225 ILCS 725/ Illinois Oil and Gas Act.

(225 ILCS 725/1) (from Ch. 96 1/2, par. 5401)

Sec. 1. Unless the context otherwise requires, the words defined in this Section have the following meanings as used in this Act.

"Person" means any natural person, corporation, association, partnership, governmental agency or other legal entity, receiver, trustee, guardian, executor, administrator, fiduciary or representative of any kind.

"Oil" means natural crude oil or petroleum and other hydrocarbons, regardless of gravity, which are produced at the well in liquid form by ordinary production methods or by the use of an oil and gas separator and which are not the result of condensation of gas after it leaves the underground reservoir.

"Gas" means all natural gas, including casinghead gas, and all other natural hydrocarbons not defined above as oil.

"Pool" means a natural, underground reservoir containing in whole or in part, a natural accumulation of oil or gas, or both. Each productive zone or stratum of a general structure, which is completely separated from any other zone or stratum in the structure, is deemed a separate "pool" as used herein.

"Field" means the same general surface area which is underlaid or appears to be underlaid by one or more pools.

"Permit" means the Department's written authorization allowing a well to be drilled, deepened, converted, or operated by an owner.

"Permittee" means the owner holding or required to hold the permit, and who is also responsible for paying assessments in accordance with Section 19.7 of this Act and, where applicable, executing and filing the bond associated with the well as principal and who is responsible for compliance with all statutory and regulatory requirements pertaining to the well.

When the right and responsibility for operating a well is vested in a receiver or trustee appointed by a court of competent jurisdiction, the permit shall be issued to the receiver or trustee.

"Orphan Well" means a well for which: (1) no fee assessment under Section 19.7 of this Act has been paid or no other bond coverage has been provided for 2 consecutive years; (2) no oil or gas has been produced from the well or from the lease or unit on which the well is located for 2 consecutive years; and (3) no permittee or owner can be identified or located by the Department. Orphaned wells include wells that may have been drilled for purposes other than those for which a permit is required under this Act if the well is a conduit for oil or salt water intrusions into fresh water zones or onto the surface which may be caused by oil and gas operations.

"Owner" means the person who has the right to drill into and produce from any pool, and to appropriate the production either for the person or for the person and another, or others, or solely for others, excluding the mineral owner's royalty if the right to drill and produce has been granted under an oil and gas lease. An owner may also be a person granted the right to drill and operate an injection (Class II UIC) well independent of the right to drill for and produce oil or gas. When the right to drill, produce, and appropriate production is held by more than one person, then all persons holding these rights may designate the owner by a written operating agreement or similar written agreement. In the absence of such an agreement, and subject to the provisions of Sections 22.2 and 23.1 through 23.16 of this Act, the owner shall be the person designated in writing by a majority in interest of the persons holding these rights.

"Department" means the Department of Natural Resources.

"Director" means the Director of Natural Resources.

"Mining Board" means the State Mining Board in the Department of Natural Resources, Office of Mines and Minerals.

"Mineral Owner's Royalty" means the share of oil and gas production reserved in an oil and gas lease free of all costs by an owner of the minerals whether denominated royalty or overriding royalty.

"Waste" means "physical waste" as that term is generally understood in the oil and gas industry, and further includes:

(1) the locating, drilling, and producing of any oil or gas well or wells drilled contrary to the valid order, rules and regulations adopted by the Department under the provisions of this Act;

(2) permitting the migration of oil, gas, or water from the stratum in which it is found, into other strata, thereby ultimately resulting in the loss of recoverable oil, gas or both;

(3) the drowning with water of any stratum or part thereof capable of producing oil or gas, except for secondary recovery purposes;

(4) the unreasonable damage to underground, fresh or mineral water supply, workable coal seams, or other mineral deposits in the operations for the discovery, development, production, or handling of oil and gas;

(5) the unnecessary or excessive surface loss or destruction of oil or gas resulting from evaporation, seepage, leakage or fire, especially such loss or destruction incident to or resulting from the escape of gas into the open air in excessive or unreasonable amounts, provided, however, it shall not be unlawful for the operator or owner of any well producing both oil and gas to burn such gas in flares when such gas is, under the other provisions of this Act, lawfully produced, and where there is no market at the well for such escaping gas; and where the same is used for the extraction of casinghead gas, it shall not be unlawful for the operator of the plant after the process of extraction is completed, to burn such residue in flares when there is no market at such plant for such residue gas;

(6) permitting unnecessary fire hazards;

(7) permitting unnecessary damage to or destruction of the surface, soil, animal, fish or aquatic life or property from oil or gas operations.

"Drilling Unit" means the surface area allocated by an order or regulation of the Department to the drilling of a single well for the production of oil or gas from an individual pool.

"Enhanced Recovery Method" means any method used in an effort to recover hydrocarbons from a pool by injection of fluids, gases or other substances to maintain, restore or augment natural reservoir energy, or by introducing immiscible or miscible gases, chemicals, other substances or heat or by in-situ combustion, or by any combination thereof.

"Well-Site Equipment" means any production-related equipment or materials specific to the well, including motors, pumps, pump jacks, tanks, tank batteries, separators, compressors, casing, tubing, and rods.

"Temporary abandonment status" means a well that has received an authorization for temporary abandonment status from the Department.

(Source: P.A. 102-1017, eff. 1-1-23.)

(225 ILCS 725/1a) (from Ch. 96 1/2, par. 5401a)

Sec. 1a. This Act shall be known and may be cited as the Illinois Oil and Gas Act.

(Source: P.A. 85-1334.)

(225 ILCS 725/1.1) (from Ch. 96 1/2, par. 5402)

Sec. 1.1. Waste as defined by this Act is prohibited.

(Source: Laws 1951, p. 1500.)

(225 ILCS 725/1.2) (from Ch. 96 1/2, par. 5403)

Sec. 1.2. The Director shall appoint an Oil and Gas Board consisting of 7 members, 6 of whom shall be actively engaged in the oil and gas industry. In appointing the 6 members representing the oil and gas industry, the Director shall give due consideration to the recommendations of organizations and associations representing the various interests of the oil and gas industry and shall appoint individuals in such a manner as to assure representation of petroleum engineering, petroleum geology, oil and gas operations and production, and the servicing of oil and gas operations and production. The one remaining member shall be appointed by the Director upon consultation with the Illinois Farm Bureau and the member must be active in production agriculture. Members shall be appointed to 2 year terms commencing on the third Monday in January of odd numbered years, and may be reappointed for additional terms provided that no member may be reappointed for a term which would cause his continued service to exceed 8 years. Any appointment to fill a vacancy shall be for the unexpired portion of the term. The Director may remove any member who fails to attend 2 consecutive meetings of the Board without sufficient excuse or for any other good cause as determined by the Director.

Members of the Oil and Gas Board shall be reimbursed for all reasonable and necessary expenses incurred in attending Board meetings and may receive a per diem stipend as determined by the Director from appropriations made available for that purpose.

The Oil and Gas Board shall meet at least quarterly and at such other times as the Department or the Board deems necessary to:

(1) Review all federal and State rules and laws affecting the oil and gas industry in Illinois.

(2) Advise and consult with the Director concerning the adoption of rules pertaining to the conservation of oil and gas.

(3) Review technical information and operations concerning the improvement of methods, conditions, and equipment for the production of oil and gas.

(4) Advise and consult with the Director concerning the proper drilling, casing and plugging of oil wells.

(5) Review the methods and procedures for the issuance of proper permits to drill oil and gas wells.

(6) Advise and consult with the Director in the administration of the Oil and Gas Well Site Plugging and Restoration Program.

(7) Advise and consult with the Director on any and all other subjects about which the Department should seek information in relation to the oil and gas industry.

The Oil and Gas Board, by a record vote of a majority of its membership, may make specific recommendations to the Department on any of the matters enumerated above, but the Board shall act solely as an advisory body to the Department and its recommendations shall have no binding effect on the Department.

Before proposing any new rule or any changes to existing rules implementing the provisions of this Act under Section 5.01 of the Illinois Administrative Procedure Act, and prior to adopting any new form or changing any existing form required to be completed by a person regulated under this Act, the Department shall first present the proposed rule or form to the Oil and Gas Board for its review and recommendations. If the Oil and Gas Board, by a unanimous record vote of its membership, makes specific objection to a proposed new rule or proposed change to an existing rule, the Department shall set forth the objection in its notice of proposed rulemaking together with the reasons for proposing the rule notwithstanding the objection of the Oil and Gas Board.

The Department shall annually publish and present to the Oil and Gas Board a financial report describing the income, expenditures, and obligations of the Underground Resources Conservation Enforcement Fund and the Plugging and Restoration Fund. The annual report shall provide information on the administration of the Oil and Gas Well Site Plugging and Restoration Program, and shall include the number of orphan wells identified and the status of closure of these wells.

In situations involving drilling or operations through veins or seams of mineable coal, the entire authority and discretion of the Department shall be vested in the Mining Board.

(Source: P.A. 91-81, eff. 7-9-99.)

(225 ILCS 725/2) (from Ch. 96 1/2, par. 5404)

Sec. 2. The provisions of this Act do not apply to quarry drill or blast holes, nor to seismograph test holes.

The provisions of this Act do not apply to geological, structure, coal or other mineral test holes, or monitoring wells in connection with any activity regulated by the Department, except that notification of intent to drill accompanied by the required fee as established by the Department and a bond shall be filed with the Department, a permit shall be obtained, and all holes shall be plugged under the supervision of the Department. The bond shall be executed by a surety, authorized to transact business in this State, in the amount of $2500 for each permit or a blanket bond of $25,000 for all permits. In lieu of the surety bond, the applicant may provide cash, certificates of deposit, or irrevocable letters of credit as security for the plugging obligation under the terms and conditions as the Department may provide by rule.

Information and records of the Department in connection with the drilling of any geological, structure, coal, or other mineral test hole shall be kept confidential, if requested in writing by the permittee, for a period of 2 years following the date the permit was issued.

(Source: P.A. 89-243, eff. 8-4-95.)

(225 ILCS 725/3) (from Ch. 96 1/2, par. 5406)

Sec. 3. The Department shall be charged with the duty of enforcing this Act and all rules, regulations and orders promulgated in pursuance of this Act.

The Department may authorize any employee of the Department, qualified by training and experience, to perform the powers and duties set forth in this Act.

(Source: P.A. 85-1334.)

(225 ILCS 725/4) (from Ch. 96 1/2, par. 5407)

Sec. 4. The Department shall have jurisdiction and authority over all persons and property necessary to enforce effectively the provisions of this Act.

In aid of such jurisdiction, the Director, or anyone designated in writing by the Director, shall have the authority to administer oaths and to issue subpoenas for the production of records or other documents and for the attendance of witnesses at any proceedings of the Department.

(Source: P.A. 85-1334.)

(225 ILCS 725/5) (from Ch. 96 1/2, par. 5408)

Sec. 5. The Director shall have the authority to obtain all necessary personnel to carry out the provisions of this Act, to designate their headquarters and to define their duties. The aforesaid personnel shall be subject to the provisions of the "Personnel Code".

(Source: P.A. 85-1334.)

