SB1715 EnrolledLRB098 08145 MGM 38238 b

1    AN ACT concerning regulation.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
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
16minute) of fresh water to wells, springs, or streams under
17ordinary hydraulic gradients. "Aquifer" is limited to aquifers
18identified as major sand and gravel aquifers in the Illinois
19State Water Survey's Illinois Community Water Supply Wells map,
20Map Series 2006-01.
21    "Base fluid" means the continuous phase fluid type,
22including, but not limited to, water used in a high volume

 

 

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1horizontal hydraulic fracturing operation.
2    "BTEX" means benzene, toluene, ethylbenzene, and xylene.
3    "Chemical" means any element, chemical compound, or
4mixture of elements or compounds that has its own specific name
5or identity, such as a Chemical Abstracts Service number,
6regardless of whether the chemical is subject to the
7requirements of paragraph (2) of subsection (g) of 29 Code of
8Federal Regulations 1910.1200.
9    "Chemical Abstracts Service" means the division of the
10American Chemical Society that is the globally recognized
11authority for information on chemical substances.
12    "Chemical Abstracts Service number" or "CAS number" means
13the unique identification number assigned to a chemical by the
14Chemical Abstracts Service.
15    "Completion combustion device" means any ignition device,
16installed horizontally or vertically, used in exploration and
17production operations to combust otherwise vented emissions.
18    "Delineation well" means a well drilled in order to
19determine the boundary of a field or producing reservoir.
20    "Department" means the Illinois Department of Natural
21Resources.
22    "Diesel" means a substance having any one of the following
23Chemical Abstracts Service Registry numbers: 68334-30-5;
2468476-34-6; 68476-30-2; 68476-31-3; 8008-20-6; or 68410-00-4.
25"Diesel" includes any additional substances regulated by the
26United States Environmental Protection Agency as diesel fuel

 

 

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1used in hydraulic fracturing activities under the federal Safe
2Drinking Water Act.
3    "Director" means the Director of Natural Resources.
4    "Enhanced oil recovery operation" means any secondary or
5tertiary recovery method used in an effort to recover
6hydrocarbons from a pool by injection of fluids, gases or other
7substances to maintain, restore, or augment natural reservoir
8energy, or by introducing gases, chemicals, other substances,
9or heat, or by in-situ combustion, or by any combination
10thereof.
11    "Flare" means a thermal oxidation system using an open,
12enclosed, or semi-enclosed flame. "Flare" does not include
13completion combustion devices as defined in this Section.
14    "Flowback period" means the process of allowing fluids to
15flow from a well following a treatment, either in preparation
16for a subsequent phase of treatment or in preparation for
17cleanup and returning the well to production. "Flowback period"
18begins when the material the hydraulic fracturing fluid returns
19to the surface following hydraulic fracturing or
20re-fracturing. "Flowback period" ends with either well shut in
21or when the well is producing continuously to the flow line or
22to a storage vessel for collection, whichever occurs first.
23    "Fresh water" means surface and subsurface water in its
24natural state that is suitable for drinking water for human
25consumption, domestic livestock, irrigation, industrial,
26municipal and recreational purposes, that is capable of

 

 

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1supporting aquatic life, and contains less than 10,000 ppm
2total dissolved solids.
3    "Gas" means all natural gas, including casinghead gas, and
4all other natural hydrocarbons not defined as oil.
5    "Groundwater" means any water below the land surface that
6is within the saturated zone or geologic materials where the
7fluid pressure in the pore space is equal to or greater than
8atmospheric pressure.
9    "Health professional" means a physician, physician
10assistant, nurse practitioner, a registered professional
11nurse, emergency medical technician, or other individual
12appropriately licensed or registered to provide health care
13services.
14    "High volume horizontal hydraulic fracturing operations"
15means all stages of a stimulation treatment of a horizontal
16well as defined by this Act by the pressurized application of
17more than 80,000 gallons per stage or more than 300,000 gallons
18total of hydraulic fracturing fluid and proppant to initiate or
19propagate fractures in a geologic formation to enhance
20extraction or production of oil or gas.
21    "High volume horizontal hydraulic fracturing permit" means
22the permit issued by the Department under this Act allowing
23high volume horizontal hydraulic fracturing operations to
24occur at a well site.
25    "High volume horizontal hydraulic fracturing treatment"
26shall have the same definition as "High volume horizontal

 

 

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

 

 

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

 

 

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1in its stream bed during all of the calendar year.
2    "Permit" means a high volume horizontal hydraulic
3fracturing permit.
4    "Permittee" means a person holding a high volume horizontal
5hydraulic fracturing permit under this Act.
6    "Person" means any individual, partnership,
7co-partnership, firm, company, limited liability company,
8corporation, association, joint stock company, trust, estate,
9political subdivision, state agency, or any other legal entity
10or their legal representative, agent, or assigns.
11    "Pollution or diminution" means:
12        (1) in groundwater, any of the following:
13            (A) detection of benzene or any other carcinogen in
14        any Class I, Class II, or Class III groundwater;
15            (B) detection of any constituent in item (i) of
16        subparagraph (A) of paragraph (3) of subsection (a) of
17        35 Ill. Adm. Code 620.310 equal to or above the listed
18        preventive response criteria in any Class I, Class II,
19        or Class III groundwater;
20            (C) detection of any constituent in 35 Ill. Adm.
21        Code 620.410 (a), (b), (c), (d) or (e) equal to or
22        above the listed standard in any Class I, Class II, or
23        Class III groundwater;
24            (D) detection of any constituent in Class III
25        groundwater equal to or above a standard established
26        under 35 Ill. Adm. Code 620.260; or

 

 

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1            (E) detection of any constituent in Class I, Class
2        II, or Class III groundwater equal to or above a
3        cleanup objective listed in 35 Ill. Adm. Code 742.
4        (2) in surface water, exceeding any applicable numeric
5    or narrative standard in 35 Ill. Adm. Code Part 302 or Part
6    304.
7    "Produced water" means water, regardless of chloride and
8total dissolved solids content, that is produced in conjunction
9with oil or natural gas production or natural gas storage
10operations, but does not include hydraulic fracturing
11flowback.
12    "Proppant" means sand or any natural or man-made material
13that is used during high volume horizontal hydraulic fracturing
14operations to prop open the artificially created or enhanced
15fractures.
16    "Public water supply" means all mains, pipes, and
17structures through which water is obtained and distributed to
18the public, including wells and well structures, intakes and
19cribs, pumping stations, treatment plants, reservoirs, and
20storage tanks and appurtenances, collectively or severally,
21actually used or intended for use for the purpose of furnishing
22water for drinking or general domestic use, and which serves at
23least 15 service connections or which regularly serves at least
2425 persons at least 60 days per year.
25    "Register of Land and Water Reserves" means the list of
26areas registered in accordance with Section 16 of the Illinois

 

 

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1Natural Areas Preservation Act and Part 4010 of Title 17 of the
2Illinois Administrative Code.
3    "Release" means any spilling, leaking, pumping, pouring,
4emitting, emptying, discharging, injecting, escaping,
5leaching, dumping, or disposing into the environment.
6    "Serious violation" means any violation set forth in 62
7Ill. Adm. Code 240.140(c).
8    "Service connection" means the opening, including all
9fittings and appurtenances, at the water main through which
10water is supplied to the user.
11    "Surface water" means all water that is open to the
12atmosphere and subject to surface runoff.
13    "Total water volume" means the total quantity of water from
14all sources used in the high volume horizontal hydraulic
15fracturing operations, including surface water, groundwater,
16produced water, or recycled water.
17    "True vertical depth" or "TVD" means the vertical distance
18from a depth in a planned or existing wellbore or well to a
19point at the surface.
20    "Water pollution" means any alteration of the physical,
21thermal, chemical, biological, or radioactive properties of
22any waters of the State, or the discharge of any contaminant
23into any water of the State, as will or is likely to create a
24nuisance or render the waters harmful, detrimental, or
25injurious to public health, safety, or welfare, or to domestic,
26commercial, industrial, agricultural, recreational, or other

 

 

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

 

 

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

 

 

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1proper to determine whether a violation of this Act or any
2orders or rules entered or adopted under this Act exists or is
3imminent. In the exercise of these powers, the Department shall
4have the authority to collect data; require testing and
5sampling; to make investigation and inspections; to examine
6properties, including records and logs; to examine, check, and
7test hydrocarbon wells; to hold hearings; to adopt
8administrative rules; and to take any action as may be
9reasonably necessary to enforce this Act.
10    (f) Except as otherwise provided, the Department may
11specify the manner in which all information required to be
12submitted under this Act is submitted.
 
13    Section 1-20. Applicability. Except as provided in Section
141-98 of this Act, this Act applies to all wells where high
15volume horizontal hydraulic fracturing operations are planned,
16have occurred, or are occurring in this State. The provisions
17of this Act shall be in addition to the provisions of the
18Illinois Oil and Gas Act. However, if there is a conflict, the
19provisions of the Illinois Oil and Gas Act are superseded by
20this Act.
 
21    Section 1-25. Setbacks and prohibitions.
22    (a) Except as otherwise provided in this Section, no well
23site where high volume horizontal hydraulic fracturing
24operations are proposed, planned, or occurring may be located

 

 

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1as follows. Unless specified otherwise, all distances shall be
2measured from the closest edge of the well site:
3        (1) within 500 feet measured horizontally from any
4    residence or place of worship unless the owner of the
5    residence or the governing body of the place of worship
6    otherwise expressly agrees in writing to a closer well
7    location;
8        (2) within 500 feet measured horizontally from the edge
9    of the property line from any school, hospital, or licensed
10    nursing home facility;
11        (3) within 500 feet measured horizontally from the
12    surface location of any existing water well or developed
13    spring used for human or domestic animal consumption,
14    unless the owner or owners of the well or developed spring
15    otherwise expressly agrees or agree in writing to a closer
16    well location;
17        (4) within 300 feet measured horizontally from the
18    center of a perennial stream or from the ordinary high
19    water mark of any river, natural or artificial lake, pond,
20    or reservoir;
21        (5) within 750 feet of a nature preserve or a site on
22    the Register of Land and Water Reserves;
23        (6) within 1,500 feet of a surface water or groundwater
24    intake of a public water supply; the distance from the
25    public water supply as identified by the Department shall
26    be measured as follows:

 

 

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1            (A) For a surface water intake on a lake or
2        reservoir, the distance shall be measured from the
3        intake point on the lake or reservoir.
4            (B) For a surface water intake on a flowing stream,
5        the distance shall be measured from a semicircular
6        radius extending upstream of the surface water intake.
7            (C) For a groundwater source, the distance shall be
8        measured from the surface location of the wellhead or
9        the ordinary high water mark of the spring.
10    The distance restrictions under this subsection (a) shall
11be determined as conditions exist at the time of the submission
12of the permit application under this Act.
13    (b) Notwithstanding any other provision of this Section,
14the owner of a water source identified in paragraph (4) of
15subsection (a) of this Section that is wholly contained within
16the owner's property may expressly agree in writing to a closer
17well location.
18    (c) It is unlawful to inject or discharge hydraulic
19fracturing fluid, produced water, BTEX, diesel, or petroleum
20distillates into fresh water.
21    (d) It is unlawful to perform any high volume horizontal
22hydraulic fracturing operations by knowingly or recklessly
23injecting diesel.
 
