        (2) For gas, 6% of the value of the gas severed from
14    the earth or water.
15    If a well is required to be permitted under the Illinois
16Hydraulic Fracturing Regulatory Act, the tax imposed by this
17Section applies, whether or not a permit was obtained.
18    (b) Oil produced from a well whose average daily production
19is 15 barrels or less for the 12-month period immediately
20preceding the production is exempt from the tax imposed by this
21Act.
22    (c) For the purposes of the tax imposed by this Act the
23amount of oil produced shall be measured or determined, in the
24case of oil, by tank tables, without deduction for overage or
25losses in handling. Allowance for any reasonable and bona fide
26deduction for basic sediment and water, and for correction of

 

 

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1temperature to 60 degrees Fahrenheit will be allowed. For the
2purposes of the tax imposed by this Act the amount of gas
3produced shall be measured or determined, by meter readings
4showing 100% of the full volume expressed in cubic feet at a
5standard base and flowing temperature of 60 degrees Fahrenheit,
6and at the absolute pressure at which the gas is sold and
7purchased. Correction shall be made for pressure according to
8Boyle's law, and used for specific gravity according to the
9gravity at which the gas is sold and purchased.
10    (d) The following severance and production of gas shall be
11exempt from the tax imposed by this Act: gas injected into the
12earth for the purpose of lifting oil, recycling, or
13repressuring; gas used for fuel in connection with the
14operation and development for, or production of, oil or gas in
15the production unit where severed; and gas lawfully vented or
16flared; gas inadvertently lost on the production unit by reason
17of leaks, blowouts, or other accidental losses.
18    (e) All oil and gas removed from the premises where severed
19is subject to the tax imposed by this Act unless exempt under
20the terms of this Act.
21    (f) The liability for the tax accrues at the time the oil
22or gas is removed from the production unit.
23(Source: P.A. 98-22, eff. 6-17-13; revised 10-7-13.)