SBA Disaster Loan Program

This information is correct as of 3/23/2020

Anyone interested in applying for this program will apply directly with the SBA. This loan program is NOT being funneled through Banks like the typical SBA 7A or SBA 504 loan programs are.

Click here for the SBA Disaster Loan Program.

Click here to download the presentation from SBA representatives that explains the program and provides some guidance on how to apply. Click here for a quick 3-step overview of the process.

Below is a list of required documents that SBA will ask to be provided with your application for the Disaster Loan Program.

Required Documentation

The following documents are required to process an SBA Disaster Loan Application and reach a loan decision. Your SBA Loan Officer and Case Manager will assist you to ensure that you submit the proper documentation. Approval decision and disbursement of loan funds is dependent on receipt of your documentation.

Businesses

  1. Business Loan Application (SBA Form 5) completed and signed by business applicant.
  2. IRS Form 4506-T completed and signed by Applicant business, each principal owning 20% or more of the applicant business, each general partner or managing member and, for any owner who has more than a 50% ownership in an affiliate business. (Affiliates include business parent, subsidiaries, and/or businesses with common ownership or management).
  3. Complete copies, including all schedules, of the most recent Federal income tax returns for the applicant business; an explanation if not available.
  4. Personal Financial Statement (SBA Form 413) completed, signed and dated by the applicant (if a sole proprietorship), each principal owning 20% or more of the applicant business, each general partner or managing member.
  5. Schedule of Liabilities listing all fixed debts (SBA Form 2202 may be used).
  6. Complete copies, including all schedules, of the most recent Federal income tax returns for each principal owning 20% or more of the applicant business, each general partner or managing member, and each affiliate when any owner has more than a 50% ownership in the affiliate business. Affiliates include, but are not limited to, business parents, subsidiaries, and/or other businesses with common ownership or management.
  7. If the most recent Federal income tax return has not been filed, a year-end profit and loss statement and balance sheet for that tax year is acceptable.
  8. A current year-to-date profit and loss statement (typically within 90 days)
  9. Additional Filing Requirements (SBA Form 1368) providing monthly sales figures.

Illinois Unemployment Resources

This information is correct as of 3/23/2020

COVID-19 and Unemployment Benefits

Unemployment benefits may be available to some individuals whose unemployment is attributable to COVID-19. IDES recently adopted emergency rules to try to make the unemployment insurance system as responsive to the current situation as possible.

What is Unemployment Insurance (UI)?

In general, UI provides temporary income maintenance to individuals who have been separated from employment through no fault of their own and who meet all eligibility requirements, including the requirements that they be able and available for work, register with the state employment service and actively seek work. Click here for more information.

For Employers:

If an employee receives unemployment benefits as a result of COVID-19, will the employer’s unemployment contribution rate increase?

At this time, no further guidance has been issued. Until such time, normal procedures will be followed. In general, the contribution rate of an experience rated employer is based, in part, on the amount of unemployment benefits paid to the employer’s former employees.

Potential Closure or Layoff

Rapid Response Services are available to employers who are planning or have gone through a permanent closure or mass layoff at a plant, facility, or enterprise, or a natural or other disaster, that results in mass job dislocation. The State Dislocated Worker Unit coordinates with employers to provide on-site information to workers and employers about employment and retraining services designed to help participants retain employment when feasible, or obtain re-employment as soon as possible. For more information, visit Rapid Response Services for Businesses or contact your local Illinois workNet Center.

Click here to learn more about unemployment benefits during this time.

Illinois Tax News – Providing Emergency Assistance Programs

This information is correct as of 3/25/2020

The Illinois Department of Commerce and Economic Opportunity is working to provide emergency assistance programs for Illinois small businesses. Click here for the current status of the plan initiatives.

IL 2019 Taxes:

The Illinois due date for individuals, trusts, and corporations to file and pay taxes has been extended to match the federal due date of July 15, 2020. This relief is automatic, an extension does not need to be filed. See the attached bulletin for details.

Illinois has not extended first quarter estimated taxes for 2020 for calendar year taxpayers, that due date remains 4/15/2020. The second quarter calendar year estimate is due 6/15/2020.

 

Exercise Care In Shutting Down Leases

With the drop in the price of oil, operators may feel compelled to completely shut down operations as to a particular lease. This could prove to be a risky proposition. An IlJinois Appellate Court decision in 2003 stated as follows with respect to the cessation of operations and the status of the lease:

“One of the reasons offered for the defendants’ failure to run the pumps and produce oil was the depressed price of oil. Though a depressed market may have rendered it unprofitable to operate the lease, it did not prevent the operation of the wells. We have reviewed the lease and have found no provision excusing production and marketing in the event that the oil market becomes depressed. The depressed price of oil was not contracted against. Consequently, it cannot be used to justify nonproduction, and it does not prevent a lapse of the lease where production has been shut down.”

