PRINTER'S NO. 89
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
113
Session of
2017
INTRODUCED BY HARPER, DEAN, MURT, READSHAW, DAVIS AND RADER,
JANUARY 23, 2017
REFERRED TO COMMITTEE ON ENVIRONMENTAL RESOURCES AND ENERGY,
JANUARY 23, 2017
AN ACT
Amending Title 58 (Oil and Gas) of the Pennsylvania Consolidated
Statutes, in unconventional gas well fee, repealing
expiration; and providing for imposition of tax, for
registration, for meters, for assessments, for time for
assessment, for extension of assessment period, for
reassessments, for interest, for penalties, for criminal
acts, for abatement of additions or penalties, for bulk and
auction sales, for collection upon failure to request
reassessment, review or appeal, for tax liens, for tax suit
reciprocity, for service, for refunds, for refund petition,
for rules and regulations, for recordkeeping, for
examinations, for unauthorized disclosure, for cooperation
with other governments, for bonds and for deposit of
proceeds.
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Consolidated Statutes is repealed:
[ยง 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.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
(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
Chapter
41. (Reserved)
43. Severance Tax
CHAPTER 41
(Reserved)
CHAPTER 43
SEVERANCE TAX
Sec.
4301. Scope of chapter.
4302. Definitions.
4303. Imposition of tax.
4304. Registration.
4305. Meters.
4306. Assessments.
4307. Time for assessment.
4308. Extension of assessment period.
4309. Reassessments.
4310. Interest.
4311. Penalties.
4312. Criminal acts.
4313. Abatement of additions or penalties.
4314. Bulk and auction sales.
4315. Collection upon failure to request reassessment, review
or appeal.
4316. Tax liens.
20170HB0113PN0089 - 2 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
4317. Tax suit reciprocity.
4318. Service.
4319. Refunds.
4320. Refund petition.
4321. Rules and regulations.
4322. Recordkeeping.
4323. Examinations.
4324. Unauthorized disclosure.
4325. Cooperation with other governments.
4326. Bonds.
4327. Deposit of proceeds.
ยง 4301. Scope of chapter.
This chapter relates to taxation of the severance of natural
gas.
ยง 4302. 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:
"Average price of natural gas." The arithmetic mean of the
market price for arm's-length transactions as reported to the
department for the previous reporting period. Within 20 days
after the end of each reporting period the department shall
calculate and publish the average price of natural gas from
returns received in the prior reporting period based on the
total units of gas severed and the total gross value of gas
reported by all producers for all arm's-length transactions on
returns filed with the department.
"Department." The Department of Revenue of the Commonwealth.
"Gross value." All of the following, calculated prior to the
payment of any royalties or other payments to a lessor and
20170HB0113PN0089 - 3 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
without any other deduction or credit:
(1) The volume-weighted average market price for an
arm's-length transaction that a producer receives at the
point of sale for natural gas during a reporting period.
(2) The average price of natural gas if:
(i) the natural gas is not sold in an arm's-length
transaction, as reported by the producer or as determined
by the department;
(ii) if the natural gas is exchanged for something
other than cash; or
(iii) if there is no sale or exchange between the
time of severance and the end of the reporting period
during which the natural gas was severed.
"Natural gas." As defined in section 2301 (relating to
definitions).
"Person." Any natural person, a corporation, fiduciary,
association or other entity. The term includes the Commonwealth
and any political subdivision, instrumentality and authority of
the Commonwealth.
"Producer." As defined in section 2301 (relating to
definitions).
"Reporting period." A calendar month in which natural gas is
severed.
"Sever." Extract or otherwise remove natural gas from the
soil or water of this Commonwealth.
"Stripper well." A natural gas well incapable of producing
more than 90,000 cubic feet of gas per day during any calendar
month, including production from all zones and multilateral well
bores at a single well, without regard to whether the production
is separately metered.
20170HB0113PN0089 - 4 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
"Taxpayer." A person subject to the tax imposed by this
chapter.
"Unconventional gas well." As defined in section 2301
(relating to definitions).
"Unit." One 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
l aw 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.
(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
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
20170HB0113PN0089 - 5 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
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. The results of the tests shall be used in
computing the volume of gas delivered under this chapter.
"Wellhead meter." A meter that measures the volume of
natural gas severed from an unconventional gas well.
ยง 4303. Imposition of tax.
