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| PRIOR PRINTER'S NOS. 1853, 2241 | PRINTER'S NO. 3936 |
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| THE GENERAL ASSEMBLY OF PENNSYLVANIA |
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| HOUSE BILL |
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| INTRODUCED BY GEORGE, LEVDANSKY, BELFANTI, BRENNAN, CARROLL, FREEMAN, GOODMAN, GRUCELA, HORNAMAN, JOSEPHS, MAHONEY, McILVAINE SMITH, MUNDY, MYERS, SIPTROTH, K. SMITH, STABACK, STURLA, J. TAYLOR, YOUNGBLOOD, CURRY, HARKINS, BRIGGS, HANNA, MIRABITO AND SEIP, MAY 13, 2009 |
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| AS RE-REPORTED FROM COMMITTEE ON ENVIRONMENTAL RESOURCES AND ENERGY, HOUSE OF REPRESENTATIVES, AS AMENDED, JUNE 21, 2010 |
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| AN ACT |
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1 | Amending Title 72 (Taxation and Fiscal Affairs) of the |
2 | Pennsylvania Consolidated Statutes, imposing a tax on the |
3 | extraction of natural gas; providing for natural gas |
4 | severance registration certificate, for duties of the |
5 | Department of Revenue, for tax assessments and tax liens; |
6 | imposing penalties; providing for service of process, for |
7 | rulemaking, for cooperation with other governments and for |
8 | bonds; establishing the Natural Gas Severance Tax Account, | <-- |
9 | the Local Government Services Account and the Oil and Gas |
10 | Environmental Disaster Recovery Account; providing for the |
11 | establishment, implementation and administration of the |
12 | Marcellus Shale Job Creation Tax Credit; imposing additional |
13 | duties on the Department of Community and Economic |
14 | Development; and making an appropriation. |
15 | The General Assembly of the Commonwealth of Pennsylvania |
16 | hereby enacts as follows: |
17 | Section 1. Title 72 of the Pennsylvania Consolidated |
18 | Statutes is amended by adding a chapter to read: |
19 | CHAPTER 15 |
20 | SEVERANCE TAX |
21 | Sec. |
22 | 1501. Short title of chapter. |
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1 | 1502. Definitions. |
2 | 1503. Imposition of tax. |
3 | 1503.1. Natural gas base rate adjustment. | <-- |
4 | 1504. Return and payment. |
5 | 1505. Natural gas severance tax registration. |
6 | 1505.1 Meters. |
7 | 1506. Assessments. |
8 | 1507. Time for assessment. |
9 | 1508. Extension of limitation assessment period. | <-- |
10 | 1509. Reassessments. |
11 | 1510. Interest. |
12 | 1511. Penalties. |
13 | 1512. Criminal acts. |
14 | 1513. Abatement of additions or penalties. |
15 | 1514. Bulk and auction sales. |
16 | 1515. Collection upon failure to request reassessment, review |
17 | or appeal. |
18 | 1516. Tax liens. |
19 | 1517. Tax suit reciprocity. |
20 | 1518. Service. |
21 | 1519. Refunds. |
22 | 1520. Refund petition. |
23 | 1521. Rules and regulations. |
24 | 1522. Recordkeeping. |
25 | 1523. Examinations. |
26 | 1524. Unauthorized disclosure. |
27 | 1525. Cooperation with other governments. |
28 | 1526. Bonds. |
29 | 1527. Natural Gas Severance Tax Fund Accounts established. | <-- |
30 | 1528. Administration of fund Transfers and distributions. | <-- |
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1 | 1529. Appropriation. |
2 | § 1501. Short title of chapter. |
3 | This chapter shall be known and may be cited as the Natural |
4 | Gas Severance Tax Act. |
5 | § 1502. Definitions. |
6 | The following words and phrases when used in this chapter |
7 | shall have the meanings given to them in this section unless the |
8 | context clearly indicates otherwise: |
9 | "Accredited laboratory." A facility engaged in the testing |
10 | and calibration of scientific measurement devices and certified |
11 | by the Department of Environmental Protection as having met the |
12 | department's standards for accreditation. |
13 | "Association." A partnership, limited partnership or any |
14 | other form of unincorporated enterprise owned or conducted by |
15 | two or more persons. |
16 | "Base rate adjustment index." The amount calculated under | <-- |
17 | section 1503(b) (relating to imposition of tax) by which the |
18 | rate of the tax imposed under section 1503(a) is adjusted |
19 | annually. |
20 | "Corporation." A corporation, joint stock association, |
21 | limited liability company, business trust or any other |
22 | incorporated enterprise organized under the laws of this |
23 | Commonwealth, the United States or any other state, territory or |
24 | foreign country or dependency. |
25 | "Department." The Department of Revenue of the Commonwealth. |
26 | "Fund." The Natural Gas Severance Tax Fund established under |
27 | section 1527. |
28 | "Gross value." The volume-weighted average market price for | <-- |
29 | all arms-length transactions that a producer receives at the |
30 | sales meter for natural gas during a reporting period. |
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1 | "Meter." A device to measure the passage of volumes of gases |
2 | or liquids past a certain point. |
3 | "Municipality." A city, borough, incorporated town or a | <-- |
4 | township. |
5 | "Natural gas." A fossil fuel consisting of a mixture of |
6 | hydrocarbon gases, primarily methane, possibly including ethane, |
7 | propane, butane, pentane, carbon dioxide, oxygen, nitrogen and |
8 | hydrogen sulfide and other gas species. The term includes |
9 | natural gas from oil fields known as associated gas or casing |
10 | head gas, natural gas fields known as nonassociated gas, coal |
11 | beds, shale beds and other formations. The term does not include | <-- |
12 | "coalbed methane" which, for the purpose of this chapter, shall |
13 | mean gas which can be produced from coal beds, coal seams, mined |
14 | out areas or gob wells. |
15 | "Nonproducing site." A point of severance that is not |
16 | capable of producing natural gas in paying quantities. |
17 | "Paying quantities." Profit to the producer, however small, |
18 | over the producer's current operating expenses. |
19 | "Person." A natural person or a corporation, fiduciary, |
20 | association or other entity, including the Commonwealth, its |
21 | political subdivisions, instrumentalities and authorities. When |
22 | the term is used in a clause prescribing and imposing a penalty |
23 | or imposing a fine or imprisonment, or both, the term shall |
24 | include the members, as applied to an association, and the |
25 | officers, as applied to a corporation. |
26 | "Producer." A person who engages or continues within this |
27 | Commonwealth in the business of severing natural gas for sale, |
28 | profit or commercial use. The term does not include a person who |
29 | severs natural gas from a storage field. |
30 | "Producing site." A point of severance capable of producing |
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1 | natural gas in paying quantities. |
2 | "Reporting period." A calendar month in which natural gas is | <-- |
3 | severed A period of three successive calendar months beginning | <-- |
4 | with the first day of July and ending on the 30th day of |
5 | September and each succeeding three successive calendar months. |
6 | "Sales meter." A meter at the point where natural gas is | <-- |
7 | sold or transported to a purchaser or market. |
8 | "Secretary." The Secretary of Revenue of the Commonwealth. | <-- |
9 | "Sever," "severing" or "severance." The extraction or other |
10 | removal of natural gas from the soil or water of this |
11 | Commonwealth. |
12 | "Storage field." A natural formation or other site that is |
13 | used to store natural gas that did not originate from and has |
14 | been injected into the formation or site. |
15 | "Stripper well." A producing site or a nonproducing site |
16 | that is not capable of producing and does not produce more than |
17 | 60,000 cubic feet of natural gas per day. |
18 | "Tax." The tax imposed under this chapter. |
19 | "Taxpayer." A person subject to the tax imposed by this |
20 | chapter. |
21 | "Unit." A thousand cubic feet of natural gas measured at the |
22 | wellhead at a temperature of 60 degrees Fahrenheit and an |
23 | absolute pressure of 14.73 pounds per square inch in accordance |
24 | with American Gas Association Standards and according to Boyle's |
25 | law Law for the measurement of gas under varying pressures with | <-- |
26 | deviations as follows: |
27 | (1) The average absolute atmospheric pressure shall be |
28 | assumed to be 14.4 pounds to the square inch, regardless of |
29 | elevation or location of point of delivery above sea level or |
30 | variations in atmospheric pressure from time to time. |
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1 | (2) The temperature of the gas passing the meters shall |
2 | be determined by the continuous use of a recording |
3 | thermometer installed to properly record the temperature of |
4 | gas flowing through the meters. The arithmetic average of the |
5 | temperature recorded each 24-hour day shall be used in |
6 | computing gas volumes. If a recording thermometer is not |
7 | installed, or if installed and not operating properly, an |
8 | average flowing temperature of 60 degrees Fahrenheit shall be |
9 | used in computing gas volume. |
10 | (3) The specific gravity of the gas shall be determined |
11 | annually by tests made by the use of an Edwards or Acme |
12 | gravity balance, or at intervals as found necessary in |
13 | practice. Specific gravity determinations shall be used in |
14 | computing gas volumes. |
15 | (4) The deviation of the natural gas from Boyle's Law |
16 | shall be determined by annual tests or at other shorter |
17 | intervals as found necessary in practice. The apparatus and |
18 | method used in making the test shall be in accordance with |
