Bill Text: IL SB3230 | 2013-2014 | 98th General Assembly | Introduced

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

Spectrum: Partisan Bill (Democrat 3-0)

Status: (Failed) 2015-01-13 - Session Sine Die [SB3230 Detail]

Download: Illinois-2013-SB3230-Introduced.html

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98TH GENERAL ASSEMBLY State of Illinois 2013 and 2014 SB3230 Introduced 2/11/2014, by Sen. Ira I. Silverstein SYNOPSIS AS INTRODUCED:
35 ILCS 450/2-15
Amends the Illinois Hydraulic Fracturing Tax Act. Removes a provision that provides for a different tax calculation for the first 24 months of oil and gas production.
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A BILL FOR
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AN ACT concerning revenue.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Illinois Hydraulic Fracturing Tax Act is
amended by changing Section 2-15 as follows:
(35 ILCS 450/2-15)
Sec. 2-15. Tax imposed.
(a) For oil and gas removed on or after July 1, 2013, there
is hereby imposed a tax upon the severance and production of
oil or gas from a well on a production unit in this State
permitted, or required to be permitted, under the Illinois
Hydraulic Fracturing Regulatory Act, for sale, transport,
storage, profit, or commercial use. The tax shall be applied
equally to all portions of the value of each barrel of oil
severed and subject to such tax and to the value of the gas
severed and subject to such tax. The For a period of 24 months
from the month in which oil or gas was first produced from the
well, the rate of tax shall be 3% of the value of the oil or gas
severed from the earth or water in this State. Thereafter, the
rate of the tax shall be as follows:
(1) For oil:
(A) where the average daily production from the
well during the month is less than 25 barrels, 3% of

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

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