SB 3113 — CREDIT UNIONS-VARIOUS

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;

SB3113 Enrolled - 6 - LRB104 19645 BAB 33094 b (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.

SB3113 Enrolled - 7 - LRB104 19645 BAB 33094 b "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 SB3113 Enrolled - 8 - LRB104 19645 BAB 33094 b 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;

and (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.

SB3113 Enrolled - 9 - LRB104 19645 BAB 33094 b "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.

101-567,102-1017, eff.

8-23-19.)1-1-23.) (205(225 ILCS 305/20)725/6) (from Ch.

17,96 1/2, par.

4421)5409) Sec.

20.6.

ElectionThe orDepartment appointmentshall 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 officials.this Act, including the adoption of rules and the holding of hearings for the following purposes:

(1) TheTo creditrequire unionthe shalldrilling, becasing directedand byplugging a board of directorswells consistingto ofbe nodone lessin thansuch 7a inmanner number,as to beprevent elected at the annualmigration meetingof byoil andor gas from theone members.stratum to another;

Directorsto shallprevent hold office until the nextintrusion annualof meeting,water unlessinto theiroil, termsgas areor staggered.coal strata;

Uponto amendmentprevent ofthe itspollution bylaws,of afresh creditwater unionsupplies mayby divideoil, thegas directors into 2 or 3salt classeswater. with each class as nearly equal in number as possible.

The(2) termTo ofrequire officethe ofperson thedesiring directorsor ofproposing theto firstdrill, classdeepen shallor expireconvert atany well for the firstexploration annualor meetingproduction afterof theiroil election,or thatgas, offor theinjection secondor classwater shallsupply expirein atconnection with enhanced recovery projects, for the seconddisposal annualof meetingsalt afterwater, theirbrine, election,or andother oil or gas field SB3113 EngrossedEnrolled - 610 - LRB104 19645 BAB 33094 b thatwastes, or for input, withdrawal, or observation in connection with the storage of natural gas or other liquid or gaseous hydrocarbons before commencing the thirddrilling, class,deepening ifor any,conversion shallof expireany atsuch well, to make application to the thirdDepartment annualupon meetingsuch afterform theiras election.the Department may prescribe and to comply with the provisions of this Section.

AtThe eachdrilling, annualdeepening meetingor afterconversion the classification, the number of directorsany equalwell tois thehereby numberprohibited ofuntil directorssuch whoseapplication termsis expiremade atand the timeapplicant ofis theissued meetinga shallpermit betherefor electedas toprovided holdby officethis untilAct. the second succeeding annual meeting if there are 2 classes or until the third succeeding annual meeting if there are 3 classes.

AEach directorapplication shall hold office for thea termwell forpermit whichshall heinclude orthe shefollowing: is elected and until his or her successor is elected and qualified.

(1.5)(A) ExceptThe asexact providedlocation inof subsectionthe (1.10),well, in(B) allthe electionsname forand directors,address everyof member has the rightmanager, tooperator, vote,contractor, indriller, person, by proxy, or byany electronicother recordperson ifresponsible approvedfor by the boardconduct of directors,drilling theoperations, number(C) of shares owned by him, or in the caseproposed depth of a member other than a natural person, the member'swell, one(D) vote,lease forownership asinformation, manyand persons(E) as there are directors to be elected, or to cumulate such shares,other andrelevant giveinformation one candidate as many votes as the numberDepartment ofmay directorsdeem multipliednecessary by the number of his shares equals, or convenient to distributeeffectuate them on the samepurposes principleof amongthis asAct. many candidates as he may desire and the directors shall not be elected in any other manner.

Shares(2.5) heldAdditionally, infor aeach jointapplicant accountwho ownedhas bynot morebeen thanissued onea memberpermit maythat beis voted(i) bynot anyof onerecord ofwith the members,Department however,on the numbereffective date of cumulativethis votesamendatory castAct mayof notthe exceed104th General Assembly, or (ii) a totalpermittee equalon record with the Department but who has failed to make payments of the numberassessments as required under Section 19.7 of sharesthis multipliedAct byat any time in the numberpreceding 5 years of directorsthe application, the permittee or applicant shall execute, as principal, SB3113 Enrolled - 11 - LRB104 19645 BAB 33094 b and file with the Department a bond, executed by a surety authorized to betransact elected.business in this State, in an amount estimated to cover the cost of plugging the well and restoring the well site and shall set at the following rates:

A(A) majority$10,000 of the shares entitled to vote shall be SB3113 Engrossed - 7 - LRB104 19645 BAB 33094 b represented either in person or by proxy for theone electionwell; of directors.

Each(B) director$25,000 shall wholly take and subscribe to an oath that he will diligently and honestly perform his duties in administeringtotal thecovering affairsa ofblanket thebond credit union, that while he may delegate to another the performance of those administrative duties he is not thereby relieved from his responsibility for theirup performance, that he will not knowingly violate or permit to be10 violatedwells; any law applicable to the credit union, and that he is the owner of at least one share of the credit union.

(1.10)(C) Upon$50,000 amendment of a credit union's bylaws, in alltotal electionscovering for directors, every member who is a naturalblanket personbond shall have the right to cast one vote, regardless of the number of his or her shares, in person, by proxy, or by electronic record if approved by the board of directors, for asup many persons as there are directors to be50 elected.wells;

(1.15) If the board of directors has adopted a policy addressing age eligibility standards on voting, holding office, or petitioning(D) the$100,000 board, then a credit union may require (i) that members be at least 18 years of age by the date of the meeting in ordertotal tocovering votea atblanket meetingsbond offor theup members, sign nominating petitions, or sign petitions requesting special meetings, and (ii) that members be at least 18 years of age by the date of election or appointment in order to hold100 electivewells. or appointive office.

