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| THE GENERAL ASSEMBLY OF PENNSYLVANIA |
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| HOUSE BILL |
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| INTRODUCED BY MICCARELLI, CHRISTIANA, MICOZZIE, BARRAR, DeLUCA, GOODMAN, MARSHALL, MURT, MUSTIO, D. O'BRIEN, READSHAW, SABATINA, SCAVELLO, STABACK AND TAYLOR, JUNE 15, 2011 |
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| REFERRED TO COMMITTEE ON FINANCE, JUNE 15, 2011 |
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| AN ACT |
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1 | Amending the act of March 4, 1971 (P.L.6, No.2), entitled "An |
2 | act relating to tax reform and State taxation by codifying |
3 | and enumerating certain subjects of taxation and imposing |
4 | taxes thereon; providing procedures for the payment, |
5 | collection, administration and enforcement thereof; providing |
6 | for tax credits in certain cases; conferring powers and |
7 | imposing duties upon the Department of Revenue, certain |
8 | employers, fiduciaries, individuals, persons, corporations |
9 | and other entities; prescribing crimes, offenses and |
10 | penalties," further providing for imposition of tax; and |
11 | providing for a natural gas severance tax. |
12 | The General Assembly of the Commonwealth of Pennsylvania |
13 | hereby enacts as follows: |
14 | Section 1. Section 302 of the act of March 4, 1971 (P.L.6, |
15 | No.2), known as the Tax Reform Code of 1971, amended December |
16 | 23, 2003 (P.L.250, No.46), is amended to read: |
17 | Section 302. Imposition of Tax.--(a) Every resident |
18 | individual, estate or trust shall be subject to, and shall pay |
19 | for the privilege of receiving each of the classes of income |
20 | hereinafter enumerated in section 303, a tax upon each dollar of |
21 | income received by that resident during that resident's taxable |
22 | year at the rate of [three and seven hundredths per cent] two |
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1 | and ninety-nine hundredths per cent. |
2 | (b) Every nonresident individual, estate or trust shall be |
3 | subject to, and shall pay for the privilege of receiving each of |
4 | the classes of income hereinafter enumerated in section 303 from |
5 | sources within this Commonwealth, a tax upon each dollar of |
6 | income received by that nonresident during that nonresident's |
7 | taxable year at the rate of [three and seven hundredths per |
8 | cent] two and ninety-nine hundredths per cent. |
9 | Section 2. The act is amended by adding an article to read: |
10 | ARTICLE XV-A |
11 | NATURAL GAS SEVERANCE TAX |
12 | Section 1501-A. Scope of article. |
13 | This article relates to natural gas severance tax. |
14 | Section 1502-A. Definitions. |
15 | The following words and phrases when used in this article |
16 | shall have the meanings given to them in this section unless the |
17 | context clearly indicates otherwise: |
18 | "Accredited laboratory." A facility engaged in the testing |
19 | and calibration of scientific measurement devices and certified |
20 | by the Department of Environmental Protection as having met the |
21 | Department of Revenue's standards for accreditation. |
22 | "Association." A partnership, limited partnership or any |
23 | other form of unincorporated enterprise owned or conducted by |
24 | two or more persons. |
25 | "Coal bed methane." Gas that can be produced from coal beds, |
26 | coal seams, mined-out areas or gob wells. |
27 | "Corporation." A corporation, joint-stock association, |
28 | limited liability company, business trust or any other |
29 | incorporated enterprise organized under the laws of the United |
30 | States, this Commonwealth or any other state, territory or |
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1 | foreign country or dependency. |
2 | "Department." The Department of Revenue of the Commonwealth. |
3 | "Meter." A device to measure the passage of volumes of gases |
4 | or liquids past a certain point. |
5 | "Municipality." A city, borough, incorporated town or |
6 | township. |
7 | "Natural gas." A fossil fuel consisting of a mixture of |
8 | hydrocarbon gases, primarily methane, possibly including ethane, |
9 | propane, butane, pentane, carbon dioxide, oxygen, nitrogen and |
10 | hydrogen sulfide and other gas species. The term includes |
11 | natural gas from oil fields known as associated gas or casing |
12 | head gas, natural gas fields known as nonassociated gas, coal |
13 | beds, shale beds and other formations. The term does not include |
14 | coal bed methane. |
15 | "Natural gas well." A bore hole drilled or being drilled for |
16 | the purpose of or to be used for producing natural gas from |
17 | subsurface geological formations. |
18 | "Nonproducing well." A natural gas well that does not |
19 | produce natural gas in excess of 90,000 cubic feet per day. |
20 | "Operator." A person who engages or continues within this |
21 | Commonwealth in the business of severing natural gas for sale, |
22 | profit or commercial use. The term does not include a person who |
23 | severs natural gas from a storage field. |
24 | "Person." A natural person or a corporation, fiduciary, |
25 | association or other entity, including the Commonwealth, its |
26 | political subdivisions, instrumentalities and authorities. When |
27 | the term is used in a provision prescribing and imposing a |
28 | penalty or imposing a fine or imprisonment, or both, the term |