The terms of the operative lease should be carefully reviewed to determine any language that addresses cessation of operations and production. Many of the lease forms provide that if the operations are not resumed within a certain number of days, the lease could terminate.

The fact that the wells on a lease are the subject of temporary abandonment status will not excuse the absence of operations and production for purposes of perpetuating the lease.

Before completely ceasing operations as to a lease, the lease provisions should be carefully reviewed. Do not place yourself in a position where it could be argued that the lease has terminated.

Consult with your attorney as to this issue and be cognizant of the minimal operations and production required to perpetuate your lease.

IOGA Letter to Governor Pritzker – Essential Need for Oil & Gas

IOGA sent the following letter to Governor Pritzker concerning the essential need for oil and gas businesses during this unprecedented time. The product our members produce
is not only vital to our state’s infrastructure but will also help to move and produce the products necessary to keep Illinois’ citizens supplied with the essentials needed for their lives
at home.

This letter encourages the Governor to careful consider the oil and gas industry in any future directives during this time.

Read the letter here. 

COVID-19

Governor Pritzker ordered a stay at home mandate except for essential services until at least April 7.  According to the Governor’s Downstate Liaison, Oil and Gas operations are deemed Essential Services.

Illinois reported its first three deaths connected to the coronavirus this week.

Governor Pritzker unveiled a comprehensive website to share resources and state announcements.

The Illinois Department of Employment Security received over 41,000 unemployment benefit claims on Monday and Tuesday of this week. That same two-day period last year saw less than 4,500 claims.

The Secretary of State has closed all offices and motor vehicle facilities.

The state is applying for a statewide Economic Injury Declaration with the US Small Business Administration to receive disaster assistance low-interest loans for small businesses and non-profit organizations.

The Department of Labor is allowing employees to work seven days per calendar week during the outbreak. Employers must submit an application to the Department of Labor, but the application will be deemed approved once it is filed. Illinois currently requires 24 consecutive hours of rest in every calendar week.

The Governor said in a press conference this week that he is assuring Illinoisans that essential services will always remain open, including but not limited to grocery stores, pharmacies, and gas stations.

Illinois Legislature Canceled Session

The General Assembly canceled the session again for the week of March 23 due to the coronavirus crisis. Leadership noted that members should be prepared to return to Springfield to address “urgent matters.” The committee deadline for bills moving from a standing committee in the first chamber has been delayed to April 3, but these deadlines will be reviewed and extended when needed.  The General Assembly is scheduled to be in district for the spring holidays from April 4-21, but lawmakers were told to reevaluate travel plans made for those weeks.

We continue to hear that the hospital assessment for Medicaid funding is being negotiated and remains a top priority for passage in April to be submitted to federal HHS for approval by July 1. Speaker Madigan, however, believes the federal government will provide leniency on that deadline. We wait to see if the General Assembly will meet in the next couple of weeks to pass a bill.

The emergency issues and the budget make it seem unlikely that we will see any of the legislative battles we faced the last few years during this legislative session.

COVID-19 Executive Order

In response to the COVID-19 pandemic, Governor Pritzker has issued a shelter-in-place Executive Order effective at 5pm, Saturday, March 21st through April 7.

However, Representatives of the Governor’s office have indicated that the Oil and Gas industry is deemed an Essential Industry under Section 12.

You can see the entire Executive Order here.

Executive Vice President Job Opening

The IOGA is an Illinois not-for-profit corporation that represents over 400 members of the oil and gas industry as to issues that directly affect the development and production of oil and gas in Illinois. The Executive VP works for and at the direction of a Board of Directors but primarily through its Executive Committee, both of which are elected by the membership.

Link to the full job description here.

ESSENTIAL CORE QUALIFICATIONS:

  1. Knowledge of oil & gas industry or other petroleum-related industry such as midstream services, refining, or petroleum purchasing/marketing is preferred
  2. Strong communication & advocacy skills including
    a. Written & oral communications
    b. Interpersonal and large/small-group communications
    c. Ability to prepare and make presentations
    d. Communication utilizing social-media platforms
  3. Demonstrated executive and organizational management experience
  4. Proficiency with Microsoft Excel, Word, & PowerPoint
  5. Knowledge of basic financial management, including budget preparation and reporting of financial data
  6. Knowledge and experience with legislative, political, and governmental processes
  7. Availability to travel to regional and national industry meetings
  8. Ability to work remotely subject to the positions travel requirements

DUTIES AND EXPECTATIONS:
The Executive VP will work and strive to protect, preserve and advance the common interest of the IOGA membership. This will include but not be limited to the following:

  • Monitor and advocate Industry positions as to state/federal legislation and regulations.
  • Work collaboratively with state and federal agencies that regulate the Industry.
  • Promote industry safety through workshops and seminar.
  • Conduct association meetings with exhibitors and technical programs.
  • Respond to members’ inquiries and requests.
  • Manage finances including budget preparation and quarterly reports.
  • Monitor and facilitate liability/worker’ s compensation insurance program.
  • Engage in public and member outreach to promote the importance of the Industry.
  • Keep members advised of all relevant issues affecting the Industry and how to protect, implement and maximize their business practices in considering governmental requirements, global pricing issues and other forces that affect their ability to operate and conduct their businesses.
  • Maintain relationships with various associations and commissions including Independent Petroleum Association of America (IPAA); Oil & Gas Advisory Board; Domestic Energy Producers Alliance (DEPA); National Stripper Well Association (NSWA); Interstate Oil & Gas Compact Commission (IOGCC); Illinois Task Force on Hydraulic Fracturing; and Prairie Research Institute Advisory Board; and other state oil and gas associations including Indiana (INOGA) and Kentucky (KOGA); and,
    • Attend annual and other meetings of the foregoing organizations to demonstrate solidarity and support and to engage in information sharing as to Industry issues.
  • Prepare, edit, and publish a monthly news bulletin for members and the public.
  • Serve as the IOGA’ s lobbyist in all matters before local, state or federal regulatory or legislative entities.
  • Establish, implement, and manage sound organizational structure for IOGA’s office and its day to day operations.
  • Maintain a sound relationship with the Executive Committee and carry out all general responsibilities as may be delegated or directed by the Executive Committee.

For additional information, contact the IOGA President as follows:
Bryan T. Hood
Shakespeare Oil Company, Inc.
202 West Main St.
Salem, Illinois 62881
Telephone: 618-548-1585
Email: bryan@shakespeare-oil.com

 

NOTES:

Additional Salary Information: Compensation is to be commensurate with experience and qualifications and will include salary; pension; health insurance; and travel reimbursement.

Oil and Gas Regulatory Revisions

Craig R. Hedin | Gesell’s Pump Sales & Service, Inc., IOGA Member at Large

Effective September 6, 2019, various revisions of the Regulations of the Oil and Gas Act were implemented. Some of the revisions were discussed as proposals in the September 2018 Mineral Law Newsletter. Final versions and publications were not completed until September 9, 2019. The Regulations are found at 62 Ill.Adm.Code, Chap. I, Part 240. The sections involved and a summary of the revisions are as follows:

Section 240.140 – Notice of Non-Compliance

Under circumstances as stated in this section, an Inspector can issue an informal notice (OG-22) indicting a non-compliant situation that requires abatement. This type of enforcement is not new but various aspects have been revised. The prior regulation referred to the non-compliance as a violation. This is a misnomer inasmuch as a violation has a specific definition and meaning within the Regulations and it would not include a non-compliance under this section. Instead, the Regulation now refer to a non-compliance as opposed to a violation. Previously, the maximum timeframe to abate the non-compliance was 120 days. This has now been increased to 180 days. Most OG-22s allow 30 days from the notice within which to abate the non-compliance. While extensions were granted, they were not specifically provided for in the Regulations. Extensions are now expressly allowed for a period not to exceed 180 days from the initial notice. Requests for extensions are made to the District Office and if denied, the requests may be submitted to the Director. Any requests must be submitted prior to the expiration of the initial deadline. If the non-compliance is not timely abated, then a notice of violation will be issued in accordance with Section 240.150. Upon abatement, an OG-22A form shall be prepared and submitted to the District Office.

Section 240.150 – Notice of Violation

This section was substantially revised as to how a Notice of Violation (NOV) is administered. Previously when a NOV was issued, it was mailed to the Permittee charged with the violation who then had 14 days to provide the Department with information in mitigation of the violation. This procedure has been eliminated. Instead, the Inspector investigates and submits the NOV directly to the Director with findings as to the nature of the violation, the action needed to abate, the timeframe for abatement, and any factors of aggravation or mitigation. The notice is not sent to the Permittee. The NOV process is between the Inspector and the Director. The Permittee is taken out of the loop. The Regulations now set out factors to consider in aggravation and mitigation. The revisions were initiated based upon a determination by the Department that the procedure involving the Permittee in the NOV process was not authorized by the applicable statute.