(2)A Theblanket boardbond ofcovering directorsmore shallthan appoint100 fromwells amongshall thebe SB3113increased Engrossedto -include 8the -bond LRB104amount, 19645as BABprovided 33094in bthis membersparagraph of(2.5), for the credittotal union,number a supervisory committee of notwells lessmore than 3100 membersthat atare thecovered organizationby meeting and within 30 days following each annual meeting of the membersblanket forbond. such terms as the bylaws provide.

MembersSuch ofbond shall be submitted to the supervisoryDepartment committeebefore may,drilling, butdeepening, needconverting, notor be,operating onany thewell boardfor ofwhich directors,a butnew shallor transfer permit is required and that has not bepreviously officersbeen ofplugged theand creditabandoned union.in accordance with the Act.

(3) The boardDepartment ofshall directorsrelease may appoint, from among the membersbond ofif theany credit union, a credit committee consisting of an odd number, not less than 3 for such terms as the bylawsfollowing provide.are met:

Members(i) ofall wells covered by the creditbond committeeare may,plugged butand needall notwell be,sites directorsare orrestored officersin ofaccordance thewith creditthis union.Act and administrative rules;

(4)(ii) Theall boardwells ofcovered directorsby maythe appointbond fromare amongtransferred theSB3113 membersEnrolled of- the12 credit- unionLRB104 a19645 membershipBAB committee33094 ofb onein oraccordance morewith persons.this Act and administrative rules;

Ifor appointed,(iii) the committeepermittee shallpays actassessments uponto allthe applicationsDepartment in accordance with Section 19.7 of this Act for membership5 andconsecutive submityears afrom reportthe date of itsissuance actionsof toa permit after the boardeffective date of directorsthis atamendatory Act of the next104th regularGeneral meetingAssembly forand review.the permittee is not in violation of this Act or any administrative rules.

IfIn nolieu membershipof committeea issurety appointed,bond, creditthe unionapplicant managementmay shallprovide actcertificates uponof alldeposit applicationsor forirrevocable membershipletters and submit a report of itscredit actionsunder tosuch theterms boardand ofconditions directorsas at the nextDepartment regularmay meetingprovide forby review.rule.

(5) The boardsureties ofon directorsall maybonds appoint,in fromeffect amongon thethis membersamendatory Act of the credit104th union,General aAssembly nominatingshall committeeremain ofliable 3as orsureties morein persons.accordance with their undertakings until released by the Department from further liability under the Act.

MembersThe ofprincipal on each bond in effect on the nominatingeffective committeedate may,of butthis needamendatory not,Act of the 104th General Assembly shall be directorsreleased orfrom officersthe obligation of maintaining the creditbond union,if butthe maywell notcovered beby membersa surety bond has been plugged and the well site restored in accordance with the Department's rules or the principal of the supervisorysurety committee.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.

TheNo appointment,permit if made, shall be madeissued into a timelycorporation manner to permit the SB3113 EngrossedEnrolled - 913 - LRB104 19645 BAB 33094 b nominatingincorporated committeeoutside to recruit, evaluate, and nominate eligible candidates for each position to be filled in the election of directorsIllinois or,until in the eventcorporation ofhas abeen vacancyauthorized in office, to bedo filledbusiness byin appointmentIllinois. of the board of directors for the remainder of the unexpired term of the director creating the vacancy.

FactorsNo thepermit nominatingshall committeebe mayissued considerto inan evaluatingindividual, prospectivepartnership, candidatesor includeother whetherunincorporated aentity candidatethat possessesis ornot isa willingresident toof acquireIllinois throughuntil trainingthat theindividual, requisitepartnership, skillsor andother qualificationsunincorporated toentity carryhas outirrevocably theconsented statutoryto dutiesbe ofsued ain director.Illinois.

The(3) boardTo ofrequire directorsthe mayperson delegateassigning, totransferring, theor nominatingselling committeeany thewell recruitment,for evaluation,which anda nominationpermit ofis eligiblerequired candidatesunder this Act to servenotify onthe committeesDepartment andof inthe executivechange officerof positions.ownership.

(6) The boardnotification ofshall directorsbe mayon createa oneform orprescribed moreby otherthe committeesDepartment, inshall additionbe toexecuted by the committeescurrent identifiedpermittee inand thisby Sectionthe andnew appointpermittee, directors or suchtheir otherauthorized personsrepresentatives, asand shall be filed with the boardDepartment designateswithin to30 servedays onafter the committeeeffective date of the assignment, transfer or committees.sale.

AnyWithin suchthe committee30-day shall30 serveday atnotification theperiod pleasureand ofprior theto boardoperating ofthe directorswell, andthe itnew permittee shall notpay act on behalf of the creditrequired unionwell ortransfer bindfee itand, towhere anyapplicable, action,file butwith itthe mayDepartment makethe recommendationsbond torequired theunder boardsubsection (2.5) of directors.this Section.

(7)(a)(4) TheTo boardrequire ofthe directorsfiling maywith appointthe anState individualGeological asSurvey of all geophysical logs, a registeredwell agentdrilling forreport theand creditdrill union.cuttings or cores, if cores are required, within 90 days after drilling ceases;

Theand nameto offile a completion report with the registeredDepartment agentwithin appointed30 bydays after the boarddate of directorsfirst shallproduction befollowing identifiedinitial indrilling theor annualany reportSB3113 filedEnrolled by- the14 credit- unionLRB104 on19645 theBAB annual33094 reportb formreworking, suppliedor byafter the Department.plugging of the well, if a dry hole.