24    Section 1-30. High volume horizontal hydraulic fracturing
25permit required.

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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1occur from the municipal authorities where the well site is
2proposed to be located. No permit shall be issued unless
3consent is secured and filed with the permit application. In
4the event that an amended location is selected, the original
5permit shall not be valid unless a new certified consent is
6filed for the amended location.
7    (d) The hydraulic fracturing permit application shall be
8accompanied by a bond as required by subsection (a) of Section
91-65 of this Act.
10    (e) Each application for a permit under this Act shall
11include payment of a non-refundable fee of $13,500. Of this
12fee, $11,000 shall be deposited into the Mines and Minerals
13Regulatory Fund for the Department to use to administer and
14enforce this Act and otherwise support the operations and
15programs of the Office of Mines and Minerals. The remaining
16$2,500 shall be deposited into the Illinois Clean Water Fund
17for the Agency to use to carry out its functions under this
18Act. The Department shall not initiate its review of the permit
19application until the applicable fee under this subsection (e)
20has been submitted to and received by the Department.
21    (f) Each application submitted under this Act shall be
22signed, under the penalty of perjury, by the applicant or the
23applicant's designee who has been vested with the authority to
24act on behalf of the applicant and has direct knowledge of the
25information contained in the application and its attachments.
26Any person signing an application shall also sign an affidavit

 

 

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1with the following certification:
2        "I certify, under penalty of perjury as provided by law
3    and under penalty of refusal, suspension, or revocation of
4    a high volume horizontal hydraulic fracturing permit, that
5    this application and all attachments are true, accurate,
6    and complete to the best of my knowledge.".
7    (g) The permit application shall be submitted to the
8Department in both electronic and hard copy format. The
9electronic format shall be searchable.
10    (h) The application for a high volume horizontal hydraulic
11fracturing permit may be submitted as a combined permit
12application with the operator's application to drill on a form
13as the Department shall prescribe. The combined application
14must include the information required in this Section. If the
15operator elects to submit a combined permit application,
16information required by this Section that is duplicative of
17information required for an application to drill is only
18required to be provided once as part of the combined
19application. The submission of a combined permit application
20under this subsection shall not be interpreted to relieve the
21applicant or the Department from complying with the
22requirements of this Act or the Illinois Oil and Gas Act.
23    (i) Upon receipt of a permit application, the Department
24shall have no more than 60 calendar days from the date it
25receives the permit application to approve, with any conditions
26the Department may find necessary, or reject the application

 

 

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1for the high volume horizontal hydraulic fracturing permit. The
2applicant may waive, in writing, the 60-day deadline upon its
3own initiative or in response to a request by the Department.
4    (j) If at any time during the review period the Department
5determines that the permit application is not complete under
6this Act, does not meet the requirements of this Section, or
7requires additional information, the Department shall notify
8the applicant in writing of the application's deficiencies and
9allow the applicant to correct the deficiencies and provide the
10Department any information requested to complete the
11application. If the applicant fails to provide adequate
12supplemental information within the review period, the
13Department may reject the application.
 
14    Section 1-40. Public notice.
15    (a) Within 5 calendar days after the Department's receipt
16of the high volume horizontal hydraulic fracturing
17application, the Department shall post notice of its receipt
18and a copy of the permit application on its website. The notice
19shall include the dates of the public comment period and
20directions for interested parties to submit comments.
21    (b) Within 5 calendar days after the Department's receipt
22of the permit application and notice to the applicant that the
23high volume horizontal hydraulic fracturing permit application
24was received, the Department shall provide the Agency, the
25Office of the State Fire Marshal, Illinois State Water Survey,

 

 

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

 

 

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

 

 

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1        telephone number for the Department's Oil and Gas
2        Division;
3            (G) a statement that any person having an interest
4        that is or may be adversely affected, any government
5        agency that is or may be affected, or the county board
6        of a county to be affected under a proposed permit, may
7        file written objections to a permit application and may
8        request a public hearing.
9    (d) After providing the public notice as required under
10paragraph (2) of subsection (c) of this Section, the applicant
11shall supplement its permit application by providing the
12Department with a certification and documentation that the
13applicant fulfilled the public notice requirements of this
14Section. The Department shall not issue a permit until the
15applicant has provided the supplemental material required
16under this subsection.
17    (e) If multiple applications are submitted at the same time
18for wells located on the same well site, the applicant may use
19one public notice for all applications provided the notice is
20clear that it pertains to multiple applications and conforms to
21the requirements of this Section. Notice shall not constitute
22standing for purposes of requesting a public hearing or for
23standing to appeal the decision of the Department in accordance
24with the Administrative Review Law.
 
25    Section 1-45. Public comment periods.

 

 

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1    (a) The public comment period shall begin 7 calendar days
2after the Department's receipt of the permit application and
3last for 30 calendar days.
4    (b) Where a public hearing is conducted under Section 1-50
5of this Act, the Department may provide for an additional
6public comment period of 15 days as necessary to allow for
7comments in response to evidence and testimony presented at the
8hearing. The additional public comment period shall begin on
9the day after the public hearing.
10    (c) During any public comment period, any person may file
11written comments to the Department concerning any portion of
12the permit application and any issue relating to the
13applicant's compliance with the requirements of the Act and any
14other applicable laws.
15    (d) The Department may request that the applicant respond
16to any substantive public comments obtained during the public
17comment period.
 
18    Section 1-50. High volume horizontal hydraulic fracturing
19permit; hearing.
20    (a) When a permit application is submitted to conduct high
21volume horizontal hydraulic fracturing operations for the
22first time at a particular well site, any person having an
23interest that is or may be adversely affected, any government
24agency that is or may be affected, or the county board of a
25county to be affected under a proposed permit, may file written

 

 

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

 

 

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

 

 

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1    Section 1-53. High volume horizontal hydraulic fracturing
2permit; determination; judicial review.
3    (a) The Department shall issue a high volume horizontal
4hydraulic fracturing permit, with any conditions the
5Department may find necessary, only if the record of decision
6demonstrates that:
7        (1) the well location restrictions of Section 1-25 of
8    this Act have been satisfied;
9        (2) the application meets the requirements of Section
10    1-35 of this Act;
11        (3) the plans required to be submitted with the
12    application under Section 1-35 of this Act are adequate and
13    effective;
14        (4) the proposed hydraulic fracturing operations will
15    be conducted in a manner that will protect the public
16    health and safety and prevent pollution or diminution of
17    any water source;
18        (5) the work plan required under Section 1-80 of this
19    Act has been submitted to the Department;
20        (6) the applicant or any parent, subsidiary, or
21    affiliate thereof has not failed to abate a violation of
22    this Act or the Illinois Oil and Gas Act;
23        (7) the Class II injection wells to be used for
24    disposal of hydraulic fracturing flowback comply with all
25    applicable requirements for mechanical integrity testing,

 

 

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

 

 

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1provide a copy of the permit as issued or the final
2administrative decision to any person or unit of local
3government who received specific public notice under Section
41-40 of this Act or submitted comments or participated in any
5public hearing under Section 1-50 of this Act.
6    (d) The Department's decision to approve or deny a high
7volume horizontal hydraulic fracturing permit shall be
8considered a final administrative decision subject to judicial
9review under the Administrative Review Law and the rules
10adopted under that Law.
11    (e) Following completion of the Department's review and
12approval process, the Department's website shall indicate
13whether an individual high volume horizontal hydraulic
14fracturing permit was approved or denied and provide a copy of
15the approval or denial.
 
16    Section 1-55. High volume horizontal hydraulic fracturing
17permit; conditions; restriction; modifications.
18    (a) Each permit issued by the Department under this Act
19shall require the permittee to comply with all provisions of
20this Act and all other applicable local, State, and federal
21laws, rules, and regulations in effect at the time the permit
22is issued. All plans submitted with the application under
23Section 1-35 shall be conditions of the permit.
24    (b) A permit issued under this Act shall continue in effect
25until plugging and restoration in compliance with this Act and

 

 

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1the Illinois Oil and Gas Act are completed to the Department's
2satisfaction. No permit may be transferred to another person
3without approval of the Department.
4    (c) No permit issued under this Act may be modified without
5approval of the Department. If the Department determines that
6the proposed modifications constitute a significant deviation
7from the terms of the original application and permit approval,
8or presents a serious risk to public health, life, property,
9aquatic life, or wildlife, the Department shall provide the
10opportunities for notice, comment, and hearing required under
11Sections 1-45 and 1-50 of this Act. The Department shall
12provide notice of the proposed modification and opportunity for
13comment and hearing to the persons who received specific public
14notice under Section 1-40 of this Act and shall publish the
15notice and the proposed modification on its website. The
16Department shall adopt rules regarding procedures for a permit
17modification.
 