29 | shall include a member of an association and an officer of a |
30 | corporation. |
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1 | "Producing well." A natural gas well that produces natural |
2 | gas in excess of 90,000 cubic feet of natural gas per day. |
3 | "Rate." The rate under section 1503-A(c). |
4 | "Reporting period." A calendar month in which natural gas is |
5 | severed. |
6 | "Secretary." The Secretary of Revenue of the Commonwealth. |
7 | "Sever." To extract or otherwise remove natural gas from the |
8 | soil or water of this Commonwealth. |
9 | "Severance." The extraction or other removal of natural gas |
10 | from the soil or water of this Commonwealth. |
11 | "Severing." Extracting or otherwise removing natural gas |
12 | from the soil or water of this Commonwealth. |
13 | "Storage field." A natural formation or other site that is |
14 | used to store natural gas that did not originate from and has |
15 | been injected into the formation or site. |
16 | "Tax." The natural gas severance tax imposed under this |
17 | article. |
18 | "Tax rate adjustment index." The amount calculated under |
19 | section 1503-A(c) by which the rate of the tax imposed under |
20 | section 1503-A(c) is adjusted annually. |
21 | "Taxpayer." A person, including, but not limited to, a well |
22 | operator who is subject to the tax imposed by this article. |
23 | "Unit." A thousand cubic feet of natural gas measured at a |
24 | wellhead at a temperature of 60 degrees Fahrenheit and an |
25 | absolute pressure of 14.73 pounds per square inch in accordance |
26 | with American Gas Association Standards and according to Boyle's |
27 | Law for the measurement of gas under varying pressures with |
28 | deviations as follows: |
29 | (1) The average absolute atmospheric pressure shall be |
30 | assumed to be 14.4 pounds to the square inch, regardless of |
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1 | elevation or location of point of delivery above sea level or |
2 | variations in atmospheric pressure from time to time. |
3 | (2) The temperature of the gas passing a wellhead meter |
4 | shall be determined by the continuous use of a recording |
5 | thermometer installed to properly record the temperature of |
6 | gas flowing through the wellhead meter. The arithmetic |
7 | average of the temperature recorded each 24-hour day shall be |
8 | used in computing gas volumes. If a recording thermometer is |
9 | not installed or is installed and not operating properly, an |
10 | average flowing temperature of 60 degrees Fahrenheit shall be |
11 | used in computing gas volume. |
12 | (3) The specific gravity of the gas shall be determined |
13 | by annual tests made by the use of an Edwards or Acme gravity |
14 | balance, or at intervals as found necessary in practice. |
15 | Specific gravity determinations shall be used in computing |
16 | gas volumes. |
17 | (4) The deviation of the natural gas from Boyle's Law |
18 | shall be determined by annual tests or at other shorter |
19 | intervals as found necessary in practice. The apparatus and |
20 | method used in making the test shall be in accordance with |
21 | recommendations of the National Bureau of Standards or Report |
22 | No. 3 of the Gas Measurement Committee of the American Gas |
23 | Association, or amendments thereto. The results of the tests |
24 | shall be used in computing the volume of gas delivered under |
25 | this article. |
26 | "Wellhead meter." A meter placed at a producing or |
27 | nonproducing site to measure the volume of natural gas severed |
28 | for which a wellhead meter certification has been issued. |
29 | "Wellhead meter certification." A report issued by an |
30 | accredited laboratory certifying the accuracy of a wellhead |
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1 | meter. |
2 | Section 1503-A. Imposition of tax. |
3 | (a) Establishment.--Except as otherwise provided in |
4 | subsection (b) and beginning after December 31, 2010, a natural |
5 | gas severance tax is levied on every operator that severs |
6 | natural gas from a producing well in this Commonwealth. |
7 | (b) Exemptions.--The tax shall not be imposed on the |
8 | following: |
9 | (1) Units severed, sold and delivered by an operator at |
10 | or within five miles of the producing well for the processing |
11 | or manufacture of tangible personal property, as defined |
12 | under section 201, within this Commonwealth. |
13 | (2) Units provided free of charge to the owner of the |
14 | surface under which the gas is severed, if the surface owner |
15 | is the end user of the gas. |
16 | (3) Owners of the surface real property where natural |
17 | gas wells are drilled or operated and have leased the rights |
18 | to recover natural gas from beneath the surface to an |
19 | operator. |
20 | (c) Rate.--The tax imposed in subsection (a) shall be 3% of |
21 | the gross value of units severed at the wellhead during a |
22 | reporting period for the first 24 months of production and 5% of |
23 | the gross value of units severed at the wellhead during a |
24 | reporting period thereafter for each producing well. |
25 | Section 1504-A. Return and payment. |
26 | (a) Requirement.--An operator shall file a return with the |
27 | department, on a form prescribed by the department, which shall |
28 | include the number of natural gas units severed by the operator |
29 | for the reporting period and the amount of tax due. |
30 | (b) Filing.--The return required by subsection (a) shall be |