19 | recommendations of the National Bureau of Standards or Report |
20 | No. 3 of the Gas Measurement Committee of the American Gas |
21 | Association, or amendments thereto. The results of the tests |
22 | shall be used in computing the volume of gas delivered under |
23 | this chapter. |
24 | "Wellhead meter." A meter placed at a producing or |
25 | nonproducing site to measure the volume of natural gas severed |
26 | for which a wellhead meter certification has been issued. |
27 | "Wellhead meter certification." A report issued by an |
28 | accredited laboratory certifying the accuracy of a wellhead |
29 | meter. |
30 | § 1503. Imposition of tax. |
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1 | (a) Establishment.--There is levied a natural gas severance |
2 | tax on every producer. |
3 | (b) Rate.--The tax imposed in subsection (a) shall be 5% of | <-- |
4 | the gross value of units severed at the wellhead during a |
5 | reporting period, plus 4.7 cents per unit severed, but shall not |
6 | be imposed on units severed from a stripper well. |
7 | (a.1) Stripper wells.--The tax shall not be imposed on units | <-- |
8 | severed from a stripper well unless the following are true: |
9 | (1) The stripper well is one of multiple producing sites |
10 | or nonproducing sites, the combined volumes of gas produced |
11 | by all of which sites are measured by a single wellhead meter |
12 | as provided in section 1505.1 (relating to meters). |
13 | (2) The combined volumes of gas produced by all the |
14 | producing sites or nonproducing sites described in paragraph |
15 | (1) is more than 60,000 cubic feet of natural gas per day. |
16 | (a.2) Exemptions.--The tax shall not be imposed on the |
17 | following: |
18 | (1) units severed, sold and delivered by a producer at |
19 | or within five miles of the producing site for the processing |
20 | or manufacture of tangible personal property, as defined |
21 | under section 201 of the act of March 4, 1971 (P.L.6, No.2), |
22 | known as the Tax Reform Code of 1971, within this |
23 | Commonwealth; or |
24 | (2) units provided free of charge to the owner of the |
25 | surface under which the gas is severed if the surface owner |
26 | is the end user of the gas. |
27 | (b) Rate.--Subject to the provisions of section 1503.1, the |
28 | rate shall be 35¢ per unit severed at the wellhead. |
29 | § 1503.1. Natural gas base rate adjustment. |
30 | (a) Annual adjustment.--The rate of tax imposed under |
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1 | section 1503 (relating to imposition of tax) shall be adjusted |
2 | annually by the amount of the base rate adjustment index as |
3 | calculated under subsection (c), provided that the tax rate |
4 | shall never be less than 35¢ per unit severed. The adjusted tax |
5 | rate shall be effective for the next year. |
6 | (b) Determination of adjustment.--On or before April 30 of |
7 | each year following the effective date of this section, the |
8 | secretary shall calculate and determine the amount of the base |
9 | rate adjustment index. |
10 | (c) Calculation of adjustment.--The base rate adjustment |
11 | index shall be determined as follows: |
12 | (1) If 5% of the average of New York Mercantile Exchange |
13 | (NYMEX) Henry Hub settled price on the last trading day of |
14 | the month, as reported by the Wall Street Journal for the |
15 | previous 12-month period ending March 31, is less than 35¢, |
16 | the base rate adjustment index shall be zero and the adjusted |
17 | tax rate shall be 35¢. |
18 | (2) If 5% of the average of the New York Mercantile |
19 | Exchange (NYMEX) Henry Hub settled price on the last trading |
20 | day of the month, as reported by the Wall Street Journal for |
21 | the previous 12-month period ending March 31, is greater than |
22 | 35¢, the base rate adjustment index shall be 50% of the |
23 | difference between 5% of the average of the NYMEX Henry Hub |
24 | settled price on the last trading day of the month, as |
25 | reported in the Wall Street Journal for the previous 12-month |
26 | period ending March 31, and 35¢. The adjusted tax rate shall |
27 | be the resulting base rate adjustment index plus 35¢. |
28 | (d) Publication of adjustment.--The secretary shall forward |
29 | the amount of the base rate adjustment index and the adjusted |
30 | tax rate, as determined under subsection (c), to the Legislative |
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1 | Reference Bureau for publication in the Pennsylvania Bulletin by |
2 | May 1 of each year and shall simultaneously provide the |
3 | information to producers as required by written notice. Failure |
4 | of the amount of the base rate adjustment index and the adjusted |
5 | tax rate to be published or provided to producers as required by |
6 | this subsection shall not affect the effectiveness of the |
7 | adjusted tax rate under subsection (b). |
8 | (e) Discontinuance of data.--If publication of the NYMEX |
9 | Henry Hub average monthly gas price data is discontinued, the |
10 | tax rate then in effect shall not be adjusted until a comparable |
11 | method for determining the base rate adjustment index is adopted |
12 | by the General Assembly in legislation. |
13 | (f) Other adjustments.--If the base data of the NYMEX Henry |
14 | Hub average monthly gas price is substantially revised, the |
15 | secretary shall, when determining the amount of the base rate |
16 | adjustment index under subsection (c), make appropriate changes |
17 | to ensure that the base rate adjustment index is reasonably |
18 | consistent with the result which would have been attained had |
19 | such substantial revision not been made. If the secretary is |
20 | unable to make reasonable changes sufficient to ensure a |
21 | consistent result, the tax rate then in effect shall not be |
22 | adjusted until a comparable method for determining the base rate |
23 | adjustment index is adopted by the General Assembly in |
24 | legislation. |
25 | (g) Application of rate determinations.--The provisions of |
26 | this section shall affect only the determination of the rate of |
27 | the tax on the severance units of natural gas imposed in section |
28 | 1503. The provisions of this section are not intended, nor shall |
29 | they be construed, to affect any other determination whatsoever, |
30 | including, but not limited to, the determination of royalty due |
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1 | under mineral leases. Notwithstanding any other provision of |
2 | law, the tax imposed by this chapter shall not reduce any |
3 | royalty payments due under mineral leases and the producer may |
4 | not recover any portion of the tax paid from the royalty owner |
5 | through other means of deduction or reallocation, |
6 | notwithstanding any provision in the lease, contract or |
7 | agreement. |
8 | § 1504. Return and payment. |
9 | (a) Requirement.--Every producer is required to file a |
10 | return with the department, on a form to be prescribed by the |
11 | department, reporting all severed natural gas per reporting | <-- |
12 | period and the tax due under section 1503 (relating to |
13 | imposition of tax). which shall include all of the following: | <-- |
14 | (1) The number of severed natural gas units for each |
15 | reporting period. |
16 | (2) The number of producing sites in each county and |
17 | municipality. |
18 | (3) The amount of tax due under section 1503 (relating to |
19 | imposition of tax). |
20 | (b) Filing.--The return required by subsection (a) shall be |
21 | filed with the department within 15 50 days following the end of | <-- |
22 | the second calendar month after a reporting period. | <-- |
23 | (c) Deadline.--The tax imposed under section 1503 is due on |
24 | the day the return is required to be filed and becomes |
25 | delinquent if not remitted to the department by that date. |
26 | § 1505. Natural gas severance tax registration. |
27 | (a) Application.--Before a producer severs natural gas in |
28 | this Commonwealth, the producer shall apply to the department |
29 | for a natural gas severance tax registration certificate. |
30 | (a.1) Application fee.--The department may charge an |
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1 | application fee to cover the administrative costs associated |
2 | with the application and registration process. If the department |
3 | charges an application fee, the department shall not issue a |
4 | registration certificate until the producer has paid the |
5 | application fee. |
6 | (a.2) Declaration.-- The producer shall include in its |
7 | application a declaration of all sites in this Commonwealth | <-- |
8 | producing sites and nonproducing sites used by the producer for | <-- |
9 | the severance of natural gas. The declaration is to include all | <-- |
10 | producing sites and nonproducing sites as well as wellhead meter |
11 | certification for each shall include copies of wellhead meter | <-- |
12 | certifications for each site. The producer is required to update |
13 | the declaration when the producer adds or removes a producing |
14 | site or nonproducing site in this Commonwealth or when there is |
15 | a change in the status of a producing site or nonproducing site |
16 | or when the producer uses a different accredited laboratory to |
17 | certify the accuracy of the producer's wellhead meters issue a | <-- |
18 | wellhead meter certification. The producer shall update the |
19 | declaration within 30 days after a calendar month in which a |
20 | change to the declaration occurs. |
21 | (b) Issuance.--Except as provided in subsection (c), after |
22 | the receipt of an application, the department shall issue a |