18    Section 1-60. High volume horizontal hydraulic fracturing
19permit; denial, suspension, or revocation.
20    (a) The Department may suspend, revoke, or refuse to issue
21a high volume horizontal hydraulic fracturing permit under this
22Act for one or more of the following causes:
23        (1) providing incorrect, misleading, incomplete, or
24    materially untrue information in a permit application or
25    any document required to be filed with the Department;

 

 

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1        (2) violating any condition of the permit;
2        (3) violating any provision of or any regulation
3    adopted under this Act or the Illinois Oil and Gas Act;
4        (4) using fraudulent, coercive, or dishonest
5    practices, or demonstrating incompetence,
6    untrustworthiness, or financial irresponsibility in the
7    conduct of business in this State or elsewhere;
8        (5) having a high volume horizontal hydraulic
9    fracturing permit, or its equivalent, revoked in any other
10    state, province, district, or territory for incurring a
11    material or major violation or using fraudulent or
12    dishonest practices; or
13        (6) an emergency condition exists under which conduct
14    of the high volume horizontal hydraulic fracturing
15    operations would pose a significant hazard to public
16    health, aquatic life, wildlife, or the environment.
17    (b) In every case in which a permit is suspended or
18revoked, the Department shall serve notice of its action,
19including a statement of the reasons for the action, either
20personally or by certified mail, receipt return requested, to
21the permittee.
22    (c) The order of suspension or revocation of a permit shall
23take effect upon issuance of the order. The permittee may
24request, in writing, within 30 days after the date of receiving
25the notice, a hearing. Except as provided under subsection (d)
26of this Section, in the event a hearing is requested, the order

 

 

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1shall remain in effect until a final order is entered pursuant
2to the hearing.
3    (d) The order of suspension or revocation of a permit may
4be stayed if requested by the permittee and evidence is
5submitted demonstrating that there is no significant threat to
6the public health, aquatic life, wildlife, or the environment
7if the operation is allowed to continue.
8    (e) The hearing shall be held at a time and place
9designated by the Department. The Director of the Department or
10any administrative law judge designated by him or her have the
11power to administer oaths and affirmations, subpoena witnesses
12and compel their attendance, take evidence, and require the
13production of books, papers, correspondence, and other records
14or information that he or she considers relevant or material.
15    (f) The costs of the administrative hearing shall be set by
16rule and shall be borne by the permittee.
17    (g) The Department's decision to suspend or revoke a high
18volume horizontal hydraulic fracturing permit is subject to
19judicial review under the Administrative Review Law.
 
20    Section 1-65. Hydraulic fracturing permit; bonds.
21    (a) An applicant for a high volume horizontal hydraulic
22fracturing permit under this Act shall provide a bond, executed
23by a surety authorized to transact business in this State. The
24bond shall be in the amount of $50,000 per permit or a blanket
25bond of $500,000 for all permits. If the applicant is required

 

 

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1to submit a bond to the Department under the Illinois Oil and
2Gas Act, the applicant's submission of a bond under this
3Section shall satisfy the bonding requirements provided for in
4the Illinois Oil and Gas Act. In lieu of a bond, the applicant
5may provide other collateral securities such as cash,
6certificates of deposit, or irrevocable letters of credit under
7the terms and conditions as the Department may provide by rule.
8    (b) The bond or other collateral securities shall remain in
9force until the well is plugged and abandoned. Upon abandoning
10a well to the satisfaction of the Department and in accordance
11with the Illinois Oil and Gas Act, the bond or other collateral
12securities shall be promptly released by the Department. Upon
13the release by the Department of the bond or other collateral
14securities, any cash or collateral securities deposited shall
15be returned by the Department to the applicant who deposited
16it.
17    (c) If, after notice and hearing, the Department determines
18that any of the requirements of this Act or rules adopted under
19this Act or the orders of the Department have not been complied
20with within the time limit set by any notice of violation
21issued under this Act, the permittee's bond or other collateral
22securities shall be forfeited. Forfeiture under this
23subsection shall not limit any duty of the permittee to
24mitigate or remediate harms or foreclose enforcement by the
25Department or the Agency. In no way will payment under this
26bond exceed the aggregate penalty as specified.

 

 

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1    (d) When any bond or other collateral security is forfeited
2under the provisions of this Act or rules adopted under this
3Act, the Department shall collect the forfeiture without delay.
4The surety shall have 30 days to submit payment for the bond
5after receipt of notice by the permittee of the forfeiture.
6    (e) All forfeitures shall be deposited in the Mines and
7Minerals Regulatory Fund to be used, as necessary, to mitigate
8or remediate violations of this Act or rules adopted under this
9Act.
 
10    Section 1-70. Well preparation, construction, and
11drilling.
12    (a) This Section shall apply to all horizontal wells that
13are to be completed using high volume horizontal hydraulic
14fracturing operations under a high volume horizontal hydraulic
15fracturing permit. The requirements of this Section shall be in
16addition to any other laws or rules regarding wells and well
17sites.
18    (b) Site preparation standards shall be as follows:
19        (1) The access road to the well site must be located in
20    accordance with access rights identified in the Illinois
21    Oil and Gas Act and located as far as practical from
22    occupied structures, places of assembly, and property
23    lines of unleased property.
24        (2) Unless otherwise approved or directed by the
25    Department, all topsoil stripped to facilitate the

 

 

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1    construction of the well pad and access roads must be
2    stockpiled, stabilized, and remain on site for use in
3    either partial or final reclamation. In the event it is
4    anticipated that the final reclamation shall take place in
5    excess of one year from drilling the well the topsoil may
6    be disposed of in any lawful manner provided the operator
7    reclaims the site with topsoil of similar characteristics
8    of the topsoil removed.
9        (3) Piping, conveyances, valves, and tanks in contact
10    with hydraulic fracturing fluid, hydraulic fracturing
11    flowback, or produced water must be constructed of
12    materials compatible with the composition of the hydraulic
13    fracturing fluid, hydraulic fracturing flowback, and
14    produced water.
15        (4) The improvement, construction, or repair of a
16    publicly owned highway or roadway, if undertaken by the
17    owner, operator, permittee, or any other private entity,
18    shall be performed using bidding procedures outlined in the
19    Illinois Department of Transportation rules governing
20    local roads and streets or applicable bidding requirements
21    outlined in the Illinois Procurement Code as though the
22    project were publicly funded.
23    (c) Site maintenance standards shall be as follows:
24        (1) Secondary containment is required for all fueling
25    tanks.
26        (2) Fueling tanks shall be subject to Section 1-25 of

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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1    at least 600 true vertical feet above the shallowest
2    hydrocarbon bearing zone or to a point at least 200 feet
3    above the shoe of the next shallower casing string that was
4    set and cemented in the well (or to the surface if less
5    than 200 feet).
6        (13) The Department must be notified prior to
7    intermediate casing cementing operations. Cementing must
8    be by the pump and plug method with a minimum of 25% excess
9    cement. A radial cement bond evaluation log, or other
10    evaluation approved by the Department, must be run to
11    verify the cement bond on the intermediate casing. Remedial
12    cementing is required if the cement bond is not adequate
13    for drilling ahead.
14        (14) Production casing must be run and fully cemented
15    to 500 feet above the top perforated zone, if possible. The
16    Department must be notified at least 24 hours prior to
17    production casing cementing operations. Cementing must be
18    by the pump and plug method with a minimum of 25% excess
19    cement.
20        (15) At any time, the Department, as it deems
21    necessary, may require installation of an additional
22    cemented casing string or strings in the well.
23        (16) After the setting and cementing of a casing
24    string, except the conductor casing, and prior to further
25    drilling, the casing string shall be tested with fresh
26    water, mud, or brine to no less than 0.22 psi per foot of

 

 

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1    casing string length or 1,500 psi, whichever is greater but
2    not to exceed 70% of the minimum internal yield, for at
3    least 30 minutes with less than a 5% pressure loss, except
4    that any casing string that will have pressure exerted on
5    it during stimulation of the well shall be tested to at
6    least the maximum anticipated treatment pressure. If the
7    pressure declines more than 5% or if there are other
8    indications of a leak, corrective action shall be taken
9    before conducting further drilling and high volume
10    horizontal hydraulic fracturing operations. The operator
11    shall contact the Department's District Office for any
12    county in which the well is located at least 24 hours prior
13    to conducting a pressure test to enable an inspector to be
14    present when the test is done. A record of the pressure
15    test must be maintained by the operator and must be
16    submitted to the Department on a form prescribed by the
17    Department prior to conducting high volume horizontal
18    hydraulic fracturing operations. The actual pressure must
19    not exceed the test pressure at any time during high volume
20    horizontal hydraulic fracturing operations.
21        (17) Any hydraulic fracturing string used in the high
22    volume horizontal hydraulic fracturing operations must be
23    either strung into a production liner or run with a packer
24    set at least 100 feet below the deepest cement top and must
25    be tested to not less than the maximum anticipated treating
26    pressure minus the annulus pressure applied between the

 

 

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

 

 

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

 

 

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

 

 

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1        (3) The permittee shall notify the Department by phone,
2    electronic communication, or letter, at least 48 hours
3    prior to the commencement of high volume horizontal
4    hydraulic fracturing operations.
5    (b) Integrity tests and monitoring.
6        (1) Before the commencement of high volume horizontal
7    hydraulic fracturing operations, all mechanical integrity
8    tests required under subsection (d) of Section 1-70 and
9    this subsection must be successfully completed.
10        (2) Prior to commencing high volume horizontal
11    hydraulic fracturing operations and pumping of hydraulic
12    fracturing fluid, the injection lines and manifold,
13    associated valves, fracture head or tree and any other
14    wellhead component or connection not previously tested
15    must be tested with fresh water, mud, or brine to at least
16    the maximum anticipated treatment pressure for at least 30
17    minutes with less than a 5% pressure loss. A record of the
18    pressure test must be maintained by the operator and made
19    available to the Department upon request. The actual high
20    volume horizontal hydraulic fracturing treatment pressure
21    must not exceed the test pressure at any time during high
22    volume horizontal hydraulic fracturing operations.
23        (3) The pressure exerted on treating equipment
24    including valves, lines, manifolds, hydraulic fracturing
25    head or tree, casing and hydraulic fracturing string, if
26    used, must not exceed 95% of the working pressure rating of

 

 

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1    the weakest component. The high volume horizontal
2    hydraulic fracturing treatment pressure must not exceed
3    the test pressure of any given component at any time during
4    high volume horizontal hydraulic fracturing operations.
5        (4) During high volume horizontal hydraulic fracturing
6    operations, all annulus pressures, the injection pressure,
7    and the rate of injection shall be continuously monitored
8    and recorded. The records of the monitoring shall be
9    maintained by the operator and shall be provided to the
10    Department upon request at any time during the period up to
11    and including 5 years after the well is permanently plugged
12    or abandoned.
13        (5) High volume horizontal hydraulic fracturing
14    operations must be immediately suspended if any anomalous
15    pressure or flow condition or any other anticipated
16    pressure or flow condition is occurring in a way that
17    indicates the mechanical integrity of the well has been
18    compromised and continued operations pose a risk to the
19    environment. Remedial action shall be undertaken
20    immediately prior to recommencing high volume horizontal
21    hydraulic fracturing operations. The permittee shall
22    notify the Department within 1 hour of suspending
23    operations for any matters relating to the mechanical
24    integrity of the well or risk to the environment.
25    (c) Fluid and waste management.
26        (1) For the purposes of storage at the well site and

 

 

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

 

 

