99TH GENERAL ASSEMBLY
State of Illinois
2015 and 2016
SB1458
 
Introduced 2/20/2015, by Sen. David S. Luechtefeld
 
SYNOPSIS AS INTRODUCED:



30 ILCS 105/5.832
225 ILCS 732/1-35
225 ILCS 732/1-65
225 ILCS 732/1-135

 Amends the State Finance Act. Renames a fund as the Oil and Gas Resource Management Fund (now, Mines and Minerals). Makes corresponding changes. Amends the Hydraulic Fracturing Regulatory Act. Provides that the Fund will be used to support the Division of Oil and Gas Resource Management (now, Office of Mines and Mineral). Effective immediately. 



LRB099 10517 SXM 30744 b


 
 
A BILL FOR
 


SB1458LRB099 10517 SXM 30744 b



1 AN ACT concerning Finance.


2 Be it enacted by the People of the State of Illinois,

3represented in the General Assembly:



4 Section 5. The State Finance Act is amended by changing 
5Section 5.832 as follows:

6 (30 ILCS 105/5.832)
7 Sec. 5.832. The Oil and Gas Management Resource Mines and 
8Minerals Regulatory Fund.
9(Source: P.A. 98-22, eff. 6-17-13; 98-756, eff. 7-16-14.)

10 Section 10. The Hydraulic Fracturing Regulatory Act is 
11amended by changing Sections 1-35, 1-65 and 1-135 as follows:

12 (225 ILCS 732/1-35)

13 Sec. 1-35. High volume horizontal hydraulic fracturing 
14permit application. 
15 (a) Every applicant for a permit under this Act shall first 
16register with the Department at least 30 days before applying 
17for a permit. The Department shall make available a 
18registration form within 90 days after the effective date of 
19this Act. The registration form shall require the following 
20information:

21  (1) the name and address of the registrant and any 
 
 
SB1458- 2 -LRB099 10517 SXM 30744 b


1 parent, subsidiary, or affiliate thereof;

2  (2) disclosure of all findings of a serious violation 
3 or an equivalent violation under federal or state laws or 
4 regulations in the development or operation of an oil or 
5 gas exploration or production site via hydraulic 
6 fracturing by the applicant or any parent, subsidiary, or 
7 affiliate thereof within the previous 5 years; and

8  (3) proof of insurance to cover injuries, damages, or 
9 loss related to pollution or diminution in the amount of at 
10 least $5,000,000, from an insurance carrier authorized, 
11 licensed, or permitted to do this insurance business in 
12 this State that holds at least an A- rating by A.M. Best & 
13 Co. or any comparable rating service.

14 A registrant must notify the Department of any change in 
15the information identified in paragraphs (1), (2), or (3) of 
16this subsection (a) at least annually or upon request of the 
17Department.

18 (b) Every applicant for a permit under this Act must submit 
19the following information to the Department on an application 
20form provided by the Department:

21  (1) the name and address of the applicant and any 
22 parent, subsidiary, or affiliate thereof;

23  (2) the proposed well name and address and legal 
24 description of the well site and its unit area;

25  (3) a statement whether the proposed location of the 
26 well site is in compliance with the requirements of Section 
 
 
SB1458- 3 -LRB099 10517 SXM 30744 b


1 1-25 of this Act and a plat, which shows the proposed 
2 surface location of the well site, providing the distance 
3 in feet, from the surface location of the well site to the 
4 features described in subsection (a) of Section 1-25 of 
5 this Act;

6  (4) a detailed description of the proposed well to be 
7 used for the high volume horizontal hydraulic fracturing 
8 operations including, but not limited to, the following 
9 information:

10   (A) the approximate total depth to which the well 
11 is to be drilled or deepened;

12   (B) the proposed angle and direction of the well;

13   (C) the actual depth or the approximate depth at 
14 which the well to be drilled deviates from vertical;

15   (D) the angle and direction of any nonvertical 
16 portion of the wellbore until the well reaches its 
17 total target depth or its actual final depth; and

18   (E) the estimated length and direction of the 
19 proposed horizontal lateral or wellbore;

20  (5) the estimated depth and elevation, according to the 
21 most recent publication of the Illinois State Geological 
22 Survey of Groundwater for the location of the well, of the 
23 lowest potential fresh water along the entire length of the 
24 proposed wellbore;

25  (6) a detailed description of the proposed high volume 
26 horizontal hydraulic fracturing operations, including, but 
 