23 | registration certificate under subsection (a). The registration |
24 | certificate shall be nonassignable. All registrants shall be |
25 | required to renew their registration certificates and wellhead |
26 | meter certifications on a staggered renewal system established |
27 | by the department. After the initial staggered renewal period, a |
28 | registration certificate or a wellhead meter certification |
29 | issued shall be valid for a period of five years. |
30 | (c) Refusal, suspension or revocation.--The department may |
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1 | refuse to issue, suspend or revoke a registration certificate if |
2 | the applicant or registrant has not filed required State tax |
3 | reports and paid State taxes not subject to a timely perfected |
4 | administrative or judicial appeal or subject to a duly |
5 | authorized deferred payment plan. The department shall notify |
6 | the applicant or registrant of any refusal, suspension or |
7 | revocation. The notice shall contain a statement that the |
8 | refusal, suspension or revocation may be made public. The notice |
9 | shall be made by first class mail. An applicant or registrant |
10 | aggrieved by the determination of the department may file an |
11 | appeal under the provisions for administrative appeals in the |
12 | act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code |
13 | of 1971. In the case of a suspension or revocation which is |
14 | appealed, the registration certificate shall remain valid |
15 | pending a final outcome of the appeals process. Notwithstanding |
16 | sections 274, 353(f), 408(b), 603, 702, 802, 904 and 1102 of the |
17 | Tax Reform Code of 1971 or any other provision of law, if no |
18 | appeal is taken or if an appeal is taken and denied at the |
19 | conclusion of the appeal process the department may disclose, by |
20 | publication or otherwise, the identity of a producer and the |
21 | fact that the producer's registration certificate has been |
22 | refused, suspended or revoked under this subsection. Disclosure |
23 | may include the basis for refusal, suspension or revocation. |
24 | (d) Violation.--A person severing natural gas in this |
25 | Commonwealth without holding a valid registration certificate |
26 | under subsection (b) shall be guilty of a summary offense and |
27 | shall, upon conviction, be sentenced to pay a fine of not less |
28 | than $300 nor more than $1,500. In the event the person |
29 | convicted defaults, he shall be sentenced to imprisonment for |
30 | not less than five days nor more than 30 days. The penalties |
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1 | imposed by this subsection shall be in addition to any other |
2 | penalties imposed by this chapter. For purposes of this |
3 | subsection, the severing of natural gas during any calendar day |
4 | shall constitute a separate violation. The Secretary of Revenue | <-- |
5 | secretary may designate employees of the department to enforce | <-- |
6 | the provisions of this subsection. The employees shall exhibit |
7 | proof of and be within the scope of the designation when |
8 | instituting proceedings as provided by the Pennsylvania Rules of |
9 | Criminal Procedure. |
10 | (e) Failure to obtain registration certificate.--Failure to |
11 | obtain or hold a valid registration certificate does not relieve |
12 | a person from liability for the tax imposed by this chapter. |
13 | § 1505.1. Meters. |
14 | A (a) General rule.--Except as provided in subsection (b), a | <-- |
15 | producer shall provide for and maintain a discrete wellhead |
16 | meter and a discrete sales meter where natural gas is severed. A | <-- |
17 | producer shall ensure that the meters are maintained according |
18 | to industry standards. Any wellhead meter installed after the |
19 | effective date of this section shall be a digital meter. |
20 | (b) Exception.--If a producer has multiple producing sites | <-- |
21 | or nonproducing sites, the combined volumes of gas produced by |
22 | all of which sites are measured by a single wellhead meter, the |
23 | producer shall not be required to provide for a discrete |
24 | wellhead meter at any of those producing sites or nonproducing |
25 | sites that is also a stripper well. |
26 | § 1506. Assessments. |
27 | (a) Authorization and requirement.--The department is |
28 | authorized and shall make the inquiries, determinations and |
29 | assessments of the natural gas severance tax, including |
30 | interest, additions and penalties imposed under this chapter. |
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1 | (b) Notice.--The notice of assessment and demand for payment |
2 | shall be mailed to the taxpayer. The notice shall set forth the |
3 | basis of the assessment. The department shall send the notice of |
4 | assessment to the taxpayer at its registered address via |
5 | certified mail if the assessment increases the taxpayer's tax |
6 | liability by $300. Otherwise, the notice of assessment may be |
7 | sent via regular mail. |
8 | § 1507. Time for assessment. |
9 | (a) Requirement.--An assessment as provided under section |
10 | 1506 (relating to assessments) shall be made within three years |
11 | after the date when the return provided for by section 1504 |
12 | (relating to return and payment) is filed or the end of the year |
13 | in which the tax liability arises, whichever shall occur last. |
14 | For the purposes of this subsection and subsection (b), a return |
15 | filed before the last day prescribed for the filing period shall |
16 | be considered as filed on the last day. |
17 | (b) Exception.--If the taxpayer underpays the correct amount |
18 | of the tax due by 25% or more, the tax may be assessed within |
19 | six years after the date the return was filed. |
20 | (c) Intent to evade.--Where no return is filed or where the |
21 | taxpayer files a false or fraudulent return with intent to evade |
22 | the tax imposed by this chapter, the assessment may be made at |
23 | any time. |
24 | (d) Erroneous credit or refund.--Within three years of the |
25 | granting of a refund or credit or within the period in which an |
26 | assessment or reassessment may have been issued by the |
27 | department for the taxable period for which the refund was |
28 | granted, whichever period shall last occur, the department may |
29 | issue an assessment to recover a refund or credit made or |
30 | allowed erroneously. |
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1 | § 1508. Extension of limitation assessment period. | <-- |
2 | Notwithstanding the provisions of this chapter, the |
3 | assessment period may be extended in the event a taxpayer has |
4 | provided written consent before the expiration of the period |
5 | provided in section 1507 (relating to time for assessment) for a |
6 | tax assessment. The amount of tax due may be assessed at any |
7 | time within the extended period. The period may be extended |
8 | further by subsequent written consents made before the |
9 | expiration of the extended period. |
10 | § 1509. Reassessments. |
11 | A taxpayer against whom an assessment is made may petition |
12 | the department for a reassessment under Article XXVII of the act |
13 | of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of |
14 | 1971. |
15 | § 1510. Interest. |
16 | The department shall assess interest on any delinquent tax at |
17 | the rate prescribed under section 806 of the act of April 9, |
18 | 1929 (P.L.343, No. 176), known as The Fiscal Code. |
19 | § 1511. Penalties. |
20 | The department shall enforce the following penalties: |
21 | (1) A penalty against a valid producer without a natural | <-- |
22 | gas severance tax registration certificate. The penalty shall |
23 | be $1 for every unit severed without a valid registration |
24 | certificate. The department may assess this penalty |
25 | separately from or in conjunction with any assessment of the |
26 | natural gas severance tax. |
27 | (2) A penalty against a producer for failure to timely |
28 | file a return as required under section 1504 (relating to |
29 | return and payment). The penalty shall be 5% of the tax |
30 | liability to be reported on the return for each day beyond |
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1 | the due date that the return is not filed. |
2 | (3) In addition to the penalty under paragraph (2), a |
3 | penalty against the producer for a willful failure to timely |
4 | file a return. The penalty shall be 200% of the tax liability |
5 | required to be reported on the return. |
6 | (4) A penalty against a producer for failure to timely |
7 | pay the tax as required by section 1504(c). The penalty shall |
8 | be 5% of the amount of tax due for each day beyond the |
9 | payment date that the tax is not paid. |
10 | § 1512. Criminal acts. |
11 | (a) Fraudulent return.--Any person with intent to defraud |
12 | the Commonwealth, who willfully makes or causes to be made a |
13 | return required by this chapter which is false, is guilty of a |
14 | misdemeanor and shall, upon conviction, be sentenced to pay a |
15 | fine of not more than $2,000 or to imprisonment for not more |
16 | than three years, or both. |
17 | (b) Other crimes.-- |
18 | (1) Except as otherwise provided by subsection (a), a |
19 | person is guilty of a misdemeanor and shall, upon conviction, |
20 | be sentenced to pay a fine of not more than $1,000 and costs |
21 | of prosecution or to imprisonment for not more than one year, |
22 | or both, for any of the following: |
23 | (i) Willfully failing to timely remit the tax to the |
24 | department. |
25 | (ii) Willfully failing or neglecting to timely file |
26 | a return or report required by this chapter. |
27 | (iii) Refusing to timely pay a tax, penalty or |