(225 ILCS 725/6) (from Ch. 96 1/2, par. 5409)

Sec. 6. The Department shall have the authority to conduct hearings and to make such reasonable rules as may be necessary from time to time in the proper administration and enforcement of this Act, including the adoption of rules and the holding of hearings for the following purposes:

(1) To require the drilling, casing and plugging of wells to be done in such a manner as to prevent the migration of oil or gas from one stratum to another; to prevent the intrusion of water into oil, gas or coal strata; to prevent the pollution of fresh water supplies by oil, gas or salt water.

(2) To require the person desiring or proposing to drill, deepen or convert any well for the exploration or production of oil or gas, for injection or water supply in connection with enhanced recovery projects, for the disposal of salt water, brine, or other oil or gas field wastes, or for input, withdrawal, or observation in connection with the storage of natural gas or other liquid or gaseous hydrocarbons before commencing the drilling, deepening or conversion of any such well, to make application to the Department upon such form as the Department may prescribe and to comply with the provisions of this Section. The drilling, deepening or conversion of any well is hereby prohibited until such application is made and the applicant is issued a permit therefor as provided by this Act. Each application for a well permit shall include the following: (A) The exact location of the well, (B) the name and address of the manager, operator, contractor, driller, or any other person responsible for the conduct of drilling operations, (C) the proposed depth of the well, (D) lease ownership information, and (E) such other relevant information as the Department may deem necessary or convenient to effectuate the purposes of this Act.

Additionally, each applicant who has not been issued a permit that is of record on the effective date of this amendatory Act of 1991, or who has not thereafter made payments of assessments under Section 19.7 of this Act for at least 2 consecutive years preceding the application, shall execute, as principal, and file with the Department a bond, executed by a surety authorized to transact business in this State, in an amount estimated to cover the cost of plugging the well and restoring the well site, but not to exceed $5000, as determined by the Department for each well, or a blanket bond in an amount not to exceed $100,000 for all wells, before drilling, deepening, converting, or operating any well for which a permit is required that has not previously been plugged and abandoned in accordance with the Act. The Department shall release the bond if the well, or all wells in the case of a blanket bond, is not completed but is plugged and the well site restored in accordance with the Department's rules or is completed in accordance with the Department's rules and the permittee pays assessments to the Department in accordance with Section 19.7 of this Act for 2 consecutive years.

In lieu of a surety bond, the applicant may provide cash, certificates of deposit, or irrevocable letters of credit under such terms and conditions as the Department may provide by rule.

The sureties on all bonds in effect on the effective date of this amendatory Act of 1991 shall remain liable as sureties in accordance with their undertakings until released by the Department from further liability under the Act. The principal on each bond in effect on the effective date of this amendatory Act of 1991 shall be released from the obligation of maintaining the bond if either the well covered by a surety bond has been plugged and the well site restored in accordance with the Department's rules or the principal of the surety has paid the initial assessment in accordance with Section 19.7 and no well or well site covered by the surety bond is in violation of the Act.

No permit shall be issued to a corporation incorporated outside of Illinois until the corporation has been authorized to do business in Illinois.

No permit shall be issued to an individual, partnership, or other unincorporated entity that is not a resident of Illinois until that individual, partnership, or other unincorporated entity has irrevocably consented to be sued in Illinois.

(3) To require the person assigning, transferring, or selling any well for which a permit is required under this Act to notify the Department of the change of ownership. The notification shall be on a form prescribed by the Department, shall be executed by the current permittee and by the new permittee, or their authorized representatives, and shall be filed with the Department within 30 days after the effective date of the assignment, transfer or sale. Within the 30 day notification period and prior to operating the well, the new permittee shall pay the required well transfer fee and, where applicable, file with the Department the bond required under subsection (2) of this Section.

(4) To require the filing with the State Geological Survey of all geophysical logs, a well drilling report and drill cuttings or cores, if cores are required, within 90 days after drilling ceases; and to file a completion report with the Department within 30 days after the date of first production following initial drilling or any reworking, or after the plugging of the well, if a dry hole. A copy of each completion report submitted to the Department shall be delivered to the State Geological Survey. The Department and the State Geological Survey shall keep the reports confidential, if requested in writing by the permittee, for 2 years after the date the permit is issued by the Department. This confidentiality requirement shall not prohibit the use of the report for research purposes, provided the State Geological Survey does not publish specific data or identify the well to which the completion report pertains.

(5) To prevent "blowouts", "caving" and "seepage" in the same sense that conditions indicated by such terms are generally understood in the oil and gas business.

(6) To prevent fires.

(7) To ascertain and identify the ownership of all oil and gas wells, producing leases, refineries, tanks, plants, structures, and all storage and transportation equipment and facilities.

(8) To regulate the use of any enhanced recovery method in oil pools and oil fields.

(9) To regulate or prohibit the use of vacuum.

(10) To regulate the spacing of wells, the issuance of permits, and the establishment of drilling units.

(11) To regulate directional drilling of oil or gas wells.

(12) To regulate the plugging of wells.

(13) To require that wells for which no logs or unsatisfactory logs are supplied shall be completely plugged with cement from bottom to top.

(14) To require a description in such form as is determined by the Department of the method of well plugging for each well, indicating the character of material used and the positions and dimensions of each plug.

(15) To prohibit waste, as defined in this Act.

(16) To require the keeping of such records, the furnishing of such relevant information and the performance of such tests as the Department may deem necessary to carry into effect the purposes of this Act.

(17) To regulate the disposal of salt or sulphur-bearing water and any oil field waste produced in the operation of any oil or gas well.

(18) To prescribe rules, conduct inspections and require compliance with health and safety standards for the protection of persons working underground in connection with any oil and gas operations. For the purposes of this paragraph, oil and gas operations include drilling or excavation, production operations, plugging or filling in and sealing, or any other work requiring the presence of workers in shafts or excavations beneath the surface of the earth. Rules promulgated by the Department may include minimum qualifications of persons performing tasks affecting the health and safety of workers underground, minimum standards for the operation and maintenance of equipment, and safety procedures and precautions, and shall conform, as nearly as practicable, to corresponding qualifications, standards and procedures prescribed under the Coal Mining Act.

(19) To deposit the amount of any forfeited surety bond or other security in the Plugging and Restoration Fund, a special fund in the State treasury which is hereby created; to deposit into the Fund any amounts collected, reimbursed or recovered by the Department under Sections 19.5, 19.6 and 19.7 of this Act; to accept, receive, and deposit into the Fund any grants, gifts or other funds which may be made available from public or private sources and all earnings received from investment of monies in the Fund; and to make expenditures from the Fund for the purposes of plugging, replugging or repairing any well, and restoring the site of any well, determined by the Department to be abandoned or ordered by the Department to be plugged, replugged, repaired or restored under Sections 8a, 19 or 19.1 of this Act, including expenses in administering the Fund.

For the purposes of this Act, the State Geological Survey shall co-operate with the Department in making available its scientific and technical information on the oil and gas resources of the State, and the Department shall in turn furnish a copy to the State Geological Survey of all drilling permits as issued, and such other drilling and operating data received or secured by the Department which are pertinent to scientific research on the State's mineral resources.

(Source: P.A. 86-205; 86-364; 86-1177; 87-744.)

(225 ILCS 725/6.1) (from Ch. 96 1/2, par. 5410)

Sec. 6.1. When the applicant has complied with all applicable provisions of this Act and the rules of the Department, the Department shall issue the permit. All applications for a permit submitted to the Department shall either be granted, denied, or a deficiency letter issued in writing within 20 business days after the date of receipt by the Department, unless the applicant and Department mutually agree to extend the 20-day period. If granted, the written permit shall be issued. If a deficiency letter is issued, the Department shall provide specific requirements for additional information or documentation needed for the application to be considered and the permit issued. Upon submission of the required information and documentation, the same process and timeframe as provided in this Section shall continue until either the permit is issued or it is determined that the permit cannot be issued because of legal or regulatory impediments. The Department shall respond in a timely manner to any application or submission of additional information and documentation after initial submission.

(Source: P.A. 98-926, eff. 9-1-14; 99-131, eff. 1-1-16.)

(225 ILCS 725/6.2)

Sec. 6.2. Oil and gas leases; termination due to non-development or non-production. The Department shall have the authority to adopt rules and hold hearings to determine if oil and gas leases submitted with an application for a permit or transfer of a permit for a well are operative on the basis that prior oil and gas leases covering the same lands have terminated due to non-development or non-production. Department determinations under this Section shall be based upon affidavits of non-development or non-production from knowledgeable individuals familiar with the history of development and production of oil or gas as to such lands, together with other evidence, which create a rebuttable presumption that the prior oil and gas leases have terminated and are of no further force and effect and that the submitted oil and gas leases are operative and effective. To create a rebuttable presumption, such affidavits, together with other evidence provided to or available from the Department, shall reasonably indicate that there has been no development or production of oil and gas on the lands described in the prior leases for at least 24 consecutive months subsequent to the expiration of the primary term or any extension of the primary term as set forth in the leases. A court order or judgment declaring the prior leases terminated is not required for determinations under this Section, except in extraordinary circumstances where such determinations cannot reasonably be concluded from the affidavits or evidence submitted to or available from the Department. Upon the Department's determination of a rebuttable presumption under this Section, the Department shall provide the current permittee with notice and a 30-day opportunity to request a hearing to rebut the presumption before a final determination on a lease is made. Any determination made by the Department under this Section shall not diminish the rights or obligations of any current permittee of a well that are otherwise provided by statute or regulation of the Department. Any request for a determination under this Section shall require the payment of a nonrefundable fee of $1,000 by the applicant. All determinations on leases by the Department under this Section shall be made no later than 90 days after the Department's receipt of a valid request for such determination. Determinations that prior oil and gas leases have terminated due to non-development or non-production shall require the current permittee to properly plug all non-plugged and non-transferred wells within the lease boundaries of the prior leases. If the current permittee fails to properly plug all non-plugged and non-transferred wells within 30 days after the issuance of the determination, the wells shall be deemed abandoned and included in the Department's Oil and Gas Well Site Plugging and Restoration Program. Department determinations under this Section shall not have res judicata or collateral estoppel effect in any judicial proceedings.

(Source: P.A. 99-138, eff. 1-1-16.)

(225 ILCS 725/7) (from Ch. 96 1/2, par. 5411)

Sec. 7. The Department shall have the right at all times to go upon and inspect oil and gas properties from which oil or gas is being produced, or gas storage fields, or where drilling operations have been or are being conducted for the purpose of ascertaining whether the provisions of this Act and any orders or rules entered or made in pursuance of this Act are being complied with.

(Source: P.A. 89-243, eff. 8-4-95.)

(225 ILCS 725/7.5)

Sec. 7.5. Natural gas storage field; natural gas incident; public notice. In addition to the requirements of this Section and any applicable State and federal law, an operator of a natural gas storage field that lies on the footprint of a Sole Source Aquifer designated as such in 2015 by the United States Environmental Protection Agency must immediately notify the following parties located within 5 miles of the boundaries of a natural gas incident:

(1) The Illinois Emergency Management Agency and all municipalities and counties.

(2) All emergency service agencies serving that area.

(3) All owners and operators of public water supplies, community water supplies, and non-community water supplies.