 
SB1458- 4 -LRB099 10517 SXM 30744 b


1 not limited to, the following:

2   (A) the formation affected by the high volume 
3 horizontal hydraulic fracturing operations, including, 
4 but not limited to, geologic name and geologic 
5 description of the formation that will be stimulated by 
6 the operation;

7   (B) the anticipated surface treating pressure 
8 range;

9   (C) the maximum anticipated injection treating 
10 pressure;

11   (D) the estimated or calculated fracture pressure 
12 of the producing and confining zones; and

13   (E) the planned depth of all proposed perforations 
14 or depth to the top of the open hole section;

15  (7) a plat showing all known previous wellbores within 
16 750 feet of any part of the horizontal wellbore that 
17 penetrated within 400 vertical feet of the formation that 
18 will be stimulated as part of the high volume horizontal 
19 hydraulic fracturing operations;

20  (8) unless the applicant documents why the information 
21 is not available at the time the application is submitted, 
22 a chemical disclosure report identifying each chemical and 
23 proppant anticipated to be used in hydraulic fracturing 
24 fluid for each stage of the hydraulic fracturing operations 
25 including the following:

26   (A) the total volume of water anticipated to be 
 
 
SB1458- 5 -LRB099 10517 SXM 30744 b


1 used in the hydraulic fracturing treatment of the well 
2 or the type and total volume of the base fluid 
3 anticipated to be used in the hydraulic fracturing 
4 treatment, if something other than water;

5   (B) each hydraulic fracturing additive anticipated 
6 to be used in the hydraulic fracturing fluid, including 
7 the trade name, vendor, a brief descriptor of the 
8 intended use or function of each hydraulic fracturing 
9 additive, and the Material Safety Data Sheet (MSDS), if 
10 applicable;

11   (C) each chemical anticipated to be intentionally 
12 added to the base fluid, including for each chemical, 
13 the Chemical Abstracts Service number, if applicable; 
14 and

15   (D) the anticipated concentration in the base 
16 fluid, in percent by mass, of each chemical to be 
17 intentionally added to the base fluid;

18  (9) a certification of compliance with the Water Use 
19 Act of 1983 and applicable regional water supply plans;

20  (10) a fresh water withdrawal and management plan that 
21 shall include the following information:

22   (A) the source of the water, such as surface or 
23 groundwater, anticipated to be used for water 
24 withdrawals, and the anticipated withdrawal location;

25   (B) the anticipated volume and rate of each water 
26 withdrawal from each withdrawal location;
 
 
SB1458- 6 -LRB099 10517 SXM 30744 b


1   (C) the anticipated months when water withdrawals 
2 shall be made from each withdrawal location;

3   (D) the methods to be used to minimize water 
4 withdrawals as much as feasible; and

5   (E) the methods to be used for surface water 
6 withdrawals to minimize adverse impact to aquatic 
7 life.
8  Where a surface water source is wholly contained within 
9 a single property, and the owner of the property expressly 
10 agrees in writing to its use for water withdrawals, the 
11 applicant is not required to include this surface water 
12 source in the fresh water withdrawal and management plan;

13  (11) a plan for the handling, storage, transportation, 
14 and disposal or reuse of hydraulic fracturing fluids and 
15 hydraulic fracturing flowback. The plan shall identify the 
16 specific Class II injection well or wells that will be used 
17 to dispose of the hydraulic fracturing flowback. The plan 
18 shall describe the capacity of the tanks to be used for the 
19 capture and storage of flowback and of the lined reserve 
20 pit to be used, if necessary, to temporarily store any 
21 flowback in excess of the capacity of the tanks. 
22 Identification of the Class II injection well or wells 
23 shall be by name, identification number, and specific 
24 location and shall include the date of the most recent 
25 mechanical integrity test for each Class II injection well;

26  (12) a well site safety plan to address proper safety 
 
 
SB1458- 7 -LRB099 10517 SXM 30744 b


1 measures to be employed during high volume horizontal 
2 hydraulic fracturing operations for the protection of 
3 persons on the site as well as the general public. Within 
4 15 calendar days after submitting the permit application to 
5 the Department, the applicant must provide a copy of the 
6 plan to the county or counties in which hydraulic 
7 fracturing operations will occur. Within 5 calendar days of 
8 its receipt, the Department shall provide a copy of the 
9 well site safety plan to the Office of the State Fire 
10 Marshal;