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1 | filed with the department within 30 days following the end of a |
2 | reporting period. |
3 | (c) Deadline.--The tax is due on the day the return is |
4 | required to be filed and becomes delinquent if not remitted to |
5 | the department by that date. |
6 | Section 1505-A. Natural gas severance tax registration. |
7 | (a) Application.--Before an operator severs natural gas in |
8 | this Commonwealth, the operator shall apply to the department |
9 | for a natural gas severance tax registration certificate. |
10 | (b) Application fee.--The department may charge an |
11 | application fee to cover the administrative costs associated |
12 | with the application and registration process, in which case the |
13 | department shall not issue a registration certificate until the |
14 | operator has paid the application fee. |
15 | (c) Declaration.-- |
16 | (1) The operator shall include in its application a |
17 | declaration of all producing wells and nonproducing wells |
18 | used by the operator for the severance of natural gas. The |
19 | declaration shall include copies of wellhead meter |
20 | certifications for each site. |
21 | (2) The operator shall update the declaration when: |
22 | (i) the operator adds or removes a producing well or |
23 | nonproducing well in this Commonwealth; |
24 | (ii) there is a change in the status of a producing |
25 | well or nonproducing well; or |
26 | (iii) the operator uses a different accredited |
27 | laboratory to issue a wellhead meter certification. |
28 | (3) The operator shall update the declaration within 30 |
29 | days after a calendar month in which a change to the |
30 | declaration occurs. |
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1 | (d) Issuance.-- |
2 | (1) Except as provided in subsection (e), after the |
3 | receipt of an application, the department shall issue a |
4 | registration certificate under subsection (a). The |
5 | registration certificate shall be nonassignable. |
6 | (2) All registrants shall renew their registration |
7 | certificates and wellhead meter certifications on a staggered |
8 | renewal system established by the department. |
9 | (3) After the initial staggered renewal period, a |
10 | registration certificate or a wellhead meter certification |
11 | issued shall be valid for a period of five years. |
12 | (e) Refusal, suspension or revocation.-- |
13 | (1) The department may refuse to issue, suspend or |
14 | revoke a registration certificate if the applicant or |
15 | registrant has not filed required State tax reports and paid |
16 | State taxes not subject to a timely perfected administrative |
17 | or judicial appeal or subject to a duly authorized deferred |
18 | payment plan. |
19 | (2) The department shall notify the applicant or |
20 | registrant of any refusal, suspension or revocation. The |
21 | notice shall contain a statement that the refusal, suspension |
22 | or revocation may be made public. The notice shall be made by |
23 | first class mail. |
24 | (3) An applicant or registrant aggrieved by the |
25 | determination of the department may file an appeal under the |
26 | provisions for administrative appeals provided under this |
27 | act. |
28 | (4) In the case of a suspension or revocation which is |
29 | appealed, the registration certificate shall remain valid |
30 | pending a final outcome of the appeals process. |
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1 | (5) Notwithstanding sections 274, 353(f), 408(b), 603, |
2 | 702, 802, 904 and 1102 or any other provision of law, if no |
3 | appeal is taken or if an appeal is taken and denied at the |
4 | conclusion of the appeal process, the department may |
5 | disclose, by publication or otherwise, the identity of a |
6 | operator and the fact that the operator's registration |
7 | certificate has been refused, suspended or revoked under this |
8 | subsection. Disclosure may include the basis for refusal, |
9 | suspension or revocation. |
10 | (f) Violation.-- |
11 | (1) A person severing natural gas in this Commonwealth |
12 | without holding a valid registration certificate under |
13 | subsection (d) shall be guilty of a summary offense and |
14 | shall, upon conviction, be sentenced to pay a fine of not |
15 | less than $300 nor more than $1,500. Each day in which a |
16 | person is guilty of a summary offense under this section |
17 | shall be deemed to be a separate violation. |
18 | (2) In the event the person convicted defaults in the |
19 | payment of the fine, the person shall be sentenced to a term |
20 | of imprisonment of not less than 5 days nor more than 30 |
21 | days. |
22 | (3) The penalties imposed by this subsection shall be in |
23 | addition to any other penalties imposed by this article. |
24 | (4) For purposes of this subsection, the severing of |
25 | natural gas during any calendar day shall constitute a |
26 | separate violation. |
27 | (5) The secretary may designate employees of the |
28 | department to enforce the provisions of this subsection. The |
29 | employees shall exhibit proof of and be within the scope of |
30 | the designation when instituting proceedings as provided by |
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1 | the Pennsylvania Rules of Criminal Procedure. |
2 | (g) Failure to obtain registration certificate.--Failure to |
3 | obtain or hold a valid registration certificate does not relieve |
4 | a person from liability for the tax. |
5 | Section 1506-A. Assessments. |