(a) Establishment.--Beginning July 1, 2017, a natural gas
severance tax is levied and payable on every unconventional gas
well required to pay the fee payable under Chapter 23 (relating
to unconventional gas well fee).
(b) Rate.--The tax imposed in subsection (a) shall be 3.5%
of the gross value of units severed at the wellhead during a
reporting period.
(c) Return and payment.--A producer subject to the
provisions of this chapter shall file a return with the
department, on a form prescribed by the department. The return
shall include the following:
(1) The total number of natural gas units severed by the
producer for the reporting period broken down into:
(i) the number of such units sold by the producer
during the reporting period in arm's-length transactions;
(ii) the number of such units sold by the producer
during the reporting period in non-arm's-length
transactions or exchanged for something other than cash;
and
(iii) the number of such units not yet sold or
exchanged as of the end of the reporting period.
20170HB0113PN0089 - 6 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
(2) The gross value of the units identified in paragraph
(1).
(3) The amount of tax due under subsection (b).
(4) Other information reasonably required by the
department.
(d) Filing.--
(1) The return required by subsection (c) shall be filed
with the department within 15 days following the end of a
reporting period. The tax is due on the day the return is
required to be filed under this subsection and shall become
delinquent if not remitted to the department by the required
date.
(2) A producer shall commence filing the returns
required under subsection (c) within 75 days following the
effective date of this section. The initial return shall
include the information required by subsection (c) for the
reporting periods that occurred between July 1, 2017, and the
75th day following the effective date of this section.
(3) An initial return that requires a calculation based
upon the average price of natural gas shall be due within 15
days following the first full reporting period for which such
data is available.
(e) Exemptions.--The tax shall not be imposed on the
following:
(1) A stripper well.
(2) A unit severed, sold and delivered by an operator at
or within five miles of the producing well for the processing
or manufacture of tangible personal property, as defined
under section 201 of the act of March 4, 1971 (P.L.6, No.2),
known as the Tax Reform Code of 1971, within this
20170HB0113PN0089 - 7 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
Commonwealth.
(3) A unit provided free of charge to the owner of the
surface under which the gas is severed if the surface owner
is the end user of the gas.
(4) An owner of the surface real property where a
natural gas well is drilled or operated and that has leased
the rights to recover natural gas from beneath the surface to
an operator.
ยง 4304. Registration.
(a) Application.--
(1) Before a producer severs natural gas or continues to
sever natural gas in this Commonwealth after the date
occurring 60 days following the effective date of this
section, the producer shall apply to the department for a
registration certificate.
(2) The department may charge an application fee to
cover the administrative costs associated with the
application and registration process.
(b) Issuance.--
(1) Except as provided in subsection (c), after the
receipt of an application and the required application fee,
the department shall issue a registration certificate to the
producer. The registration certificate is nonassignable.
(2) A registrant shall renew the registration
certificate on a staggered renewal system established by the
department. After the initial staggered renewal period, a
registration certificate is valid for a period of five years.
(c) Refusal, suspension or revocation.--
(1) The department may refuse to issue, suspend or
revoke a registration certificate if the applicant or
20170HB0113PN0089 - 8 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
registrant has not filed required State tax reports and paid
State taxes not subject to a timely perfected administrative
or judicial appeal or an authorized deferred payment plan.
(2) The department shall notify the applicant or
registrant of a refusal, suspension or revocation. The notice
shall contain a statement that the refusal, suspension or
revocation may be made public. The notice shall be made by
first class mail.
(3) An applicant or registrant aggrieved by the
determination of the department may file an appeal under the
provisions for administrative appeals in the act of March 4,
1971 (P.L.6, No.2), known as the Tax Reform Code of 1971. In
the case of a suspension or revocation which is appealed, the
registration certificate shall remain valid pending a final
outcome of the appeals process. Notwithstanding any other
provision of law, if no appeal is taken or if an appeal is
taken and denied at the conclusion of the appeal process, the
department may disclose, by publication or otherwise, the
identity of a producer and the fact that the producer's
registration certificate has been refused, suspended or
revoked under this subsection. Disclosure may include the
basis for refusal, suspension or revocation.
(d) Violation.--
(1) A person that severs natural gas in this
Commonwealth in violation of subsection (a) commits a summary
offense and shall, upon conviction, be sentenced to pay a
fine not less than $300 nor more than $1,500 or, in default
of the payment, to imprisonment for not less than five days
nor more than 30 days.