28 | interest imposed or provided for by this chapter. |
29 | (iv) Willfully failing to preserve its books, papers |
30 | and records as directed by the department. |
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1 | (v) Refusing to permit the department or its |
2 | authorized agents to examine its books, records or |
3 | papers. |
4 | (vi) Knowingly make any incomplete, false or |
5 | fraudulent return or report. |
6 | (vii) Preventing or attempting to prevent the full |
7 | disclosure of the amount of natural gas severance tax |
8 | due. |
9 | (viii) Providing any person with a false statement |
10 | as to the payment of natural gas severance tax with |
11 | respect to any pertinent facts. |
12 | (ix) Making, uttering or issuing a false or |
13 | fraudulent statement. |
14 | (2) The penalties imposed by this section shall be in |
15 | addition to other penalties imposed by this chapter. |
16 | § 1513. Abatement of additions or penalties. |
17 | Upon the filing of a petition for reassessment or a petition |
18 | for refund by a taxpayer as provided under this chapter, |
19 | additions or penalties imposed upon the taxpayer by this chapter |
20 | may be waived or abated in whole or in part where the petitioner |
21 | establishes that he acted in good faith, without negligence and |
22 | with no intent to defraud. |
23 | § 1514. Bulk and auction sales. |
24 | A person that sells or causes to be sold at auction, or that |
25 | sells or transfers in bulk, 51% or more of a stock of goods, |
26 | wares or merchandise of any kind, fixtures, machinery, |
27 | equipment, buildings or real estate involved in a business for |
28 | which the person holds a registration certificate or is required |
29 | to obtain a registration certificate under the provisions of |
30 | this chapter shall be subject to the provisions of section 1403 |
|
1 | of the act of April 9, 1929 (P.L.343, No.176), known as The |
2 | Fiscal Code. |
3 | § 1515. Collection upon failure to request reassessment, review |
4 | or appeal. |
5 | (a) Power of department.--The department may collect the |
6 | natural gas severance tax imposed under this chapter: | <-- |
7 | (1) If an assessment of the tax is not paid within 30 |
8 | days after notice to the taxpayer when no petition for |
9 | reassessment has been filed. |
10 | (2) Within 60 days of the reassessment, if no petition |
11 | for review has been filed. |
12 | (3) If no appeal has been made, within 30 days of: |
13 | (i) the Board of Finance and Revenue's decision of a |
14 | petition for review; or |
15 | (ii) the expiration of the board's time for acting |
16 | upon the petition. |
17 | (4) In all cases of judicial sales, receiverships, |
18 | assignments or bankruptcies. |
19 | (b) Prohibition.--In a case for the collection of taxes |
20 | under subsection (a), the taxpayer against whom they were |
21 | assessed shall not be permitted to set up a ground of defense |
22 | that might have been determined by the department, the Board of |
23 | Finance and Revenue or the courts, provided that the defense of |
24 | failure of the department to mail notice of assessment or |
25 | reassessment to the taxpayer and the defense of payment of |
26 | assessment or reassessment may be raised in proceedings for |
27 | collection by a motion to stay the proceedings. |
28 | § 1516. Tax liens. |
29 | (a) Lien imposed.--If any taxpayer neglects or refuses to |
30 | pay the natural gas severance tax tax imposed under this chapter | <-- |
|
1 | for which the taxpayer is liable under this chapter after |
2 | demand, the amount, including interest, addition or penalty, |
3 | together with additional costs that may accrue, shall be a lien |
4 | in favor of the Commonwealth upon the real and personal property |
5 | of the taxpayer but only after the same has been entered and |
6 | docketed of record by the prothonotary of the county where the |
7 | property is situated. The department may, at any time, transmit |
8 | to the prothonotaries of the respective counties certified |
9 | copies of all liens imposed by this section. It shall be the |
10 | duty of the prothonotary receiving the lien to enter and docket |
11 | the same of record to the office of the prothonotary. The lien |
12 | shall be indexed as judgments are now indexed. No prothonotary |
13 | shall require as a condition precedent to the entry of the lien |
14 | the payment of costs incidental to its entry. |
15 | (b) Priority of lien and effect on judicial sale.--Except |
16 | for the costs of the sale and the writ upon which the sale was |
17 | made and real estate taxes and municipal claims against the |
18 | property, a lien imposed under this section shall have priority |
19 | from the date of its recording and shall be fully paid and |
20 | satisfied out of the proceeds of any judicial sale of property |
21 | subject to the lien, before any other obligation, judgment, |
22 | claim, lien or estate to which the property may subsequently |
23 | become subject, but shall be subordinate to mortgages and other |
24 | liens existing and duly recorded or entered of record prior to |
25 | the recording of the lien. |
26 | (c) No discharge by sale on junior lien.--In the case of a |
27 | judicial sale of property subject to a lien imposed under this |
28 | section, upon a lien or claim over which the lien imposed under |
29 | this section has priority, the sale shall discharge the lien |
30 | imposed under this section to the extent only that the proceeds |
|
1 | are applied to its payment, and the lien shall continue in full |
2 | force and effect as to the balance remaining unpaid. There shall |
3 | be no inquisition or condemnation upon any judicial sale of real |
4 | estate made by the Commonwealth under the provisions of this |
5 | chapter. The lien shall continue as provided in the act of April |
6 | 9, 1929 (P.L.343, No.176), known as The Fiscal Code, and a writ |
7 | of execution may directly issue upon the lien without the |
8 | issuance and prosecution to judgment of a writ of scire facias, |
9 | provided that not less than ten days before issuance of any |
10 | execution on the lien, notice of the filing and the effect of |
11 | the lien shall be sent by registered mail to the taxpayer at its |
12 | last known post office address, provided further that the lien |
13 | shall have no effect upon any stock of goods, wares or |
14 | merchandise regularly sold or leased in the ordinary course of |
15 | business by the taxpayer against whom the lien has been entered, |
16 | unless and until a writ of execution has been issued and a levy |
17 | made upon said stock of goods, wares and merchandise. |
18 | (d) Duty of prothonotary.--Any willful failure of any |
19 | prothonotary to carry out any duty imposed upon him by this |
20 | section shall be a misdemeanor. Upon conviction, he shall be |
21 | sentenced to pay a fine of not more than $1,000 and costs of |
22 | prosecution or to imprisonment for not more than one year, or |
23 | both. |
24 | (e) Priority.--Except as provided in this chapter, the |
25 | distribution, voluntary or compulsory, in receivership, |
26 | bankruptcy or otherwise of the property or estate of any person, |
27 | all taxes imposed by this chapter which are due and unpaid and |
28 | are not collectible under the provisions of section 225 of the |
29 | act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code |
30 | of 1971, shall be paid from the first money available for |
|
1 | distribution in priority to all other claims and liens, except |
2 | as the laws of the United States may give priority to a claim to |
3 | the Federal Government. A person charged with the administration |
4 | or distribution of the property or estate who violates the |
5 | provisions of this section shall be personally liable for the |
6 | taxes imposed by this chapter which are accrued and unpaid and |
7 | chargeable against the person whose property or estate is being |
8 | administered or distributed. |
9 | (f) Other remedies.--Subject to the limitations contained in |
10 | this chapter as to the assessment of taxes, nothing contained in |
11 | this section shall be construed to restrict, prohibit or limit |
12 | the use by the department in collecting taxes due and payable of |
13 | another remedy or procedure available at law or equity for the |
14 | collection of debts. |
15 | § 1517. Tax suit reciprocity. |
16 | The courts of this Commonwealth shall recognize and enforce |
17 | liabilities for natural gas severance taxes lawfully imposed by |
18 | any other state, provided that the other state recognizes and |
19 | enforces the tax set forth in this chapter. |
20 | § 1518. Service. |
21 | A producer is deemed to have appointed the Secretary of the |
22 | Commonwealth its agent for the acceptance of service of process |
23 | or notice in a proceeding for the enforcement of the civil |
24 | provisions of this chapter and service made upon the Secretary |
25 | of the Commonwealth as agent shall be of the same legal force |
26 | and validity as if the service had been personally made upon the |
27 | producer. Where service cannot be made upon the producer in the |
28 | manner provided by other laws of this Commonwealth relating to |
29 | service of process, service may be made upon the Secretary of |
30 | the Commonwealth. In that case, a copy of the process or notice |
|
1 | shall be personally served upon any agent or representative of |
2 | the producer who may be found within this Commonwealth or, where |
3 | no agent or representative may be found, a copy of the process |
4 | or notice shall be sent via registered mail to the producer at |
5 | the last known address of its principal place of business, home |
6 | office or residence. |