TheA SB3113copy Engrossedof -each 10completion -report LRB104submitted 19645to BAB 33094 b business office of the registeredDepartment agent may, but is not required to, shall be thedelivered sameto as the principalState placeGeological ofSurvey. business of the credit union.

AnyThe process,Department notice,and orthe demandState requiredGeological orSurvey permittedshall bykeep lawthe toreports beconfidential, servedif uponrequested in writing by the creditpermittee, unionfor may2 beyears servedafter uponthe date the registeredpermit agentis appointedissued by the creditDepartment. union.

(b)This Aconfidentiality creditrequirement union that has appointed a registered agent shall postnot onprohibit its website the nameuse of itsthe registeredreport agent,for theresearch addresspurposes, ofprovided itsthe principalState placeGeological ofSurvey business,does andnot thatpublish thespecific appointmentdata wasor authorizedidentify bythe actionwell ofto which the boardcompletion ofreport directors.pertains.

(c)(5) ATo creditprevent union"blowouts", that"caving" hasand appointed"seepage" ain registeredthe agentsame maysense changethat itsconditions registeredindicated agent at any time by postingsuch onterms itsare websitegenerally aunderstood statementin settingthe forthoil theand following:gas business.

(i)(6) theTo addressprevent offires. its principal place of business, (ii) the name of its existing registered agent, (iii) the name of its successor registered agent, and (iv) that the change was authorized by action of the board of directors.

(d)(7) ATo registeredascertain agentand mayidentify resignthe atownership anyof timeall byoil submittingand writtengas noticewells, thereofproducing toleases, therefineries, credittanks, unionplants, atstructures, itsand principalall placestorage ofand business.transportation equipment and facilities.

The(8) noticeTo shallregulate setthe forthuse theof following:any enhanced recovery method in oil pools and oil fields.

(i)(9) theTo nameregulate ofor theprohibit credit union for which the registereduse agent is acting, (ii) the address of thevacuum, principalincluding placecharging ofa businessvacuum ofpermit SB3113application Engrossedfee - 11 - LRB104 19645 BAB 33094 b the credit union, (iii) the name of theup registeredto agent,$300 (iv)per thatpermit. the registered agent is resigning, and (v) the effective date of the resignation, which shall not be less than 30 days after the date of filing of the notice.

(8)(10) TheTo useregulate ofthe electronicspacing recordsof forwells, memberthe votingissuance pursuantof topermits, thisand Section shall employ a security procedure that meets the attributionestablishment criteria set forth in Section 9 of thedrilling Uniformunits. Electronic Transactions Act.

(9)SB3113 AsEnrolled used- in15 this- Section,LRB104 "electronic",19645 "electronicBAB record",33094 andb "security(11) procedure"To haveregulate thedirectional meaningsdrilling ascribedof tooil thoseor termsgas inwells. the Uniform Electronic Transactions Act.

(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 SB3113 Enrolled - 16 - LRB104 19645 BAB 33094 b 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 SB3113 Enrolled - 17 - LRB104 19645 BAB 33094 b 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.

102-38,104-150, eff.

6-25-21;1-1-26.) (225 ILCS 725/8a) (from Ch.

102-687,96 eff.1/2, par.

12-17-21;5413) Sec.

102-774,8a. eff.

5-13-22;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.

102-858,The eff.notice shall contain:

5-13-22;1.

103-154,the eff.nature of the violation;

6-30-23;2.

103-289,the eff.action needed to abate the violation, including any appropriate remedial measures to prevent future violation such as replacement, repair, testing and SB3113 Enrolled - 18 - LRB104 19645 BAB 33094 b reworking a well and any appurtenances and equipment;

7-28-23.)3. (205 ILCS 305/26) (from Ch.

17,the par.time within which the violation is to be abated;

4427)and Sec.4.

26.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.

ExecutiveUpon officers.receipt of a notice of violation, the Director shall conduct his investigation and may affirm, vacate or modify the notice of violation.

(1)In Atdetermining theirwhether firstto meeting,take actions in addition to remedial action necessary to abate a violation, the boardDirector shall consider the person's or permittee's history of directorsprevious shallviolations electincluding fromviolations amongat theirother ownlocations numberand executiveunder officersother consistingpermits, the seriousness of athe chairmanviolation including any irreparable harm to the environment or damage to property, the degree of culpability of the boardperson or permittee and onethe existence of any additional conditions or morefactors vicein chairmen,aggravation aor secretary,mitigation andincluding ainformation treasurer.provided by the person or permittee.

The directorsDirector shall appointserve athe chiefperson managementor officialpermittee whowith shallhis havedecision suchat title as the directorsconclusion shallof determine.the investigation.

TheModification directorsof and the chiefnotice managementof officialviolation may alsoinclude: appoint one or more vice SB3113 Engrossed - 12 - LRB104 19645 BAB 33094 b presidents and other officers.

The1. chief management official, and vice presidents, and other officers president may, but need not, be directors.

Anyany twodifferent or moreadditional officesremedial mayaction berequired heldto byabate the sameviolation person,and except the chairmantime ofwithin thewhich board may not also hold the officeviolation ofmust vicebe chairmanabated; or secretary.

(2)2. The executive officers shall serve for a term of one year, or until their successors are chosen and have been duly qualified.

(3)the Theassessment dutiesof civil penalties not to exceed SB3113 Enrolled - 19 - LRB104 19645 BAB 33094 b $5,000 for each and every falsification or misstatement of theinformation executiveand officerscivil shallpenalties benot prescribedto inexceed the$4,000 bylaws.per and $1,000 a day for each and every act of violation not including a falsification or misstatement of information;

Compensation3. of the executive officers shall be such as may be established by the directors from time to time.