As soon as practicable, but no later than 3 months after the effective date of this amendatory Act of the 100th General Assembly, the Department shall adopt rules establishing the minimum criteria for an unintentional release of natural gas that would constitute an incident for purposes of this Section. In determining what constitutes an incident, the Department shall consider, but is not limited to, the following criteria:

(1) the amount of natural gas or other substances that were released as a result of the incident;

(2) the duration of the natural gas incident before it was resolved; and

(3) whether there is an imminent threat of danger to property or public safety.

The rules shall be at least as stringent as the definition of "incident" as promulgated by the United States Secretary of Transportation under 49 CFR 191.3(1)(iii). The Department shall maintain the rules so that the rules are at least as stringent as the definition of "incident" from time to time in effect under 49 CFR 191.3(1)(iii).

In addition, all private residents, owners and operators of private water systems, or businesses, including agricultural operations, located within one and a half miles of the boundaries of the natural gas incident must be notified as soon as practically possible.

Notices to private residents and businesses must be attempted through verbal communication, whether in person or by telephone. If verbal communication cannot be established, a physical notice must be posted on the premises of the private residence or business in a conspicuous location where it is easily seen by the inhabitants of the private residence or employees at the business. The physical notice shall carry the following text in at least 18-point font: "NATURAL GAS INCIDENT NOTICE - READ IMMEDIATELY". Notices required under this Section shall be provided whether or not the threat of exposure has been eliminated. Both verbal and physical notices shall include the location of the natural gas incident, the date and time that the natural gas incident was discovered, contact information of the operator of the natural gas storage field, and any applicable safety information.

The operator of a natural gas storage field has a continuous and ongoing obligation to further notify the affected parties as necessary if it is determined that the boundaries of the natural gas incident have increased, moved, or shifted. This notice requirement shall be construed as broadly as possible.

(Source: P.A. 100-896, eff. 1-1-19.)

(225 ILCS 725/7.6)

Sec. 7.6. Gas storage field inspection. The Department shall conduct annual inspections at all gas storage fields lying on the footprint of a Sole Source Aquifer designated as such in 2015 by the United States Environmental Protection Agency in the State to ensure that there are no infrastructure deficiencies or failures that could pose any harm to public health. The owner of the gas storage field shall cover the costs of the annual inspection.

(Source: P.A. 100-896, eff. 1-1-19.)

(225 ILCS 725/8) (from Ch. 96 1/2, par. 5412)

Sec. 8. The Department shall have the authority and it shall be its duty to make such inquiries as it may think proper to determine whether or not waste, over which it has jurisdiction, exists or is imminent. In the exercise of such power the Department shall have the authority to collect data; to make investigation and inspections; to examine properties, including drilling records and logs; to examine, check and test oil and gas wells; to hold hearings; and to take such action as may be reasonably necessary to enforce this Act.

(Source: P.A. 85-1334.)

(225 ILCS 725/8a) (from Ch. 96 1/2, par. 5413)

Sec. 8a. When an inspector or other authorized employee or agent of the Department determines that any permittee, or any person engaged in conduct or activities required to be permitted under this Act, is in violation of any requirement of this Act or the rules adopted hereunder or any permit condition, or has falsified or otherwise misstated any information on or relative to any application, permit, required record, or other document required to be submitted to the Department by this Act or any rules or procedures adopted under this Act, a notice of violation shall be completed and delivered to the Director or his designee.

The notice shall contain:

1. the nature of the violation;

2. the action needed to abate the violation, including any appropriate remedial measures to prevent future violation such as replacement, repair, testing and reworking a well and any appurtenances and equipment;

3. the time within which the violation is to be abated; and

4. any factors known to the person completing the notice of violation in aggravation or mitigation and the existence of any factors indicating that the permit should be conditioned or modified.

Upon receipt of a notice of violation, the Director shall conduct his investigation and may affirm, vacate or modify the notice of violation. In determining whether to take actions in addition to remedial action necessary to abate a violation, the Director shall consider the person's or permittee's history of previous violations including violations at other locations and under other permits, the seriousness of the violation including any irreparable harm to the environment or damage to property, the degree of culpability of the person or permittee and the existence of any additional conditions or factors in aggravation or mitigation including information provided by the person or permittee.

The Director shall serve the person or permittee with his decision at the conclusion of the investigation. Modification of the notice of violation may include:

1. any different or additional remedial action required to abate the violation and the time within which the violation must be abated;

2. the assessment of civil penalties not to exceed $5,000 for each and every falsification or misstatement of information and $1,000 a day for each and every act of violation not including a falsification or misstatement of information;

3. probationary or permanent modification or conditions on the permit which may include special monitoring or reporting requirements; and

4. revocation of the permit.

The Director's decision shall provide that the person or permittee has the right to request a hearing.

The Director's decision affirming, vacating or modifying the notice of violation shall be considered served when mailed by first class mail to the person or permittee at his last known address.

A person or permittee shall have 30 days from the date of service of the Director's decision to request a hearing. If the Director's decision includes the assessment of a civil penalty, the person or permittee charged with the penalty shall pay the penalty in full or, if the person or permittee wishes to contest either the amount of the penalty or the fact of the violation, submit the assessed amount, with the request for a hearing, to be held in escrow. The filing of a request for a hearing shall not operate as a stay of the Director's decision. All civil penalties finally assessed and paid to the Department shall be deposited in the Underground Resources Conservation Enforcement Fund.

Any person who willfully or knowingly authorized, ordered, or carried out any violation cited in the Director's decision shall be subject to the same actions, including civil penalties, which may be imposed on the person or permittee under this Section.

Upon receipt of a request, the Department shall provide an opportunity for a formal hearing upon not less than 5 days notice. The hearing shall be conducted by the Director or anyone designated by him for such purpose, and shall be located and conducted in accordance with the rules of the Department. Failure of the person or permittee to timely request a hearing or, if a civil penalty has been assessed, to timely tender the assessed civil penalty, shall constitute a waiver of all legal rights to contest the Director's decision, including the amount of any civil penalty. Within 30 days of the close of the hearing record or expiration of the time to request a hearing, the Department shall issue a final administrative order.

If, at the expiration of the period of time originally fixed in the Director's decision or in any subsequent extension of time granted by the Department, the Department finds that the violation has not been abated, it may immediately order the cessation of operations or the portions thereof relevant to the violation. Such cessation order shall be served in the manner and within the time prescribed in Section 19.1 of this Act.

Pending the holding of any hearing or entry of a final administrative order under this Section, the person or permittee to whom the cessation order was issued may file a written request for temporary relief subject to the same terms and conditions as are provided for in Section 19.1 of this Act.

If the Department finds that a person or permittee has failed to comply with a final administrative order, the Department may immediately order the cessation of operations or the portions thereof relevant to the final administrative order. Such cessation order shall be served in the manner and within the time prescribed in Section 19.1 of this Act. The Department shall commence a hearing within 5 days after issuance of a cessation order and shall conclude such hearing without appreciable delay. At the hearing the Department shall have the burden of proving that the person or permittee has not complied with the final administrative order. A cessation order issued under this paragraph shall continue in effect until modified, vacated, or terminated by the Department.

The Department shall refuse to issue a permit or permits, and shall revoke any permit or permits previously issued if:

(1) the applicant has falsified or otherwise misstated any information on or relative to the permit application;

(2) the applicant has failed to abate a violation of the Act specified in a final administrative decision of the Department;

(3) an officer, director, partner, or person with an interest in the applicant exceeding 5% failed to abate a violation of the Act specified in a final administrative decision of the Department; or

(4) the applicant is an officer, director, partner, or person with an interest exceeding 5% in another entity that has failed to abate a violation of the Act specified in a final administrative decision of the Department.

(Source: P.A. 99-137, eff. 1-1-16.)

(225 ILCS 725/8b) (from Ch. 96 1/2, par. 5414)

Sec. 8b. No person shall drill, convert or deepen a well for the purpose of disposing of oil field brine or for using any enhanced recovery method in any underground formation or strata without first securing a permit therefor. Such permit shall be obtained as provided in clause (2) of Section 6 and is subject to the fee prescribed in Section 14, except that such fees for Class II UIC wells shall be deposited in the Underground Resources Conservation Enforcement Fund. All injection wells regulated by the Department's Class II UIC program approved pursuant to 40 CFR 147.701, subpart 0, of record on January 1 of each year, except those which are properly plugged, are subject to an annual fee as follows: on January 1, 1988, $50 per well; on January 1, 1989, $75 per well; and on January 1, 1990, $100 per well. Extension of this fee into subsequent years shall be contingent upon authorization of such by the General Assembly. Such fee shall be paid no later than January 31 of each year. Proceeds of such payments shall be deposited in the Underground Resources Conservation Enforcement Fund. The Department may prescribe appropriate rules to implement this Section and to prevent waste, as defined in this Act, in connection with such wells.

(Source: P.A. 85-1334.)

(225 ILCS 725/8c) (from Ch. 96 1/2, par. 5414.1)

Sec. 8c. (a) No person shall operate a liquid oil field waste transportation system without a liquid oil field waste transportation permit. The liquid oil field waste transporter assumes legal responsibility for the liquid oil field waste when it first enters the liquid oil field waste transportation system, until it is disposed of in a manner authorized and approved by the Department.

(b) No person shall engage, employ or contract with any other person except a permittee under this Section, to remove liquid oil field waste from his premises.

(c) Every person who engages, employs or contracts with any other person to remove liquid oil field waste from his premises shall maintain detailed records of all such liquid oil field waste removal effectuated on forms provided by the Department and shall submit such information in such detail and with such frequency, as the Department may require.

(d) Before engaging in the business of removing liquid oil field waste from the on-site collection point, a person shall apply for and obtain a permit from the Department. The application shall be accompanied by a permit fee of $150 and by a surety bond covering the period and any renewal thereof for which the permit is issued by a surety company registered in the State, to indemnify the Department for the abatement of pollution of waters which result from any improper disposal of liquid oil field waste by the permittee. The bonds shall be $10,000. The Department shall be the obligee and the bond shall be for the benefit and purpose to indemnify the State for the elimination of harmful or nuisance conditions and for the abatement of any pollution of waters which result from the improper disposal of liquid oil field waste by the permittee.

In lieu of the surety bond, the applicant may provide cash, certificates of deposit, or irrevocable letters of credit under such terms and conditions as the Department may provide by rule.

The surety of any bond posted for the issuance of a liquid oil field waste transportation permit, upon 30 days notice in writing to the Department and to the permittee, may cancel any such bond, but such cancellation shall not affect any rights which shall have accrued on the bond before the effective date of the cancellation.

(e) If the Department, after such investigation as it deems necessary, is satisfied that the applicant has the qualifications, experience, reputation, and equipment to perform the services in a manner not detrimental to the public interest, in a way that will not cause unlawful pollution of the waters of the State and meets the bonding requirements of subsection (d), it shall issue a permit to the applicant.

(f)(1) All trucks or other vehicles used to transport or carry liquid oil field waste shall carry a permit issued by the Department for inspection by its representative or any law enforcement agent. The application for the vehicle permit shall state the make, model and year of the vehicle as well as the capacity of the tank used in transporting liquid oil field waste and such other information as the Department requires. Each application shall be accompanied by a biennial permit fee of $150 for each vehicle sought to be licensed, payable to the State, and if the Department, after such investigation as it deems necessary, finds the truck or vehicle and equipment is proper and adequate for the purpose, it shall issue a permit for the use of the vehicle. The permit is not transferable from one vehicle to another. The vehicle permit number shall be printed on a decal furnished by the Department which shall designate the years for which the permit was issued. This decal shall be affixed to the upper right hand corner of the inside of the windshield.