7 | § 1519. Refunds. |
8 | Under Article XXVII of the act of March 4, 1971 (P.L.6, |
9 | No.2), known as the Tax Reform Code of 1971, the department |
10 | shall refund all taxes, interest and penalties paid to the |
11 | Commonwealth under the provisions of this chapter to which the |
12 | Commonwealth is not rightfully entitled. The refunds shall be |
13 | made to the person or the person's heirs, successors, assigns or |
14 | other personal representatives who paid the tax, provided that |
15 | no refund shall be made under this section regarding a payment |
16 | made by reason of an assessment where a taxpayer has filed a |
17 | petition for reassessment under section 2702 of the Tax Reform |
18 | Code of 1971 to the extent the petition is adverse to the |
19 | taxpayer by a decision which is no longer subject to further |
20 | review or appeal. Nothing in this chapter shall prohibit a |
21 | taxpayer who has filed a timely petition for reassessment from |
22 | amending it to a petition for refund where the petitioner paid |
23 | the tax assessed. |
24 | § 1520. Refund petition. |
25 | (a) General rule.--Except as provided for in subsection (b), |
26 | the refund or credit of tax, interest or penalty provided for by |
27 | section 1519 (relating to refunds) shall be made only where the |
28 | person who has paid the tax files a petition for refund with the |
29 | department under Article XXVII of the act of March 4, 1971 |
30 | (P.L.6, No.2), known as the Tax Reform Code of 1971, within the |
|
1 | time limits of section 3003.1 of the Tax Reform Code of 1971. |
2 | (b) Natural gas severance tax.--A refund or credit of tax, |
3 | interest or penalty paid as a result of an assessment made by |
4 | the department under section 1505 (relating to natural gas |
5 | severance tax registration), shall be made only where the person |
6 | who has paid the tax files with the department a petition for a |
7 | refund with the department under Article XXVII within the time |
8 | limits of section 3003.1 of the Tax Reform Code of 1971. The |
9 | filing of a petition for refund, under the provisions of this |
10 | subsection, shall not affect the abatement of interest, |
11 | additions or penalties to which the person may be entitled by |
12 | reason of his payment of the assessment. |
13 | § 1521. Rules and regulations. |
14 | The department is charged with the enforcement of the |
15 | provisions of this chapter and is authorized and empowered to |
16 | prescribe, adopt, promulgate and enforce rules and regulations |
17 | not inconsistent with the provisions of this chapter relating to |
18 | any matter or thing pertaining to the administration and |
19 | enforcement of the provisions of this chapter and the collection |
20 | of taxes, penalties and interest imposed by this chapter. The |
21 | department may prescribe the extent, if any, to which any of the |
22 | rules and regulations shall be applied without retroactive |
23 | effect. |
24 | § 1522. Recordkeeping. |
25 | (a) General rule.--Every person liable for any tax imposed |
26 | by this chapter, or for the collection of such tax, shall keep |
27 | records, including those enumerated in subsection (b), render |
28 | statements, make returns and comply with the rules and |
29 | regulations as the department may prescribe regarding matters |
30 | pertinent to the person's business. Whenever it is necessary, |
|
1 | the department may require a person, by notice served upon the |
2 | person or by regulations, to make returns, render statements or |
3 | keep records as the department deems sufficient to show whether |
4 | or not a person is liable to pay tax under this chapter. |
5 | (a.1) Records.--Records to be maintained are: |
6 | (1) Wellhead meter and sales meter charts for each | <-- |
7 | reporting period and the meter calibration and maintenance |
8 | records. If turbine meters are in use, the maintenance |
9 | records will be made available to the department upon |
10 | request. |
11 | (2) Records, statements and other instruments furnished |
12 | to a producer by a person to whom the producer delivers for |
13 | sale, transport or delivery of natural gas. |
14 | (3) Records, statements and other instruments as the |
15 | department may prescribe by regulation. |
16 | (b) Records of nonresidents.--A nonresident who does |
17 | business in this Commonwealth as a producer shall keep adequate |
18 | records of the business and of the tax due as a result. The |
19 | records shall be retained within this Commonwealth unless |
20 | retention outside this Commonwealth is authorized by the |
21 | department. The department may require a taxpayer who desires to |
22 | retain records outside this Commonwealth to assume reasonable |
23 | out-of-State audit expenses. |
24 | (c) Keeping of separate records.--A producer who is engaged |
25 | in another business or businesses which do not involve the |
26 | severing of natural gas taxable under this chapter, shall keep |
27 | separate books and records of the businesses so as to show the |
28 | taxable severing of natural gas under this chapter separately |
29 | from other business activities not taxable hereunder. If any |
30 | person fails to keep separate books and records, the person |
|
1 | shall be liable for a penalty equaling 100% of tax due under |
2 | this chapter for the period where separate records were not |
3 | maintained. |
4 | § 1523. Examinations. |
5 | The department or any of its authorized agents are authorized |
6 | to examine the books, papers and records of any taxpayer in |
7 | order to verify the accuracy and completeness of any return made |
8 | or, if no return was made, to ascertain and assess the tax |
9 | imposed by this chapter. The department may require the |
10 | preservation of all books, papers and records for any period |
11 | deemed proper by it but not to exceed three years from the end |
12 | of the calendar year to which the records relate. Every taxpayer |
13 | is required to give to the department or its agent the means, |
14 | facilities and opportunity for examinations and investigation |
15 | under this section. The department is further authorized to |
16 | examine any person, under oath, concerning the taxable severing |
17 | of natural gas by any taxpayer or concerning any other matter |
18 | relating to the enforcement or administration of this chapter, |
19 | and to this end may compel the production of books, papers and |
20 | records and the attendance of all persons whether as parties or |
21 | witnesses whom it believes to have knowledge of relevant |
22 | matters. The procedure for the hearings or examinations shall be |
23 | the same as that provided by the act of April 9, 1929 (P.L.343, |
24 | No. 176), known as The Fiscal Code. |
25 | § 1524. Unauthorized disclosure. |
26 | Any information gained by the department as a result of any |
27 | return, examination, investigation, hearing or verification |
28 | required or authorized by this chapter shall be confidential |
29 | except for official purposes and except in accordance with |
30 | proper judicial order or as otherwise provided by law, and any |
|
1 | person unlawfully divulging the information shall be guilty of a |
2 | misdemeanor and shall, upon conviction, be sentenced to pay a |
3 | fine of not more than $1000 and costs of prosecution or to |
4 | imprisonment for not more than one year, or both. |
5 | § 1525. Cooperation with other governments. |
6 | Notwithstanding the provisions of section 1517 (relating to |
7 | tax suit reciprocity), the department may permit the |
8 | Commissioner of the Internal Revenue Service of the United |
9 | States, the proper officer of any state or the authorized |
10 | representative of either of them to inspect the tax returns of |
11 | any taxpayer, or may furnish to the commissioner or officer or |
12 | to either of their authorized representative an abstract of the |
13 | return of any taxpayer, or supply him with information |
14 | concerning any item contained in any return or disclosed by the |
15 | report of any examination or investigation of the return of any |
16 | taxpayer. This permission shall be granted only if the laws of |
17 | the United States or another state grant substantially similar |
18 | privileges to the proper officer of the Commonwealth charged |
19 | with the administration of this chapter. |
20 | § 1526. Bonds. |
21 | (a) Taxpayer to file bond.--The department may require a |
22 | nonresident natural person or any foreign corporation, |
23 | association, fiduciary or other entity, not authorized to do |
24 | business within this Commonwealth or not having an established |
25 | place of business in this Commonwealth and subject to the tax |
26 | imposed by section 1503 (relating to imposition of tax), to file |
27 | a bond issued by a surety company authorized to do business in |
28 | this Commonwealth and approved by the Insurance Commissioner as |
29 | to solvency and responsibility, in amounts as it may fix, to |
30 | secure the payment of any tax or penalties due or which may |
|
1 | become due from a nonresident natural person, corporation, |
2 | association, fiduciary or other entity whenever it deems it |
3 | necessary to protect the revenues obtained under this chapter. |
4 | The department may also require a bond of a person petitioning |
5 | the department for reassessment in the case of any assessment |
6 | over $500 or where, in its opinion, the ultimate collection is |
7 | in jeopardy. For a period of three years, the department may |
8 | require a bond of any person who has, on three or more occasions |
9 | within a 12-month period, either filed a return or made payment |
10 | to the department more than 30 days late. In the event the |