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1        a capacity at least equivalent to 110% of the maximum
2        volume of hydraulic fracturing flowback anticipated to
3        be recovered;
4            (C) the lined pit shall be constructed, installed,
5        and maintained in accordance with the manufacturers'
6        specifications and good engineering practices to
7        prevent overflow during any use;
8            (D) the liner shall have sufficient elongation to
9        cover the bottom and interior sides of the pit with the
10        edges secured with at least a 12 inch deep anchor
11        trench around the pit perimeter to prevent any slippage
12        or destruction of the liner materials; and
13            (E) the foundation for the liner shall be free of
14        rock and constructed with soil having a minimum
15        thickness of 12 inches after compaction covering the
16        entire bottom and interior sides of the pit.
17        (3) Fresh water may be stored in tanks or pits at the
18    election of the operator.
19        (4) Tanks required under this subsection must be
20    above-ground tanks that are closed, watertight, and will
21    resist corrosion. The permittee shall routinely inspect
22    the tanks for corrosion.
23        (5) Hydraulic fracturing fluids and hydraulic
24    fracturing flowback must be removed from the well site
25    within 60 days after completion of high volume horizontal
26    fracturing operations, except that any excess hydraulic

 

 

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

 

 

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

 

 

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1    Department. Drill cuttings contaminated with oil-based mud
2    or polymer-based mud shall not be disposed of on site.
3    Annular disposal of drill cuttings or fluid is prohibited.
4        (12) Any release of hydraulic fracturing fluid,
5    hydraulic fracturing additive, or hydraulic fracturing
6    flowback, used or generated during or after high volume
7    horizontal hydraulic fracturing operations shall be
8    immediately cleaned up and remediated pursuant to
9    Department requirements. Any release of hydraulic
10    fracturing fluid or hydraulic fracturing flowback in
11    excess of 1 barrel, shall be reported to the Department.
12    Any release of a hydraulic fracturing additive shall be
13    reported to the Department in accordance with the
14    appropriate reportable quantity thresholds established
15    under the federal Emergency Planning and Community
16    Right-to-Know Act as published in the Code of Federal
17    Regulations (CFR), 40 CFR Parts 355, 370, and 372, the
18    federal Comprehensive Environmental Response,
19    Compensation, and Liability Act as published in 40 CFR Part
20    302, and subsection (r) of Section 112 of the Federal Clean
21    Air Act as published in 40 CFR Part 68. Any release of
22    produced water in excess of 5 barrels shall be cleaned up,
23    remediated, and reported pursuant to Department
24    requirements.
25        (13) Secondary containment for tanks required under
26    this subsection and additive staging areas is required.

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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1    Section 1-80. Water quality monitoring.
2    (a) Each applicant for a high volume horizontal hydraulic
3fracturing permit shall provide the Department with a work plan
4to ensure accurate and complete sampling and testing as
5required under this Section. The work plan shall ensure
6compliance with the requirements of this Section and include,
7at a minimum, the following:
8        (1) information identifying all water sources within
9    the range of testing under this Section;
10        (2) a sampling plan and protocol, including
11    notification to the Department at least 7 calendar days
12    prior to sample collection;
13        (3) the name and contact information of an independent
14    third party under the supervision of a professional
15    engineer or professional geologist that shall be
16    designated to conduct sampling to establish a baseline as
17    provided for under subsection (b) of this Section;
18        (4) the name and contact information of an independent
19    third party under the supervision of a professional
20    engineer or professional geologist that shall be
21    designated to conduct sampling to establish compliance
22    with monitoring as provided within subsection (c) of this
23    Section;
24        (5) the name and contact information of an independent
25    testing laboratory, certified to perform the required

 

 

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1    laboratory method, to conduct the analysis required under
2    subsections (b) and (c) of this Section;
3        (6) proof of access and the right to test within the
4    area for testing prescribed within subsection (b) of this
5    Section during the duration of high volume horizontal
6    hydraulic fracturing operations covered under the permit
7    application, and copies of any non-disclosure agreements
8    made under subsection (d) of this Section; and
9        (7) identification of practicable contingency
10    measures, including provision for alternative drinking
11    water supplies, which could be implemented in the event of
12    pollution or diminution of a water source as provided for
13    in Section 1-83.
14    (b) Prior to conducting high volume horizontal hydraulic
15fracturing operations on a well, a permittee shall retain an
16independent third party, as required within paragraph (3) of
17subsection (a) of this Section, and shall conduct baseline
18water quality sampling of all water sources within 1,500 feet
19of the well site prior to any fracturing activities. Where (i)
20there are no groundwater wells within 1,500 feet of a well
21site, or access to groundwater wells within 1,500 feet of the
22well site has been denied under subsection (d) of this Section,
23and (ii) the proposed well site is located within 1,500 feet
24horizontally from any portion of an aquifer, the permittee
25shall conduct sampling of the aquifer at the closest
26groundwater well with access to the aquifer to which the

 

 

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1permittee has not been denied access under subsection (d) of
2this Section. Installation of a groundwater monitoring well is
3not required to satisfy the sampling requirements of this
4Section. The samples collected by the independent third party,
5under the supervision of a professional engineer or
6professional geologist, shall be analyzed by an independent
7testing laboratory in accordance with paragraph (4) of
8subsection (a) of this Section. Testing shall be done by
9collection of a minimum of 3 samples for each water source
10required to be tested under this Section. The permittee shall,
11within 7 calendar days after receipt of results of tests
12conducted under this subsection, submit the results to the
13Department or to the owner of the water source under a
14non-disclosure agreement under subsection (d) of this Section.
15The Department shall post the results on its website within 7
16calendar days after receipt. The results shall, at a minimum,
17include a detailed description of the sampling and testing
18conducted under this subsection, the chain of custody of the
19samples, and quality control of the testing.
20    (c) After baseline tests are conducted under subsection (b)
21of this Section and following issuance of a permit by the
22Department, the permittee shall have all water sources which
23are subjected to sampling under subsection (b) of this Section
24sampled and tested in the same manner 6 months, 18 months, and
2530 months after the high volume horizontal hydraulic fracturing
26operations have been completed. Sampling of a water source

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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1    (e) Within 15 calendar days after a determination has been
2made regarding the pollution or diminution, the Department
3shall provide notice of its findings and the orders, if any, to
4all persons that use the water source for domestic,
5agricultural, industrial, or any other legitimate beneficial
6uses.
7    (f) Upon issuance of an Order or a finding of pollution or
8diminution under subsection (d) of this Section, the Department
9shall contact the Agency and forward all information from the
10investigation to the Agency. The Agency shall investigate the
11potential for violations as designated within Section 1-87 of
12this Act.
13    (g) Reports of potential cases of water pollution that may
14be associated with high volume horizontal hydraulic fracturing
15operations may be submitted electronically. The Department
16shall establish a format for these reports to be submitted
17through the website developed under Section 1-110 of this Act.
18The Department shall electronically provide these reports to
19the Agency.
20    (h) The Department shall publish, on its website, lists of
21confirmed cases of pollution or diminution that result from
22high volume horizontal hydraulic fracturing operations. This
23information shall be searchable by county.
24    (i) Nothing in this Section shall prevent the Department
25from issuing a cessation order under Section 8a of the Illinois
26Oil and Gas Act.
 

 

 

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1    Section 1-85. Presumption of pollution or diminution.
2    (a) This Section establishes a rebuttable presumption for
3the purposes of evidence and liability under State law
4regarding claims of pollution or diminution of a water source
5and for use regarding the investigation and order authority
6under Section 1-83.
7    (b) Unless rebutted by a defense established in subsection
8(c) of this Section, it shall be presumed that any person
9conducting or who has conducted high volume horizontal
10hydraulic fracturing operations shall be liable for pollution
11or diminution of a water supply if:
12        (1) the water source is within 1,500 feet of the well
13    site;
14        (2) water quality data showed no pollution or
15    diminution prior to the start of high volume horizontal
16    hydraulic fracturing operations; and
17        (3) the pollution or diminution occurred during high
18    volume horizontal hydraulic fracturing operations or no
19    more than 30 months after the completion of the high volume
20    horizontal hydraulic fracturing operations.
21    (c) To rebut the presumption established under this
22Section, a person presumed responsible must affirmatively
23prove by clear and convincing evidence any of the following:
24        (1) the water source is not within 1,500 feet of the
25    well site;

 

 

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1        (2) the pollution or diminution occurred prior to high
2    volume horizontal hydraulic fracturing operations or more
3    than 30 months after the completion of the high volume
4    horizontal hydraulic fracturing operations; or
5        (3) the pollution or diminution occurred as the result
6    of an identifiable cause other than the high volume
7    horizontal hydraulic fracturing operations.
 
8    Section 1-87. Water quality investigation and enforcement.
9    (a) No person shall cause or allow high volume horizontal
10hydraulic fracturing operations permitted under this Act to
11violate Section 12 of the Illinois Environmental Protection Act
12or surface water or groundwater regulations adopted under the
13Illinois Environmental Protection Act.
14    (b) The Agency shall have the duty to investigate
15complaints that activities under this Act have caused a
16violation of Section 12 of the Illinois Environmental
17Protection Act or surface or groundwater rules adopted under
18the Illinois Environmental Protection Act. Any action taken by
19the Agency in enforcing these violations shall be taken under
20and consistent with the Illinois Environmental Protection Act,
21including but not limited to, the Agency's authority to seek a
22civil or criminal cause of action under that Act. The test
23results under subsections (b) and (c) of Section 1-80 of this
24Act may be considered by the Agency during an investigation
25under this Section.