6 | (a) Authorization and requirement.--The department shall |
7 | make the inquiries, determinations and assessments of the tax, |
8 | including interest, additions and penalties imposed under this |
9 | article. |
10 | (b) Notice.--The notice of assessment and demand for payment |
11 | shall be mailed to the taxpayer. The notice shall state the |
12 | basis of the assessment. The department shall send the notice of |
13 | assessment to the taxpayer at its registered address by |
14 | certified mail if the assessment increases the taxpayer's tax |
15 | liability by $300. Otherwise, the notice of assessment may be |
16 | sent by regular mail. |
17 | Section 1507-A. Time for assessment. |
18 | (a) Requirement.-- |
19 | (1) An assessment as provided under section 1506-A shall |
20 | be made within three years after the date when the return |
21 | provided for by section 1504-A is filed or the end of the |
22 | year in which the tax liability arises, whichever shall occur |
23 | last. |
24 | (2) For the purposes of this subsection and subsection |
25 | (b), a return filed before the last day prescribed for the |
26 | filing period shall be considered as filed on the last day. |
27 | (b) Exception.--If the taxpayer underpays the correct amount |
28 | of the tax due by 25% or more, the tax may be assessed within |
29 | six years after the date the return was filed. |
30 | (c) Intent to evade.--Where no return is filed or where the |
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1 | taxpayer files a false or fraudulent return with intent to evade |
2 | the tax, the assessment may be made at any time. |
3 | (d) Erroneous credit or refund.--Within three years of the |
4 | granting of a refund or credit or within the period in which an |
5 | assessment or reassessment may have been issued by the |
6 | department for the taxable period for which the refund was |
7 | granted, whichever period shall last occur, the department may |
8 | issue an assessment to recover a refund or credit made or |
9 | allowed erroneously. |
10 | Section 1508-A. Extension of assessment period. |
11 | Notwithstanding any other provision of this article, the |
12 | assessment period may be extended in the event a taxpayer has |
13 | provided written consent before the expiration of the period |
14 | provided in section 1507-A for a tax assessment. The amount of |
15 | tax due may be assessed at any time within the extended period. |
16 | The period may be extended further by subsequent written |
17 | consents made before the expiration of the extended period. |
18 | Section 1509-A. Reassessments. |
19 | A taxpayer against whom an assessment is made may petition |
20 | the department for a reassessment under Article XXVII. |
21 | Section 1510-A. Interest. |
22 | The department shall assess interest on any delinquent tax at |
23 | the rate prescribed under section 806 of the act of April 9, |
24 | 1929 (P.L.343, No.176), known as The Fiscal Code. |
25 | Section 1511-A. Penalties. |
26 | The department shall enforce the following penalties: |
27 | (1) The penalty against an operator for severing natural |
28 | gas without a natural gas severance tax registration |
29 | certificate shall be $1 for every unit severed without a |
30 | valid registration certificate. The department may assess |
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1 | this penalty separately from or in conjunction with any |
2 | assessment of the natural gas tax. |
3 | (2) The penalty against an operator for failure to |
4 | timely file a return as required under section 1504-A or for |
5 | failure to timely pay the tax as required by section |
6 | 1504‑A(c) shall be 5% of the tax liability to be reported on |
7 | the return for each day beyond the due date that the return |
8 | is not filed or tax is not paid. |
9 | (3) In addition to the penalty prescribed under |
10 | paragraph (2), the penalty against an operator for a willful |
11 | failure to file a timely return shall be 200% of the tax |
12 | liability required to be reported on the return. |
13 | Section 1512-A. Criminal acts. |
14 | (a) Fraudulent return.--Any person, with intent to defraud |
15 | the Commonwealth, who willfully makes or causes to be made a |
16 | return required by this article which is false, commits a |
17 | misdemeanor of the third degree and shall, upon conviction |
18 | thereof, be sentenced to pay a fine of not more than $2,000 or |
19 | to imprisonment for not more than three years, or both. |
20 | (b) Other crimes.-- |
21 | (1) Except as otherwise provided by subsection (a), a |
22 | person commits a misdemeanor of the third degree and shall, |
23 | upon conviction thereof, be sentenced to pay a fine of not |
24 | more than $1,000 and costs of prosecution or to imprisonment |
25 | for not more than one year, or both, for any of the |
26 | following: |
27 | (i) Willfully failing to timely remit the tax to the |
28 | department. |
29 | (ii) Willfully failing or neglecting to timely file |
30 | a return or report required by this article. |
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1 | (iii) Refusing to timely pay a tax, penalty or |
2 | interest imposed or provided for by this article. |
3 | (iv) Willfully failing to preserve its books, papers |
4 | and records as directed by the department. |
5 | (v) Refusing to permit the department or its |
6 | authorized agents to examine its books, records or |
7 | papers. |
8 | (vi) Knowingly making any incomplete, false or |