(2) For purposes of this subsection, each day in which
20170HB0113PN0089 - 9 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
natural gas is severed shall constitute a separate violation.
(3) The penalties imposed by this subsection shall be in
addition to any other penalties imposed by this chapter.
(4) The S ecretary of Revenue may designate employees of
the department to enforce the provisions of this subsection.
The employees shall exhibit proof of and be within the scope
of the designation when instituting proceedings as provided
by the Pennsylvania Rules of Criminal Procedure.
(e) Failure to obtain registration certificate.--Failure to
obtain or hold a valid registration certificate does not relieve
a person from liability for the tax imposed by this chapter.
ยง 4305. Meters.
A producer shall provide for and maintain a discrete wellhead
meter where natural gas is severed . A producer shall ensure that
the meters are maintained according to industry standards. Any
wellhead meter installed after the effective date of this
section shall be a digital meter.
ยง 4306. Assessments.
(a) Authorization and requirement.--The department shall
make inquiries, determinations and assessments of the tax
imposed under this chapter, including interest, additions and
penalties imposed under this chapter.
(b) Notice.--The notice of assessment and demand for payment
shall be mailed to the taxpayer. The notice shall state the
basis of the assessment. The department shall send the notice of
assessment to the taxpayer at the taxpayer's registered address
via certified mail if the assessment increases the taxpayer's
tax liability by $300. Otherwise, the notice of assessment may
be sent via regular mail.
ยง 4307. Time for assessment.
20170HB0113PN0089 - 10 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
(a) Requirement.--
(1) An assessment as provided under section 4306
(relating to assessments) shall be made within three years
after the date when the return provided for under section
4303(c) (relating to imposition of tax) is filed or the end
of the year in which the tax liability arises, whichever
shall occur last.
(2) For purposes of this subsection and subsection (b),
a return filed before the last day prescribed for the filing
period shall be considered as filed on the last day.
(b) Exception.--If the taxpayer underpays the correct amount
of the tax due by 25% or more, the tax may be assessed within
six years after the date the return was filed.
(c) Intent to evade.--Where no return is filed or where the
taxpayer files a false or fraudulent return with intent to evade
the tax imposed by this chapter, the assessment may be made at
any time.
(d) Erroneous credit or refund.--Within three years of the
granting of a refund or credit or within the period in which an
assessment or reassessment may have been issued by the
department for the taxable period for which the refund was
granted, whichever period shall occur last, the department may
issue an assessment to recover a refund or credit made or
allowed erroneously.
ยง 4308. Extension of assessment period.
Notwithstanding the provisions of this chapter, the
assessment period may be extended in the event a taxpayer has
provided written consent before the expiration of the period
provided in section 4307 (relating to time for assessment) for a
tax assessment. The amount of tax due may be assessed at any
20170HB0113PN0089 - 11 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
time within the extended period. The period may be extended
further by subsequent written consents made before the
expiration of the extended period.
ยง 4309. Reassessments.
A taxpayer against whom an assessment is made may petition
the department for a reassessment under Article XXVII of the act
of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of
1971.
ยง 4310. Interest.
The department shall assess interest on any delinquent tax at
the rate prescribed under section 806 of the act of April 9,
1929 (P.L.343, No.176), known as The Fiscal Code.
ยง 4311. Penalties.
The department shall enforce the following penalties:
(1) A penalty against a producer without a registration
certificate required under section 4304 (relating to
registration). The penalty shall be $1 for every unit severed
without a valid registration certificate. The department may
assess this penalty separately from or in conjunction with
any assessment of the natural gas severance tax.
(2) A penalty against a producer for failure to timely
file a return as required under section 4303(c) (relating to
imposition of tax). The penalty shall be 5% of the tax
liability to be reported on the return for each day beyond
the due date that the return is not filed.
(3) In addition to the penalty under paragraph (2), a
penalty against the producer for a willful failure to timely
file a return. The penalty shall be 200% of the tax liability
required to be reported on the return.
(4) A penalty against a producer for failure to timely
20170HB0113PN0089 - 12 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
pay the tax as required by section 4303(d). The penalty shall
be 5% of the amount of tax due for each day beyond the
payment date that the tax is not paid.
ยง 4312. Criminal acts.