11  (13) a containment plan describing the containment 
12 practices and equipment to be used and the area of the well 
13 site where containment systems will be employed, and within 
14 5 calendar days of its receipt, the Department shall 
15 provide a copy of the containment plan to the Office of the 
16 State Fire Marshal;

17  (14) a casing and cementing plan that describes the 
18 casing and cementing practices to be employed, including 
19 the size of each string of pipe, the starting point, and 
20 depth to which each string is to be set and the extent to 
21 which each string is to be cemented;

22  (15) a traffic management plan that identifies the 
23 anticipated roads, streets, and highways that will be used 
24 for access to and egress from the well site. The traffic 
25 management plan will include a point of contact to discuss 
26 issues related to traffic management. Within 15 calendar 
 
 
SB1458- 8 -LRB099 10517 SXM 30744 b


1 days after submitting the permit application to the 
2 Department, the applicant must provide a copy of the 
3 traffic management plan to the county or counties in which 
4 the well site is located, and within 5 calendar days of its 
5 receipt, the Department shall provide a copy of the traffic 
6 management plan to the Office of the State Fire Marshal;

7  (16) the names and addresses of all owners of any real 
8 property within 1,500 feet of the proposed well site, as 
9 disclosed by the records in the office of the recorder of 
10 the county or counties;

11  (17) drafts of the specific public notice and general 
12 public notice as required by Section 1-40 of this Act;

13  (18) a statement that the well site at which the high 
14 volume horizontal hydraulic fracturing operation will be 
15 conducted will be restored in compliance with Section 
16 240.1181 of Title 62 of the Illinois Administrative Code 
17 and Section 1-95 of this Act;

18  (19) proof of insurance to cover injuries, damages, or 
19 loss related to pollution in the amount of at least 
20 $5,000,000; and

21  (20) any other relevant information which the 
22 Department may, by rule, require.

23 (c) Where an application is made to conduct high volume 
24horizontal fracturing operations at a well site located within 
25the limits of any city, village, or incorporated town, the 
26application shall state the name of the city, village, or 
 
 
SB1458- 9 -LRB099 10517 SXM 30744 b


1incorporated town and be accompanied with a certified copy of 
2the official consent for the hydraulic fracturing operations to 
3occur from the municipal authorities where the well site is 
4proposed to be located. No permit shall be issued unless 
5consent is secured and filed with the permit application. In 
6the event that an amended location is selected, the original 
7permit shall not be valid unless a new certified consent is 
8filed for the amended location.

9 (d) The hydraulic fracturing permit application shall be 
10accompanied by a bond as required by subsection (a) of Section 
111-65 of this Act.

12 (e) Each application for a permit under this Act shall 
13include payment of a non-refundable fee of $13,500. Of this 
14fee, $11,000 shall be deposited into the Oil and Gas Resource 
15Management Mines and Minerals Regulatory Fund for the 
16Department to use to administer and enforce this Act and 
17otherwise support the operations and programs of the Division 
18of Oil and Gas Resource Management Office of Mines and 
19Minerals. The remaining $2,500 shall be deposited into the 
20Illinois Clean Water Fund for the Agency to use to carry out 
21its functions under this Act. The Department shall not initiate 
22its review of the permit application until the applicable fee 
23under this subsection (e) has been submitted to and received by 
24the Department.

25 (f) Each application submitted under this Act shall be 
26signed, under the penalty of perjury, by the applicant or the 
 
 
SB1458- 10 -LRB099 10517 SXM 30744 b


1applicant's designee who has been vested with the authority to 
2act on behalf of the applicant and has direct knowledge of the 
3information contained in the application and its attachments. 
4Any person signing an application shall also sign an affidavit 
5with the following certification:

6  "I certify, under penalty of perjury as provided by law 
7 and under penalty of refusal, suspension, or revocation of 
8 a high volume horizontal hydraulic fracturing permit, that 
9 this application and all attachments are true, accurate, 
10 and complete to the best of my knowledge.".

11 (g) The permit application shall be submitted to the 
12Department in both electronic and hard copy format. The 
13electronic format shall be searchable.