9 | fraudulent return or report. |
10 | (vii) Preventing or attempting to prevent the full |
11 | disclosure of the amount of tax due. |
12 | (viii) Providing any person with a false statement |
13 | as to the payment of the tax with respect to any |
14 | pertinent facts. |
15 | (ix) Making, uttering or issuing a false or |
16 | fraudulent statement. |
17 | (2) The penalties imposed by this section shall be in |
18 | addition to other penalties imposed by this article. |
19 | Section 1513-A. Abatement of additions or penalties. |
20 | Upon the filing of a petition for reassessment or a petition |
21 | for refund by a taxpayer as provided under this article, |
22 | additions or penalties imposed upon the taxpayer by this article |
23 | may be waived or abated in whole or in part where the petitioner |
24 | establishes that the petitioner acted in good faith, without |
25 | negligence and with no intent to defraud. |
26 | Section 1514-A. Bulk and auction sales. |
27 | A person who sells or causes to be sold at auction or sells |
28 | or transfers in bulk 51% or more of a stock of goods, wares or |
29 | merchandise of any kind, fixtures, machinery, equipment, |
30 | buildings or real estate involved in a business for which the |
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1 | person holds a registration certificate or is required to obtain |
2 | a registration certificate under the provisions of this article, |
3 | shall be subject to the provisions of section 1403 of the act of |
4 | April 9, 1929 (P.L.343, No.176), known as The Fiscal Code. |
5 | Section 1515-A. Collection upon failure to request |
6 | reassessment, review or appeal. |
7 | (a) Power of department.--The department may collect the |
8 | tax: |
9 | (1) If an assessment of the tax is not paid within 30 |
10 | days and no petition for reassessment has been filed, after |
11 | notice to the taxpayer. |
12 | (2) Within 60 days of a reassessment, if no petition for |
13 | review has been filed. |
14 | (3) If no appeal has been made, within 30 days of: |
15 | (i) the Board of Finance and Revenue's decision of a |
16 | petition for review; or |
17 | (ii) the expiration of the Board of Finance and |
18 | Revenue's time for acting upon a petition for review. |
19 | (4) In all cases of judicial sales, receiverships, |
20 | assignments or bankruptcies. |
21 | (b) Limitation of defenses.--In a case for the collection of |
22 | taxes under subsection (a), the taxpayer against whom the taxes |
23 | were assessed may not set up a ground of defense that might have |
24 | been determined by the department, the Board of Finance and |
25 | Revenue or the courts, provided that the defense of failure of |
26 | the department to mail notice of assessment or reassessment to |
27 | the taxpayer and the defense of payment of assessment or |
28 | reassessment may be raised in proceedings for collection by a |
29 | motion to stay the proceedings. |
30 | Section 1516-A. Tax liens. |
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1 | (a) Lien imposed.-- |
2 | (1) If a taxpayer neglects or refuses to pay the tax for |
3 | which the taxpayer is liable under this article after demand, |
4 | the amount, including interest, addition or penalty, together |
5 | with additional costs that may accrue, shall be a lien in |
6 | favor of the Commonwealth upon the real and personal property |
7 | of the taxpayer but only after the lien has been entered and |
8 | docketed of record by the prothonotary of the county where |
9 | the property is situated. |
10 | (2) The department may, at any time, transmit to the |
11 | prothonotaries of the respective counties certified copies of |
12 | all liens imposed by this section. |
13 | (3) (i) The prothonotary who receives the lien shall |
14 | enter and docket the same of record to the office of the |
15 | prothonotary. The lien shall be indexed as judgments are |
16 | now indexed. |
17 | (ii) No prothonotary shall require as a condition |
18 | precedent to the entry of the lien the payment of costs |
19 | incidental to its entry. |
20 | (b) Priority of lien and effect on judicial sale.--Except |
21 | for the costs of the sale and the writ upon which the sale was |
22 | made and real estate taxes and municipal claims against the |
23 | property, a lien imposed under this section shall: |
24 | (1) Have priority from the date of its recording and |
25 | shall be fully paid and satisfied out of the proceeds of any |
26 | judicial sale of property subject to the lien, before any |
27 | other obligation, judgment, claim, lien or estate to which |
28 | the property may subsequently become subject. |
29 | (2) Be subordinate to mortgages and other liens existing |
30 | and duly recorded or entered of record prior to the recording |
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1 | of the lien. |
2 | (c) No discharge by sale on junior lien.-- |
3 | (1) In the case of a judicial sale of property subject |
4 | to a lien imposed under this section, upon a lien or claim |
5 | over which the lien imposed under this section has priority, |
6 | the sale shall discharge the lien imposed under this section |
7 | to the extent only that the proceeds are applied to its |
8 | payment, and the lien shall continue in full force and effect |
9 | as to the balance remaining unpaid. |
10 | (2) There shall be no inquisition or condemnation upon |
11 | any judicial sale of real estate made by the Commonwealth |
12 | under the provisions of this article. The lien shall continue |