(a) Fraudulent return.--Any person with intent to defraud
the Commonwealth, who willfully makes or causes to be made a
return required by this chapter which is false, is guilty of a
misdemeanor and shall, upon conviction, be sentenced to pay a
fine of not more than $2,000 or to imprisonment for not more
than three years, or both.
(b) Other crimes.--
(1) Except as otherwise provided under subsection (a), a
person is guilty of a misdemeanor and shall, upon conviction,
be sentenced to pay a fine of not more than $1,000 and costs
of prosecution or to imprisonment for not more than one year,
or both, for any of the following:
(i) Willfully failing to timely remit the tax to the
department.
(ii) Willfully failing or neglecting to timely file
a return or report required by this chapter.
(iii) Refusing to timely pay a tax, penalty or
interest imposed or provided for by this chapter.
(iv) Willfully failing to preserve the person's
books, papers and records as directed by the department.
(v) Refusing to permit the department or the
person's authorized agents to examine the person's books,
records or papers.
(vi) Knowingly making any incomplete, false or
fraudulent return or report.
(vii) Preventing or attempting to prevent the full
20170HB0113PN0089 - 13 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
disclosure of the amount of natural gas severance tax
due.
(viii) Providing any person with a false statement
as to the payment of the tax imposed under this chapter
with respect to any pertinent facts.
(ix) Making, uttering or issuing a false or
fraudulent statement.
(2) The penalties imposed by this section shall be in
addition to other penalties imposed by this chapter.
ยง 4313. Abatement of additions or penalties.
Upon the filing of a petition for reassessment or a petition
for refund by a taxpayer as provided under this chapter,
additions or penalties imposed upon the taxpayer by this chapter
may be waived or abated, in whole or in part, where the
petitioner establishes that he acted in good faith, without
negligence and with no intent to defraud.
ยง 4314. Bulk and auction sales.
A person that sells or causes to be sold at auction, or that
sells or transfers in bulk, 51% or more of a stock of goods,
wares or merchandise of any kind, fixtures, machinery,
equipment, buildings or real estate involved in a business for
which the person holds a registration certificate or is required
to obtain a registration certificate under the provisions of
this chapter shall be subject to the provisions of section 1403
of the act of April 9, 1929 (P.L.343, No.176), known as The
Fiscal Code.
ยง 4315. Collection upon failure to request reassessment, review
or appeal.
(a) Power of department.--The department may collect the tax
imposed under this chapter:
20170HB0113PN0089 - 14 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
(1) If an assessment of the tax is not paid within 30
days after notice to the taxpayer when no petition for
reassessment has been filed.
(2) Within 60 days of the reassessment, if no petition
for review has been filed.
(3) If no appeal has been made, within 30 days of:
(i) the Board of Finance and Revenue's decision of a
petition for review; or
(ii) the expiration of the Board of Finance and
Revenue's time for acting upon the petition.
(4) In all cases of judicial sales, receiverships,
assignments or bankruptcies.
(b) Prohibition.--In a case for the collection of taxes
under subsection (a), the taxpayer against whom the taxes were
assessed may not set up a ground of defense that might have been
determined by the department, the Board of Finance and Revenue
or the courts, provided that the defense of failure of the
department to mail notice of assessment or reassessment to the
taxpayer and the defense of payment of assessment or
reassessment may be raised in proceedings for collection by a
motion to stay the proceedings.
ยง 4316. Tax liens.
(a) Lien imposed.--
(1) If a taxpayer neglects or refuses to pay the tax
imposed under this chapter for which the taxpayer is liable
under this chapter after demand, the amount, including
interest, addition or penalty, together with additional costs
that may accrue, shall be a lien in favor of the Commonwealth
upon the real and personal property of the taxpayer , but only
after the same has been entered and docketed of record by the
20170HB0113PN0089 - 15 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
prothonotary of the county where the property is situated.
(2) The department may, at any time, transmit to the
prothonotaries of the respective counties certified copies of
all liens imposed by this section .
(3) The prothonotary receiving the lien shall enter and
docket the lien of record to the office of the prothonotary.
The lien shall be indexed as judgments are now indexed. No
prothonotary shall require as a condition precedent to the
entry of the lien the payment of costs incidental to its
entry.