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.

SB3113 Enrolled - 20 - LRB104 19645 BAB 33094 b 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.

SB3113 Enrolled - 21 - LRB104 19645 BAB 33094 b 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 SB3113 Enrolled - 22 - LRB104 19645 BAB 33094 b 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.

97-133,99-137, eff.

1-1-12.)1-1-16.) (205(225 ILCS 305/29)725/8e) (fromSec. Ch.

17,8e. par.

4430)Temporary Sec.abandonment status fees.

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

Meetings(b) All annual fees collected pursuant to subsection (a) shall be deposited into the Plugging and Restoration Fund, and one-half of directors.all such deposited fees shall be used solely for the Landowner Grant Program.

(1)deposited The board of directors and the executive committee shall meet as oftenfollows: as necessary, but one body must meet at least monthly and the other at least quarterly, as prescribed in the bylaws.

Unless(1) aone-half greaterof numberall issuch requiredfees byshall thebe bylaws,placed ain majority of the wholePlugging boardand ofRestoration directorsFund; shall constitute a quorum.

Theand act(2) ofone-half a majority of theall directorssuch presentfees at a meeting at which a quorum is present shall be theplaced actin of the boardLandowner ofGrant directorsProgram. unless the act of a greater number is required by this Act, the credit union's articles of incorporation or the bylaws.

SB3113 Engrossed - 13 - LRB104 19645 BAB 33094 b (1.5) Notwithstanding anything to the contrary in subsection (1), the board of directors of a credit union with a composite rating of either 1 or 2 under the Uniform Financial Institutions Rating System known as the CAMELS supervisory rating system (or an equivalent rating under a comparable rating system) and a management rating under such composite rating of either 1 or 2 may meet not less than 6 times annually, with at least one meeting held during each fiscal quarter.

This meeting frequency schedule shall be available to an eligible credit union irrespective of whether it has appointed an executive committee pursuant to Section 28.

(1.7) Notwithstanding subsection (1) or (1.5), the board of directors of a credit union with $50,000,000 or more in assets, a composite rating of either 1 or 2 under the Uniform Financial Institutions Rating System known as the CAMELS supervisory rating system (or an equivalent rating under a comparable rating system), and a management rating under the composite rating of either 1 or 2 may meet no fewer than 4 times annually, with at least one meeting held during each fiscal quarter.

The board of directors of a credit union with less than $50,000,000 in assets, but with the composite and management ratings referenced in this subsection, may meet no fewer than 4 times annually, with at least one meeting held during each fiscal quarter, upon prior written approval of the Secretary.

The meeting frequency schedule set forth in this subsection shall be available to an eligible credit union, SB3113 Engrossed - 14 - LRB104 19645 BAB 33094 b irrespective of whether it has appointed an executive committee pursuant to Section 28.

(2) Unless specifically prohibited by the articles of incorporation or bylaws, directors and committee members may participate in and act at any meeting of the board or committee through the use of a conference telephone or other communications equipment by means of which all persons participating in the meeting can communicate with each other.

Participation in the meeting shall constitute attendance and presence in person at the meeting of the person or persons so participating.

(3) Unless specifically prohibited by the articles of incorporation or bylaws, any action required by this Act to be taken at a meeting of the board of directors or a committee and any other action that may be taken at a meeting of the board of directors or a committee may be taken without a meeting if a consent in writing setting forth the action taken is signed by all the directors entitled to vote with respect to the subject matter thereof, or by all members of the committee, as the case may be.

The consent shall be evidenced by one or more written approvals, each of which sets forth the action taken and bears the signatures of one or more directors or committee members.

All the approvals evidencing the consent shall be delivered to the secretary to be filed in the corporate records of the credit union.

The action taken shall be effective when all the directors or committee members have approved the consent SB3113 Engrossed - 15 - LRB104 19645 BAB 33094 b unless the consent specifies a different effective date.

A consent signed by all the directors or all the members of a committee shall have the same effect as a unanimous vote, and may be stated as such in any document filed with the director under this Act.

(3.5)(a) The secretary, as an executive officer of the credit union elected by the board of directors pursuant to subsection (1) of Section 26, or a recording secretary duly appointed by the board of directors to act on behalf of the secretary, shall prepare and maintain minutes of all meetings of the members and the board of directors.

The secretary or recording secretary shall sign the minutes for the limited purpose of authenticating them as an accurate description of the information presented and action taken at the subject meeting.

The signature shall not constitute approval of the minutes.

(b) The chairman may, but is not required to, sign the minutes of any such meeting of the membership or board of directors.

In the event the chairman signs the minutes, that signature shall not constitute approval of the minutes.

(c) Pursuant to subsection (1) of Section 27, the board of directors is charged with and has control over the general management of the operations, funds, and records of the credit union, and the minutes, as compliance review documents of the credit union under paragraph (a) of subsection (4) of this Section 29, shall only be deemed final and binding upon the SB3113 Engrossed - 16 - LRB104 19645 BAB 33094 b approval by a majority vote of the directors present at a meeting at which a quorum is present, or by unanimous action without a meeting.

(d) Minutes of membership meetings require approval by a majority of the membership present at a meeting at which a quorum is present.

(4)(a) As used in this subsection:

"Affiliate" means an organization established to serve the needs of credit unions, the business of which relates to the daily operations of credit unions.

"Compliance review documents" means reports, meeting minutes, and other documents prepared in connection with a review or evaluation conducted by or for the board of directors.

