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| THE GENERAL ASSEMBLY OF PENNSYLVANIA |
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| HOUSE BILL |
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| INTRODUCED BY LEVDANSKY, APRIL 22, 2010 |
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| REFERRED TO COMMITTEE ON FINANCE, APRIL 22, 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 Fund and |
9 | the Local Government Services Fund; and making an |
10 | appropriation. |
11 | The General Assembly of the Commonwealth of Pennsylvania |
12 | hereby enacts as follows: |
13 | Section 1. Title 72 of the Pennsylvania Consolidated |
14 | Statutes is amended by adding a chapter to read: |
15 | CHAPTER 15 |
16 | SEVERANCE TAX |
17 | Sec. |
18 | 1501. Short title of chapter. |
19 | 1502. Definitions. |
20 | 1503. Imposition of tax. |
21 | 1503.1. Natural gas base rate adjustment. |
22 | 1504. Return and payment. |
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1 | 1505. Natural gas severance tax registration. |
2 | 1505.1. Meters. |
3 | 1506. Assessments. |
4 | 1507. Time for assessment. |
5 | 1508. Extension of limitation period. |
6 | 1509. Reassessments. |
7 | 1510. Interest. |
8 | 1511. Penalties. |
9 | 1512. Criminal acts. |
10 | 1513. Abatement of additions or penalties. |
11 | 1514. Bulk and auction sales. |
12 | 1515. Collection upon failure to request reassessment, review |
13 | or appeal. |
14 | 1516. Tax liens. |
15 | 1517. Tax suit reciprocity. |
16 | 1518. Service. |
17 | 1519. Refunds. |
18 | 1520. Refund petition. |
19 | 1521. Rules and regulations. |
20 | 1522. Recordkeeping. |
21 | 1523. Examinations. |
22 | 1524. Unauthorized disclosure. |
23 | 1525. Cooperation with other governments. |
24 | 1526. Bonds. |
25 | 1527. Funds established. |
26 | 1528. Administration of fund. |
27 | 1529. Appropriation. |
28 | § 1501. Short title of chapter. |
29 | This chapter shall be known and may be cited as the Natural |
30 | Gas Severance Tax Act. |
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1 | § 1502. Definitions. |
2 | The following words and phrases when used in this chapter |
3 | shall have the meanings given to them in this section unless the |
4 | context clearly indicates otherwise: |
5 | "Accredited laboratory." A facility engaged in the testing |
6 | and calibration of scientific measurement devices and certified |
7 | by the Department of Environmental Protection as having met the |
8 | Department of Revenue's standards for accreditation. |
9 | "Association." A partnership, limited partnership or any |
10 | other form of unincorporated enterprise owned or conducted by |
11 | two or more persons. |
12 | "Corporation." A corporation, joint stock association, |
13 | limited liability company, business trust or any other |
14 | incorporated enterprise organized under the laws of this |
15 | Commonwealth, the United States or any other state, territory or |
16 | foreign country or dependency. |
17 | "Department." The Department of Revenue of the Commonwealth. |
18 | "Fund." The Natural Gas Severance Tax Fund established under |
19 | section 1527. |
20 | "Meter." A device to measure the passage of volumes of gases |
21 | or liquids past a certain point. |
22 | "Municipality." A city, borough, incorporated town or a |
23 | township. |
24 | "Natural gas." A fossil fuel consisting of a mixture of |
25 | hydrocarbon gases, primarily methane, possibly including ethane, |
26 | propane, butane, pentane, carbon dioxide, oxygen, nitrogen and |
27 | hydrogen sulfide and other gas species. The term includes |
28 | natural gas from oil fields known as associated gas or casing |
29 | head gas, natural gas fields known as nonassociated gas, coal |
30 | beds, shale beds and other formations. |
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1 | "Nonproducing site." A point of severance that is not |
2 | capable of producing natural gas in paying quantities. |
3 | "Paying quantities." Profit to the producer, however small, |
4 | over the producer's current operating expenses. |
5 | "Person." A natural person or a corporation, fiduciary, |
6 | association or other entity, including the Commonwealth, its |
7 | political subdivisions, instrumentalities and authorities. When |
8 | the term is used in a clause prescribing and imposing a penalty |
9 | or imposing a fine or imprisonment, or both, the term shall |
10 | include the members, as applied to an association, and the |
11 | officers, as applied to a corporation. |
12 | "Producer." A person who engages or continues within this |
13 | Commonwealth in the business of severing natural gas for sale, |