(2) All vehicle permits shall be valid for 2 years. Application for renewal of a permit must be made 30 days prior to the expiration date of the permit. The fee for renewal shall be the same as for the original permit.

(g)(1) The tank shall be kept tightly closed in transit, to prevent the escape of contents.

(2) The permittee shall dispose of all liquid oil field waste in conformance with the provisions of this Section.

(3) The permittee shall not dispose of liquid oil field waste onto or into the ground except at locations specifically approved and permitted by the Department. No liquid oil field waste shall be placed in a location where it could enter any public or private drain, pond, stream or other body of surface or ground water.

(h) Any person who violates or refuses to comply with any of the provisions of this Section shall be subject to the provisions of Sections 8a and 19.1 of this Act. In addition, any person who gathers, handles, transports, or disposes of liquid oil field waste without a liquid oil field waste transportation permit or utilizes the services of an unpermitted person shall upon conviction thereof by a court of competent jurisdiction be fined not less than $2,000 for a violation and costs of prosecution, and in default of payment of fine and costs, imprisoned for not less than 10 days nor more than 30 days. When the violation is of a continuing nature, each day upon which a violation occurs is a separate offense.

(i) For the purposes of this Section:

(1) "Liquid oil field waste" means oil field brines, tank and pit bottom sediments, and drilling and completion fluids, to the extent those wastes are now or hereafter exempt from the provisions of Subtitle C of the federal Resource Conservation and Recovery Act of 1976.

(2) "Liquid oil field waste transportation system" means all trucks and other motor vehicles used to gather, handle or transport liquid oil field waste from the point of any surface on-site collection to any subsequent off-site storage, utilization or disposal.

(Source: P.A. 102-1017, eff. 1-1-23.)

(225 ILCS 725/8d)

Sec. 8d. Falsification or misstatement of information. No person shall falsify or otherwise misstate any information on or relative to any application, permit, required record, or other document required to be submitted to the Department by this Act or any rules or procedures adopted under this Act.

(Source: P.A. 99-137, eff. 1-1-16.)

(225 ILCS 725/8e)

Sec. 8e. Temporary abandonment status fees.

(a) The Department shall assess and collect annual fees of $100 per well for each well that is in temporary abandonment status.

(b) All annual fees collected pursuant to subsection (a) shall be deposited as follows:

(1) one-half of all such fees shall be placed in the Plugging and Restoration Fund; and

(2) one-half of all such fees shall be placed in the Landowner Grant Program.

(Source: P.A. 102-1017, eff. 1-1-23.)

(225 ILCS 725/9) (from Ch. 96 1/2, par. 5415)

Sec. 9. The Department shall adopt rules of procedure for hearings and other proceedings before it under this Act. The provisions of the Illinois Administrative Procedure Act shall apply to all rules adopted under this Act.

(Source: P.A. 85-1334.)

(225 ILCS 725/9.1)

Sec. 9.1. Notice for hearings or other proceedings.

(a) All permittees under this Act shall provide the Department with a current address within 90 days after the effective date of this amendatory Act of the 99th General Assembly for the Department's use in providing notice of any hearings or other proceedings under this Act. Permittees must inform the Department of any address changes within 30 days after the effective date of the address change. Permittees shall provide current address information and inform the Department of any address changes on a form prescribed by the Department.

(b) Written notice of a hearing or proceeding required to be provided to a permittee under this Act shall be given either personally or by certified mail with return receipt requested sent to the address provided to the Department as required by subsection (a) of this Section. Permittees shall sign certified mail return receipts for all mail received from the Department.

(c) If notice sent by certified mail is returned unsigned or undelivered and, upon due inquiry, the permittee cannot be found for personal delivery, the Department shall provide written notice of a hearing or other proceeding by publication of the notice in a newspaper published in the county where the well or wells at issue are located. If there is no newspaper published in that county, then the publication shall be in a newspaper published in an adjoining county in this State having a circulation in the county where the well or wells at issue are located. The notice shall be published once. The Department shall, within 10 days after the publication of the newspaper notice, send a copy of the notice to the address provided to the Department as required by subsection (a) of this Section. The certificate of an authorized representative of the Department that newspaper notice was published and that a copy of the newspaper notice has been sent to the permittee pursuant to this subsection is evidence that the Department has properly provided notice to the permittee for the hearing or other proceeding.

(d) Any notice required to be provided to a permittee under this Act shall include the identification of the well or wells at issue, the date, time, place, and nature of the hearing or other proceeding, and the name and contact information of the Department where additional information can be obtained.

(Source: P.A. 99-138, eff. 1-1-16.)

(225 ILCS 725/10) (from Ch. 96 1/2, par. 5416)

Sec. 10. All final administrative decisions of the Department made on or after the effective date of this amendatory Act of 1988 are subject to judicial review under the Administrative Review Law as now or hereafter amended, and the rules adopted under such Law. The term "administrative decision" is defined as in Section 3-101 of the Code of Civil Procedure.

Such proceedings for judicial review may be commenced in the Circuit Court of the county in which any part of the land or other estate in real property which is the subject matter of the administrative decision is situated. If the administrative decision does not pertain to real property, venue shall be as provided in Section 3-104 of the Code of Civil Procedure.

The Department shall not be required to certify any record to the court or file any answer in court or otherwise appear in any court in a judicial review proceeding, unless there is filed in the court with the complaint a receipt from the Department acknowledging payment of the costs of furnishing and certifying the record, which costs shall be computed at the rate of 20 cents per page of such record. Failure on the part of the plaintiff to file such receipt in court shall be grounds for dismissal of the action.

(Source: P.A. 85-1334.)

(225 ILCS 725/11) (from Ch. 96 1/2, par. 5417)

Sec. 11. Whenever it shall appear that any person is violating or threatening to violate any provision of this Act, or any rule or final administrative order made hereunder, the Department, through the Attorney General, who may call to his or her assistance the State's Attorney of the county in which an action is instituted, shall bring an action in the name of the People of the State of Illinois against such person in the circuit court of the county wherein any part of the land or any activity which is the subject matter of such action is located, or a final administrative order was entered, to restrain such person from continuing such violation or from carrying out the threat of violation. In such action the Department, in the name of the People of the State of Illinois, may obtain such injunctions, prohibitory and mandatory, including temporary restraining orders and preliminary injunctions, or other enforcement orders as the facts may warrant.

All remedies and penalties provided for in this Act shall be cumulative in effect and, accordingly, proceedings under this Section are in addition to, and not in lieu of, other remedies and penalties provided for in this Act.

(Source: P.A. 86-205; 86-364; 86-1028.)

(225 ILCS 725/12) (from Ch. 96 1/2, par. 5418)

Sec. 12. Any well for which a permit is required under this Act, other than a plugged well, which was drilled prior to the effective date of this Act and for which no permit has previously been issued, is required to be permitted. Application shall be made as required in subsection (2) of Section 6, except that the spacing requirements of Section 21.1 of this Act shall not apply, and no permit fee will be assessed for any such well if application for a permit is made within one year of the effective date of this amendatory Act of 1990. Except for Class II UIC wells, provisions of this Act and Department rules pertaining to well construction shall not apply. After this one year period, any unpermitted well to which this Section applies will be deemed to be operating without a permit and subject to the penalties set forth in this Act.

(Source: P.A. 85-1334; 86-1177.)

(225 ILCS 725/13) (from Ch. 96 1/2, par. 5419)

Sec. 13. Where an application is made to drill or deepen an oil or gas well within the limits of any city, village or incorporated town, the application shall so state, and be accompanied with a certified copy of the official consent of the municipal authorities for said well to be drilled, and no permit shall be issued unless consent is secured and filed with the application. In the event that an amended location is selected, the original permit shall not be valid unless a new certified consent is filed for the amended location.

(Source: Laws 1941, vol. 1, p. 934.)

(225 ILCS 725/14) (from Ch. 96 1/2, par. 5420)

Sec. 14. Each application for a permit to drill, deepen, convert, or amend shall be accompanied by the required fee of $400. The fee for an application for a permit to oil lease road shall be $150. A fee of $75 for the first 100 wells and $50 for each well in excess of 100 shall be paid by the new owner for each transfer of well ownership. Except for the assessments required to be deposited in the Plugging and Restoration Fund under Section 19.7 of this Act and any other deposits required to be deposited in the Plugging and Restoration Fund under this Act, all fees assessed and collected under this Act shall be deposited in the Underground Resources Conservation Enforcement Fund. The monies deposited into the Plugging and Restoration Fund or the Underground Resources Conservation Enforcement Fund under this Section shall not be subject to administrative charges or chargebacks unless otherwise authorized by this Act.

On and after July 1, 2022, any fees that are created by or increased by this amendatory Act of the 102nd General Assembly in this Section shall be deposited into the Plugging and Restoration Fund.

(Source: P.A. 102-1017, eff. 1-1-23.)

(225 ILCS 725/15) (from Ch. 96 1/2, par. 5421)

Sec. 15. Any permit to drill a well for oil or gas shall expire one year from the date of issuance unless acted upon prior thereto by the commencement of drilling operations which are to be continued with due diligence. It shall in all respects be subject to the provisions of this Act and the rules, regulations, limitations and penalties herein provided or which may hereafter be adopted for the drilling, operation or plugging of oil or gas wells, or other drilling operations.

(Source: Laws 1951, p. 1500.)

(225 ILCS 725/16) (from Ch. 96 1/2, par. 5422)

Sec. 16. Every owner or operator of any oil or gas well may appoint a person to act as his Attorney in fact to execute applications for permits to drill oil or gas wells, or any wells in connection therewith, and to execute bonds and any other papers relative to such permits. Such owner or operator shall file with the Department a properly executed power of attorney on a form acceptable to the Department. Every person so appointing an Attorney in fact shall, within five days after the termination of any such appointment, notify the Department in writing of such termination.

(Source: P.A. 85-1334.)

(225 ILCS 725/17) (from Ch. 96 1/2, par. 5423)

Sec. 17. In case any person drilling an oil or gas well shall request a location over a portion of the coal where mining operations have not heretofore been conducted and where coal is in place, then said well shall be drilled and sunk with due regard for the plans for future development and extensions of said seams.

(Source: Laws 1941, vol. 1, p. 934.)

(225 ILCS 725/18) (from Ch. 96 1/2, par. 5424)

Sec. 18. In no event shall any high explosive be exploded in any well until twenty-four hours' notice of the intention has been given to the owner of any working coal seam.

(Source: P.A. 97-813, eff. 7-13-12.)

(225 ILCS 725/19) (from Ch. 96 1/2, par. 5425)

Sec. 19. If when a well is sunk and there is no oil or gas found and such hole is what is commonly known as a "barren well" or "dry hole", or when a well is abandoned, then such hole shall be plugged in accordance with rules and regulations formulated in pursuance of the provisions of this Act. The Department shall have power to determine what constitutes abandonment.

(Source: P.A. 85-1334.)