(b) This subsection applies to the board of directors in relation to its functions to evaluate and seek to improve any of the following:

(i) loan policies or underwriting standards;

(ii) asset quality;

(iii) financial reporting to federal or State governmental or regulatory agencies;

or (iv) compliance with federal or State statutory or regulatory requirements, including, without limitation, the manner in which it performs its duties under Section 30.

(c) Meetings, minutes of meetings, and reports of the SB3113 Engrossed - 17 - LRB104 19645 BAB 33094 b board of directors shall be subject to the confidentiality and redaction standards set forth in this subsection.

(d) Except as provided in paragraph (e), compliance review documents and the deliberations of the board of directors are confidential.

An affiliate of a credit union, a credit union regulatory agency, and the insurer of credit union share accounts shall have access to compliance review documents;

however, (i) the documents remain confidential and (ii) delivery of compliance review documents to an affiliate or pursuant to the requirements of a credit union regulatory agency or an insurer of credit union share accounts do not constitute a waiver of the confidentiality granted in this Section.

(e) This Section does not apply to any civil or administrative action initiated by a credit union regulatory agency or an insurer of credit union share accounts.

(f) This Section shall not be construed to limit the discovery or admissibility in any civil action of any documents, including compliance review documents.

(g) Any report required under this Act to be furnished to the board of directors by the membership committee, credit committee, or any other committee may be submitted in a summary format that redacts personally identifiable information as defined under applicable State and federal law.

(h) Compliance review documents may be disclosed by the Secretary or a credit union to any person or entity to whom SB3113 Engrossed - 18 - LRB104 19645 BAB 33094 b confidential supervisory information may be disclosed pursuant to subsection (3) of Section 9.1.

103-289,102-1017, eff.

7-28-23;1-1-23.) (225 ILCS 725/14) (from Ch.

104-403,96 eff.1/2, par.

1-1-26.)5420) (205Sec. ILCS 305/30) (from Ch.

17,14. par.

4431)Each Sec.application for a permit to drill, deepen, convert, or amend shall be accompanied by the required fee of SB3113 Enrolled - 23 - LRB104 19645 BAB 33094 b $400.

30.The fee for an application for a permit to oil lease road shall be $150.

DutiesA fee of directors.$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.

(a)Except Itfor shallthe assessments required to be deposited in the dutyPlugging and Restoration Fund under Section 19.7 of this Act and any other deposits required to be deposited in the directorsPlugging to:and Restoration Fund under this Act, all fees assessed and collected under this Act shall be deposited in the Underground Resources Conservation Enforcement Fund.

(1)The Reviewmoneys actionsmonies ondeposited applicationsinto forthe membership.Plugging and Restoration Fund or the Underground Resources Conservation Enforcement Fund under this Section or deposited into the Plugging and Restoration Fund under Section 26 shall not be subject to administrative charges or chargebacks unless otherwise authorized by this Act.

AOn recordand ofafter theJuly membership1, committee's2022, approvalany orfees denialthat ofare membershipcreated by or management'sincreased approvalby orthis denialamendatory Act of membershipthe if102nd noGeneral membershipAssembly committeein hasthis beenSection appointed shall be availabledeposited tointo the boardPlugging ofand directorsRestoration forFund. inspection.

A person denied membership by the membership committee or credit union management may appeal the denial to the board;

(2) Provide adequate fidelity bond coverage for officers, employees, directors and committee members, and for losses caused by persons outside of the credit union, subject to rules and regulations promulgated by the Secretary;

(3) Determine from time to time the interest rates, not in excess of that allowed under this Act, which shall be charged on loans to members and to authorize interest refunds, if any, to members from income earned and received in proportion to the interest paid by them on such classes of loans and under such conditions as the SB3113 Engrossed - 19 - LRB104 19645 BAB 33094 b board prescribes.

The directors may establish different interest rates to be charged on different classes of loans;

(4) Within any limitations set forth in the credit union's bylaws, fix the maximum amount which may be loaned with and without security to a member;

(5) Declare dividends on various classes of shares in the manner and form as provided in the bylaws;

(6) Limit the number of shares which may be owned by a member;

such limitations to apply alike to all members;

(7) Have charge of the investment of funds, except that the board of directors may designate an investment committee or any qualified individual or entity to have charge of making investments under policies established by the board of directors;

(8) Authorize the employment of or contracting with such persons or organizations as may be necessary to carry on the operations of the credit union, provided that prior approval is received from the Department before delegating substantially all managerial duties and responsibilities to a credit union organization, and fix the compensation, if any, of the officers and provide for compensation for other employees within policies established by the board of directors;

(9) Authorize the conveyance of property;

(10) Borrow or lend money consistent with the SB3113 Engrossed - 20 - LRB104 19645 BAB 33094 b provisions of this Act;

(11) Designate a depository or depositories for the funds of the credit union and supervise the investment of funds;

(12) Suspend or remove, or both, any or all officers or any or all members of the membership, credit, or other committees whenever, in the judgment of the board of directors, the best interests of the credit union will be served thereby;

provided that members of the supervisory committee may not be suspended or removed except for failure to perform their duties;

and provided that removal of any officer shall be without prejudice to the contract rights, if any, of the person so removed;

(13) Appoint any special committees deemed necessary;

and (14) Perform such other duties as the members may direct, and perform or authorize any action not inconsistent with this Act and not specifically reserved by the bylaws to the members.

(b) The board of directors may delegate to the chief management official, according to guidelines established by the board that may include the authority to further delegate one or more duties, all of the following duties:

(1) determining the interest rates on loans;

(2) determining the dividend rates on share accounts;

and SB3113 Engrossed - 21 - LRB104 19645 BAB 33094 b (3) hiring employees other than the chief management official, including, without limitation, vice presidents and other officers, and fixing their title, grade, and compensation.

