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PRINTER'S NO. 679
THE GENERAL ASSEMBLY OF PENNSYLVANIA
SENATE BILL
No.
415
Session of
2015
INTRODUCED BY HAYWOOD, HUGHES, KITCHEN, FARNESE, SCHWANK,
TARTAGLIONE AND LEACH, APRIL 6, 2015
REFERRED TO ENVIRONMENTAL RESOURCES AND ENERGY, APRIL 6, 2015
AN ACT
Amending Title 58 (Oil and Gas) of the Pennsylvania Consolidated
Statutes, in unconventional gas well fee, deleting expiration
provision; providing for the taxation of natural gas
extraction in Pennsylvania; establishing the Shale for Our
Future Fund; and providing for use of revenues.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Section 2318 of Title 58 of the Pennsylvania
Consolidated Statutes is repealed:
[§ 2318. Expiration.
(a) Notice.--The Secretary of the Commonwealth shall, upon
the imposition of a severance tax on unconventional gas wells in
this Commonwealth, submit for publication in the Pennsylvania
Bulletin notice of the imposition.
(b) Date.--This chapter shall expire on the date of the
publication of the notice under subsection (a).]
Section 2. Title 58 is amended by adding a part to read:
PART IV
TAXATION
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Chapter
51. Natural Gas Severance Tax
CHAPTER 51
NATURAL GAS SEVERENCE TAX
Sec.
5101. Definitions.
5102. Imposition of tax.
5103. Return and payment.
5104. Use of funds.
§ 5101. Definitions.
The following words and phrases when used in this chapter
shall have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Department." The Department of Revenue of the Commonwealth.
"Fund." The Shale for Our Future Fund established in section
5103(d) (relating to return and payment).
"Natural gas." A fossil fuel consisting of a mixture of
hydrocarbon gases, primarily methane, possibly including ethane,
propane, butane, pentane, carbon dioxide, oxygen, nitrogen and
hydrogen sulfide and other gas species. The term includes
natural gas from oil fields known as associated gas or casing
head gas, natural gas fields known as nonassociated gas, coal
beds, shale beds and other formations. The term does not include
coal bed methane.
"Producer." A person who engages or continues within this
Commonwealth in the business of severing natural gas for sale,
profit or commercial use. The term does not include a person who
severs natural gas from a storage field.
"Producing site." A point of severance capable of producing
natural gas in paying quantities.
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"Reporting period." A calendar month in which natural gas is
severed.
"Sever." To extract or otherwise remove natural gas from the
soil or water of this Commonwealth.
"Severance." The extraction or other removal of natural gas
from the soil or water of this Commonwealth.
"Severing." Extracting or otherwise removing natural gas
from the soil or water of this Commonwealth.
"Tax." The natural gas severance tax imposed under section
5102 (relating to imposition of tax).
"Unit." A thousand cubic feet of natural gas measured at the
wellhead at a temperature of 60 degrees Fahrenheit and an
absolute pressure of 14.73 pounds per square inch in accordance
with American Gas Association Standards and according to Boyle's
law for the measurement of gas under varying pressures with
deviations as follows:
(1) The average absolute atmospheric pressure shall be
assumed to be 14.4 pounds to the square inch, regardless of
elevation or location of point of delivery above sea level or
variations in atmospheric pressure from time to time.
(2) The temperature of the gas passing the meters shall
be determined by the continuous use of a recording
thermometer installed to properly record the temperature of
gas flowing through the meters. The arithmetic average of the
temperature recorded each 24-hour day shall be used in
computing gas volumes. If a recording thermometer is not
installed, or is installed and not operating properly, an
average flowing temperature of 60 degrees Fahrenheit shall be
used in computing gas volume.
(3) The specific gravity of the gas shall be determined
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annually by tests made by the use of an Edwards or Acme
gravity balance or at intervals as found necessary in
practice. Specific gravity determinations shall be used in
computing gas volumes.
(4) The deviation of the natural gas from Boyle's law
shall be determined by annual tests or at other shorter
intervals as found necessary in practice. The apparatus and
method used in making the test shall be in accordance with
recommendations of the National Bureau of Standards or Report
No. 3 of the Gas Measurement Committee of the American Gas
Association or amendments to the recommendations or report.
The results of the tests shall be used in computing the
volume of gas delivered under this chapter.
§ 5102. Imposition of tax.
(a) Establishment.--Beginning July 1, 2015, a natural gas
severance tax shall be levied on every producer.
(b) Rate.--The tax shall be imposed at the rate of 8% of the
gross value of the units severed at the wellhead during a
reporting period.
§ 5103. Return and payment.
(a) Requirement.--Each producer shall file a return with the
department, on a form prescribed by the department. The return
shall include all of the following:
(1) The number of natural gas units severed by the
producer for the reporting period.
(2) The number of producing sites used by the producer
for the severance of natural gas in each county and
municipality.
(3) The amount of tax due.
(b) Filing.--The return required by subsection (a) shall be
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filed with the department within 15 days following the end of a
reporting period. The first return shall be due August 15, 2015.
(c) Deadline.--The tax shall be due on the day the return is
required to be filed and shall become delinquent if not remitted
to the department by that date.
(d) Fund established.--There is established in the State
Treasury a fund to be known as the Shale for Our Future Fund.
(e) Deposit.--The tax collected shall be deposited into the
Shale for Our Future Fund. Money in the fund is appropriated on
a continuing basis for the purposes set forth under section 5104
(relating to use of funds).
§ 5104. Use of funds.
Money deposited into the fund under section 5103 (relating to
return and payment) is allocated as follows:
(1) Annually, $100,000,000 shall be transferred to the
Department of Environmental Protection to be used exclusively
for the Growing Greener program.
(2) The remaining revenue shall be distributed as
follows:
(i) For preschool, public elementary and public
secondary education funding, 60%.
(ii) To pay the unfunded accrued liability of the
State Employees' Retirement System, 20%.
(iii) To pay the unfunded accrued liability of the
Public School Employees' Retirement System, 20%.
Section 3. This act shall take effect immediately.
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