(225 ILCS 725/19.1) (from Ch. 96 1/2, par. 5426)

Sec. 19.1. If, after notice and an opportunity for a hearing, the Department finds that a well drilled for the exploration, development, storage or production of oil or gas, or as injection, salt water disposal, salt water source, observation, and geological or structure test has been abandoned or is leaking salt water, oil, gas or other deleterious substances into any fresh water formation or onto the surface of the land in the vicinity of the well, the Department shall issue an order that the well be properly plugged, replugged or repaired to remedy such situation. If the permittee fails to do so within 30 days from the date of the order, then any person duly authorized by the Department may enter upon the land on which the well is located and plug, replug, or repair the well as may be reasonably required to remedy the condition. The costs and expenses incurred by the Department under this Act shall be a debt due by the permittee to the Department together with interest at the rate set forth in Section 2-1303 of the Code of Civil Procedure. The permittee's failure to comply with the Department's order is a violation of this Act.

If the Department determines that any condition or practice exists, or that any person or permittee is in violation of any requirement of this Act or the rules adopted hereunder or any permit condition, which condition, practice or violation creates an imminent danger to the health or safety of the public, or an imminent danger of significant environmental harm or significant damage to property, any authorized employee or agent of the Department may order the immediate cessation of operation. If a responsible party cannot be readily located in the judgment of the employee or agent issuing the order, the employee or agent may take any action he deems necessary to cause a cessation of operations and abatement of any condition. The cessation order shall be served by mailing it certified mail-return receipt requested to the last known address of the person or permittee as soon as is practicably possible but in no event later than 5 days after its issuance.

Pending completion of the investigation and any hearing under Section 8a of this Act, the person or permittee may file with the Department a written request for temporary relief from the cessation order, together with a detailed statement giving reasons for granting such relief. The Department shall commence a hearing within 5 days after receipt of the request and may grant such relief, under such conditions as it may prescribe, if the applicant shows a substantial likelihood that the findings of the Department will be favorable to him and such relief will not adversely affect the health or safety of the public or cause significant environmental harm or significant damage to property.

(Source: P.A. 89-243, eff. 8-4-95.)

(225 ILCS 725/19.2) (from Ch. 96 1/2, par. 5427)

Sec. 19.2. Supplemental remedy.

Nothing in this Act shall relieve any person or persons otherwise legally responsible from any obligation to plug, replug or repair a well and shall not limit the authority of the Department to require the proper plugging, replugging or repair of a well, but is intended as a supplemental remedy when any person or persons obligated to do so fail to do so.

(Source: P.A. 76-579.)

(225 ILCS 725/19.3) (from Ch. 96 1/2, par. 5428)

Sec. 19.3. Liability for damages-Responsibility for future remedial work.

Any person who enters upon the land on which the well is located to plug, replug or repair the well, or supports or contributes to such action in accordance with the order of the Department, shall not be liable for any damages resulting from operations reasonably necessary or proper to plug, replug or repair the well, except damages to growing crops and improvements.

That person shall not be held to have assumed responsibility for future remedial work on the well or be liable in damages or otherwise for conditions subsequently arising from or in connection with the well.

(Source: P.A. 76-579.)

(225 ILCS 725/19.4) (from Ch. 96 1/2, par. 5429)

Sec. 19.4. No admission of liability or discharge of action.

The fact that any person has initiated or supported a proceeding before the Department or has remedied or attempted to remedy the condition of any well under the authority of this Act shall not be construed as an admission of liability or received in evidence against such person in any action or proceeding where responsibility for or damages from surface or subsurface pollution, or injury to any fresh water or oil or gas bearing formation is an issue, nor shall such fact be construed as releasing or discharging any action, cause of action, or claim against such person in favor of any third person for damages to property resulting from surface or subsurface pollution, or injury to any fresh water or oil or gas bearing formation, to the extent that any such action, cause of action or claim may have existed prior to the initiation or support of such proceeding or such remedying or attempted remedying of the condition of such well.

(Source: P.A. 76-579.)

(225 ILCS 725/19.5) (from Ch. 96 1/2, par. 5430)

Sec. 19.5. Any person who had no obligation to plug, replug or repair the well or restore the site of any well, but who does so under the provisions of this Act, including the Department under Section 19.6 of this Act, shall have a cause of action against the person or persons who by law were obligated to properly plug, replug or repair the well for the reasonable cost and expense incurred in plugging, replugging or repairing the well, and shall have a lien enforceable upon the interest of such obligated person or persons in and to the oil and gas rights in the land and equipment located thereon to the extent of such reasonable cost and expense. The lien created by this Section shall not, however, affect the rights of any purchaser, mortgagee, judgment creditor or other lien holder arising prior to the filing of a notice of such lien in the office of the recorder of the county in which the real estate on which the well is located is situated, or in the office of the registrar of titles of such county if that real estate is registered under "An Act concerning land titles" approved May 1, 1897, as amended; which notice shall definitely describe the real estate and property involved, the nature and extent of the lien claimed, and the facts upon which the same is based.

In the case of orphan wells, the State of Illinois, by and through the Department, shall have a lien for all fees due and for all funds expended by the Department to plug, replug, repair or restore the site of the orphan well upon the interest of all owners and all the interest of the operator of the orphan well or wells for which such fees are due and unpaid or for which such funds are expended. The lien shall extend to the entire owners' and operator's interest in the wells and to all equipment used in connection with the operating of such wells as to the entire acreage included in the drilling unit or units. The lien created in the case of an orphan well shall be prior and superior to any mortgage or other lien except for the lien of local property taxes.

The Oil and Gas Lien Act of 1989 shall apply and be applicable to the perfection and foreclosure of all liens under this Section.

(Source: P.A. 87-744.)

(225 ILCS 725/19.6) (from Ch. 96 1/2, par. 5430.1)

Sec. 19.6. The Department has the following specific powers and duties in administering the Oil and Gas Well Site Plugging and Restoration Program, Landowner Grant Program, and the Plugging and Restoration Fund:

(a) To adopt rules in conformity with this Act, including rules establishing priorities for well site plugging, repair, and restoration consistent with this Act.

(b) To adopt rules necessary to implement the Oil and Gas Well Site Plugging and Restoration Program and Landowner Grant Program.

(c) To collect the fees assessed by the Department under this Act and to make deposits into the Plugging and Restoration Fund.

(d) To deposit the amount of any forfeited surety bond or other security in the Plugging and Restoration Fund.

(e) To recover well site plugging, repair, and restoration costs from permittees who fail to reimburse the Plugging and Restoration Fund for expenses attributable to those permittees and to deposit any amounts reimbursed or collected into the Plugging and Restoration Fund.

(f) To accept, receive, and deposit into the Plugging and Restoration Fund any grants, gifts, or other funds that may be made available from public or private sources.

(g) To make expenditures of amounts appropriated from the Plugging and Restoration Fund, as it may deem appropriate in its sole discretion, for the sole purposes of plugging, replugging, or repairing any well, restoring the site of any well, including but not limited to removal of well site equipment or production facilities, and for reimbursement to landowners for plugging a well and restoring the site of a well, including but not limited to removal of well site equipment located on the landowner's property, for which the landowner has no legal obligation to plug the wells or remove the well site equipment, if the well is determined by the Department to be abandoned or ordered by the Department to be plugged, replugged, repaired, or restored under Section 8a, 19, 19.1, or 19.8 of this Act including the costs of administering the Oil and Gas Well Site Plugging and Restoration Program, the Plugging and Restoration Fund, and the Landowner Grant Program.

(h) To sell or assign any lien arising under Section 19.5 of this Act to the highest and best bidder who may agree to perform the necessary plugging or corrective work as prescribed by the Department and to deposit the proceeds of such sale in the Plugging and Restoration Fund or to offset Department plugging costs.

(i) To enter into contracts in accordance with the Illinois Purchasing Act and to administer the Landowner Grant Program. In contracts or grants for the plugging, replugging, repairing or restoration of a well, well site, or an associated tank battery or production facility, the consideration paid by the Department may include the sale and assignment of any lien arising under Section 19.5 of this Act.

(j) To dispose in a commercially reasonable manner, at generally recognized market value, well site equipment, including an associated tank battery and production facility equipment, and any amount of hydrocarbons from the well that is stored on the lease, by either or both of the following methods after it has been determined to be abandoned by the Department through inclusion of the well in the Oil and Gas Well Site Plugging and Restoration Program:

(1) a plugging contract may provide that the person plugging the well or remediating oil field waste pollution, or both, will have clear title, subject to any perfected, prior legal or equitable claim, on all well site equipment and hydrocarbons from the well that are stored on the lease, or hydrocarbons recovered during the plugging operation in exchange for a sum of money deducted as a credit from the contract price; or

(2) the well site equipment, including but not limited to an associated tank battery and production facility equipment, hydrocarbons from the well that are stored on the lease, and hydrocarbons recovered during the plugging operation may be sold at a public auction or a public or private sale. All well site equipment and hydrocarbons acquired by a person by sale shall be acquired under clear title, subject to any perfected prior legal or equitable claims.

(Source: P.A. 90-260, eff. 7-30-97.)

(225 ILCS 725/19.7) (from Ch. 96 1/2, par. 5430.2)

Sec. 19.7. The Department shall assess and collect annual well fees from each permittee in the amount of $100 per well for the first 100 wells and a $75 fee for each well in excess of 100 for which a permit is required under this Act.

Fees shall be assessed for each calendar year commencing in 1991 for all wells of record as of July 1, 1991 and July 1 of each year thereafter. The fees assessed by the Department under this Section are in addition to any other fees required by law. All fees assessed under this Section shall be submitted to the Department no later than 30 days from the date listed on the annual fee assessment letter sent to the permittee. Of the fees assessed and collected by the Department each year under this Section, 50% shall be deposited into the Underground Resources Conservation Enforcement Fund, and 50% shall be deposited into the Plugging and Restoration Fund unless, total fees assessed and collected for any calendar year exceed $1,500,000; then, $750,000 shall be deposited into the Underground Resources Conservation Enforcement Fund and the balance of the fees assessed and collected shall be deposited into the Plugging and Restoration Fund. Upon request of the Department to the Comptroller and Treasurer, the Comptroller and Treasurer shall make any interfund transfers necessary to effect the allocations required by this Section.

The monies deposited into the Plugging and Restoration Fund or the Underground Resources Conservation Enforcement Fund under this Section shall not be subject to administrative charges or chargebacks unless otherwise authorized by this Act.

(Source: P.A. 102-1017, eff. 1-1-23.)

(225 ILCS 725/19.8) (from Ch. 96 1/2, par. 5430.3)

Sec. 19.8. The purpose of the Plugging and Restoration Fund is to provide security in case the permittee fails to perform his duties under this Act. Expenditures from the Fund shall be made by the Department for the payment of costs for work undertaken under this Section and shall only occur as follows:

(a) After the Department gives the permittee notice and an opportunity for hearing in accordance with Section 19.1 of this Act and finds that an abandoned well must be plugged, that a leaking well must be plugged, replugged, or repaired or that a well site must be restored, and after the permittee fails to perform the required plugging, replugging, repair, or restoration work within the time prescribed in Section 19.1 of the Act, the Department may elect to plug, replug, or repair the well or wells, and to restore the well site in accordance with the Department's rules.