14 | profit or commercial use. The term does not include a person who |
15 | severs natural gas from a storage field. |
16 | "Producing site." A point of severance capable of producing |
17 | natural gas in paying quantities. |
18 | "Reporting period." A period of three successive calendar |
19 | months beginning with the first day of July and ending on the |
20 | 30th day of September and each succeeding three successive |
21 | calendar months. |
22 | "Secretary." The Secretary of Revenue of the Commonwealth. |
23 | "Sever," "severing" or "severance." The extraction or other |
24 | removal of natural gas from the soil or water of this |
25 | Commonwealth. |
26 | "Storage field." A natural formation or other site that is |
27 | used to store natural gas that did not originate from and has |
28 | been injected into the formation or site. |
29 | "Stripper well." A producing site or a nonproducing site |
30 | that is not capable of producing and does not produce more than |
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1 | 60,000 cubic feet of natural gas per day. |
2 | "Tax." The tax imposed under this chapter. |
3 | "Taxpayer." A person subject to the tax imposed by this |
4 | chapter. |
5 | "Unit." A thousand cubic feet of natural gas measured at the |
6 | wellhead at a temperature of 60 degrees Fahrenheit and an |
7 | absolute pressure of 14.73 pounds per square inch in accordance |
8 | with American Gas Association Standards and according to Boyle's |
9 | law for the measurement of gas under varying pressures with |
10 | deviations as follows: |
11 | (1) The average absolute atmospheric pressure shall be |
12 | assumed to be 14.4 pounds to the square inch, regardless of |
13 | elevation or location of point of delivery above sea level or |
14 | variations in atmospheric pressure from time to time. |
15 | (2) The temperature of the gas passing the meters shall |
16 | be determined by the continuous use of a recording |
17 | thermometer installed to properly record the temperature of |
18 | gas flowing through the meters. The arithmetic average of the |
19 | temperature recorded each 24-hour day shall be used in |
20 | computing gas volumes. If a recording thermometer is not |
21 | installed, or if installed and not operating properly, an |
22 | average flowing temperature of 60 degrees Fahrenheit shall be |
23 | used in computing gas volume. |
24 | (3) The specific gravity of the gas shall be determined |
25 | annually by tests made by the use of an Edwards or Acme |
26 | gravity balance or at intervals as found necessary in |
27 | practice. Specific gravity determinations shall be used in |
28 | computing gas volumes. |
29 | (4) The deviation of the natural gas from Boyle's law |
30 | shall be determined by annual tests or at other shorter |
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1 | intervals as found necessary in practice. The apparatus and |
2 | method used in making the test shall be in accordance with |
3 | recommendations of the National Bureau of Standards or Report |
4 | No. 3 of the Gas Measurement Committee of the American Gas |
5 | Association, or amendments thereto. The results of the tests |
6 | shall be used in computing the volume of gas delivered under |
7 | this chapter. |
8 | "Wellhead meter." A meter placed at a producing or |
9 | nonproducing site to measure the volume of natural gas severed |
10 | for which a wellhead meter certification has been issued. |
11 | "Wellhead meter certification." A report issued by an |
12 | accredited laboratory certifying the accuracy of a wellhead |
13 | meter. |
14 | § 1503. Imposition of tax. |
15 | (a) Establishment.--There is levied a natural gas severance |
16 | tax on every producer. |
17 | (b) Rate.--During the fiscal year in which the tax imposed |
18 | in subsection (a) becomes effective, the rate shall be 25¢ per |
19 | unit severed at the wellhead, but shall not be imposed on units |
20 | severed from a stripper well. |
21 | § 1503.1. Natural gas base rate adjustment. |
22 | (a) Annual adjustment.--The tax and rate imposed in section |
23 | 1503 (relating to imposition of tax) shall be adjusted annually |
24 | by the secretary on July 1 for the ensuing 12 calendar months as |
25 | determined by this section, but shall never be adjusted less |
26 | than 25¢ per unit severed. |
27 | (b) Determination of adjustment.--The secretary shall |
28 | determine, on or before April 30, the adjusted tax rate for the |
29 | 12 calendar months beginning July 1, of that year, by |
30 | determining the natural gas base rate adjustment. |
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1 | (c) Calculation of adjustment.--The natural gas base rate |