(b) Priority of lien and effect on judicial sale.--Except
for the costs of the sale and the writ upon which the sale was
made and real estate taxes and municipal claims against the
property, a lien imposed under this section shall have priority
from the date of its recording and shall be fully paid and
satisfied out of the proceeds of any judicial sale of property
subject to the lien, before any other obligation, judgment,
claim, lien or estate to which the property may subsequently
become subject, but shall be subordinate to mortgages and other
liens existing and duly recorded or entered of record prior to
the recording of the lien.
(c) No discharge by sale on junior lien.--
(1) In the case of a judicial sale of property subject
to a lien imposed under this section, upon a lien or claim
over which the lien imposed under this section has priority,
the sale shall discharge the lien imposed under this section
to the extent only that the proceeds are applied to its
payment, and the lien shall continue in full force and effect
as to the balance remaining unpaid.
(2) There shall be no inquisition or condemnation upon
20170HB0113PN0089 - 16 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
any judicial sale of real estate made by the Commonwealth
under the provisions of this chapter.
(3) The lien shall continue as provided in the act of
April 9, 1929 (P.L.343, No.176), known as The Fiscal Code,
and a writ of execution may directly issue upon the lien
without the issuance and prosecution to judgment of a writ of
scire facias, provided that not less than 10 days before
issuance of any execution on the lien, notice of the filing
and the effect of the lien shall be sent by registered mail
to the taxpayer's last known post office address, provided
further that the lien shall have no effect upon any stock of
goods, wares or merchandise regularly sold or leased in the
ordinary course of business by the taxpayer against whom the
lien has been entered, unless and until a writ of execution
has been issued and a levy made upon the stock of goods,
wares and merchandise.
(d) Penalty.--A prothonotary who intentionally violates this
section commits a misdemeanor of the third degree and shall,
upon conviction, be sentenced to pay a fine of not more than
$1,000 and costs of prosecution or to imprisonment for not more
than one year, or both.
(e) Priority.--
(1) Except as provided in this chapter, the
distribution, voluntary or compulsory, in receivership,
bankruptcy or otherwise of the property or estate of any
person, all taxes imposed by this chapter which are due and
unpaid and are not collectible under the provisions of
section 225 of the act of March 4, 1971 (P.L.6, No.2), known
as the Tax Reform Code of 1971, shall be paid from the first
money available for distribution in priority to all other
20170HB0113PN0089 - 17 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
claims and liens, except as the laws of the United States may
give priority to a claim to the Federal Government.
(2) A person charged with the administration or
distribution of the property or estate who violates the
provisions of this section shall be personally liable for the
taxes imposed by this chapter which are accrued and unpaid
and chargeable against the person whose property or estate is
being administered or distributed.
(f) Other remedies.--Subject to the limitations contained in
this chapter as to the assessment of taxes, nothing contained in
this section shall be construed to restrict, prohibit or limit
the use by the department in collecting taxes due and payable of
another remedy or procedure available at law or equity for the
collection of debts.
ยง 4317. Tax suit reciprocity.
The courts of the Commonwealth shall recognize and enforce
liabilities for natural gas severance or extraction taxes
lawfully imposed by any other state, if the other state
recognizes and enforces the tax imposed under this chapter.
ยง 4318. Service.
A producer is deemed to have appointed the Secretary of the
Commonwealth as the producer's agent for the acceptance of
service of process or notice in a proceeding for the enforcement
of the civil provisions of this chapter, and service made upon
the Secretary of the Commonwealth as agent shall be of the same
legal force and validity as if the service had been personally
made on the producer . Where service cannot be made upon the
producer in the manner provided by other laws of this
Commonwealth relating to service of process, service may be made
upon the Secretary of the Commonwealth. In that case, a copy of
20170HB0113PN0089 - 18 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
the process or notice shall be personally served upon any agent
or representative of the producer who may be found within this
Commonwealth or, where no agent or representative may be found,
a copy of the process or notice shall be sent via registered
mail to the producer at the last known address of t he producer's
principal place of business, home office or residence.
ยง 4319. Refunds.
(a) General rule.--Under Article XXVII of the act of March
4, 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971, the
department shall refund all taxes, interest and penalties paid
to the Commonwealth under the provisions of this chapter to
which the Commonwealth is not rightfully entitled. The refunds
shall be made to the person or the person's heirs, successors,
assigns or other personal representatives who paid the tax,
provided that no refund shall be made under this section
regarding a payment made by reason of an assessment where a
taxpayer has filed a petition for reassessment under section
2702 of the Tax Reform Code of 1971 to the extent the petition
is adverse to the taxpayer by a decision which is no longer
subject to further review or appeal.