 

 

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1    (c) A person who has reason to believe they have incurred
2contamination of a water source as a result of high volume
3horizontal hydraulic fracturing may notify the Agency and
4request an investigation be conducted. The Agency shall forward
5this request to the Department for consideration of an
6investigation under Section 1-83 of this Act. If the Agency is
7provided with notice under subsection (f) of Section 1-83, the
8Agency shall conduct an investigation to determine whether
9pollution or diminution is continuing to occur at the location
10subject to the order, as well as locations identified by the
11Department or at any other water source within 1,500 feet of
12the well site. Any person conducting or who has conducted high
13volume horizontal hydraulic fracturing operations shall supply
14any information requested to assist the Agency in its
15investigation. The Agency shall give due consideration to any
16information submitted during the course of the investigation.
17    (d) Pollution or diminution is a violation of this Act and
18may be pursued by the Department subject to the procedures and
19remedies under Sections 1-100 and 1-105 of this Act.
20    (e) If an Agency investigation under Section 1-83 or
21subsection (c) of this Section confirms that the cause of the
22pollution, diminution, or water pollution is attributable to
23high volume horizontal hydraulic fracturing operations, in
24addition to any other relief available under law, the permittee
25shall be required to reimburse the costs and reasonable
26expenses incurred by the Agency for all activities related to

 

 

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1the investigation and cleanup. These costs shall include, but
2not be limited to, inspections, investigations, analyses,
3personnel, direct and indirect costs, studies, assessments,
4reports, and review and evaluation of that data, as well as
5costs under the Agency's review of whether the quality of a
6restored or replaced water supply meets or exceeds the quality
7of the water supply before it was affected by the permittee.
8Costs shall be reimbursed to the Agency by the permittee within
930 calendar days after receipt of a written request for
10reimbursement by the Agency. For all costs that remain unpaid
11following 30 calendar days after receipt of a written request
12for reimbursement, the Agency may institute a civil action for
13cost recovery under subsection (e) of Section 1-101 of this
14Act. Failure to reimburse the Agency within 30 calendar days
15after receipt of the written request for reimbursement is a
16violation of this Act. Reimbursement of costs collected under
17this subsection shall be deposited by the Agency into the
18Illinois Clean Water Fund.
 
19    Section 1-95. Plugging; restoration.
20    (a) The permittee shall perform and complete plugging of
21the well and restoration of the well site in accordance with
22the Illinois Oil and Gas Act and any and all rules adopted
23thereunder. The permittee shall bear all costs related to
24plugging of the well and reclamation of the well site. If the
25permittee fails to plug the well in accordance with this

 

 

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

 

 

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1well site and production facility in accordance with the
2applicable restoration requirements in subsection (c) of this
3Section and shall remove all equipment and materials involved
4in site preparation, drilling, and high volume horizontal
5hydraulic fracturing operations, including tank batteries,
6rock and concrete pads, oil field debris, injection and flow
7lines at or above the surface, electric power lines and poles
8extending on or above the surface, tanks, fluids, pipes at or
9above the surface, secondary containment measures, rock or
10concrete bases, drilling equipment and supplies, and any and
11all other equipment, facilities, or materials used during any
12stage of site preparation work, drilling, or hydraulic
13fracturing operations at the well site. Work on the removal of
14equipment and materials at the well site shall begin within 6
15months after plugging the final well on the well site and be
16completed no later than 12 months after the last producing well
17on the well site has been plugged. Roads installed as part of
18the oil and gas operation may be left in place if provided in
19the lease or pursuant to agreement with the surface owner, as
20applicable.
 
21    Section 1-96. Seismicity.
22    (a) For purposes of this Section, "induced seismicity"
23means an earthquake event that is felt, recorded by the
24national seismic network, and attributable to a Class II
25injection well used for disposal of flow-back and produced

 

 

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1fluid from hydraulic fracturing operations.
2    (b) The Department shall adopt rules, in consultation with
3the Illinois State Geological Survey, establishing a protocol
4for controlling operational activity of Class II injection
5wells in an instance of induced seismicity.
6    (c) The rules adopted by the Department under this Section
7shall employ a "traffic light" control system allowing for low
8levels of seismicity while including additional monitoring and
9mitigation requirements when seismic events are of sufficient
10intensity to result in a concern for public health and safety.
11    (d) The additional mitigation requirements referenced in
12subsection (c) of this Section shall provide for either the
13scaling back of injection operations with monitoring for
14establishment of a potentially safe operation level or the
15immediate cessation of injection operations.
 
16    Section 1-97. Department mapping and reporting. On or
17before February 1, 2014, the Department shall, with the
18assistance of the Illinois State Geological Survey, submit a
19report to the General Assembly and Governor identifying the
20following in Illinois and include any recommendations for
21additional legislative or administrative action on these
22items:
23    (a) the location of resources of shale gas and oil,
24conventional gas and oil, and process materials, including sand
25and other naturally occurring geologic materials used in high

 

 

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1volume horizontal hydraulic fracturing operations;
2    (b) the potential impacts of high volume horizontal
3hydraulic fracturing operations on:
4        (1) sites owned, managed or leased by the Department;
5        (2) nature preserves;
6        (3) sites on the Register of Land and Water Reserves;
7        (4) the availability of water for human consumption and
8    general domestic use; and
9        (5) the potential for influencing natural seismic
10    activity.
11    Two years after the effective date of the first high volume
12horizontal hydraulic fracturing permit issued by the
13Department, and every 3 years thereafter, the Department shall
14prepare a report that examines the following:
15        (1) the number of high volume horizontal hydraulic
16    fracturing permits issued by the Department, on an annual
17    basis;
18        (2) a map showing the locations in this State where
19    high volume horizontal hydraulic fracturing operations
20    have been permitted by the Department;
21        (3) identification of the latest scientific research,
22    best practices, and technological improvements related to
23    high volume horizontal hydraulic fracturing operations and
24    methods to protect the environment and public health;
25        (4) any confirmed environmental impacts in this State
26    due to high volume horizontal hydraulic fracturing

 

 

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1    operations, including, but not limited to, any reportable
2    release of hydraulic fracturing flowback, hydraulic
3    fracturing fluid, and hydraulic fracturing additive;
4        (5) confirmed public health impacts in this State due
5    to high volume horizontal hydraulic fracturing operations;
6        (6) a comparison of the revenues generated under
7    subsection (e) of Section 1-35 of this Act to the
8    Department's costs associated with implementing and
9    administering provisions of this Act;
10        (7) a comparison of the revenues generated under
11    subsection (e) of Section 1-87 of this Act to the Agency's
12    costs associated with implementing and administering
13    provisions of this Act;
14        (7.5) a summary of revenues generated annually from
15    income, ad valorem, sales, and any other State and local
16    taxes applicable to activity permitted under this Act by
17    the Department, including an estimate of the income tax
18    generated from lease payments and royalty payments;
19        (8) a description of any modifications to existing
20    programs, practices, or rules related to high volume
21    horizontal hydraulic fracturing operations made by the
22    Department;
23        (9) any problems or issues the Department identifies as
24    it implements and administers the provisions of this Act;
25        (10) any recommendations for legislative action by the
26    General Assembly to address the findings in the report; and

 

 

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1        (11) any other information the Department deems
2    relevant regarding its specific experiences implementing
3    and administering the provisions of this Act and,
4    generally, high volume horizontal hydraulic fracturing
5    operations.
6    The first report shall also examine any studies issued by
7the United States Environmental Protection Agency regarding
8high volume horizontal hydraulic fracturing operations. The
9report required by this Section shall be provided to the
10General Assembly and Governor.
 
11    Section 1-98. Hydraulic fracturing completion reporting.
12    (a) For the purposes of this Section, "hydraulic fracturing
13operations" means all stages of a stimulation treatment of a
14horizontal well as defined by this Act by the pressurized
15application of more than 80,000 gallons but less than 300,001
16gallons of hydraulic fracturing fluid and proppant to initiate
17or propagate fractures in a geologic formation to enhance
18extraction or production of oil or gas.
19    (b) Within 60 calendar days after the conclusion of
20hydraulic fracturing operations, the operator shall file a
21hydraulic fracturing operations completion report with the
22Department. The hydraulic fracturing operations completion
23report shall contain the following information:
24        (1) the name and location of the well;
25        (2) the total and per-stage gallons of hydraulic

 

 

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1    fracturing fluid used at the well;
2        (3) depth of the wellbore (including both total
3    vertical depth and total measured depth);
4        (4) length of horizontal wellbore;
5        (5) the maximum surface treating pressure used;
6        (6) the formation targeted;
7        (7) the number of hydraulic fracturing stages; and
8        (8) total perforated interval and individual
9    perforation intervals.
 
10    Section 1-99. Task Force on Hydraulic Fracturing
11Regulation.
12    (a) There is hereby created the Task Force on Hydraulic
13Fracturing Regulation.
14    (b) The task force shall consist of the following members
15as follows:
16        (1) Four legislators, appointed one each by the
17    President of the Senate, the Minority Leader of the Senate,
18    the Speaker of the House of Representatives, and the
19    Minority Leader of the House of Representatives;
20        (2) The Governor, or his or her representative;
21        (3) The Director of the Illinois Environmental
22    Protection Agency, or his or her representative;
23        (4) The Director of the Illinois Department of Natural
24    Resources, or his or her representative;
25        (5) The Attorney General of the State of Illinois, or

 

 

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1    his or her representative;
2        (6) The Director of the Illinois State Geological
3    Survey, or his or her representative;
4        (7) Four representatives from environmental
5    organizations, at least one of whom shall be a national
6    environmental organization, at least one of whom shall be a
7    Midwest regional environmental organization, and at least
8    one of whom shall be an Illinois-based environmental
9    organization, appointed by the Director of the Illinois
10    Department of Natural Resources; and
11        (8) Four representatives from entities representing
12    the interests of the oil and gas industry, at least one of
13    whom shall represent companies whose activities are
14    national in scope, at least one of whom shall represent
15    companies whose activities are primarily limited to this
16    State, at least one of whom shall represent an industry
17    trade association, and at least one of whom shall represent
18    a statewide labor federation representing more than one
19    international union, appointed by the Director of the
20    Illinois Department of Natural Resources.
21    (c) The Director of the Illinois Department of Natural
22Resources shall serve as chairperson of the task force, and the
23Department shall be responsible for administering its
24operations and ensuring that the requirements of this Section
25are met.
26    (d) The task force may consult with any persons or entities

 

 

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1it deems necessary to carry out its mandate.
2    (e) Members of the task force shall be appointed no later
3than 90 days after the effective date of this amendatory Act of
4the 98th General Assembly. The members of the task force shall
5receive no compensation for serving as members of the task
6force.
7    (f) The task force shall (1) prepare a report evaluating
8the scope of hydraulic fracturing activity in the State and (2)
9provide recommendations to the General Assembly as to whether
10further legislation is needed to regulate hydraulic fracturing
11in this State. In performing these tasks, the task force shall
12consider, at a minimum, the data collected by the Department
13under Section 1-98 of this Act and the Illinois Oil and Gas
14Act.
15    (g) The task force shall submit its report and
16recommendations specified in subsection (f) of this Section to
17the General Assembly on or before September 15, 2016.
18    (h) The task force, upon issuance of its report and
19recommendations, is dissolved and this Section is repealed.
 