2 | adjustment and the resulting adjusted tax rate for the |
3 | applicable 12-month period is determined as follows: |
4 | (1) If 5% of the average of the New York Mercantile |
5 | Exchange (NYMEX) Henry Hub settled price on the last trading |
6 | day of the month, as reported in the Wall Street Journal for |
7 | the previous 12-month period ending March 31, is less than |
8 | 25¢, the natural gas base rate adjustment shall be zero and |
9 | the adjusted tax rate shall be 25¢. |
10 | (2) If 5% of the average of the NYMEX Henry Hub settled |
11 | price on the last trading day of the month, as reported in |
12 | the Wall Street Journal for the previous 12-month period |
13 | ending March 31, is greater than 25¢, the natural gas base |
14 | rate adjustment shall be 50% of the difference between 5% of |
15 | the average of the NYMEX Henry Hub settled price on the last |
16 | trading day of the month, as reported in the Wall Street |
17 | Journal for the previous 12-month period ending March 31, and |
18 | 25¢. The adjusted tax rate shall be the resulting natural gas |
19 | base rate adjustment plus 25¢. |
20 | (d) Publication of adjustment.--The secretary shall publish |
21 | the natural gas base rate adjustment and the adjusted tax rate, |
22 | as determined in this section, in the Pennsylvania Bulletin by |
23 | May 1 of each year and shall provide the information to |
24 | producers by written notice mailed 60 days prior to the |
25 | effective date thereof. Failure to make such publication or to |
26 | give such notice shall not be a condition for the adjusted tax |
27 | rate which shall nevertheless be effective. |
28 | (e) Tax rate in event of discontinuance of base.--If |
29 | publication of the NYMEX Henry Hub average monthly gas price |
30 | data is discontinued, the tax rate shall remain that last |
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1 | established under this section until a comparable method for |
2 | determining the tax rate is adopted by the General Assembly. |
3 | (f) Other permissible adjustments of tax base.--If the base |
4 | data of the NYMEX Henry Hub average monthly gas price is |
5 | substantially revised, the secretary shall make appropriate |
6 | adjustments to ensure that the natural gas base rate adjustment |
7 | is reasonably consistent with the result which would have been |
8 | attained had such substantial revision not been made. If the |
9 | secretary is unable to make reasonable changes sufficient to |
10 | ensure a consistent result, the tax rate shall remain that last |
11 | established under this section until a comparable method for |
12 | determining the tax rate is adopted by the General Assembly. |
13 | (g) Application of rate determinations.--The provisions of |
14 | this section shall affect only the determination of the rate of |
15 | the tax on the severance of units of natural gas imposed in |
16 | section 1503. The provisions of this section are not intended, |
17 | nor shall they be construed, to affect any other determination |
18 | whatsoever, including, but not limited to, the determination of |
19 | royalty due under mineral leases. Notwithstanding any other |
20 | provision of law, the rate of tax shall not reduce any royalty |
21 | payments due under mineral leases. |
22 | § 1504. Return and payment. |
23 | (a) Requirement.--Every producer is required to file a |
24 | return with the department on a form to be prescribed by the |
25 | department. The return shall do all of the following: |
26 | (1) Report all severed natural gas units per reporting |
27 | period. |
28 | (2) Identify the number of producing sites in each |
29 | county and municipality. |
30 | (3) Report the tax due under section 1503 (relating to |
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1 | imposition of tax). |
2 | (b) Filing.--The return required by subsection (a) shall be |
3 | filed with the department within 50 days following the end of a |
4 | reporting period. |
5 | (c) Deadline.--The tax imposed under section 1503 is due on |
6 | the day the return is required to be filed and becomes |
7 | delinquent if not remitted to the department by that date. |
8 | § 1505. Natural gas severance tax registration. |
9 | (a) Application.--Before a producer severs natural gas in |
10 | this Commonwealth, the producer shall apply to the department |
11 | for a natural gas severance tax registration certificate. |
12 | (a.1) Application fee.--The department may charge an |
13 | application fee to cover the administrative costs associated |
14 | with the application and registration process. If the department |
15 | charges an application fee, the department shall not issue a |