11 | department determines a taxpayer is required to file a bond, it |
12 | shall give notice to the taxpayer specifying the amount of the |
13 | bond required. The taxpayer shall file the bond within five days |
14 | after notice is given by the department unless, within five |
15 | days, the taxpayer shall request in writing a hearing before the |
16 | Secretary of Revenue secretary or his representative. At the | <-- |
17 | hearing, the necessity, propriety and amount of the bond shall |
18 | be determined by the secretary or the secretary's |
19 | representative. The determination shall be final and the |
20 | taxpayer shall comply with it within 15 days after notice is |
21 | mailed to the taxpayer. |
22 | (b) Securities in lieu of bond.--In lieu of the bond |
23 | required by this section securities approved by the department |
24 | or cash in a prescribed amount may be deposited. The securities |
25 | or cash shall be kept in the custody of the department. The |
26 | department may apply the securities or cash to the tax imposed |
27 | by this chapter and interest or penalties due without notice to |
28 | the depositor. The securities may be sold by the department to |
29 | pay the tax and/or interest or penalties due at public or |
30 | private sale upon five days' written notice to the depositor. |
|
1 | (c) Failure to file bond.--The department may file a lien |
2 | under section 1516 (relating to tax liens) against any taxpayer |
3 | who fails to file a bond when required to do so under this |
4 | section. All funds received upon execution of the judgment on |
5 | the lien shall be refunded to the taxpayer with 3% interest, |
6 | should a final determination be made that it does not owe any |
7 | payment to the department. |
8 | § 1527. Natural Gas Severance Tax Fund. | <-- |
9 | (a) Establishment.--The Natural Gas Severance Tax Fund is |
10 | established as a separate fund in the State Treasury. |
11 | (b) Deposit.--The proceeds of the natural gas severance tax, |
12 | penalties and interest imposed by this chapter, less the amounts |
13 | appropriated under section 1529 (relating to appropriation), |
14 | shall be deposited into the fund. |
15 | (c) Restriction.--The money in the fund shall only be used |
16 | in accordance with section 1528 (relating to administration of |
17 | fund). |
18 | § 1528. Administration of fund. |
19 | (a) Transfers.--The State Treasurer shall make the following |
20 | transfers from the fund on a quarterly basis commencing on the |
21 | first business day of January 2010: |
22 | (1) Sixty percent to the General Fund. |
23 | (2) Three percent to the Department of Public Welfare to |
24 | provide cash and crisis grants to low-income households under |
25 | the Low Income Home Energy Assistance Program. |
26 | (3) Fifteen percent to the Environmental Stewardship |
27 | Fund. |
28 | (4) Four percent to the Hazardous Sites Cleanup Fund. |
29 | (5) Five percent to the Liquid Fuels Tax Fund for the |
30 | reconstruction, maintenance and repair of State roadways and |
|
1 | bridges. The funds under this paragraph shall be: |
2 | (i) allocated in addition to and not in lieu of any |
3 | funds normally and customarily allocated to the |
4 | reconstruction, maintenance and repair of roadways and |
5 | bridges by the Department of Transportation; and |
6 | (ii) distributed equally among all the 67 counties |
7 | of this Commonwealth. |
8 | (b) Distributions.-- |
9 | (1) The State Treasurer shall distribute from the fund, |
10 | on a quarterly basis commencing on the first business day of |
11 | January 2010, 4.5% to municipalities where natural gas has |
12 | been severed and taxed under this chapter in the previous |
13 | quarter. The amount distributed shall be determined on a pro |
14 | rata basis as follows: The total amount to be distributed |
15 | under this paragraph is divided by the total number of |
16 | taxable gas units severed in the Commonwealth during the |
17 | preceding quarter; this quotient is then multiplied by the |
18 | total number of taxable gas units severed in the municipality |
19 | during the preceding quarter. The result equals the amount of |
20 | money to be distributed to the municipality, which shall be |
21 | used solely for any of the following: |
22 | (i) Reconstruction, maintenance and repair of |
23 | municipal roadways and bridges which the municipality has |
24 | determined have been or are being used extensively to |
25 | transport natural gas or equipment related to the |
26 | production thereof. |
27 | (ii) Parks and recreation. |
28 | (iii) Industrial and commercial development. |
29 | (iv) Preservation and improvement of municipal water |
30 | supplies. |
|
1 | (v) Maintenance and capital improvements to the |
2 | municipal waste and sewage systems. |
3 | (vi) Preservation and reclamation of the surface |
4 | waters of the municipality. |
5 | (vii) Other lawful purposes reasonably related to |
6 | the consequences of severing natural gas in the |
7 | municipality. |
8 | (2) The State Treasurer shall distribute from the fund, |
9 | on a quarterly basis commencing on the first business day of |
10 | January 2010, 4.5% to counties where natural gas has been |
11 | severed and taxed under this chapter in the previous quarter. |
12 | The amount distributed to a county shall be determined on a |
13 | pro rata basis as follows: The total amount to be distributed |
14 | under this paragraph is divided by the total number of |
15 | taxable gas units severed in the Commonwealth during the |
16 | preceding quarter; this quotient is then multiplied by the |
17 | total number of taxable gas units severed in the county |
18 | during the preceding quarter. The result equals the amount of |
19 | money to be distributed to the county, which shall be |
20 | administered by a board comprised of the chairperson of the |
21 | board of county commissioners, a representative from the |
22 | natural gas producing municipalities within the county and a |
23 | county commissioner selected by the representative of the |
24 | natural gas producing municipalities. The board shall give |
25 | priority to the reconstruction, repair and maintenance of |
26 | county roadways and bridges determined by the board to have |
27 | been and are used to transport natural gas or equipment |
28 | related to the production thereof and may allocate the |
29 | remainder to the county or its municipalities for any of the |
30 | purposes enumerated in subsection (b)(1). A simple majority |
|
1 | vote of all the members of the board shall be required for |
2 | any action under this paragraph. |
3 | (3) The State Treasurer shall distribute from the fund, |
4 | on a quarterly basis commencing on the first day of January |
5 | 2010, 2% to the Pennsylvania Game Commission, which shall be |
6 | used for the commission's operational, administrative and |
7 | enforcement costs. |
8 | (4) The State Treasurer shall distribute from the fund, |
9 | on a quarterly basis commencing on the first day of January |
10 | 2010, 2% to the Pennsylvania Fish and Boat Commission, which |
11 | shall be used for the commission's operational, |
12 | administrative and enforcement costs. |
13 | (c) Annual reports.--Counties and municipalities receiving |
14 | money from the fund under this section shall submit to the |
15 | Department of Transportation, on a form to be provided by the |
16 | Department of Transportation on its Internet website, within 30 |
17 | days following the end of each fiscal year a report that |
18 | accounts for the use of the money distributed to them under |
19 | section 1528 in the fiscal year preceding the date of the |
20 | report. The Department of Transportation shall submit to the |
21 | Governor, to the chair and minority chair of the Transportation |
22 | Committee of the Senate and the chair and minority chair of the |
23 | Transportation Committee of the House of Representatives within |
24 | 45 days following the end of each fiscal year a report that |
25 | accounts for the use of the money distributed to the Department |
26 | of Transportation under section 1528 in the fiscal year |
27 | preceding the date of the report and that includes copies of the |
28 | reports submitted to the Department of Transportation by the |
29 | counties and municipalities receiving money from the fund. |
30 | § 1527. Accounts established. | <-- |
|
1 | (a) Natural Gas Severance Tax Account.-- |
2 | (1) The Natural Gas Severance Tax Account is established |
3 | as a restricted account within the General Fund. |
4 | (2) The proceeds of the tax imposed under section 1503 |
5 | (relating to imposition of tax), penalties and interest |
6 | imposed under this chapter, less the amounts appropriated |
7 | under section 1529 (relating to appropriation), shall be |
8 | deposited into the account. |
9 | (3) The money in the account shall only be used in |
10 | accordance with section 1528 (relating to administration of |
11 | fund). |
12 | (b) Local Government Services Account.-- |
13 | (1) The Local Government Services Account is established |
14 | as a restricted account within the General Fund. |
15 | (2) The allocation under section 1528(a)(3) shall be |
16 | deposited into the Local Government Services Account and |
17 | shall be distributed as provided by law. |
18 | (c) Oil and Gas Environmental Disaster Recovery Account.-- |
19 | (1) The Oil and Gas Environmental Disaster Recovery |
20 | Account is established as a restricted account within the |
21 | General Fund. |
22 | (2) The money in the account shall only be used to |
23 | provide moneys to fund recovery costs associated with an |
24 | environmental disaster occurring as a result of oil and gas |
25 | drilling within this Commonwealth and shall only be expended |