(c) Each director shall have a working familiarity with basic finance and accounting practices consistent with the size and complexity of the credit union operation they serve, including the ability to read and understand the credit union's balance sheet and income and expense statements and the ability to ask, when appropriate, substantive questions of management and auditors.

For the purposes of this subsection (c), substantive questions include queries concerning financial services and products offered to the membership;

how those activities generate revenue for the credit union;

the credit, liquidity, interest rate, compliance, strategic, transaction, and reputation risks associated with those activities;

and the internal control structures maintained by the credit union that limit and manage those risks.

A director who was elected or appointed on or after January 1, 2015 and who comes to the position without the requisite financial skills shall have until 6 months after the date of election or appointment to acquire the enumerated skills.

An incumbent director who was elected or appointed before January 1, 2015 and does not possess the requisite financial skills shall have until July 1, 2015 to acquire the enumerated SB3113 Engrossed - 22 - LRB104 19645 BAB 33094 b skills.

An incumbent director or a director who is elected or appointed on or after January 1, 2015 who already understands his or her credit union's financial statements shall not be required to do anything further to satisfy the financial skills requirement set forth in subsection (c).

It is the intent of the Department that all credit union directors possess a basic understanding of their credit union's financial condition.

It is not the intent of the Department to subject credit union directors to examiner scrutiny of their financial skills.

Rather, the Department shall evaluate whether the credit union has in place a policy to make available to their directors appropriate training to enhance their financial knowledge of the credit union.

Directors may receive the training through internal credit union training, external training offered by the credit union's retained auditors, trade associations, vendors, regulatory agencies, or any other sources or on-the-job experience, or a combination of those activities.

The training may be received through any medium, including, but not limited to, conferences, workshops, audit closing meetings, seminars, teleconferences, webinars, and other internet based delivery channels.

97-133,102-1017, eff.

1-1-12;1-1-23.) (225 ILCS 725/26) (from Ch.

98-784,96 eff.1/2, par.

7-24-14.)5456) (205 ILCS 305/57.3 new) SB3113 Engrossed - 23 - LRB104 19645 BAB 33094 b Sec.

57.3.26.

Digital(a) assetAny services.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 SB3113 Enrolled - 24 - LRB104 19645 BAB 33094 b exceed:

(a)(1) For$1,000 purposesa ofday thisfor Section,each the terms "covered person", "digital asset", "digital asset business activity", and "serviceevery provider"act haveof theviolation meaningslasting given90 todays thoseor termsless. in the Digital Assets and Consumer Protection Act.

(b)(2) A$2,000 credit union may establish relationships with covered persons and service providers in connection with the offering or provision by those covered persons or service providers of a digitalday assetfor businessany activityviolation tolasting enablemore thethan members90 ofdays thebut creditless unionthan to180 hold,days. buy, and sell digital assets.

The(3) credit$4,000 uniona shallday havefor theany authorityviolation tolasting perform180 administrativedays functionsor relatedmore. to digital asset business activity to facilitate digital asset transactions between its members and covered persons and service providers.

(c)Any Acivil creditpenalties unionthat mustare exerciseassessed appropriate due diligence in selectingexcess aof covered$1,000 personper orday serviceshall providerbe withdeposited whominto to do business, and the writtenPlugging agreement between the credit union and coveredRestoration personFund. or service provider must address:

(1)Civil thepenalties featuresmay ofnot thebe digitalassessed assetuntil program;notice has been sent to the permittee.

(2)Such thenotice responsibilitiesmay andbe dutiessent ofelectronically at the coveredtime personthe ornotice serviceof providerviolation andis creditsent unionto underthe Springfield office of the program;Department.

(3)A permittee may notify the confidentiality,Department security,if disclosure,an andextraordinary processingcircumstance prevents abatement of credita unionviolation memberfor information;which civil penalties are sought to be assessed against the permittee.

(4)If the applicablepermittee reportingnotifies andthe terminationDepartment, provisions;the permittee shall then provide evidence of the extraordinary circumstance to the Department, as set forth by rule.

andThe SB3113assessment Engrossedof -a 24civil -penalty LRB104shall 19645not BABbegin 33094until bthe (5)extraordinary compliancecircumstance withterminates, theas requirementsset offorth allby applicablerule. laws.

(d)The Whenprocess marketingto ordeclare advertisingan digitalextraordinary assets,circumstance, digitalthe assetDepartment's businessreview activitiesand conductedapproval byof coveredthe personsextraordinary orcircumstance, service providers, and relatedany administrativeappeal functions to the members of the creditDepartment's union,determination the members shall be informedset thatby therule. digital assets:

(1)An areextraordinary circumstance shall include, but not federallybe insuredlimited SB3113 Enrolled - 25 - LRB104 19645 BAB 33094 b to, roads being posted with a weight limit that prevents the movement of equipment, wet field conditions that prevent mitigation activities, or insuredflooding bythat anyprevents otherthe insurermovement approvedof byequipment for the Secretary;abatement.

(2)(b) Any person willfully 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 notprescribed guaranteedherein byfor the creditviolation union;by such other person.

(3) are or may be speculative and volatile;

(4) may have associated fees;

(5) may not allow member recourse;

and (6) are or are not being offered by a third party.

(205 ILCS 305/59) (from Ch.

17, par.

4460) Sec.

59.

Investment of funds.