16 | registration certificate until the producer has paid the |
17 | application fee. |
18 | (a.2) Declaration.--The producer shall include in its |
19 | application a declaration of all sites in this Commonwealth used |
20 | by the producer for the severance of natural gas. The |
21 | declaration is to include all producing sites and nonproducing |
22 | sites as well as wellhead meter certification for each. The |
23 | producer is required to update the declaration when the producer |
24 | adds or removes a producing site or nonproducing site in this |
25 | Commonwealth or when there is a change in the status of a |
26 | producing site or nonproducing site or when the producer uses a |
27 | different accredited laboratory to certify the accuracy of the |
28 | producer's wellhead meters. The producer shall update the |
29 | declaration within 30 days after a calendar month in which a |
30 | change to the declaration occurs. |
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1 | (b) Issuance.--Except as provided in subsection (c), after |
2 | the receipt of an application, the department shall issue a |
3 | registration certificate under subsection (a). The registration |
4 | certificate shall be nonassignable. All registrants shall be |
5 | required to renew their registration certificates and wellhead |
6 | meter certifications on a staggered renewal system established |
7 | by the department. After the initial staggered renewal period, a |
8 | registration certificate or a wellhead meter certification |
9 | issued shall be valid for a period of five years. |
10 | (c) Refusal, suspension or revocation.--The department may |
11 | refuse to issue, suspend or revoke a registration certificate if |
12 | the applicant or registrant has not filed required State tax |
13 | reports and paid State taxes not subject to a timely perfected |
14 | administrative or judicial appeal or subject to a duly |
15 | authorized deferred payment plan. The department shall notify |
16 | the applicant or registrant of any refusal, suspension or |
17 | revocation. The notice shall contain a statement that the |
18 | refusal, suspension or revocation may be made public. The notice |
19 | shall be made by first class mail. An applicant or registrant |
20 | aggrieved by the determination of the department may file an |
21 | appeal under the provisions for administrative appeals in the |
22 | act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code |
23 | of 1971. In the case of a suspension or revocation which is |
24 | appealed, the registration certificate shall remain valid |
25 | pending a final outcome of the appeals process. Notwithstanding |
26 | sections 274, 353(f), 408(b), 603, 702, 802, 904 and 1102 of the |
27 | Tax Reform Code of 1971 or any other provision of law, if no |
28 | appeal is taken or if an appeal is taken and denied at the |
29 | conclusion of the appeal process, the department may disclose, |
30 | by publication or otherwise, the identity of a producer and the |
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1 | fact that the producer's registration certificate has been |
2 | refused, suspended or revoked under this subsection. Disclosure |
3 | may include the basis for refusal, suspension or revocation. |
4 | (d) Violation.--A person severing natural gas in this |
5 | Commonwealth without holding a valid registration certificate |
6 | under subsection (b) shall be guilty of a summary offense and |
7 | shall, upon conviction, be sentenced to pay a fine of not less |
8 | than $300 nor more than $1,500. In the event the person |
9 | convicted defaults, he shall be sentenced to imprisonment for |
10 | not less than five days nor more than 30 days. The penalties |
11 | imposed by this subsection shall be in addition to any other |
12 | penalties imposed by this chapter. For purposes of this |
13 | subsection, the severing of natural gas during any calendar day |
14 | shall constitute a separate violation. The Secretary of Revenue |
15 | may designate employees of the department to enforce the |
16 | provisions of this subsection. The employees shall exhibit proof |
17 | of and be within the scope of the designation when instituting |
18 | proceedings as provided by the Pennsylvania Rules of Criminal |
19 | Procedure. |
20 | (e) Failure to obtain registration certificate.--Failure to |
21 | obtain or hold a valid registration certificate does not relieve |
22 | a person from liability for the tax imposed by this chapter. |
23 | § 1505.1. Meters. |
24 | A producer shall provide for and maintain a discrete wellhead |
25 | meter where natural gas is severed. A producer shall ensure |
26 | meters are maintained according to industry standards. Any |