13 | as provided in the act of April 9, 1929 (P.L.343, No.176), |
14 | known as The Fiscal Code, and a writ of execution may |
15 | directly issue upon the lien without the issuance and |
16 | prosecution to judgment of a writ of scire facias, subject to |
17 | the following: |
18 | (i) Not less than ten days before issuance of any |
19 | execution on the lien, notice of the filing and the |
20 | effect of the lien shall be sent by registered mail to |
21 | the taxpayer at its last known post office address. |
22 | (ii) The lien shall have no effect upon any stock of |
23 | goods, wares or merchandise regularly sold or leased in |
24 | the ordinary course of business by the taxpayer against |
25 | whom the lien has been entered, unless and until a writ |
26 | of execution has been issued and a levy made upon the |
27 | stock of goods, wares and merchandise. |
28 | (d) Violation by prothonotary.--A willful failure of a |
29 | prothonotary to carry out any duty imposed on the prothonotary |
30 | by this section shall be a misdemeanor of the third degree and, |
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1 | upon conviction thereof, the prothonotary shall be sentenced to |
2 | pay a fine of not more than $1,000 and costs of prosecution or |
3 | to imprisonment for not more than one year, or both. |
4 | (e) Priority.-- |
5 | (1) Except as otherwise provided in this article, the |
6 | distribution, voluntary or compulsory, in receivership, |
7 | bankruptcy or otherwise of the property or estate of any |
8 | person, all taxes which are due and unpaid and are not |
9 | collectible under the provisions of section 225, shall be |
10 | paid from the first money available for distribution in |
11 | priority to all other claims and liens, except as the laws of |
12 | the United States may give priority to a claim to the Federal |
13 | Government. |
14 | (2) A person required to administer or distribute the |
15 | property or estate who violates the provisions of this |
16 | section shall be personally liable for the taxes which are |
17 | accrued and unpaid and chargeable against the person whose |
18 | property or estate is being administered or distributed. |
19 | (f) Construction.--Subject to the limitations contained in |
20 | this article as to the assessment of taxes, nothing contained in |
21 | this section shall be construed to restrict, prohibit or limit |
22 | the use by the department in collecting taxes due and payable of |
23 | another remedy or procedure available at law or equity for the |
24 | collection of debts. |
25 | Section 1517-A. Tax suit reciprocity. |
26 | The courts of this Commonwealth shall recognize and enforce |
27 | liabilities for natural gas severance or extraction taxes |
28 | lawfully imposed by any other state, provided that the other |
29 | state recognizes and enforces the tax imposed under this |
30 | article. |
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1 | Section 1518-A. Service. |
2 | (a) Appointment of Secretary of the Commonwealth.--An |
3 | operator is deemed to have appointed the Secretary of the |
4 | Commonwealth its agent for the acceptance of service of process |
5 | or notice in a proceeding for the enforcement of the civil |
6 | provisions of this article and service made upon the Secretary |
7 | of the Commonwealth as agent shall be of the same legal force |
8 | and validity as if the service had been personally made upon the |
9 | operator. |
10 | (b) Substituted service.-- |
11 | (1) Where service cannot be made upon the operator in |
12 | the manner provided by other laws of this Commonwealth |
13 | relating to service of process, service may be made upon the |
14 | Secretary of the Commonwealth. |
15 | (2) In that case, a copy of the process or notice shall |
16 | be personally served upon any agent or representative of the |
17 | operator who may be found within this Commonwealth or, where |
18 | no agent or representative may be found, a copy of the |
19 | process or notice shall be sent by registered mail to the |
20 | operator at the last known address of its principal place of |
21 | business, home office or residence. |
22 | Section 1519-A. Refunds. |
23 | (a) General rule.--Pursuant to Article XXVII, the department |
24 | shall refund all taxes, interest and penalties paid to the |
25 | Commonwealth under the provisions of this article to which the |
26 | Commonwealth is not rightfully entitled. |
27 | (b) Payment of refunds.-- |
28 | (1) Subject to the provisions of paragraph (2), the |
29 | refunds shall be paid to the person or the person's heirs, |
30 | successors, assigns or other personal representatives who |
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1 | paid the tax. |
2 | (2) No refund shall be made under this section regarding |
3 | a payment made by reason of an assessment where a taxpayer |
4 | has filed a petition for reassessment under section 2702 to |
5 | the extent the petition is adverse to the taxpayer by a |
6 | decision which is no longer subject to further review or |
7 | appeal. |
8 | (c) Construction.--Nothing in this article shall be |
9 | construed to prohibit a taxpayer who has filed a timely petition |
10 | for reassessment from amending it to a petition for refund where |
11 | the petitioner paid the tax assessed. |
12 | Section 1520-A. Refund petition. |
13 | (a) General rule.--Except as provided for in subsection (b), |
14 | the refund or credit of tax, interest or penalty provided for by |
15 | section 1519-A shall be made only where the person who has paid |