(a) Funds not used in loans to members may be invested, pursuant to subsection (7) of Section 30 of this Act, and subject to Departmental rules and regulations:

(1) In securities, obligations or other instruments of or issued by or fully guaranteed as to principal and interest by the United States of America or any agency thereof or in any trust or trusts established for investing directly or collectively in the same;

(2) In obligations of any state of the United States, SB3113 Engrossed - 25 - LRB104 19645 BAB 33094 b the District of Columbia, the Commonwealth of Puerto Rico, and the several territories organized by Congress, or any political subdivision thereof;

however, a credit union may not invest more than 10% of its unimpaired capital and surplus in the obligations of one issuer, exclusive of general obligations of the issuer, and investments in municipal securities must be limited to securities rated in one of the 4 highest rating investment grades by a nationally recognized statistical rating organization;

(3) In certificates of deposit or passbook type accounts issued by a state or national bank, mutual savings bank or savings and loan association;

provided that such institutions have their accounts insured by the Federal Deposit Insurance Corporation or the Federal Savings and Loan Insurance Corporation;

but provided, further, that a credit union's investment in an account in any one institution may exceed the insured limit on accounts;

(4) In shares, classes of shares or share certificates of other credit unions, including, but not limited to, corporate credit unions;

provided that such credit unions have their members' accounts insured by the NCUA or other approved insurers, and that if the members' accounts are so insured, a credit union's investment may exceed the insured limit on accounts;

(5) In shares of a cooperative society organized under SB3113 Engrossed - 26 - LRB104 19645 BAB 33094 b the laws of this State or the laws of the United States in the total amount not exceeding 10% of the unimpaired capital and surplus of the credit union;

provided that such investment shall first be approved by the Department;

(6) In obligations of the State of Israel, or obligations fully guaranteed by the State of Israel as to payment of principal and interest;

(7) In shares, stocks or obligations of other financial institutions in the total amount not exceeding 5% of the unimpaired capital and surplus of the credit union;

(8) In federal funds and bankers' acceptances;

(9) In shares or stocks of Credit Union Service Organizations in the total amount not exceeding the greater of 6% of the unimpaired capital and surplus of the credit union or the amount authorized for federal credit unions;

(10) In corporate bonds identified as investment grade by at least one nationally recognized statistical rating organization, provided that:

(i) the board of directors has established a written policy that addresses corporate bond investment procedures and how the credit union will manage credit risk, interest rate risk, liquidity risk, and concentration risk;

and (ii) the credit union has documented in its SB3113 Engrossed - 27 - LRB104 19645 BAB 33094 b records that a credit analysis of a particular investment and the issuing entity was conducted by the credit union, a third party on behalf of the credit union qualified by education or experience to assess the risk characteristics of corporate bonds, or a nationally recognized statistical rating agency before purchasing the investment and the analysis is updated at least annually for as long as it holds the investment;

(11) To aid in the credit union's management of its assets, liabilities, and liquidity in the purchase of an investment interest in a pool of loans, in whole or in part and without regard to the membership of the borrowers, from other depository institutions and financial type institutions, including mortgage banks, finance companies, insurance companies, and other loan sellers, subject to such safety and soundness standards, limitations, and qualifications as the Department may establish by rule or guidance from time to time;

(12) To aid in the credit union's management of its assets, liabilities, and liquidity by receiving funds from another financial institution as evidenced by certificates of deposit, share certificates, or other classes of shares issued by the credit union to the financial institution;

(13) In the purchase and assumption of assets held by other financial institutions, with approval of the SB3113 Engrossed - 28 - LRB104 19645 BAB 33094 b Secretary and subject to any safety and soundness standards, limitations, and qualifications as the Department may establish by rule or guidance from time to time;

(14) In the shares, stocks, or obligations of community development financial institutions as defined in regulations issued by the U.S.

Department of the Treasury and minority depository institutions as defined by the National Credit Union Administration;

however the aggregate amount of all such investments shall not at any time exceed 5% of the paid-in and unimpaired capital and surplus of the credit union;

(15)(A) In shares, stocks, or member units of financial technology companies in the total amount not exceeding 2.5% of the net worth of the credit union, so long as:

(i) the credit union would remain well capitalized as defined by 12 CFR 702.102 if the credit union reduced its net worth by the full investment amount at the time the investment is made or at any point during the time the investment is held by the credit union;

(ii) the credit union and the financial technology company are operated in a manner that demonstrates to the public the separate corporate existence of the credit union and financial technology company;

and (iii) the credit union has received a composite SB3113 Engrossed - 29 - LRB104 19645 BAB 33094 b rating of 1 or 2 under the CAMELS supervisory rating system.

(B) The investment limit in subparagraph (A) of this paragraph (15) is increased to 5% of the net worth of the credit union if it has received a management rating of 1 under the CAMELS supervisory rating system at the time a specific investment is made and at all times during the term of the investment.

A credit union that satisfies the criteria in subparagraph (A) of this paragraph (15) and this subparagraph may request approval from the Secretary for an exception to the 5% limit up to a limit of 10% of the net worth of the credit union, subject to such safety and soundness standards, limitations, and qualifications as the Department may establish by rule or guidance from time to time.

The request shall be in writing and substantiate the need for the higher limit, describe the credit union's record of investment activity, and include financial statements reflecting a sound fiscal history.

(C) Before investing in a financial technology company, the credit union shall obtain a written legal opinion as to whether the financial technology company is established in a manner that will limit potential exposure of the credit union to no more than the loss of funds invested in the financial technology company and the legal opinion shall:

(i) address factors that have led courts to SB3113 Engrossed - 30 - LRB104 19645 BAB 33094 b "pierce the corporate veil", such as inadequate capitalization, lack of separate corporate identity, common boards of directors and employees, control of one entity over another, and lack of separate books and records;

and (ii) be provided by independent legal counsel of the credit union.