20    Section 1-100. Criminal offenses; penalties.
21    (a) Except as otherwise provided in this Section, it shall
22be a Class A misdemeanor to knowingly violate this Act, its
23rules, or any permit or term or condition thereof, or knowingly
24to submit any false information under this Act or regulations
25adopted thereunder, or under any permit or term or condition

 

 

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1thereof. A person convicted or sentenced under this subsection
2(a) shall be subject to a fine of not to exceed $10,000 for
3each day of violation.
4    (b) It is unlawful for a person knowingly to violate:
5        (1) subsection (c) of Section 1-25 of this Act;
6        (2) subsection (d) of Section 1-25 of this Act;
7        (3) subsection (a) of Section 1-30 of this Act;
8        (4) paragraph (9) of subsection (c) of Section 1-75 of
9    this Act; or
10        (5) subsection (a) of Section 1-87 of this Act.
11    A person convicted or sentenced for any knowing violation
12of the requirements or prohibitions listed in this subsection
13(b) commits a Class 4 felony, and in addition to any other
14penalty prescribed by law is subject to a fine not to exceed
15$25,000 for each day of violation. A person who commits a
16second or subsequent knowing violation of the requirements or
17prohibitions listed in this subsection (b) commits a Class 3
18felony and, in addition to any other penalties provided by law,
19is subject to a fine not to exceed $50,000 for each day of
20violation.
21    (c) Any person who knowingly makes a false, fictitious, or
22fraudulent material statement, orally or in writing, to the
23Department or Agency as required by this Act, its rules, or any
24permit, term, or condition of a permit, commits a Class 4
25felony, and each false, fictitious, or fraudulent statement or
26writing shall be considered a separate violation. In addition

 

 

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1to any other penalty prescribed by law, persons in violation of
2this subsection (c) is subject to a fine of not to exceed
3$25,000 for each day of violation. A person who commits a
4second or subsequent knowing violation of this subsection (c)
5commits a Class 3 felony and, in addition to any other
6penalties provided by law, is subject to a fine not to exceed
7$50,000 for each day of violation.
8    (d) Any criminal action provided for under this Section
9shall be brought by the State's Attorney of the county in which
10the violation occurred or by the Attorney General and shall be
11conducted in accordance with the applicable provision of the
12Code of Criminal Procedure of 1963. For criminal conduct in
13this Section, the period for commencing prosecution shall not
14begin to run until the offense is discovered by or reported to
15a State or local agency having authority to investigate
16violations of this Act.
 
17    Section 1-101. Violations; civil penalties and
18injunctions.
19    (a) Except as otherwise provided in this Section, any
20person who violates any provision of this Act or any rule or
21order adopted under this Act or any permit issued under this
22Act shall be liable for a civil penalty not to exceed $50,000
23for the violation and an additional civil penalty not to exceed
24$10,000 for each day during which the violation continues.
25    (b) Any person who violates any requirements or

 

 

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1prohibitions of provisions listed in this subsection (b) is
2subject to a civil penalty not to exceed $100,000 for the
3violation and an additional civil penalty not to exceed $20,000
4for each day during which the violation continues. The
5following are violations are subject to the penalties of this
6subsection (b):
7        (1) subsection (c) of Section 1-25 of this Act;
8        (2) subsection (d) of Section 1-25 of this Act;
9        (3) subsection (a) of Section 1-30 of this Act;
10        (4) paragraph (9) of subsection (c) of Section 1-75 of
11    this Act; or
12        (5) subsection (a) of Section 1-87 of this Act.
13    (c) Any person who knowingly makes, submits, causes to be
14made, or causes to be submitted a false report of pollution,
15diminution, or water pollution attributable to high volume
16horizontal hydraulic fracturing operations that results in an
17investigation by the Department or Agency under this Act shall
18be liable for a civil penalty not to exceed $1,000 for the
19violation.
20    (d) The penalty shall be recovered by a civil action before
21the circuit court of the county in which the well site is
22located or in the circuit court of Sangamon County. Venue shall
23be considered proper in either court. These penalties may, upon
24the order of a court of competent jurisdiction, be made payable
25to the Environmental Protection Trust Fund, to be used in
26accordance with the provisions of the Environmental Protection

 

 

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1Trust Fund Act.
2    (e) The State's Attorney of the county in which the
3violation occurred, or the Attorney General, may, at the
4request of the Department or on his or her own motion,
5institute a civil action for the recovery of costs, an
6injunction, prohibitory or mandatory, to restrain violations
7of this Act, any rule adopted under this Act, the permit or
8term or condition of the permit, or to require other actions as
9may be necessary to address violations of this Act, any rule
10adopted under this Act, the permit or term or condition of the
11permit.
12    (f) The State's Attorney of the county in which the
13violation occurred, or the Attorney General, shall bring
14actions under this Section in the name of the People of the
15State of Illinois. Without limiting any other authority that
16may exist for the awarding of attorney's fees and costs, a
17court of competent jurisdiction may award costs and reasonable
18attorney's fees, including the reasonable costs of expert
19witnesses and consultants, to the State's Attorney or the
20Attorney General in a case where he or she has prevailed
21against a person who has committed a knowing or repeated
22violation of this Act, any rule adopted under this Act, or the
23permit or term or condition of the permit.
24    (g) All final orders imposing civil penalties under this
25Section shall prescribe the time for payment of those
26penalties. If any penalty is not paid within the time

 

 

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

 

 

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1perform any act or duty under this Act that is not
2discretionary with the Department. No action may be commenced
3under this subsection (b) prior to 60 days after the plaintiff
4has given notice in writing of the action to the Department,
5except that action may be brought immediately after the
6notification in the case where the violation or order
7complained of constitutes an imminent threat to the health or
8safety of the plaintiff or would immediately affect a legal
9interest of the plaintiff.
10    (c) The court, in issuing any final order in any action
11brought under this Section, may award costs of litigation
12(including attorney and expert witness fees) to any party, on
13the basis of the importance of the proceeding and the
14participation of the parties to the efficient and effective
15enforcement of this Act. The court may, if a temporary
16restraining order or preliminary injunction is sought, require
17the filing of a bond or equivalent security in accordance with
18Part 1 of Article XI of the Code of Civil Procedure.
19    (d) Any person who is injured in his or her person or
20property through the violation by any operator of any rule,
21order, or permit issued under this Act may bring an action for
22damages (including reasonable attorney and expert witness
23fees). Nothing in this subsection (d) shall affect any of the
24rights established by or limits imposed under the Workers'
25Compensation Act.
26    (e) Any action brought under this Section may be brought

 

 

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1only in the county in which the high volume horizontal
2hydraulic fracturing operation complained of is located.
3    (f) In any action under this Section, the Department shall
4have an unconditional right to intervene.
5    (g) No existing civil or criminal remedy for any wrongful
6action shall be excluded or impaired by this Act.
7    (h) Nothing in this Section shall restrict any right that
8any person (or class of persons) may have under any statute or
9common law to seek enforcement of any of the provisions of this
10Act and the rules adopted under this Act, or to seek any other
11relief (and including relief against the United States or the
12Department).
 
13    Section 1-105. Violations, complaints, and notice;
14website.
15    The Department shall maintain a detailed database that is
16readily accessible to the public on the Department's website.
17The database shall show each violation found by the Department
18regarding high volume horizontal hydraulic fracturing
19operations and the associated well owners, operators, and
20subcontractors. When the Department determines that any person
21has violated this Act, the Department shall provide notice by
22U.S. Postal Service certified mail, return receipt requested,
23of the Department's determination to all persons required to
24receive specific public notice under Section 1-40 of this Act
25within 7 calendar days after the determination. The Department

 

 

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1shall also post the notice on the Department's website. The
2notice shall include a detailed, plain language description of
3the violation and a detailed, plain language description of all
4known risks to public health, life, property, aquatic life, and
5wildlife resulting from the violation.
 
6    Section 1-110. Public information; website.
7    (a) All information submitted to the Department under this
8Act is deemed public information, except information deemed to
9constitute a trade secret under Section 1-77 of this Act and
10private information and personal information as defined in the
11Freedom of Information Act.
12    (b) To provide the public and concerned citizens with a
13centralized repository of information, the Department shall
14create and maintain a comprehensive website dedicated to
15providing information concerning high volume horizontal
16hydraulic fracturing operations. The website shall contain,
17assemble, and link the documents and information required by
18this Act to be posted on the Department's or other agencies'
19websites. The Department shall also create and maintain an
20online searchable database that provides information related
21to high volume horizontal hydraulic fracturing operations on
22wells that, at a minimum, include, for each well it permits,
23the identity of its operators, its waste disposal, its chemical
24disclosure information, and any complaints or violations under
25this Act. The website created under this Section shall allow

 

 

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1users to search for completion reports by well name and
2location, dates of fracturing and drilling operations,
3operator, and by chemical additives.
 
4    Section 1-120. Applicable federal, State, and local laws.
5Compliance with this Act does not relieve responsibility for
6compliance with the Illinois Oil and Gas Act, the Illinois
7Environmental Protection Act, and other applicable federal,
8State, and local laws.
 
9    Section 1-123. Application of water well laws. Nothing in
10this Act shall be construed to affect the application of the
11Illinois Water Well Construction Code, the Illinois Water Well
12Pump Installation Code, the Water Well and Pump Installation
13Contractor's License Act, or any rules adopted thereunder to
14all water wells, closed loop wells, or monitoring wells, as
15those terms are defined in Section 3 of the Illinois Water Well
16Construction Code, that are located, drilled, constructed, or
17modified in connection with activities regulated by this Act.
 
18    Section 1-125. Administrative review. All final
19administrative decisions, including issuance or denial of a
20permit, made by the Department under this Act are subject to
21judicial review under the Administrative Review Law and its
22rules.
 

 

 

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

 
15    Section 2-5. Short title. This Act may be cited as the
16"Illinois Hydraulic Fracturing Tax Act".
 
17    Section 2-10. Definitions. For the purposes of this Act,
18unless the context otherwise requires:
19    "Barrel" for oil measurement means a barrel of 42 U.S.
20gallons of 231 cubic inches per gallon, computed at a
21temperature of 60 degrees Fahrenheit.