26 | by special appropriation by the General Assembly. |
27 | § 1528. Transfers and distributions. |
28 | (a) Fiscal year 2010-2011.--The State Treasurer shall make |
29 | the following transfers and distributions of the money in the |
30 | Natural Gas Severance Tax Account established under section |
|
1 | 1527(a) (relating to accounts established) on the first business |
2 | day of July for fiscal year 2010-2011: |
3 | (1) The first $75,000,000 generated under section 1503 |
4 | (relating to imposition of tax) shall be deposited into the |
5 | General Fund. The remaining proceeds collected under section |
6 | 1503 shall be distributed as follows: |
7 | (i) Fifty percent to the General Fund. |
8 | (ii) Fifteen percent to the Environmental |
9 | Stewardship Fund. |
10 | (iii) Twenty percent to the Local Government |
11 | Services Account established under section 1527(b), to be |
12 | further distributed by the State Treasurer as follows: |
13 | (A) Thirty percent to counties with producing |
14 | sites. The money under this clause shall be |
15 | distributed to each eligible county based on a |
16 | formula that divides the number of producing sites in |
17 | the county by the total number of producing sites in |
18 | all the counties in this Commonwealth with the |
19 | resulting percentage multiplied times the money |
20 | available for distribution. |
21 | (B) Forty percent to municipalities with |
22 | producing sites. The money under this clause shall be |
23 | distributed to each eligible municipality based on a |
24 | formula that divides the number of producing sites in |
25 | the municipality by the total number of producing |
26 | sites in all municipalities in this Commonwealth with |
27 | the resulting percentage multiplied times the money |
28 | available for distribution. |
29 | (C) Twenty percent to municipalities with no |
30 | producing sites located in a county with producing |
|
1 | sites. The money under this clause shall be |
2 | distributed to each eligible municipality based on a |
3 | formula that divides the number of producing sites in |
4 | the county by the total number of producing sites in |
5 | all counties in this Commonwealth with the resulting |
6 | percentage multiplied times the money available for |
7 | distribution. The State Treasurer shall distribute an |
8 | equal share to each eligible municipality within the |
9 | same county. |
10 | (D) Ten percent to the Pennsylvania Emergency |
11 | Management Agency to be distributed to fire and |
12 | ambulance services in counties with producing sites |
13 | in accordance with the procedures established in the |
14 | act of July 31, 2003 (P.L.73, No.17), known as the |
15 | Volunteer Fire Company and Volunteer Ambulance |
16 | Service Grant Act. |
17 | (E) Only producing sites on which the tax is |
18 | levied under section 1503(a) shall be included in any |
19 | of the calculations made under this paragraph. |
20 | (iv) Two percent to the Hazardous Sites Cleanup |
21 | Fund. |
22 | (v) Three percent to the Conservation District Fund |
23 | for distribution to county conservation districts |
24 | pursuant to guidelines established by the State |
25 | Conservation Commission. |
26 | (vi) Two percent to the Pennsylvania Game |
27 | Commission. |
28 | (vii) Three percent to the Pennsylvania Fish and |
29 | Boat Commission. |
30 | (viii) Two percent to the Department of Public |
|
1 | Welfare to provide cash crisis grants to low-income |
2 | households under the Low Income Home Energy Assistance |
3 | Program. |
4 | (ix) Two percent to the Oil and Gas Environmental |
5 | Disaster Recovery Account. |
6 | (x) One percent to the Department of Environmental |
7 | Protection for State dam removal, restoration and repair |
8 | projects. |
9 | (b) For fiscal year 2011-2012 and thereafter.--For fiscal |
10 | year 2011-2012 and thereafter, the State Treasurer shall make |
11 | the following transfers and distributions of the money in the |
12 | Natural Gas Severance Tax Account established under section |
13 | 1527(a) on the first business day of July for the fiscal year: |
14 | (1) Fifty percent to the General Fund. |
15 | (2) Fifteen percent to the Environmental Stewardship |
16 | Fund. |
17 | (3) Twenty percent to the Local Government Services |
18 | Account established under section 1527(b), to be further |
19 | distributed by the State Treasurer as follows: |
20 | (i) Thirty percent to counties with producing sites. |
21 | The money under this subparagraph shall be distributed to |
22 | each eligible county based on a formula that divides the |
23 | number of producing sites in the county by the total |
24 | number of producing sites in all the counties in this |
25 | Commonwealth with the resulting percentage multiplied |
26 | times the money available for distribution. |
27 | (ii) Forty percent to municipalities with producing |
28 | sites. The money under this subparagraph shall be |
29 | distributed to each eligible municipality based on a |
30 | formula that divides the number of producing sites in the |
|
1 | municipality by the total number of producing sites in |
2 | all municipalities in this Commonwealth with the |
3 | resulting percentage multiplied times the money available |
4 | for distribution. |
5 | (iii) Twenty percent to municipalities with no |
6 | producing sites located in a county with producing sites. |
7 | The money under this subparagraph shall be distributed to |
8 | each eligible municipality based on a formula that |
9 | divides the number of producing sites in the county by |
10 | the total number of producing sites in all counties in |
11 | this Commonwealth with the resulting percentage |
12 | multiplied times the money available for distribution. |
13 | The State Treasurer shall distribute an equal share to |
14 | each eligible municipality within the same county. |
15 | (iv) Ten percent to the Pennsylvania Emergency |
16 | Management Agency to be distributed to fire and ambulance |
17 | services in counties with producing sites in accordance |
18 | with the procedures established in the Volunteer Fire |
19 | Company and Volunteer Ambulance Service Grant Act. |
20 | (v) Only producing sites on which the tax is levied |
21 | under section 1503(a) shall be included in any of the |
22 | calculations made under this paragraph. |
23 | (4) Two percent to the Hazardous Sites Cleanup Fund. |
24 | (5) Three percent to the Conservation District Fund for |
25 | distribution to county conservation districts pursuant to |
26 | guidelines established by the State Conservation Commission. |
27 | (6) Two percent to the Pennsylvania Game Commission. |
28 | (7) Three percent to the Pennsylvania Fish and Boat |
29 | Commission. |
30 | (8) Two percent to the Department of Public Welfare to |
|
1 | provide cash crisis grants to low-income households under the |
2 | Low Income Home Energy Assistance Program. |
3 | (9) Two percent to the Oil and Gas Environmental |
4 | Disaster Recovery Account. |
5 | (10) One percent of the proceeds of the natural gas |
6 | severance tax, penalties and interest imposed by this |
7 | chapter, less the amounts appropriated under section 1529 |
8 | (relating to appropriations), shall be allocated to the |
9 | Department of Environmental Protection for State dam removal, |
10 | restoration and repair projects. |
11 | § 1529. Appropriation. |
12 | The amount of the proceeds from the tax imposed by this |
13 | chapter as shall be necessary for the payment of refunds, |
14 | enforcement or administration under this chapter, is hereby |
15 | appropriated for such purposes. |
16 | Section 2. Title 72 is amended by adding a part to read: | <-- |
17 | PART III |
18 | TAX CREDITS |
19 | Chapter |
20 | 31. Marcellus Shale Job Creation Tax Credit |
21 | CHAPTER 31 |
22 | MARCELLUS SHALE JOB CREATION TAX CREDIT |
23 | Sec. |
24 | 3101. Definitions. |
25 | 3102. Eligibility. |
26 | 3103. Application process. |
27 | 3104. Tax credits. |
28 | 3105. Prohibitions. |
29 | 3106. Penalties. |
30 | 3107. Annual reports. |
|
1 | 3108. Notice of availability of tax credits. |
2 | § 3101. Definitions. |
3 | The following words and phrases when used in this chapter |
4 | shall have the meanings given to them in this section unless the |
5 | context clearly indicates otherwise: |
6 | "Base period." As follows: |
7 | (1) Except as set forth in paragraph (2), the three |
8 | years immediately preceding the date on which a company may |
9 | begin creating new jobs which may be eligible for job |
10 | creation tax credits. |
11 | (2) If a company has been in business in this |
12 | Commonwealth for less than three years, the period which it |
13 | has been in business in this Commonwealth. |
14 | "Department." The Department of Community and Economic |
15 | Development of the Commonwealth. |
16 | "Job creation tax credits." Tax credits for job creation for |
17 | which the department has issued a certificate under this |
18 | chapter. |
19 | "New job." A full-time job, the average hourly rate, |
20 | excluding benefits, for which must be at least 350% of the |
21 | Federal minimum wage, created within a municipality located in |
22 | this Commonwealth by a company within three years from the start |
23 | date. The term includes a job which was previously held by a |
24 | nonresident and is filled by a resident. The term does not |
25 | include a temporary or seasonal job. |
26 | "Nonresident." An individual who does not reside in this |
27 | Commonwealth. |
28 | "Qualified apprenticeship training program." A program |
29 | registered with the Apprenticeship and Training council within |
30 | the Department of Labor and Industry that is in compliance with |
|
1 | applicable Federal and State laws and regulations and which |