(b) The Department may elect to pay the cost of conducting tests and to take appropriate action to determine and temporarily correct the source of oil or salt water intrusion that may be caused by oil and gas operations into fresh water zones or onto the surface. Except in the case of an orphaned well, no expenditure may be made for this purpose unless a cessation order has been issued under Section 8a or 19.1, and the time within which abatement was required to be completed has expired.

(c) The Department may elect to plug, replug, repair, or restore the well site of any orphan well, but only after a determination by the Department, in accordance with its rules, that the well is orphaned. In cases where no permittee can be identified or located and no contributions have been made to the fund attributable to the operation of the well, expenditures shall be limited to amounts attributable to earnings on monies in the Fund or from amounts in the Fund other than permittee contributions, unless those amounts are otherwise restricted.

(Source: P.A. 87-744.)

(225 ILCS 725/19.9) (from Ch. 96 1/2, par. 5430.4)

Sec. 19.9. (a) If the permittee is delinquent in the payment of the fees assessed under Section 19.7 of this Act or if amounts have been obligated from the Plugging and Restoration Fund to plug, repair, or restore a permittee's well or well site, no further permits shall be issued to that permittee until all delinquent fees have been paid or until all costs obligated from the Plugging and Restoration Fund have been reimbursed together with interest at the rate set forth in Section 2-1303 of the Code of Civil Procedure.

(b) If the permittee is delinquent for more than 60 days in the payment of the fees assessed under Section 19.7 of this Act or if amounts have been obligated from the Plugging and Restoration Fund to plug, repair, or restore a permittee's well or well site, all operations of the permit holder under current permits shall cease, subject to the provisions of Section 19.1 of this Act regarding cessation orders, until all delinquent fees have been paid or until all costs obligated from the Plugging and Restoration Fund have been reimbursed together with interest at the rate set forth in Section 2-1303 of the Code of Civil Procedure.

(Source: P.A. 87-744.)

(225 ILCS 725/20) (from Ch. 96 1/2, par. 5431)

Sec. 20. No oil or gas well shall be drilled hereafter nearer than 250 feet to any opening to a working coal mine used as a means of ingress or egress for the persons employed therein or which is used as an air shaft, except by mutual agreement between the person owning or operating the mine and the oil or gas operator.

(Source: Laws 1941, vol. 1, p. 934.)

(225 ILCS 725/21.1) (from Ch. 96 1/2, par. 5433)

Sec. 21.1. (a) The Department is authorized to issue permits for the drilling of wells and to regulate the spacing of wells for oil and gas purposes. For the prevention of waste, to protect and enforce the correlative rights of owners in the pool, and to prevent the drilling of unnecessary wells, the Department shall, upon application of any interested person and after notice and hearing, establish a drilling unit or units for the production of oil and gas or either of them for each pool, provided that no spacing regulation shall be adopted nor drilling unit established which requires the allocation of more than 40 acres of surface area nor less than 10 acres of surface area to an individual well for production of oil from a pool the top of which lies less than 4,000 feet beneath the surface (as determined by the original or discovery well in the pool), provided, however, that the Department may permit the allocation of greater acreage to an individual well than that above specified, and provided further that the spacing of wells in any pool the top of which lies less than 4,000 feet beneath the surface (as determined by the original or discovery well in the pool) shall not include the fixing of a pattern except with respect to the 2 nearest external boundary lines of each drilling unit, and provided further that no acreage allocation shall be required for input or injection wells nor for producing wells lying within a secondary recovery unit as now or hereafter established.

(b) Drilling units shall be of approximately uniform size and shape for each entire pool, except that where circumstances reasonably require, the Department may grant exceptions to the size or shape of any drilling unit or units. Each order establishing drilling units shall specify the size and shape of the unit, which shall be such as will result in the efficient and economical development of the pool as a whole, and subject to the provisions of subsection (a) hereof the size of no drilling unit shall be smaller than the maximum area that can be efficiently and economically drained by one well. Each order establishing drilling units for a pool shall cover all lands determined or believed to be underlaid by such pool, and may be modified by the Department from time to time to include additional lands determined to be underlaid by such pool. Each order establishing drilling units may be modified by the Department to change the size thereof, or to permit the drilling of additional wells.

(b-2) Any petition requesting a drilling unit exception shall be accompanied by a non-refundable application fee in the amount of $1,500 for a Modified Drilling Unit or Special Drilling Unit or a non-refundable application fee in the amount of $2,500 for a Pool-Wide Drilling Unit.

(c) Each order establishing drilling units shall prohibit the drilling of more than one well on any drilling unit for the production of oil or gas from the particular pool with respect to which the drilling unit is established and subject to the provisions of subsection (a) hereof shall specify the location for the drilling of such well thereon, in accordance with a reasonably uniform spacing pattern, with necessary exceptions for wells drilled or drilling at the time of the application. If the Department finds, after notice and hearing, that surface conditions would substantially add to the burden or hazard of drilling such well at the specified location, or for some other reason it would be inequitable or unreasonable to require a well to be drilled at the specified location, the Department may issue an order permitting the well to be drilled at a location other than that specified in the order establishing drilling units.

(d) After the date of the notice for a hearing called to establish drilling units, no additional well shall be commenced for production from the pool until the order establishing drilling units has been issued, unless the commencement of the well is authorized by order of the Department.

(e) After an order establishing a drilling unit or units has been issued by the Department, the commencement of drilling of any well or wells into the pool with regard to which such unit was established for the purpose of producing oil or gas therefrom, at a location other than that authorized by the order, or by order granting exception to the original spacing order, is hereby prohibited. The operation of any well drilled in violation of an order establishing drilling units is hereby prohibited.

(f) Any application or petition by any interested person for a drilling unit as provided in this Section shall be accepted and filed or not accepted and filed by the Department within 10 business days after receipt by the Department. If the petition is accepted and filed, a public hearing on the petition shall be scheduled not less than 30 days, but not more than 60 days, after the acceptance and filing by the Department. If not accepted, and filed, the Department shall provide specific requirements for additional information or documentation needed for the petition to be considered, accepted, and filed. Upon submission of the required information and documentation, the same process and timeframe as provided in this subsection (f) shall continue until the petition has been accepted and filed at which time a hearing shall be scheduled as previously stated in this subsection (f). The petition shall not be accepted and filed if it is determined by the Department that, under any circumstance, legal or regulatory impediments would prevent such acceptance and filing. If the Department does not timely respond to any petition or the submission of additional information or documentation after initial submission, then the petition shall be deemed to be in sufficient form for acceptance and filing and the Department shall proceed with the scheduling of a public hearing. The Department, after public hearing, shall either grant or deny the petition within 20 working days after the conclusion of the hearing.

(g) Any petition by an interested person to establish drilling units for a pool as provided in this Section shall be accepted and filed or not accepted and filed by the Department within 10 business days after receipt by the Department. If the petition is accepted and filed, a public hearing on the petition shall be scheduled not less than 30 days, but not more than 60 days, after the acceptance and filing by the Department. If not accepted and filed, the Department shall provide specific requirements for additional information or documentation needed for the petition to be considered, accepted, and filed. Upon submission of the required information and documentation, the same process and timeframe as provided in this subsection (g) shall continue until the petition has been accepted and filed at which time a hearing shall be scheduled as previously stated in this subsection (g). The petition shall not be accepted and filed if it is determined by the Department that, under any circumstance, legal or regulatory impediments would prevent such acceptance and filing. If the Department does not timely respond to any petition or the submission of additional information or documentation after initial submission, then the petition shall be deemed to be in sufficient form for acceptance and filing and the Department shall proceed with the scheduling of a public hearing. The Department, after public hearing, shall either grant or deny the petition within 20 working days after the conclusion of the hearing.

(Source: P.A. 97-1136, eff. 1-1-13; 98-926, eff. 9-1-14.)

(225 ILCS 725/22.2) (from Ch. 96 1/2, par. 5436)

Sec. 22.2. Integration of interests in drilling unit.

(a) As used in this Section, "owner" means any person having an interest in the right to drill into and produce oil or gas from any pool, and to appropriate the production for such owner or others.

(b) Except as provided in subsection (b-5), when 2 or more separately owned tracts of land are embraced within an established drilling unit, or when there are separately owned interests in all or a part of such units, the owners of all oil and gas interests therein may validly agree to integrate their interests and to develop their lands as a drilling unit. Where, however, such owners have not agreed to integrate their interests and where no action has been commenced seeking permission to drill pursuant to the provisions of "An Act in relation to oil and gas interests in land", approved July 1, 1939, and where at least one of the owners has drilled or has proposed to drill a well on an established drilling unit the Department on the application of an owner shall, for the prevention of waste or to avoid the drilling of unnecessary wells, require such owners to do so and to develop their lands as a drilling unit. The Department, as a part of the order integrating interests, may prescribe the terms and conditions upon which the royalty interests in the unit or units shall, in the absence of voluntary agreement, be determined to be integrated without the necessity of a subsequent separate order integrating the royalty interests. Each such integration order shall be upon terms and conditions that are just and reasonable.

(b-5) When 2 or more separately owned tracts of land are embraced within an established drilling unit, or when there are separately owned interests in all or a part of the unit, and one of the owners is the Department of Natural Resources, integration of the separate tracts shall be allowed only if, following a comprehensive environmental impact review performed by the Department, the Department determines that no substantial or irreversible detrimental harm will occur on Department lands as a result of any proposed activities relating to mineral extraction. The environmental impact review shall include but shall not be limited to an assessment of the potential destruction or depletion of flora and fauna, wildlife and its supporting habitat, surface and subsurface water supplies, aquatic life, and recreational activities located on the land proposed to be integrated. The Department shall adopt rules necessary to implement this subsection.

(b-6) All proceeds, bonuses, rentals, royalties, and other inducements and considerations received from the integration of Department of Natural Resources lands that have not been purchased by the Department of Natural Resources with moneys appropriated from the Wildlife and Fish Fund shall be deposited as follows: at least 50% of the amounts received shall be deposited into the State Parks Fund and not more than 50% shall be deposited into the Plugging and Restoration Fund.

(c) All orders requiring such integration shall be made after notice and hearing and shall be upon terms and conditions that are just and reasonable and will afford to the owners of all oil and gas interests in each tract in the drilling unit the opportunity to recover or receive their just and equitable share of oil or gas from the drilling unit without unreasonable expense and will prevent or minimize reasonably avoidable drainage from each integrated drilling unit which is not equalized by counter drainage, but the Department may not limit the production from any well under this provision. The request shall be made by petition accompanied by a non-refundable application fee of $1,500. The fee shall be deposited into the Underground Resources Conservation Enforcement Fund. The monies deposited into the Underground Resources Conservation Enforcement Fund under this subsection shall not be subject to administrative charges or chargebacks unless otherwise authorized by this Act.

(d) All operations, including, but not limited to, the commencement, drilling, or operation of a well upon any portion of a drilling unit shall be deemed for all purposes the conduct of such operations upon each separately owned tract in the drilling unit by the several owners thereof. That portion of the production allocated to a separately owned tract included in a drilling unit shall, when produced, be deemed, for all purposes, to have been actually produced from such tract by a well drilled thereon.

(e) In making the determination of integrating separately owned interests, and determining to whom the permit should be issued, the Department may consider:

(1) the reasons requiring the integration of separate interests;

(2) the respective interests of the parties in the drilling unit sought to be established, and the pool or pools in the field where the proposed drilling unit is located;

(3) any parties' prior or present compliance with the Act and the Department's rules; and

(4) any other information relevant to protect the correlative rights of the parties sought to be affected by the integration order.