 

 

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1    "Construction" means any constructing, altering,
2reconstructing, repairing, rehabilitating, refinishing,
3refurbishing, remodeling, remediating, renovating, custom
4fabricating, maintaining, landscaping, improving, drilling,
5testing, moving, wrecking, painting, decorating, demolishing,
6and adding to or subtracting from any building, structure,
7highway, roadway, street, bridge, alley, sewer, ditch, water
8works, parking facility, railroad, excavation or other
9structure, project, development, real property or improvement,
10or to do any part thereof, whether or not the performance of
11the construction involves the addition to, or fabrication into,
12any structure, project, development, real property or
13improvement herein described performed or done on behalf of an
14operator in connection with and at the location of a well site
15subject to the tax imposed by this Act.
16    "Construction worker" means a person performing
17construction.
18    "Department" means the Illinois Department of Revenue.
19    "Fracturing" or "hydraulic fracturing" means the
20propagation of fractures in a rock layer, by a pressurized
21fluid used to release petroleum or natural gas (including shale
22gas, tight gas, and coal seam gas), for extraction.
23    "Gas" means natural gas taken from below the surface of the
24earth or water in this State, regardless of whether the gas is
25taken from a gas well or from a well also productive of oil or
26any other product.

 

 

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1    "General prevailing rate of hourly wages" has the meaning
2ascribed to it in Section 2 of the Prevailing Wage Act, as
3determined by the Director of the Department of Labor under
4Section 9 of the Prevailing Wage Act for the county in which
5the construction occurs.
6    "Illinois construction worker" means a construction
7worker, as defined in this Section, domiciled in Illinois for
824 months prior to the date of the issuance of a high volume
9horizontal hydraulic fracturing permit for the well site on
10which the construction is performed.
11    "Lease number" means the number assigned by the purchaser
12to identify each production unit.
13    "Oil" means petroleum or other crude oil, condensate,
14casinghead gasoline, or other mineral oil that is severed or
15withdrawn from below the surface of the soil or water in this
16State.
17    "Operator" means the person primarily responsible for the
18management and operation of oil or gas productions from a
19production unit.
20    "Person" means any natural individual, firm, partnership,
21association, joint stock company, joint adventure, public or
22private corporation, limited liability company, or a receiver,
23executor, trustee, guardian, or other representative appointed
24by order of any court.
25    "Producer" means any person owning, controlling, managing,
26or leasing any oil or gas property or oil or gas well, and any

 

 

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1person who severs in any manner any oil or gas in this State,
2and shall include any person owning any direct and beneficial
3interest in any oil or gas produced, whether severed by such
4person or some other person on their behalf, either by lease,
5contract, or otherwise, including working interest owners,
6overriding royalty owners, or royalty owners.
7    "Production unit" means a unit of property designated by
8the Department of Natural Resources from which oil or gas is
9severed.
10    "Purchaser" means a person who is the first purchaser of a
11product after severance from a production unit.
12    "Remove" or "removal" means the physical transportation of
13oil or gas off of the production unit where severed; and if the
14oil or gas is used on the premises where severed, or if the
15manufacture or conversion of oil or gas into refined products
16occurs on the premises where severed, oil or gas shall be
17deemed to have been removed on the date such use, manufacture,
18or conversion begins.
19    "Severed" or "severing" means: (1) the production of oil
20through extraction or withdrawal of the same, whether such
21extraction or withdrawal is by natural flow, mechanical flow,
22forced flow, pumping, or any other means employed to get the
23oil from below the surface of the soil or water and shall
24include the withdrawal by any means whatsoever of oil upon
25which the tax has not been paid, from any surface reservoir,
26natural or artificial, or from a water surface; and (2) the

 

 

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

 

 

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11-5 of the Hydraulic Fracturing Regulatory Act.
2    "Working interest" means any interest in or any right to
3the production of oil and gas, excluding royalty or overriding
4royalty interests.
 
5    Section 2-15. Tax imposed.
6    (a) For oil and gas removed on or after July 1, 2013, there
7is hereby imposed a tax upon the severance and production of
8oil or gas from a well on a production unit in this State
9permitted, or required to be permitted, under the Illinois
10Hydraulic Fracturing Regulatory Act, for sale, transport,
11storage, profit, or commercial use. The tax shall be applied
12equally to all portions of the value of each barrel of oil
13severed and subject to such tax and to the value of the gas
14severed and subject to such tax. For a period of 24 months from
15the month in which oil or gas was first produced from the well,
16the rate of tax shall be 3% of the value of the oil or gas
17severed from the earth or water in this State. Thereafter, the
18rate of the tax shall be as follows:
19        (1) For oil:
20            (A) where the average daily production from the
21        well during the month is less than 25 barrels, 3% of
22        the value of the oil severed from the earth or water;
23            (B) where the average daily production from the
24        well during the month is 25 or more barrels but less
25        than 50 barrels, 4% of the value of the oil severed

 

 

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1        from the earth or water;
2            (C) where the average daily production from the
3        well during the month is 50 or more barrels but less
4        than 100 barrels, 5% of the value of the oil severed
5        from the earth or water; or
6            (D) where the average daily production from the
7        well during the month is 100 or more barrels, 6% of the
8        value of the oil severed from the earth or water.
9        (2) For gas, 6% of the value of the gas severed from
10    the earth or water.
11    If a well is required to be permitted under the Illinois
12Hydraulic Fracturing Regulatory Act, the tax imposed by this
13Section applies, whether or not a permit was obtained.
14    (b) Oil produced from a well whose average daily production
15is 15 barrels or less for the 12-month period immediately
16preceding the production is exempt from the tax imposed by this
17Act.
18    (c) For the purposes of the tax imposed by this Act the
19amount of oil produced shall be measured or determined, in the
20case of oil, by tank tables, without deduction for overage or
21losses in handling. Allowance for any reasonable and bona fide
22deduction for basic sediment and water, and for correction of
23temperature to 60 degrees Fahrenheit will be allowed. For the
24purposes of the tax imposed by this Act the amount of gas
25produced shall be measured or determined, by meter readings
26showing 100% of the full volume expressed in cubic feet at a

 

 

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1standard base and flowing temperature of 60 degrees Fahrenheit,
2and at the absolute pressure at which the gas is sold and
3purchased. Correction shall be made for pressure according to
4Boyle's law, and used for specific gravity according to the
5gravity at which the gas is sold and purchased.
6    (d) The following severance and production of gas shall be
7exempt from the tax imposed by this Act: gas injected into the
8earth for the purpose of lifting oil, recycling, or
9repressuring; gas used for fuel in connection with the
10operation and development for, or production of, oil or gas in
11the production unit where severed; and gas lawfully vented or
12flared; gas inadvertently lost on the production unit by reason
13of leaks, blowouts, or other accidental losses.
14    (e) All oil and gas removed from the premises where severed
15is subject to the tax imposed by this Act unless exempt under
16the terms of this Act.
17    (f) The liability for the tax accrues at the time the oil
18or gas is removed from the production unit.
 
19    Section 2-17. Local Workforce Tax Rate Reduction.
20    (a) The rate of tax imposed on working interest owners of a
21well under Section 2-15 of this Act shall be reduced by 0.25%
22for the life of the well when a minimum of 50% of the total
23workforce hours on the well site are performed by Illinois
24construction workers being paid wages equal to or exceeding the
25general prevailing rate of hourly wages.

 

 

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1    (b) When more than one well is drilled on a well site,
2total workforce hours shall be determined on a well-by-well
3basis.
4    (c) Any operator that intends to claim the reduction
5provided for in this Section on his or her behalf, or on the
6behalf of the working interest owners, shall be responsible for
7obtaining from all construction contractors working on a well
8site, records to document the claim for the reduction in tax
9rate. Operators shall, at a minimum, obtain from construction
10contractors, in writing, the total number of construction
11workers that performed work under the contract, the number of
12Illinois construction workers that performed work under the
13contract, whether oral or written, between the operator and the
14construction contractor, the hours worked by each construction
15worker and the wage paid to each construction worker for the
16hours of work performed on the well site. The operator shall
17obtain and retain any other records the Department determines
18are necessary to verify a claim for a reduction in the tax. The
19operator shall make the records available to the Department
20upon request.
21    For the purposes of this Section, each construction
22contractor, upon written request from the operator, shall
23retain the following records: each worker's name, address, and
24telephone number, if available, years of residency in Illinois,
25the type of work the worker performs, the hourly wages paid
26each worker, and the number of hours worked by each worker for

 

 

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1the term of the contract. The construction contractor shall
2retain any other records the Department determines are
3necessary to verify a claim for a reduction in the tax. The
4construction contractor shall make the records available to the
5operator and Department upon request. The operator and
6construction contractors shall retain the records for 3 years.
7    No later than the 6 months after the date of the first
8purchase of oil or gas from a well, the operator shall file
9with the Department, in the form and manner required by the
10Department, a report and documentation to support that the
11working interest owners qualify for the reduction in the rate
12of tax provided for in this Section. The report shall be signed
13by the operator, or an officer, employee, or agent of the
14contractor, and state under oath that he or she has examined
15the report and documentation and the report and documentation
16are true and accurate. The Department shall keep the records
17submitted in accordance with this subsection for a period of
18not less than 3 years from the date of filing.
19    (d) The Department shall notify the first purchaser and the
20operator when the working interest owners qualify for a
21reduction in the tax under this Section and state the amount of
22the reduction. The reduction shall be effective the date of
23first production. The first purchaser or operator may take a
24credit for any retroactive reduction in the tax rate on a
25return filed under Sections 2-45 and 2-50 of this Act.
26    (e) Reports shall be filed on forms furnished and

 

 

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1prescribed by the Department and shall contain any other
2information as the Department may reasonably require.
 
3    Section 2-20. Taxable value; method of determining. The
4Department may determine the value of products severed from a
5production unit when the operator and purchaser are affiliated
6persons, when the sale and purchase of products is not an arm's
7length transaction, or when products are severed and removed
8from a production unit and a value is not established for those
9products. The value determined by the Department shall be
10commensurate with the actual price received for products of
11like quality, character, and use which are severed in the same
12field or area. If there are no sales of products of like
13quality, character, and use severed in the same field or area,
14then the Department shall establish a reasonable value based on
15sales of products of like quality, character, and use which are
16severed in other areas of the State, taking into consideration
17any other relevant factors.
 
18    Section 2-25. Withholding of tax. Any purchaser who makes
19a monetary payment to a producer for his or her portion of the
20value of products from a production unit shall withhold from
21such payment the amount of tax due from the producer. Any
22purchaser who pays any tax due from a producer shall be
23entitled to reimbursement from the producer for the tax so paid
24and may take credit for such amount from any monetary payment

 

 

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1to the producer for the value of products. To the extent that a
2purchaser required to collect the tax imposed by this Act has
3actually collected that tax, such tax is held in trust for the
4benefit of the State of Illinois.
 