14 (h) The application for a high volume horizontal hydraulic 
15fracturing permit may be submitted as a combined permit 
16application with the operator's application to drill on a form 
17as the Department shall prescribe. The combined application 
18must include the information required in this Section. If the 
19operator elects to submit a combined permit application, 
20information required by this Section that is duplicative of 
21information required for an application to drill is only 
22required to be provided once as part of the combined 
23application. The submission of a combined permit application 
24under this subsection shall not be interpreted to relieve the 
25applicant or the Department from complying with the 
26requirements of this Act or the Illinois Oil and Gas Act.

 
 
SB1458- 11 -LRB099 10517 SXM 30744 b


1 (i) Upon receipt of a permit application, the Department 
2shall have no more than 60 calendar days from the date it 
3receives the permit application to approve, with any conditions 
4the Department may find necessary, or reject the application 
5for the high volume horizontal hydraulic fracturing permit. The 
6applicant may waive, in writing, the 60-day deadline upon its 
7own initiative or in response to a request by the Department.

8 (j) If at any time during the review period the Department 
9determines that the permit application is not complete under 
10this Act, does not meet the requirements of this Section, or 
11requires additional information, the Department shall notify 
12the applicant in writing of the application's deficiencies and 
13allow the applicant to correct the deficiencies and provide the 
14Department any information requested to complete the 
15application. If the applicant fails to provide adequate 
16supplemental information within the review period, the 
17Department may reject the application.


18(Source: P.A. 98-22, eff. 6-17-13; 98-756, eff. 7-16-14.)

19 (225 ILCS 732/1-65)

20 Sec. 1-65. Hydraulic fracturing permit; bonds.
21 (a) An applicant for a high volume horizontal hydraulic 
22fracturing permit under this Act shall provide a bond, executed 
23by a surety authorized to transact business in this State. The 
24bond shall be in the amount of $50,000 per permit or a blanket 
25bond of $500,000 for all permits. If the applicant is required 
 
 
SB1458- 12 -LRB099 10517 SXM 30744 b


1to submit a bond to the Department under the Illinois Oil and 
2Gas Act, the applicant's submission of a bond under this 
3Section shall satisfy the bonding requirements provided for in 
4the Illinois Oil and Gas Act. In lieu of a bond, the applicant 
5may provide other collateral securities such as cash, 
6certificates of deposit, or irrevocable letters of credit under 
7the terms and conditions as the Department may provide by rule.

8 (b) The bond or other collateral securities shall remain in 
9force until the well is plugged and abandoned. Upon abandoning 
10a well to the satisfaction of the Department and in accordance 
11with the Illinois Oil and Gas Act, the bond or other collateral 
12securities shall be promptly released by the Department. Upon 
13the release by the Department of the bond or other collateral 
14securities, any cash or collateral securities deposited shall 
15be returned by the Department to the applicant who deposited 
16it.

17 (c) If, after notice and hearing, the Department determines 
18that any of the requirements of this Act or rules adopted under 
19this Act or the orders of the Department have not been complied 
20with within the time limit set by any notice of violation 
21issued under this Act, the permittee's bond or other collateral 
22securities shall be forfeited. Forfeiture under this 
23subsection shall not limit any duty of the permittee to 
24mitigate or remediate harms or foreclose enforcement by the 
25Department or the Agency. In no way will payment under this 
26bond exceed the aggregate penalty as specified.

 
 
SB1458- 13 -LRB099 10517 SXM 30744 b


1 (d) When any bond or other collateral security is forfeited 
2under the provisions of this Act or rules adopted under this 
3Act, the Department shall collect the forfeiture without delay. 
4The surety shall have 30 days to submit payment for the bond 
5after receipt of notice by the permittee of the forfeiture.

6 (e) All forfeitures shall be deposited in the Oil and Gas 
7Resource Management Mines and Minerals Regulatory Fund to be 
8used, as necessary, to mitigate or remediate violations of this 
9Act or rules adopted under this Act.


10(Source: P.A. 98-22, eff. 6-17-13.)

11 (225 ILCS 732/1-135)

12 Sec. 1-135. The Oil and Gas Resource Management Mines and 
13Minerals Regulatory Fund.  The Oil and Gas Resource Management 
14Mines and Minerals Regulatory Fund is created as a special fund 
15in the State treasury. All moneys required by this Act to be 
16deposited into the Fund shall be used by the Department to 
17administer and enforce this Act and otherwise support the 
18operations and programs of the Division of Oil and Gas Resource 
19Management Office of Mines and Minerals.

20(Source: P.A. 98-22, eff. 6-17-13.)


21 Section 99. Effective date. This Act takes effect upon 
22becoming law.