(f) Each such integration order shall authorize the drilling, testing, completing, equipping, and operation of a well on the drilling unit; provide who may drill and operate the well; prescribe the time and manner in which all the owners in the drilling unit may elect to participate therein; and make provision for the payment by all those who elect to participate therein of the reasonable actual cost thereof, plus a reasonable charge for supervision and interest. Should an owner not elect to voluntarily participate in the risk and costs of the drilling, testing, completing and operation of a well as determined by the Department, the integration order shall provide either that:

(1) the nonparticipating owner shall surrender a leasehold interest to the participating owners on a basis and for such terms and consideration the Department finds fair and reasonable; or

(2) the nonparticipating owner shall share in a proportionate part of the production of oil and gas from the drilling unit determined by the Department, and pay a proportionate part of operation cost after the participating owners have recovered from the production of oil or gas from a well all actual costs in the drilling, testing, completing and operation of the well plus a penalty to be determined by the Department of not less than 100% nor more than 300% of such actual costs.

(g) For the purpose of this Section, the owner or owners of oil and gas rights in and under an unleased tract of land shall be regarded as a lessee to the extent of a 7/8 interest in and to said rights and a lessor to the extent of the remaining 1/8 interest therein.

(h) In the event of any dispute relative to costs and expenses of drilling, testing, equipping, completing and operating a well, the Department shall determine the proper costs after due notice to interested parties and a hearing thereon. The operator of such unit, in addition to any other right provided by the integration order of the Department, shall have a lien on the mineral leasehold estate or rights owned by the other owners therein and upon their shares of the production from such unit to the extent that costs incurred in the development and operation upon said unit are a charge against such interest by order of the Department or by operation of law. Such liens shall be separable as to each separate owner within such unit, and shall remain liens until the owner or owners drilling or operating the well have been paid the amount due under the terms of the integration order. The Department is specifically authorized to provide that the owner or owners drilling, or paying for the drilling, or for the operation of a well for the benefit of all shall be entitled to production from such well which would be received by the owner or owners for whose benefit the well was drilled or operated, after payment of royalty, until the owner or owners drilling or operating the well have been paid the amount due under the terms of the integration order settling such dispute.

(Source: P.A. 97-1136, eff. 1-1-13.)

(225 ILCS 725/23.1) (from Ch. 96 1/2, par. 5438)

Sec. 23.1. The owner or owners of any tract of land which is productive or capable of being productive of oil or gas or any owner or operator of an oil and gas leasehold on which productive wells are situated, under a lease authorizing the lessee or his assigns to explore for and remove oil and gas, from any sand, strata, or formation, shall be permitted, in the interest of oil and gas conservation, to use any enhanced recovery method for the purpose of recovering the oil and gas contained therein; provided, that the owner or operator of a well to be used for any enhanced recovery method shall make a written application to the Department for authority so to do, and provided that written approval has been granted him by the Department; and provided further that the operation shall be done under the rules and regulations of the Department; and further provided, that use of any enhanced recovery method shall not be deemed to be an unlawful act.

(Source: P.A. 85-1334.)

(225 ILCS 725/23.2) (from Ch. 96 1/2, par. 5439)

Sec. 23.2. (a) When 2 or more separately owned tracts of land are embraced within a pool or a portion of a pool suitable for any enhanced recovery method, the owners thereof may validly agree to integrate their interest therein and to develop their land as a unit, and production from any tract in such established unit shall be regarded as production from all presently owned tracts or interests within such units.

(b) Agreements made in the interest of conservation of oil or gas, or both, or the prevention of waste, between and among owners or operators, or both, owning separate holdings in the same oil or gas pool, or in any area that appears from geological or other data to be underlain by a common accumulation of oil or gas, or both, or between and among such owners or operators, or both, and royalty owners therein, of a pool or area, or any part thereof, as a unit for establishing and carrying out a plan for the cooperative development and operation thereof, when such agreements are approved by the Department, are hereby authorized and shall not be held or construed to violate any of the statutes of this State relating to trusts, monopolies or contracts and combinations in restraint of trade.

(Source: P.A. 85-1334.)

(225 ILCS 725/23.3) (from Ch. 96 1/2, par. 5440)

Sec. 23.3. The Department, upon the petition of any interested person, shall hold a public hearing to consider the need for operating a pool, pools, or any portion thereof, as a unit to enable, authorize and require operations which will increase the ultimate recovery of oil and gas, prevent the waste of oil and gas, and protect correlative rights of the owners of the oil and gas.

(1) Such petition shall contain the following:

(a) A description of the land and pool, pools, or parts thereof, within the proposed unit area.

(b) The names of all persons owning or having an interest in the oil and gas rights in the proposed unit area as of the date of filing the petition, as disclosed by the records in the office of the recorder for the county or counties in which the unit area is situated, and their addresses, if known. If the address of any person is unknown, the petition shall so indicate.

(c) A statement of the type of operations contemplated for the unit area.

(d) A copy of a proposed plan of unitization signed by persons owning not less than 51% of the working interest underlying the surface within the area proposed to be unitized, which the petitioner considers fair, reasonable and equitable; said plan of unitization shall include (or provide in a separate unit operating agreement, if there be more than one working interest owner, a copy of which shall accompany the petition) the following:

(i) A plan for allocating to each separately owned tract in the unit area its share of the oil and gas produced from the unit area and not required or consumed in the conduct of the operation of the unit area or unavoidably lost.

(ii) A provision indicating how unit expense shall be determined and charged to the several owners, including a provision for carrying or otherwise financing any working interest owner who has not executed the proposed plan of unitization and who elects to be carried or otherwise financed, and allowing the unit operator, for the benefit of those working interest owners who have paid the development and operating costs, the recovery of not more than 150% of such person's actual share of development costs of the unit plus operating costs, with interest. Recovery of the money advanced to owners wishing to be financed, for development and operating costs of the unit, together with such other sums provided for herein, shall only be recoverable from such owner's share of unit production from the unit area.

(iii) A procedure and basis upon which wells, equipment, and other properties of the several working interest owners within the unit area are to be taken over and used for unit operations, including the method of arriving at the compensation therefor.

(iv) A plan for maintaining effective supervision and conduct of unit operations, in respect to which each working interest owner shall have a vote with a value corresponding to the percentage of unit expense chargeable against the interest of such owner.

(e) A non-refundable application fee in the amount of $2,500.

(2) Concurrently with the filing of the petition with the Department, the petitioner may file or cause to be filed, in the office of the recorder for the county or counties in which the affected lands sought to be unitized are located, a notice setting forth:

(a) The type of proceedings before the Department and a general statement of the purpose of such proceedings.

(b) A legal description of the lands, oil and gas lease or leases, and other oil and gas property interests, which may be affected by the proposed unitization.

(3) Upon the filing of such notice:

(a) All transfers of title to oil and gas rights shall thereafter be subject to the final order of the Department in such proceedings, and

(b) Such notice shall be constructive notification to every person subsequently acquiring an interest in or a lien on any of the property affected thereby, and every person whose interest or lien is not shown of record at the time of filing such notice shall, for the purpose of this Act, be deemed a subsequent purchaser and shall be bound by the proceedings before the Department to the same extent and in the same manner as if he were a party thereto.

(Source: P.A. 97-1136, eff. 1-1-13.)

(225 ILCS 725/23.4) (from Ch. 96 1/2, par. 5441)

Sec. 23.4. (1) Upon the receipt of a petition for unitization, the Department shall fix the time and place for a public hearing, which shall be no less than 30 days nor more than 60 days after the date of the filing of said petition. The Department, at petitioner's expense, shall give notice of such hearing under this Section at least 10 days prior to the hearing in the following manner:

(a) by mailing such notice by United States Mail, postage prepaid, and directed to the persons named in the petition at their last known addresses 10 days prior to the hearing; and

(b) by publication of such notice for service on those persons whose addresses are unknown or whose names are unknown, once each week for 2 consecutive weeks, with the first notice appearing at least 10 days prior to the hearing in a newspaper of general circulation published in each county containing some portion of the proposed unit area.

(2) All notices for public hearing under this Section shall issue in the name of the State of Illinois and shall be signed by the Director. Such notices shall specify the number and style of the proceedings, the time and place of the hearing, the purpose of the hearing, the name of the petitioner, and a legal description of the lands contained within the proposed unit area.

(Source: P.A. 85-1334.)

(225 ILCS 725/23.5) (from Ch. 96 1/2, par. 5442)

Sec. 23.5. When a public hearing is held, the Department shall promptly issue an order providing for the unit operation of a pool or pools, or parts thereof, if he determines, based on the evidence presented at such public hearing, that:

(1) the unitized management and operation is economically feasible and reasonably necessary to increase the ultimate recovery of oil and gas, to prevent waste, and to protect correlative rights, and

(2) the value of the estimated ultimate additional recovery of oil and gas will exceed the estimated additional cost, if any, incident to conducting the unit operation, and

(3) the areal extent of the pool or pools, or parts thereof, has been reasonably defined and determined by drilling operations, and the unitization and operation of such will have no substantially adverse effect upon the remainder of the pool or pools, or parts thereof, and

(4) the allocation of unit production to each separately owned tract is fair, reasonable, and equitable to all owners of oil and gas rights in the unit area, and

(5) the determination and allocation of unit expense is fair, reasonable and equitable to the working interest owners, and

(6) the compensation or adjustment for wells, equipment and other properties of the working interest owners is fair, reasonable and equitable.

(Source: P.A. 85-1334.)

(225 ILCS 725/23.6) (from Ch. 96 1/2, par. 5443)

Sec. 23.6. If, after considering the petition and all evidence offered, the Director determines that the petitioner has failed to establish the several requirements for formation of a unit as provided herein, he shall promptly enter its order denying the petition and dismissing the same. Such order shall set forth the reasons for dismissal, and the same shall be promptly filed by the petitioner, if notice was filed under paragraph (2) of Section 23.3, in the Recorder's office of the county or counties wherein the land is situated.

(Source: P.A. 89-243, eff. 8-4-95.)

(225 ILCS 725/23.7) (from Ch. 96 1/2, par. 5444)

Sec. 23.7. The order for unitization shall recite the findings required by Section 23.5; and if the requirements of Section 23.5 are satisfied, then the order shall approve the plan of unitization submitted by the petitioner.

(Source: P.A. 79-462.)

(225 ILCS 725/23.8) (from Ch. 96 1/2, par. 5445)

Sec. 23.8. No order of the Department providing for unit operations shall become effective unless and until the plan of unitization has been approved in writing by those persons who, under the order, will be required to pay at least 51% of the unit expense, and also by the persons owning at least 51% of the unit production or proceeds thereof that will be credited to interests which are free of unit expense, including but not limited to, royalties, overriding royalties, carried interests, net profit interests, and production payments, and the Director has made such a finding, either in the order providing for unit operations or in a supplemental order, that the plan of unitization has been so approved; provided, however, that if any person is obligated to pay 51% or more, but less than 100% of the unit expense, the approval of that person and at least one other such person shall be required; and if one person entitled to production or proceeds thereof will be credited to interests which are free of unit expense, owns 51% or more, but less than 100%, the approval of that person and at least one other such person shall be required. If the plan of unitization has not been so approved at the time the order providing for unit operations is issued, the Department shall, upon petition and notice, hold such supplemental hearings as may be required to determine if and when the plan of unitization has been so approved and shall issue a supplemental order evidencing such approval. If the requisite number of persons and the requisite percentage of interests in the unit area do not approve the plan of unitization within a period of 6 months from the date on which the order providing for unit operations is made, such order shall be revoked by the Department unless for good cause shown the Department extends said time for an additional period of time not to exceed one year.