27 | wellhead meter installed after the effective date of this |
28 | section shall be a digital meter. |
29 | § 1506. Assessments. |
30 | (a) Authorization and requirement.--The department is |
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1 | authorized and shall make the inquiries, determinations and |
2 | assessments of the natural gas severance tax, including |
3 | interest, additions and penalties imposed under this chapter. |
4 | (b) Notice.--The notice of assessment and demand for payment |
5 | shall be mailed to the taxpayer. The notice shall set forth the |
6 | basis of the assessment. The department shall send the notice of |
7 | assessment to the taxpayer at its registered address via |
8 | certified mail if the assessment increases the taxpayer's tax |
9 | liability by $300. Otherwise, the notice of assessment may be |
10 | sent via regular mail. |
11 | § 1507. Time for assessment. |
12 | (a) Requirement.--An assessment as provided under section |
13 | 1506 (relating to assessments) shall be made within three years |
14 | after the date when the return provided for by section 1504 |
15 | (relating to return and payment) is filed or the end of the year |
16 | in which the tax liability arises, whichever shall occur last. |
17 | For the purposes of this subsection and subsection (b), a return |
18 | filed before the last day prescribed for the filing period shall |
19 | be considered as filed on the last day. |
20 | (b) Exception.--If the taxpayer underpays the correct amount |
21 | of the tax due by 25% or more, the tax may be assessed within |
22 | six years after the date the return was filed. |
23 | (c) Intent to evade.--Where no return is filed or where the |
24 | taxpayer files a false or fraudulent return with intent to evade |
25 | the tax imposed by this chapter, the assessment may be made at |
26 | any time. |
27 | (d) Erroneous credit or refund.--Within three years of the |
28 | granting of a refund or credit or within the period in which an |
29 | assessment or reassessment may have been issued by the |
30 | department for the taxable period for which the refund was |
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1 | granted, whichever period shall last occur, the department may |
2 | issue an assessment to recover a refund or credit made or |
3 | allowed erroneously. |
4 | § 1508. Extension of limitation period. |
5 | Notwithstanding the provisions of this chapter, the |
6 | assessment period may be extended in the event a taxpayer has |
7 | provided written consent before the expiration of the period |
8 | provided in section 1507 (relating to time for assessment) for a |
9 | tax assessment. The amount of tax due may be assessed at any |
10 | time within the extended period. The period may be extended |
11 | further by subsequent written consents made before the |
12 | expiration of the extended period. |
13 | § 1509. Reassessments. |
14 | A taxpayer against whom an assessment is made may petition |
15 | the department for a reassessment under Article XXVII of the act |
16 | of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of |
17 | 1971. |
18 | § 1510. Interest. |
19 | The department shall assess interest on any delinquent tax at |
20 | the rate prescribed under section 806 of the act of April 9, |
21 | 1929 (P.L.343, No.176), known as The Fiscal Code. |
22 | § 1511. Penalties. |
23 | The department shall enforce the following penalties: |
24 | (1) A penalty against a valid producer without a natural |
25 | gas severance tax registration certificate. The penalty shall |
26 | be $1 for every unit severed without a valid registration |
27 | certificate. The department may assess this penalty |
28 | separately from or in conjunction with any assessment of the |
29 | natural gas severance tax. |
30 | (2) A penalty against a producer for failure to timely |
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1 | file a return as required under section 1504 (relating to |
2 | return and payment). The penalty shall be 5% of the tax |
3 | liability to be reported on the return for each day beyond |
4 | the due date that the return is not filed. |
5 | (3) In addition to the penalty under paragraph (2), a |
6 | penalty against the producer for a willful failure to timely |
7 | file a return. The penalty shall be 200% of the tax liability |
8 | required to be reported on the return. |
9 | (4) A penalty against a producer for failure to timely |
10 | pay the tax as required by section 1504(c). The penalty shall |
11 | be 5% of the amount of tax due for each day beyond the |
12 | payment date that the tax is not paid. |
13 | § 1512. Criminal acts. |