Section 240.160 – Director’s Decision

Upon receipt of an NOV, the Director conducts an investigation based upon the Inspector’s report and any other available information. The Director shall render a Director’s Decision which affirms, vacates, or modifies the NOV. Subsection (d) sets forth specific violations whereby the Department may assess a civil penalty even if the violation was timely abated. Correspondingly, violations not specifically stated for penalty shall not be the subject of a penalty if the violation is timely abated. The factors which determine the amount of the penalty have been eliminated. The factors were comprised of history of prior administrative or operating violations, seriousness of the violation, and the Permittee’s actions. Civil penalties are now determined on a case by case basis but shall not exceed $1,000.00 per day from the date that the Permittee knew or should have known of the existence of a violation. The Director’s Decision shall be served on the Permittee and shall be considered served when mailed to the Permittee. Within 30 days of service, the Permittee may submit in writing any mitigating factors and may request the opportunity to enter into a settlement agreement. The Department’s goal with respect to the revisions is to allow for a penalty process to accommodate those responsible Permittees who readily abate violations and to punish Permittees who do not regularly comply or timely abate violations.

Section 240.180 – Enforcement Hearings

The revisions as to enforcement include having hearings at locations other than Springfield. Hearing Officers can select locations that promote the convenience of the parties and the conservation of Department resources. Furthermore, the Hearing Officer may order that a hearing be held by telephone conference, video conference or other electronic means. Factors to consider as to the means of conferencing include cost effectiveness, efficiency, facility accommodations, witness availability, public interest, parties’ preferences, and the complexity and contentiousness of the proceeding.

Provisions as to cessation orders in the event abatement does not timely occur have been eliminated and now are addressed in Section 240.185.

Section 240.185 – Cessation of Operations

This section now provides that if a violation is not timely abated, the Department can order an immediate cessation of operations. Cessation can also be ordered if a condition exists that creates an imminent danger to the health or safety of the public or environmental harm or damage to property. The determining criteria provides for greater discretion inasmuch as the prior enumeration of specific conditions which can result in cessation have been eliminated. If such conditions are observed, the Department shall make reasonable efforts to locate and advise the responsible Permittee and provide an opportunity to immediately abate the condition. If the Permittee cannot be located or does not abate the condition, then the Department can take such action to cause a cessation of operations and abate the condition. Cessation orders can be issued with or without notice. Provisions as to hearings on an order of cessation have been eliminated and are now addressed in Section 240.190.

Section 240.186 – Cessation of Conditions Creating an Imminent Danger to Public Health and Safety and the Environment

This section has been repealed in its entirety and is now addressed by Sections 140.185 and 140.190.

Section 240.190 – Temporary Relief Hearings

This section provides for hearings relating to cessation orders. The revisions include conducting the hearings at a site closer to the subject of the order rather than in Springfield and selecting locations that promote the convenience of the parties and the conservation of Department resources. The Hearing Officer may also order that the holding of hearings be done by telephone conference, video conference, or other electronic means. Factors to consider as to the means of conferencing include cost effectiveness, efficiency, facility accommodations, witness availability, public interest, the parties’ preferences, and the complexity and contentiousness of the proceedings.

Section 240.420 – Well Location Exceptions Within Drilling Unit

This section is now limited to the addressing of a non-conforming well location in the permit application process. Reasons for moving a well location and the right to move the location a maximum of 30 feet after the issuance of a permit have been eliminated from this section. The conditions for moving the location are now generally limited to those that are impractical to drill at a location as authorized by the Regulations. The well can be moved to any location providing it is not less than 330 feet from the lease boundary line. If it is within 330 feet, then written consent of the adjacent leaseholders or mineral owners is required or if no consent is obtained, then a notice is given as to the well location with a possible hearing as to any objection. The provision for moving the well location up to 30 feet because of a lost well during drilling operations has been eliminated.

Section 240.425 – Change of a Permitted Drilling Location

This is a new section. While Section 240.420 pertains to well location issues in the permitting process, this new section pertains to well location issues after the permit is issued. If after a permit is issued but prior to commencement of drilling, it is determined that the permitted well location is impractical to drill, the location can be unilaterally moved a maximum of 60 feet provided the new location meets the requirements of Sections 240.410 and 240.420. An amended application setting out a revised survey and the reasons for relocation shall be filed within 10 days after moving the location.

If the location is moved more than 60 feet, the same requirements must be met but the location must also be approved by the Department prior to the commencement of drilling operations.

If a well is lost during drilling operations, the well location may be moved up to 30 feet from the permitted location and drilling commenced again. But, the District Office must be advised and grant approval prior to the move, and a new application and fee must be submitted to the Department within 10 days. The new location must also be in compliance with other requirements of the section.

Section 280.810 – Tanks, Tank Batteries and Containment Dikes

A revision of this section now allows a Permittee to petition the Department to utilize an alternative construction method for containment dikes other than the ones described in the section. The request must be in writing and the Department is to respond to the request within 30 days.