(Source: P.A. 89-243, eff. 8-4-95.)

(225 ILCS 725/23.9) (from Ch. 96 1/2, par. 5446)

Sec. 23.9. With respect to an interest in the oil and gas rights which is encumbered by a lien of record, both the person owning such interest and the lienor shall, for the purposes of this Section, be considered as the record owner of legal title thereto; provided that when the lien is based upon an instrument which gives the grantor or grantors in such instruments the right to execute a plan of unitization, the grantor or grantors shall for said purposes be deemed the record owner or owners.

(Source: P.A. 79-462.)

(225 ILCS 725/23.10) (from Ch. 96 1/2, par. 5447)

Sec. 23.10. The obligation or liability of each working interest owner for the payment of unit expense shall at all times be several and not joint or collective, and in no event shall a working interest owner be chargeable with, obligated or liable, directly or indirectly, for more than the amount apportioned, assessed or otherwise charged pursuant to the plan of unitization.

(Source: P.A. 79-462.)

(225 ILCS 725/23.11) (from Ch. 96 1/2, par. 5448)

Sec. 23.11. The unit operator shall have a lien for all costs incurred pursuant to the plan of unitization upon the leasehold estate, exclusive of a 1/8 share of gross production, which is attributable to a lessor's royalty interest, and on all the oil and gas leasehold interest and on all the equipment and material used in unit operations owned by each working interest owner, subject to the plan of unitization, to the full extent of such owner's ownership on the day a notice is filed pursuant to Paragraph 2 of Section 23.3 to secure the payment of such working interest owner's proportionate part of the unit development and operating expense. The unit operator may enforce such lien by serving notice on the purchaser of production attributable to such owner's interest, and the purchaser shall make payment thereof to the operator without indemnity as to disposition of such proceeds. Such lien shall attach to and become a charge against such owner's working interest, or any portion thereof, or any oil and gas leasehold, or part thereof, included within the unit area. Such lien shall also attach to and become a charge against all equipment used in unit operations and all unit production, or the proceeds thereof, inuring to the benefit of such owner's working interest. Notice of such lien may be given, and the same may be foreclosed, as provided for in "An Act in relation to liens of contractors, sub-contractors, material men and laborers for work performed and materials furnished in digging, drilling, building, erecting, completing, operating and maintaining oil and gas wells and pipe lines", filed July 25, 1939, as heretofore or hereafter amended; provided, however, that where provision has been made in the plan of unitization for carrying or financing any working interest owner as authorized by Subparagraph (d) of Paragraph 1 of Section 23.3, the lien authorized by this Section shall attach to and become a charge only against such owner's share of the unit production, or the proceeds thereof, and against such owner's share in the equipment used in unit operations, until such financing be terminated as provided in the plan of unitization.

(Source: P.A. 79-462.)

(225 ILCS 725/23.12) (from Ch. 96 1/2, par. 5449)

Sec. 23.12. The unit area may be unitized or joined with adjoining portions of the same pool or pools, or portions thereof, including a unit area of another or other units and a new unit created for unitized management, operation and further development of such enlarged unit area upon the filing of a petition therefor, and after notice and hearing, in the same manner and on the same conditions, all as herein provided with respect to the creation of a unit in the first instance, provided always that the requisites of Sections 23.5 and 23.8 shall be applicable. Upon issuance of the order by the Director creating a new unit, the new unit so created shall thereupon supersede such existing unit or units. Such order shall not alter the proportionate allocation of unit production among the separately owned tracts included in such previously established unit area or unit areas. Any new working interest owner whose interest by such order is added to the new unit area and who becomes liable for his proportionate share of the unit expense shall not be liable for any unit expense incurred prior to such person's entry in the new unit. At the time such interest is included in the new unit area, an equipment inventory will be made in order to charge or credit such newly committed interest with its proportionate share of capital investment. An oil-in-storage inventory will be taken immediately prior to adding the newly committed interest.

(Source: P.A. 85-1334.)

(225 ILCS 725/23.13) (from Ch. 96 1/2, par. 5450)

Sec. 23.13. The Department and the proper body, board or officer of any political, municipal or other subdivision or agency of the State are hereby authorized and have the power to execute plans of unitization with respect to land or oil and gas rights subject to the control and management of such respective body, board or officer.

(Source: P.A. 85-1334.)

(225 ILCS 725/23.14) (from Ch. 96 1/2, par. 5451)

Sec. 23.14. Any guardian, executor of a last will, any trustee by court appointment, and the owners who may be operating leaseholds within the proposed unitized area under the authority of a judgment of a circuit court under an Act of the State of Illinois entitled "An Act in Relation to Oil and Gas Interests in Land", approved July 1, 1939, when acting under and pursuant to the authority of a court order entered by the court appointing or authorizing such fiduciary or owners to act, or a trustee acting under general authority of appointment by trust document, is hereby authorized and has power to execute plans of unitization, including unit operating agreements, with respect to land or oil and gas rights subject to the control and management of such owners or fiduciary.

(Source: P.A. 84-452.)

(225 ILCS 725/23.15) (from Ch. 96 1/2, par. 5452)

Sec. 23.15. (1) Property rights, leases, contracts and all other rights and obligations affecting oil and gas rights within the unit area shall be regarded as amended and modified to the extent necessary to conform to the provisions and requirements of this Act and to any valid and applicable plan of unitization or order of the Department made and adopted pursuant hereto, but otherwise remain in full force and effect, provided always that plans of unitization, including unit operating agreements, shall not provide, constitute or be construed as an exchange or transfer of real property or mineral interests in the respective separately owned tracts included within the unit.

(2) Nothing contained in this Act shall be construed to require a transfer to or vesting in the unit of title to the separately owned tracts or leases within the unit area, other than the right to use and operate the same to the extent set out in the plan of unitization; nor shall the unit be regarded as owning the unit production. The unit production and the proceeds from the sale thereof shall be owned by the several persons to whom the same is allocated under the plan of unitization. All property, whether real or personal, which the unit may in any way acquire, hold or possess, shall not be acquired, held or possessed by the unit for its own account but shall be so acquired, held and possessed by the unit for the account of, and as agent for, the several working interest owners, and shall be the property of such working interest owners as their interests may appear under the plan of unitization, subject, however, to the right of the unit to the possession, management, use or disposal of the same in the proper conduct of its affairs, and subject to the lien the unit may have thereon to secure the payment of unit expense.

(3) The amount of the unit production allocated to each separately owned tract within the unit, and only that amount, regardless of the well or wells in the unit area from which it may be produced, and regardless of whether it be more or less than the amount of production from the well or wells, if any, or any such separately owned tract, shall for all intents, uses and purposes be regarded and considered as production from such separately owned tract, and except as otherwise authorized in this Act, or in the plan of unitization approved by the Department, shall be distributed among or the proceeds thereof paid to the several persons entitled to share in the production from such separately owned tract in the same manner, in the same proportions, and upon the same conditions they would have participated and shared in the production or proceeds thereof from such separately owned tract had not said unit been organized, and with the same legal force and effect. If adequate provisions are made for the receipt thereof, the share of the unit production allocated to each separately owned tract shall be delivered in kind to the persons entitled thereto by virtue of ownership of oil and gas rights therein or by purchase from such owners subject to the rights of the unit operator to withhold and sell the same in payment of unit expense pursuant to the plan of unitization, and subject further to the call of the unit operator on such portions of the unit production for operating purposes as may be provided in the plan of unitization.

(4) Operations conducted under and in accordance with the plan of unitization shall be regarded and considered a fulfillment of and compliance with all of the provisions, covenants and conditions, express or implied, of the several oil and gas leases upon lands included within the unit, or other contracts pertaining to the development thereof. Wells drilled or operated on any part of the unit, no matter where located, shall for all purposes be regarded as wells drilled on each separately owned tract within such unit.

(5) Nothing herein or in any plan of unitization shall be construed as increasing or decreasing the implied covenants of a lease with respect to a pool or lands not included within the unit area.

(Source: P.A. 85-1334.)

(225 ILCS 725/23.16) (from Ch. 96 1/2, par. 5453)

Sec. 23.16. From and after the effective date of the order of the Director creating a unit and prescribing the plan of unitization applicable thereto, the operation of any well producing from the pool or portion thereof within the unit area defined in the order, by persons other than the unit operator or persons acting under its authority or except in the manner and to the extent prescribed in such plan of unitization shall be unlawful and is hereby prohibited.

(Source: P.A. 85-1334.)

(225 ILCS 725/25) (from Ch. 96 1/2, par. 5455)

Sec. 25. No power herein granted to prevent waste shall be interpreted or construed as authorizing limitation of production of any well, wells, lease, leases, pool, field or properties to prevent or control economic waste or limit production to market demand.

Exploration and discovery of new and additional pools, fields and producing horizons are vital and the effect and administration of this Act shall be in accordance therewith and not contrary thereto. Any rule, regulation or order issued under the general powers of this Act in violation of the provisions of this Section shall be void and of no effect.

(Source: Laws 1951, p. 1500.)

(225 ILCS 725/26) (from Ch. 96 1/2, par. 5456)

Sec. 26. (a) Any person who violates any provision of this Act or any valid rule, regulation, permit or order of the Department made hereunder, or who repeats or continues the violation thereof, shall be subject to a civil penalty not to exceed $1,000 a day for each and every act of violation.

(b) Any person wilfully aiding or abetting any other person in the violation of any provision of this Act, or any rule, regulation and order made hereunder, shall be subject to the same penalties as are prescribed herein for the violation by such other person.

(Source: P.A. 85-1334.)

(225 ILCS 725/28) (from Ch. 96 1/2, par. 5457)

Sec. 28. If any section, paragraph, sentence or phrase of this Act shall be declared unconstitutional, or void for any reason by any court of final jurisdiction, such fact shall not in any manner invalidate or affect any other section, paragraph, sentence or phrase of this Act, but the same shall continue in full force and effect.

(Source: Laws 1941, vol. 1, p. 934.)

(225 ILCS 725/28.1) (from Ch. 96 1/2, par. 5458)

Sec. 28.1. The transfer of rights, powers and duties from the Mining Board to the Department of Mines and Minerals by this amendatory Act of 1988 shall not affect the obligations or duties, or the rights, powers or privileges, of any person subject to the provisions of this Act.

The transfer of rights, powers and duties from the Department of Mines and Minerals to the Department of Natural Resources by the Department of Natural Resources Act does not affect the obligations or duties, or the rights, powers or privileges, of any person under this Act.

No act done, ratified or cancelled, or right occurring or established, or any action or proceeding had or commenced in an administrative, civil or criminal cause, shall be affected and the same may be continued without regard to the transfer of rights, powers and duties provided for herein.

(Source: P.A. 89-445, eff. 2-7-96.)