16 | the tax files a petition for refund with the department under |
17 | Article XXVII within the time limits of section 3003.1. |
18 | (b) Natural gas severance tax.-- |
19 | (1) A refund or credit of tax, interest or penalty paid |
20 | as a result of an assessment made by the department under |
21 | section 1505-A shall be made only where the person who has |
22 | paid the tax files with the department a petition for a |
23 | refund under Article XXVII within the time limits of section |
24 | 3003.1. |
25 | (2) The filing of a petition for refund under the |
26 | provisions of this subsection shall not affect the abatement |
27 | of interest, additions or penalties to which the person may |
28 | be entitled by reason of the person's payment of the |
29 | assessment. |
30 | Section 1521-A. Rules and regulations. |
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1 | The department shall enforce the provisions of this article |
2 | and may prescribe, adopt, promulgate and enforce rules and |
3 | regulations not inconsistent with the provisions of this article |
4 | relating to any matter or thing pertaining to the administration |
5 | and enforcement of the provisions of this article and the |
6 | collection of taxes, penalties and interest imposed by this |
7 | article. The department may prescribe the extent, if any, to |
8 | which any of the rules and regulations shall be applied without |
9 | retroactive effect. |
10 | Section 1522-A. Recordkeeping and meters. |
11 | (a) Duty to maintain records.-- |
12 | (1) Every person liable for the tax or for the |
13 | collection of the tax shall keep records, including those |
14 | enumerated in subsection (b), render statements, make returns |
15 | and comply with the rules and regulations as the department |
16 | may prescribe regarding matters pertinent to the person's |
17 | business. |
18 | (2) Whenever it is necessary, the department may require |
19 | a person, by notice served upon the person or by regulations, |
20 | to make returns, render statements or keep records as the |
21 | department deems sufficient to show whether or not the person |
22 | is liable to pay the tax. |
23 | (b) Records.--Every person liable for the tax shall maintain |
24 | the following records: |
25 | (1) Wellhead meter charts for each reporting period and |
26 | the meter calibration and maintenance records. If turbine |
27 | meters are in use, the maintenance records shall be made |
28 | available to the department upon request. |
29 | (2) Records, statements and other instruments furnished |
30 | to an operator by a person to whom the operator delivers for |
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1 | sale, transport or delivery of natural gas. |
2 | (3) Records, statements and other instruments as the |
3 | department may prescribe by regulation. |
4 | (c) Records of nonresidents.-- |
5 | (1) A nonresident who does business in this Commonwealth |
6 | as an operator shall keep adequate records of the business |
7 | and of the tax due as a result. The records shall be retained |
8 | within this Commonwealth unless retention outside this |
9 | Commonwealth is authorized by the department. |
10 | (2) The department may require a taxpayer who desires to |
11 | retain records outside this Commonwealth to assume reasonable |
12 | out-of-State audit expenses. |
13 | (d) Keeping of separate records.-- |
14 | (1) An operator who is engaged in another business which |
15 | does not involve the severing of natural gas taxable under |
16 | this article shall keep separate books and records of the |
17 | businesses so as to show the taxable severing of natural gas |
18 | under this article separately from other business activities |
19 | not taxable under this article. |
20 | (2) If any person fails to keep separate books and |
21 | records, the person shall be liable for a penalty equaling |
22 | 100% of tax due for the period where separate records were |
23 | not maintained. |
24 | (e) Type of meters required.--An operator shall provide for |
25 | and maintain, according to industry standards, a discrete |
26 | wellhead meter where natural gas is severed. Any wellhead meter |
27 | installed after the effective date of this section shall be a |
28 | digital meter. |
29 | Section 1523-A. Examinations. |
30 | (a) Powers of department.--The department or any of its |
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1 | authorized agents may: |
2 | (1) Examine the books, papers and records of any |
3 | taxpayer in order to verify the accuracy and completeness of |
4 | any return made or, if no return was made, to ascertain and |
5 | assess the tax. |
6 | (2) Require the preservation of all books, papers and |
7 | records for any period deemed proper by it but not to exceed |
8 | three years from the end of the calendar year to which the |
9 | records relate. |
10 | (3) Examine any person, under oath, concerning the |
11 | taxable severing of natural gas by any taxpayer or concerning |
12 | any other matter relating to the enforcement or |
13 | administration of this article, and to this end may compel |
14 | the production of books, papers and records and the |
15 | attendance of all persons whether as parties or witnesses |
16 | whom it believes to have knowledge of relevant matters. The |
17 | procedure for the hearings or examinations shall be the same |
18 | as that provided by the act of April 9, 1929 (P.L.343, No. |
19 | 176), known as The Fiscal Code. |
