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920 Water Well Construction Code passes through JCAR
The 920 rule changes may finally be coming to a close. After a minor delay to tweak definitions, the Joint Committee on Administrative Rules passed the code on Tuesday, October 22 in Springfield. More details will be available soon as the revised 920 rules are published in their entirety.
Fracking Approved in Illinois House & Senate
SB 1715, sponsored by Sen. Mike Frerichs (D-Champaign) and Rep. John Bradley (D-Marion), setting up regulation of hydraulic fracturing passed both chambers and will now be sent to the Governor for his consideration. The legislation includes the most protective regulations for high volume horizontal hydraulic fracturing anywhere in the nation. Among the regulations are well construction and casing standards, setback requirements, water testing requirements, and waste management procedures. Protections for surface landowners are also included in the bill, with specific requirements for the repair of land following drilling and following the useful life of the well. The bill includes a “severance” tax on the oil and gas extraction. The tax will be assessed on the oil that is collected from wells at 3% on the total value of oil in the first two years of the life of the well. In subsequent years the tax will be between 3% and 6% based on a sliding scale related to the production of the well. If a well produces less than 15 barrels of oil a month, a tax will not be applied. A tax credit was also created that reduces the amount of the severance tax paid by working interest owners by .25% for wells where more than half of employees are Illinois workers paid at least the prevailing wage. This solution was supported by both the oil and gas industry and the unions as an appropriate way to encourage the hiring of Illinois workers for the jobs associated with hydraulic fracturing.
SB 1715 passed the House with a vote of 108 yes votes and 9 no votes and the Senate with a vote of 52 yes, 3 no, and 4 present votes.