(b) Construction.--Nothing in this chapter shall be
construed to prohibit a taxpayer that has filed a timely
petition for reassessment from amending it to a petition for
refund where the petitioner paid the tax assessed.
ยง 4320. Refund petition.
(a) General rule.--Except as provided for in subsection (b),
the refund or credit of tax, interest or penalty provided for by
section 4319 (relating to refunds) shall be made only where the
person who has paid the tax files a petition for refund with the
department under Article XXVII of the act of March 4, 1971
20170HB0113PN0089 - 19 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
(P.L.6, No.2), known as the Tax Reform Code of 1971, within the
time limits of section 3003.1 of the Tax Reform Code of 1971.
(b) Natural gas severance tax.--
(1) A refund or credit of tax, interest or penalty paid
as a result of an assessment made by the department under
section 4306 (relating to assessments) shall be made only
where the person who has paid the tax files a petition for a
refund with the department under Article XXVII of the Tax
Reform Code of 1971 within the time limits of section 3003.1
of the Tax Reform Code of 1971.
(2) The filing of a petition for refund under the
provisions of this subsection shall not affect the abatement
of interest, additions or penalties to which the person may
be entitled by reason of payment of the assessment.
ยง 4321. Rules and regulations.
The department is charged with the enforcement of the
provisions of this chapter and is authorized and empowered to
prescribe, adopt, promulgate and enforce rules and regulations
not inconsistent with the provisions of this chapter relating to
any matter or thing pertaining to the administration and
enforcement of the provisions of this chapter and the collection
of taxes, penalties and interest imposed by this chapter. The
department may prescribe the extent, if any, to which any of the
rules and regulations shall be applied without retroactive
effect.
ยง 4322. Recordkeeping.
(a) General rule.--Every person liable for any tax imposed
by this chapter, or for the collection of the tax, shall keep
records, including those enumerated in subsection (b), render
statements, make returns and comply with the rules and
20170HB0113PN0089 - 20 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
regulations as the department may prescribe regarding matters
pertinent to the person's business. Whenever it is necessary,
the department may require a person, by notice served upon the
person or by regulations, to make returns, render statements or
keep records as the department deems sufficient to show whether
or not a person is liable to pay tax under this chapter.
(b) Records.--Records to be maintained are:
(1) Wellhead meter charts for each reporting period and
the meter calibration and maintenance records. If turbine
meters are in use, the maintenance records will be made
available to the department upon request.
(2) Records, statements and other instruments furnished
to a producer by a person to whom the producer delivers for
sale, transport or delivery of natural gas.
(3) Records, statements and other instruments as the
department may prescribe by regulation.
(c) Records of nonresidents.--
(1) A nonresident who does business in this Commonwealth
as a producer shall keep adequate records of the business and
of the tax due as a result. The records shall be retained
within this Commonwealth unless retention outside this
Commonwealth is authorized by the department.
(2) The department may require a taxpayer that desires
to retain records outside this Commonwealth to assume
reasonable out-of-State audit expenses.
(d) Keeping of separate records.--
(1) A producer that is engaged in another business or
businesses which do not involve the severing of natural gas
taxable under this chapter shall keep separate books and
records of the businesses so as to show the taxable severing
20170HB0113PN0089 - 21 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
of natural gas under this chapter separately from other
business activities not taxable hereunder.
(2) If any person fails to keep separate books and
records, the person shall be liable for a penalty equaling
100% of tax due under this chapter for the period where
separate records were not maintained.
ยง 4323. Examinations.
(a) Right to examine.--
(1) The department or any of its authorized agents may
examine the books, papers and records of any taxpayer in
order to verify the accuracy and completeness of any return
made or, if no return were made, to ascertain and assess the
tax imposed by this chapter. The department may require the
preservation of all books, papers and records for any period
deemed proper by the department but not to exceed three years
from the end of the calendar year to which the records
relate.
(2) Every taxpayer shall give to the department or its
agent the means, facilities and opportunity for examinations
and investigations under this section.
(3) The department may examine any person, under oath,
concerning the taxable severing of natural gas by any
taxpayer or concerning any other matter relating to the
enforcement or administration of this chapter, and to this
end may compel the production of books, papers and records
and the attendance of all persons whether as parties or
witnesses believed to have knowledge of relevant matters.