20 | (b) Duties of taxpayers.--Every taxpayer shall provide the |
21 | department or its agent with the means, facilities and |
22 | opportunity for examinations and investigations under this |
23 | section. |
24 | Section 1524-A. Unauthorized disclosure. |
25 | (a) General rule.--Any information gained by the department |
26 | as a result of any return, examination, investigation, hearing |
27 | or verification required or authorized by this article shall be |
28 | confidential except for official purposes and except in |
29 | accordance with proper judicial order or as otherwise provided |
30 | by law. |
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1 | (b) Penalty for violation.--Any person unlawfully divulging |
2 | the information commits a misdemeanor of the third degree and |
3 | shall, upon conviction thereof, be sentenced to pay a fine of |
4 | not more than $1,000 and costs of prosecution or to a term of |
5 | imprisonment for not more than one year, or both. |
6 | Section 1525-A. Cooperation with other governments. |
7 | (a) General rule.--Notwithstanding the provisions of section |
8 | 1517-A, the department may permit the Commissioner of the |
9 | Internal Revenue Service of the United States, the proper |
10 | officer of any state or the authorized representative of either |
11 | of them to inspect the tax returns of any taxpayer, or may |
12 | furnish to the commissioner or officer or to either of their |
13 | authorized representatives an abstract of the return of a |
14 | taxpayer or supply any of them with information concerning any |
15 | item contained in a return or disclosed by the report of an |
16 | examination or investigation of the return of a taxpayer. |
17 | (b) Applicability.--Subsection (a) shall apply only when the |
18 | laws of the United States or another state grant substantially |
19 | similar privileges to the proper officer of the Commonwealth |
20 | charged with the administration of this article. |
21 | Section 1526-A. Bonds. |
22 | (a) Taxpayer to file bond.-- |
23 | (1) The department may require a nonresident natural |
24 | person or any foreign corporation, association, fiduciary or |
25 | other entity not authorized to do business within this |
26 | Commonwealth or not having an established place of business |
27 | in this Commonwealth and subject to the tax to file a bond |
28 | issued by a surety company authorized to do business in this |
29 | Commonwealth and approved by the Insurance Commissioner as to |
30 | solvency and responsibility, in amounts as it may fix, to |
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1 | secure the payment of any tax or penalties due or which may |
2 | become due from a nonresident natural person, corporation, |
3 | association, fiduciary or other entity whenever it deems it |
4 | necessary to protect the revenues obtained under this |
5 | article. |
6 | (2) The department may also require a bond of a person |
7 | petitioning the department for reassessment in the case of an |
8 | assessment over $500 or where, in the department's opinion, |
9 | the ultimate collection is in jeopardy. |
10 | (3) For a period of three years, the department may |
11 | require a bond of any person who has, on three or more |
12 | occasions within a 12-month period, either filed a return or |
13 | made payment to the department more than 30 days late. |
14 | (4) (i) In the event the department determines a |
15 | taxpayer must file a bond, the department shall give |
16 | notice to the taxpayer specifying the amount of the bond |
17 | required. |
18 | (ii) The taxpayer shall file the bond within five |
19 | days after notice is given by the department unless, |
20 | within five days, the taxpayer requests in writing a |
21 | hearing before the secretary or the secretary's |
22 | representative. |
23 | (iii) At the hearing, the necessity, propriety and |
24 | amount of the bond shall be determined by the secretary |
25 | or the secretary's representative. |
26 | (iv) The determination shall be final and the |
27 | taxpayer shall comply with the determination within 15 |
28 | days after notice is mailed to the taxpayer. |
29 | (b) Securities in lieu of bond.-- |
30 | (1) In lieu of the bond required by this section, |
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1 | securities approved by the department or cash in a prescribed |
2 | amount may be deposited. |
3 | (2) The securities or cash shall be kept in the custody |
4 | of the department. The department may apply the securities or |
5 | cash to the tax and interest or penalties due without notice |
6 | to the depositor. The securities may be sold by the |
7 | department to pay the tax, interest or penalties, or any |
8 | combination thereof, due at public or private sale upon five |
9 | days' written notice to the depositor. |
10 | (c) Failure to file bond.-- |
11 | (1) The department may file a lien under section 1516‑A |
12 | against a taxpayer who fails to file a bond when required to |
13 | do so under this section. |
14 | (2) All funds received upon execution of the judgment on |
15 | the lien shall be refunded to the taxpayer with 3% interest, |
16 | if the department makes a final determination that the |
17 | taxpayer does not owe any payment to the department. |
18 | Section 3. The amendment of section 302 of the act shall |
19 | apply to taxable years beginning after December 31, 2011. |
20 | Section 4. This act shall take effect in 120 days. |
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