(D) Before investing in the financial technology company, the credit union shall enter into a written investment agreement with the financial technology company and the agreement shall contain the following clauses:

(i) the financial technology company will:

(I) provide the Department with access to the books and records of the financial technology company relating to the investment made by the credit union, with the costs of examining those records borne by the credit union in accordance with the per diem rate established by the Department by rule;

(II) follow generally accepted accounting principles;

and (III) provide the credit union with its financial statements on at least a quarterly basis and certified public accountant audited financial statements on an annual basis;

and (ii) the financial technology company and credit union agree to terminate their contractual relationship:

(I) upon 90 days' written notice to the parties by the Secretary that the safety and soundness SB3113 Engrossed - 31 - LRB104 19645 BAB 33094 b of the credit union is threatened pursuant to the Department's cease and desist and suspension authority in Sections 8 and 61;

(II) upon 30 days' written notice to the parties if the credit union's net worth ratio falls below the level that classifies it as well capitalized as defined by 12 CFR 702.102;

and (III) immediately upon the parties' receipt of written notice from the Secretary when the Secretary reasonably concludes, based upon specific facts set forth in the notice to the parties, that the credit union will suffer immediate, substantial, and irreparable injury or loss if it remains a party to the investment agreement.

(E) The termination of the investment agreement between the financial technology company and credit union shall in no way operate to relieve the financial technology company from repaying the investment or other obligation due and owing the credit union at the time of termination.

(F) Any financial technology company in which a credit union invests pursuant to this paragraph (15) that directly or indirectly originates, purchases, facilitates, brokers, or services loans to consumers in Illinois shall not charge an interest rate that exceeds the applicable maximum rate established by the Board of the National Credit Union Administration pursuant to 12 CFR SB3113 Engrossed - 32 - LRB104 19645 BAB 33094 b 701.21(c)(7)(iii)-(iv).

The maximum interest rate described in this subparagraph that may be charged by a financial technology company applies to all consumer loans and consumer credit products;

and (16) In derivatives transactions, to aid in the credit union's management of interest rate risk.

Before entering into a derivatives transaction, and at all times during its management of a derivatives transactions program, a credit union shall satisfy and comply with all the requirements set forth in 12 CFR 703.101 et seq.

All definitional terms and operational standards shall have the meanings given to them in 12 CFR 703.101 et seq., except references to federal credit unions shall be construed to mean Illinois-chartered credit unions, and references to the National Credit Union Administration and Regional Director shall be respectfully construed to mean the Department and the Secretary.

A credit union with assets of at least $500 million and a CAMELS management component rating of 1 or 2 need not obtain prior approval from the Department before engaging in derivative transactions but shall notify the Secretary in writing or by electronic mail within 5 business days after entering into its first derivatives transaction;

and .

(17) In commercial mortgage related securities and collateralized mortgage obligations to aid in the credit union's management of its assets, liabilities, and SB3113 Engrossed - 33 - LRB104 19645 BAB 33094 b liquidity.

Before entering into a transaction to purchase a commercial mortgage related security or investing in a collateralized mortgage obligation and at all times during its management of the purchase or investment, a credit union shall satisfy and comply with the requirements set forth in 12 CFR 703.6 and 703.14 and applicable rules adopted by the Secretary.

For the purposes of this paragraph, all definitional terms and operational standards shall have the meanings given to them in 12 CFR 703.6 and 703.14, except references to federal credit unions shall be construed to mean Illinois-chartered credit unions.

(b) As used in this Section:

"Political subdivision" includes, but is not limited to, counties, townships, cities, villages, incorporated towns, school districts, educational service regions, special road districts, public water supply districts, fire protection districts, drainage districts, levee districts, sewer districts, housing authorities, park districts, and any agency, corporation, or instrumentality of a state or its political subdivisions, whether now or hereafter created and whether herein specifically mentioned or not.

"Financial institution" includes any bank, savings bank, savings and loan association, or credit union established under the laws of the United States, this State, or any other state.

SB3113 Engrossed - 34 - LRB104 19645 BAB 33094 b "Financial technology company" includes any corporation, partnership, limited liability company, or other entity organized under the laws of Illinois, another state, or the United States of America:

(1) that the principal business of which is the provision of financial products or financial services, or both, that:

(i) currently relate or may prospectively relate to the daily operations of credit unions;

(ii) are of current or prospective benefit to the members of credit unions;

or (iii) are of current or prospective benefit to consumers eligible for membership in credit unions;

and (2) that applies technological interventions, including, without limitation, specialized software or algorithm processes, products, or solutions, to improve and automate the delivery and use of those financial products or financial services.

(c) A credit union investing to fund an employee benefit plan obligation is not subject to the investment limitations of this Act and this Section and may purchase an investment that would otherwise be impermissible if the investment is directly related to the credit union's obligation under the employee benefit plan and the credit union holds the investment only for so long as it has an actual or potential SB3113 Engrossed - 35 - LRB104 19645 BAB 33094 b obligation under the employee benefit plan.

(d) If a credit union acquires loans from another financial institution or financial-type institution pursuant to this Section, the credit union shall be authorized to provide loan servicing and collection services in connection with those loans.

102-496,85-1334.) eff.

8-20-21;

102-774, eff.

5-13-22;

102-858, eff.

5-13-22;

103-154, eff.

6-30-23;

103-1034, eff.

8-9-24.) Section 99.

Effective date.

This Act takes effect upon becoming law.