2 | requires at least 2,000 but not more than 10,000 hours of on- |
3 | the-job apprenticeship training. |
4 | "Resident." Any natural person who is considered a resident |
5 | of this Commonwealth under the act of March 4, 1971 (P.L.6, |
6 | No.2), known as the Tax Reform Code of 1971. |
7 | "Start date." The date on which a company may begin creating |
8 | new jobs which may be eligible for job creation tax credits. |
9 | "Year one." A one-year period immediately following the |
10 | start date. |
11 | "Year three." A one-year period immediately following the |
12 | end of year two. |
13 | "Year two." A one-year period immediately following the end |
14 | of year one. |
15 | § 3102. Eligibility. |
16 | In order to be eligible to receive job creation tax credits |
17 | under this chapter, a company must demonstrate to the department |
18 | the following: |
19 | (1) The company's financial stability and the project's |
20 | financial viability. |
21 | (2) The company's express intent to maintain operations |
22 | in this Commonwealth for a period of five years from the date |
23 | the company submits its tax credit certificate to the |
24 | Department of Revenue. |
25 | (3) The company is in conformity with industry laws and |
26 | regulations overseen and enforced by the Department of |
27 | Environmental Protection. |
28 | § 3103. Application process. |
29 | (a) Application.--A company must complete and submit to the |
30 | department a job creation tax credit application along with a |
|
1 | copy of the permit issued by the Department of Environmental |
2 | Protection providing that the company has obtained the necessary |
3 | permit allowing the company to drill in this Commonwealth or a |
4 | statement from the Department of Environmental Protection |
5 | stating the same. The Department of Environmental Protection |
6 | shall notify the Department of Labor and Industry, the |
7 | Department of Revenue and the department upon suspension or |
8 | revocation of drilling permits or other changes that affect the |
9 | company's ability to continuously drill in this Commonwealth. |
10 | (b) Applicant priority.--The department shall give priority |
11 | to eligible applicants that will place the following workers in |
12 | new jobs: |
13 | (1) Workers who have completed a qualified |
14 | apprenticeship training program or a job training program |
15 | approved by the Department of Labor and Industry. |
16 | (2) Dislocated workers under the act of December 18, |
17 | 2001 (P.L.949, No.114), known as the Workforce Development |
18 | Act, who meet any one of the following conditions: |
19 | (i) Have been terminated or laid off or have |
20 | received notice of termination or layoff, and are |
21 | eligible for or have exhausted unemployment compensation |
22 | benefits. |
23 | (ii) Are unlikely to return to the industry or |
24 | occupation in which the individuals were employed. |
25 | (iii) Have been terminated or received notice of |
26 | termination as a result of the permanent closure or |
27 | relocation of a plant, facility or plant operation in |
28 | which the individuals were employed. |
29 | (iv) Are chronically unemployed. |
30 | (v) Have limited opportunities of employment in the |
|
1 | geographic area in which the individuals reside. |
2 | (vi) Are individuals who may face substantial |
3 | barriers to employment because of age or disability. |
4 | (3) Workers who have been unemployed for at least six |
5 | months. |
6 | (4) Underemployed workers who require skill training to |
7 | meet industry demands or increase employment opportunities. |
8 | (c) Approval.--If the department approves the company's |
9 | application, the department and the company shall execute a |
10 | commitment letter containing the following: |
11 | (1) A description of the project. |
12 | (2) The number of new jobs to be created. |
13 | (3) The amount of private capital investment in the |
14 | project. |
15 | (4) The maximum job creation tax credit amount the |
16 | company may claim. |
17 | (5) A signed statement that the company intends to |
18 | maintain its operation in this Commonwealth for five years |
19 | from the start date. |
20 | (6) A signed statement from the company that the company |
21 | will provide to the department a list of workers which |
22 | satisfies the requirements of subsection (b) for which the |
23 | company will claim tax credit, including documentation of |
24 | each worker's status as a resident of this Commonwealth. |
25 | (7) Such other information as the department deems |
26 | appropriate. |
27 | (d) Commitment letter.--After a commitment letter has been |
28 | signed by both the Commonwealth and the company, the company |
29 | shall receive a job creation tax credit certificate and filing |
30 | information. |
|
1 | § 3104. Tax credits. |
2 | (a) Maximum amount.--A company may claim a tax credit of |
3 | $2,500 per new job created and up to the maximum job creation |
4 | tax credit amount specified in the commitment letter. |
5 | (b) Determination of new jobs created.-- |
6 | (1) New jobs shall be deemed created in year one to the |
7 | extent that the company's average employment by quarter |
8 | during year one exceeds the company's average employment |
9 | level during the company's base period, as adjusted for any |
10 | job held by a nonresident during the period which is no |
11 | longer held by a nonresident. |
12 | (2) New jobs shall be deemed created in year two to the |
13 | extent that the company's average employment by quarter |
14 | during year two exceeds the company's average employment by |
15 | quarter during year one. |
16 | (3) New jobs shall be deemed created in year three to |
17 | the extent that the company's average employment by quarter |
18 | during year three exceeds the company's average employment by |
19 | quarter during year two. |
20 | (c) Applicable taxes.--A company may apply the tax credit to |
21 | 100% of the company's corporate net income tax, capital stock |
22 | and franchise tax or the capital stock and franchise tax of a |
23 | shareholder of the company if the company is a Pennsylvania S |
24 | corporation, personal income tax or the personal income tax of |
25 | shareholders of a Pennsylvania S corporation or any combination |
26 | thereof. |
27 | (d) Tax credit term.--A company may claim the job creation |
28 | tax credit for each new job created, as approved by the |
29 | department, for a period determined by the department but not to |
30 | exceed five years from the date the company first submits a job |
|
1 | creation tax credit certificate. |
2 | (e) Availability of tax credits.--Each fiscal year, |
3 | $25,000,000 in tax credits shall be made available to the |
4 | department and may be awarded by the department in accordance |
5 | with this chapter. |
6 | § 3105. Prohibitions. |
7 | The following actions with regard to job creation tax credits |
8 | are prohibited: |
9 | (1) Approval of jobs that have been created prior to the |
10 | start date, unless the job was held by a nonresident who has |
11 | been replaced by a resident. |
12 | (2) The assignment, transfer or use of credits by any |
13 | other company, provided, however, that tax credits may be |
14 | assigned in whole or in part to an affiliated entity. As used |
15 | in this paragraph, the term "affiliated entity" means an |
16 | entity which is part of the same "affiliated group," as |
17 | defined by section 1504(a)(1) of the Internal Revenue Code of |
18 | 1986 (Public Law 99-514, 26 U.S.C. § 1504(a)(1)), as the |
19 | company awarded the credit. |
20 | § 3106. Penalties. |
21 | (a) Failure to create jobs.--A company which receives job |
22 | creation tax credits and fails to create the approved number of |
23 | new jobs within three years of the start date will be required |
24 | to refund to the Commonwealth the total amount of credit or |
25 | credits granted. |
26 | (b) Waiver.--The department may waive the penalties outlined |
27 | in subsection (a) if it is determined that a company's |
28 | operations were not maintained or the new jobs were not created |
29 | because of circumstances beyond the company's control. Such |
30 | circumstances include natural disasters or unforeseen industry |
|
1 | trends. |
2 | § 3107. Annual reports. |
3 | (a) Contents.--The department shall provide an annual report |
4 | on job creation tax credits which at a minimum shall include: |
5 | (1) A list of all job creation tax credit certificates |
6 | provided during the previous fiscal year. |
7 | (2) The name and location of each company receiving job |
8 | creation tax credit certificates. |
9 | (3) An analysis of the job creation tax credits' ability |
10 | to create jobs in this Commonwealth. |
11 | (4) Any other information that may be deemed relevant by |
12 | the department. |
13 | (b) Submission.--The annual report shall be submitted to the |
14 | Governor, the Majority Leader of the Senate, the Minority Leader |
15 | of the Senate, the Majority Leader of the House of |
16 | Representatives and the Minority Leader of the House of |
17 | Representatives by March 1 of the first full year following the |
18 | effective date of this section and March 1 of each year |
19 | thereafter. |
20 | § 3108. Notice of availability of tax credits. |
21 | The department shall publish notice of the availability of |
22 | the job creation tax credit on its publicly accessible Internet |
23 | website and make information available annually to the |
24 | Department of Labor and Industry Workforce Investment Board for |
25 | distribution to local boards. |
26 | Section 2 3. This act shall take effect October 1, 2009 in | <-- |
27 | 60 days. |
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