(b) Procedure.--The procedure for the hearings or
examinations shall be the same as that provided under the act of
April 9, 1929 (P.L.343, No.176), known as The Fiscal Code.
20170HB0113PN0089 - 22 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
ยง 4324. Unauthorized disclosure.
(a) General rule.--Any information gained by the department
as a result of any return, examination, investigation, hearing
or verification required or authorized by this chapter shall be
confidential except for official purposes and except in
accordance with proper judicial order or as otherwise provided
by law.
(b) Penalty.--Any person unlawfully divulging the
information shall be guilty of a misdemeanor and shall, upon
conviction, be sentenced to pay a fine of not more than $1,000
and costs of prosecution or to imprisonment for not more than
one year, or both.
ยง 4325. Cooperation with other governments.
Notwithstanding the provisions of section 4317 (relating to
tax suit reciprocity), the department may permit the
Commissioner of the Internal Revenue Service, the proper officer
of any state or the authorized representative of either of them
to inspect the tax returns of any taxpayer, or may furnish to
the commissioner or officer or to either of their authorized
representatives an abstract of the return of any taxpayer, or
supply him with information concerning any item contained in any
return or disclosed by the report of any examination or
investigation of the return of any taxpayer. This permission
shall be granted only if the laws of the United States or
another state grant substantially similar privileges to the
proper officer of the Commonwealth charged with the
administration of this chapter.
ยง 4326. Bonds.
(a) Taxpayer to file bond.--
(1) The department may require a nonresident natural
20170HB0113PN0089 - 23 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
person or any foreign corporation, association, fiduciary or
other entity, not authorized to do business within this
Commonwealth or not having an established place of business
in this Commonwealth and subject to the tax imposed by
section 4303 (relating to imposition of tax), to file a bond
issued by a surety company authorized to do business in this
Commonwealth and approved by the Insurance Commissioner as to
solvency and responsibility, in amounts as the department may
fix, to secure the payment of any tax or penalties due or
which may become due from a nonresident natural person ,
corporation, association, fiduciary or other entity whenever
the department deems it necessary to protect the revenues
obtained under this chapter.
(2) The department may also require a bond of a person
petitioning the department for reassessment in the case of
any assessment over $500 or where, in the department's
opinion, the ultimate collection is in jeopardy.
(3) For a period of three years, the department may
require a bond of any person that has, on three or more
occasions within a 12-month period, either filed a return or
made payment to the department more than 30 days late.
(4) In the event the department determines a taxpayer is
required to file a bond, the department shall give notice to
the taxpayer specifying the amount of the bond required.
(5) The taxpayer shall file the bond within five days
after notice is given by the department unless, within five
days, the taxpayer requests in writing a hearing before the
S ecretary of Revenue or his representative.
(6) At the hearing, the necessity, propriety and amount
of the bond shall be determined by the S ecretary of Revenue
20170HB0113PN0089 - 24 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
or his representative.
(7) The determination shall be final and the taxpayer
shall comply within 15 days after notice is mailed to the
taxpayer.
(b) Securities in lieu of bond.--
(1) In lieu of the bond required by this section,
securities approved by the department or cash in a prescribed
amount may be deposited. The securities or cash shall be kept
in the custody of the department.
(2) The department may:
(i) Apply the securities or cash to the tax imposed
by this chapter and interest or penalties due without
notice to the depositor.
(ii) Sell the securities to pay the tax and interest
or penalties due at public or private sale upon five
days' written notice to the depositor.
(c) Failure to file bond.--
(1) The department may file a lien under section 4316
(relating to tax liens) against any taxpayer who fails to
file a bond when required to do so under this section.
(2) All funds received upon execution of the judgment on
the lien shall be refunded to the taxpayer with 3% interest
should a final determination be made that the taxpayer does
not owe any payment to the department.
ยง 4327. Deposit of proceeds.
The proceeds of the tax imposed under section 4303 (relating
to imposition of tax) and penalties and interest imposed under
this chapter shall be deposited as follows:
(1) Fifty percent into the Public School Employees'
Retirement Fund for the purpose of reducing accrued unfunded
20170HB0113PN0089 - 25 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
liabilities.
(2) Fifty percent to a restricted account in the General
Fund for the payment of the general government operations of
the Pennsylvania State Police.
Section 3. This act shall take effect immediately.
20170HB0113PN0089 - 26 -
1
2
3
4
5