5    Section 2-30. Payment and collection of tax.
6    (a) For oil and gas removed on or after July 1, 2013, the
7tax incurred under this Act shall be due and payable on or
8before the last day of the month following the end of the month
9in which the oil or gas is removed from the production unit.
10The tax is upon the producers of such oil or gas in the
11proportion to their respective beneficial interests at the time
12of severance. The first purchaser of any oil or gas sold shall
13collect the amount of the tax due from the producers by
14deducting and withholding such amount from any payments made by
15such purchaser to the producers and shall remit the tax in this
16Act.
17    In the event the tax shall be withheld by a purchaser from
18payments due a producer and such purchaser fails to make
19payment of the tax to the State as required herein, the first
20purchaser shall be liable for the tax. However, in the event a
21first purchaser fails to pay the tax withheld from a producer's
22payment, the producer's interest remains subject to any lien
23filed pursuant to subsection (c) of this Section. A producer
24shall be entitled to bring an action against such purchaser to
25recover the amount of tax so withheld together with penalties

 

 

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1and interest which may have accrued by failure to make such
2payment. A producer shall be entitled to all attorney fees and
3court costs incurred in such action. To the extent that a
4producer liable for the tax imposed by this Act collects the
5tax, and any penalties and interest, from a purchaser, such
6tax, penalties, and interest are held in trust by the producer
7for the benefit of the State of Illinois.
8    (b) For all production units a first purchaser begins to
9purchase oil or gas from on or after July 1, 2013, the first
10purchaser is required to withhold and remit the tax imposed by
11this Act to the Department from the oil and gas purchased from
12the production unit unless the first purchaser obtains from the
13operator an exemption certificate signed by the operator
14stating that the production unit is not subject to the tax
15imposed by this Act. The exemption certificate must include the
16following information:
17        (1) name and address of the operator;
18        (2) name of the production unit;
19        (3) number assigned to the production unit by the first
20    purchaser, if available;
21        (4) legal description of the production unit; and
22        (5) a statement by the operator that the production
23    unit is exempt from the tax imposed by the Illinois
24    Hydraulic Fracturing Tax Act.
25    If a first purchaser obtains an exemption certificate that
26contains the required information and reasonably relies on the

 

 

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1exemption certificate and it is subsequently determined by the
2Department that the production unit is subject to the tax
3imposed by this Act, the Department will collect any tax that
4is due from the operator and producers, and the first purchaser
5is relieved of any liability.
6    (c) Notwithstanding subsection (a) of this Section, the tax
7is a lien on the oil and gas from the time of severance from the
8land or under the water until the tax and all penalties and
9interest are fully paid, and the State shall have a lien on all
10the oil or gas severed from the production unit in this State
11in the hands of the operator, any producer or the first or any
12subsequent purchaser thereof to secure the payment of the tax.
13If a lien is filed by the Department, the purchaser shall
14withhold from producers or operators the amount of tax, penalty
15and interest identified in the lien.
 
16    Section 2-35. Registration of purchasers. A person who
17engages in business as a purchaser of oil or gas in this State
18shall register with the Department. Application for a
19certificate of registration shall be made to the Department
20upon forms furnished by the Department and shall contain any
21reasonable information the Department may require. Upon
22receipt of the application for a certificate of registration in
23proper form, the Department shall issue to the applicant a
24certificate of registration.
 

 

 

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1    Section 2-40. Inspection of records by the Department;
2subpoena power, contempt. The Department shall have the power
3to require any operator, producer, transporter, or person
4purchasing any oil or gas severed from the earth or water to
5furnish any additional information deemed to be necessary for
6the purpose of computing the amount of the tax, and for such
7purpose to examine the meter and other charts, books, records,
8and all files of such person, and for such purpose the
9Department shall have the power to issue subpoenas and examine
10witnesses under oath, and if any witness shall fail or refuse
11to appear at the request of the director, or refuses access to
12books, records, and files, the circuit court of the proper
13county, or the judge thereof, on application of the Department,
14shall compel obedience by proceedings for contempt, as in the
15case of disobedience of the requirements of a subpoena issued
16from such court or a refusal to testify therein.
 
17    Section 2-45. Purchaser's return and tax remittance. Each
18purchaser shall make a return to the Department showing the
19quantity of oil or gas purchased during the month for which the
20return is filed, the price paid therefore, total value, the
21name and address of the operator or other person from whom the
22same was purchased, a description of the production unit in the
23manner prescribed by the Department from which such oil or gas
24was severed and the amount of tax due from each production unit
25for each calendar month. All taxes due, or to be remitted, by

 

 

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1the purchaser shall accompany this return. The return shall be
2filed on or before the last day of the month after the calendar
3month for which the return is required. The Department may
4require any additional report or information it may deem
5necessary for the proper administration of this Act.
6    Such returns shall be filed electronically in the manner
7prescribed by the Department. Purchasers shall make all
8payments of that tax to the Department by electronic funds
9transfer unless, as provided by rule, the Department grants an
10exception upon petition of a purchaser. Purchasers' returns
11must be accompanied by appropriate computer generated magnetic
12media supporting schedule data in the format required by the
13Department, unless, as provided by rule, the Department grants
14an exception upon petition of a purchaser.
 
15    Section 2-50. Operator returns; payment of tax.
16    (a) If, on or after July 1, 2013, oil or gas is transported
17off the production unit where severed by the operator, used on
18the production unit where severed, or if the manufacture and
19conversion of oil and gas into refined products occurs on the
20production unit where severed, the operator is responsible for
21remitting the tax imposed under subsections (a) of Section 15,
22on or before the last day of the month following the end of the
23calendar month in which the oil and gas is removed from the
24production unit, and such payment shall be accompanied by a
25return to the Department showing the gross quantity of oil or

 

 

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1gas removed during the month for which the return is filed, the
2price paid therefore, and if no price is paid therefore, the
3value of the oil and gas, a description of the production unit
4from which such oil or gas was severed, and the amount of tax.
5The Department may require any additional information it may
6deem necessary for the proper administration of this Act.
7    (b) Operators shall file all returns electronically in the
8manner prescribed by the Department unless, as provided by
9rule, the Department grants an exception upon petition of an
10operator. Operators shall make all payments of that tax to the
11Department by electronic funds transfer unless, as provided by
12rule, the Department grants an exception upon petition of an
13operator. Operators' returns must be accompanied by
14appropriate computer generated magnetic media supporting
15schedule data in the format required by the Department, unless,
16as provided by rule, the Department grants an exception upon
17petition of a purchaser.
18    (c) Any operator who makes a monetary payment to a producer
19for his or her portion of the value of products from a
20production unit shall withhold from such payment the amount of
21tax due from the producer. Any operator who pays any tax due
22from a producer shall be entitled to reimbursement from the
23producer for the tax so paid and may take credit for such
24amount from any monetary payment to the producer for the value
25of products. To the extent that an operator required to collect
26the tax imposed by this Act has actually collected that tax,

 

 

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1such tax is held in trust for the benefit of the State of
2Illinois.
3    (d) In the event the operator fails to make payment of the
4tax to the State as required herein, the operator shall be
5liable for the tax. A producer shall be entitled to bring an
6action against such operator to recover the amount of tax so
7withheld together with penalties and interest which may have
8accrued by failure to make such payment. A producer shall be
9entitled to all attorney fees and court costs incurred in such
10action. To the extent that a producer liable for the tax
11imposed by this Act collects the tax, and any penalties and
12interest, from an operator, such tax, penalties, and interest
13are held in trust by the producer for the benefit of the State
14of Illinois.
15    (e) When the title to any oil or gas severed from the earth
16or water is in dispute and the operator of such oil or gas is
17withholding payments on account of litigation, or for any other
18reason, such operator is hereby authorized, empowered and
19required to deduct from the gross amount thus held the amount
20of the tax imposed and to make remittance thereof to the
21Department as provided in this Section.
22    (f) An operator required to file a return and pay the tax
23under this Section shall register with the Department.
24Application for a certificate of registration shall be made to
25the Department upon forms furnished by the Department and shall
26contain any reasonable information the Department may require.

 

 

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1Upon receipt of the application for a certificate of
2registration in proper form, the Department shall issue to the
3applicant a certificate of registration.
4    (g) If oil or gas is transported off the production unit
5where severed by the operator and sold to a purchaser or
6refiner, the State shall have a lien on all the oil or gas
7severed from the production unit in this State in the hands of
8the operator, the first or any subsequent purchaser thereof, or
9refiner to secure the payment of the tax. If a lien is filed by
10the Department, the purchaser or refiner shall withhold from
11the operator the amount of tax, penalty and interest identified
12in the lien.
 
13    Section 2-55. Tax withholding and remittance when title to
14minerals disputed. When the title to any oil or gas severed
15from the earth or water is in dispute and the purchaser of such
16oil or gas is withholding payments on account of litigation, or
17for any other reason, such purchaser is hereby authorized,
18empowered and required to deduct from the gross amount thus
19held the amount of the tax imposed and to make remittance
20thereof to the Department as provided in this Act.
 
21    Section 2-60. Transporters. When requested by the
22Department, all transporters of oil or gas out of, within or
23across the State of Illinois shall be required to furnish the
24Department such information relative to the transportation of

 

 

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1such oil or gas as the Department may require. The Department
2shall have authority to inspect bills of lading, waybills,
3meter, or other charts, documents, books and records as may
4relate to the transportation of oil or gas in the hands of each
5transporter. The Department shall further be empowered to
6demand the production of such bills of lading, waybills,
7charts, documents, books, and records relating to the
8transportation of oil or gas at any point in the State of
9Illinois.
 
10    Section 2-65. Rulemaking. The Department is hereby
11authorized to adopt any rules as may be necessary to administer
12and enforce the provisions of this Act.
 
13    Section 2-70. Incorporation by reference. All of the
14provisions of Sections 4, 5, 5a, 5b, 5c, 5d, 5e, 5f, 5g, 5j, 6,
156a, 6b, 6c, 7, 8, 9, 10, 11, 11a, 12, and 13 of the "Retailers'
16Occupation Tax Act" which are not inconsistent with this Act,
17and all provisions of the Uniform Penalty and Interest Act
18shall apply, as far as practicable, to the subject matter of
19this Act to the same extent as if such provisions were included
20herein.
 
21    Section 2-75. Distribution of proceeds. All moneys
22received by the Department under this Act shall be paid into
23the General Revenue Fund in the State treasury.
 

 

 

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1
ARTICLE 3.

 
2    Section 3-150. The State Finance Act is amended by adding
3Section 5.826 as follows:
 
4    (30 ILCS 105/5.826 new)
5    Sec. 5.826. The Mines and Minerals Regulatory Fund.
 
6
ARTICLE 9.

 
7    Section 99-999. Effective date. This Act takes effect upon
8becoming law.