14 | (a) Fraudulent return.--Any person with intent to defraud |
15 | the Commonwealth, who willfully makes or causes to be made a |
16 | return required by this chapter which is false, is guilty of a |
17 | misdemeanor and shall, upon conviction, be sentenced to pay a |
18 | fine of not more than $2,000 or to imprisonment for not more |
19 | than three years, or both. |
20 | (b) Other crimes.-- |
21 | (1) Except as otherwise provided by subsection (a), a |
22 | person is guilty of a misdemeanor and shall, upon conviction, |
23 | be sentenced to pay a fine of not more than $1,000 and costs |
24 | of prosecution or to imprisonment for not more than one year, |
25 | or both, for any of the following: |
26 | (i) Willfully failing to timely remit the tax to the |
27 | department. |
28 | (ii) Willfully failing or neglecting to timely file |
29 | a return or report required by this chapter. |
30 | (iii) Refusing to timely pay a tax, penalty or |
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1 | interest imposed or provided for by this chapter. |
2 | (iv) Willfully failing to preserve its books, papers |
3 | and records as directed by the department. |
4 | (v) Refusing to permit the department or its |
5 | authorized agents to examine its books, records or |
6 | papers. |
7 | (vi) Knowingly make any incomplete, false or |
8 | fraudulent return or report. |
9 | (vii) Preventing or attempting to prevent the full |
10 | disclosure of the amount of natural gas severance tax |
11 | due. |
12 | (viii) Providing any person with a false statement |
13 | as to the payment of natural gas severance tax with |
14 | respect to any pertinent facts. |
15 | (ix) Making, uttering or issuing a false or |
16 | fraudulent statement. |
17 | (2) The penalties imposed by this section shall be in |
18 | addition to other penalties imposed by this chapter. |
19 | § 1513. Abatement of additions or penalties. |
20 | Upon the filing of a petition for reassessment or a petition |
21 | for refund by a taxpayer as provided under this chapter, |
22 | additions or penalties imposed upon the taxpayer by this chapter |
23 | may be waived or abated in whole or in part where the petitioner |
24 | establishes that he acted in good faith, without negligence and |
25 | with no intent to defraud. |
26 | § 1514. Bulk and auction sales. |
27 | A person that sells or causes to be sold at auction, or that |
28 | sells or transfers in bulk, 51% or more of a stock of goods, |
29 | wares or merchandise of any kind, fixtures, machinery, |
30 | equipment, buildings or real estate involved in a business for |
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1 | which the person holds a registration certificate or is required |
2 | to obtain a registration certificate under the provisions of |
3 | this chapter shall be subject to the provisions of section 1403 |
4 | of the act of April 9, 1929 (P.L.343, No.176), known as The |
5 | Fiscal Code. |
6 | § 1515. Collection upon failure to request reassessment, review |
7 | or appeal. |
8 | (a) Power of department.--The department may collect the |
9 | natural gas severance tax: |
10 | (1) If an assessment of the tax is not paid within 30 |
11 | days after notice to the taxpayer when no petition for |
12 | reassessment has been filed. |
13 | (2) Within 60 days of the reassessment, if no petition |
14 | for review has been filed. |
15 | (3) If no appeal has been made, within 30 days of: |
16 | (i) the Board of Finance and Revenue's decision of a |
17 | petition for review; or |
18 | (ii) the expiration of the board's time for acting |
19 | upon the petition. |
20 | (4) In all cases of judicial sales, receiverships, |
21 | assignments or bankruptcies. |
22 | (b) Prohibition.--In a case for the collection of taxes |
23 | under subsection (a), the taxpayer against whom they were |
24 | assessed shall not be permitted to set up a ground of defense |
25 | that might have been determined by the department, the Board of |
26 | Finance and Revenue or the courts, provided that the defense of |
27 | failure of the department to mail notice of assessment or |
28 | reassessment to the taxpayer and the defense of payment of |
29 | assessment or reassessment may be raised in proceedings for |
30 | collection by a motion to stay the proceedings. |
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1 | § 1516. Tax liens. |
2 | (a) Lien imposed.--If any taxpayer neglects or refuses to |
3 | pay the natural gas severance tax for which the taxpayer is |
4 | liable under this chapter after demand, the amount, including |
5 | interest, addition or penalty, together with additional costs |
6 | that may accrue, shall be a lien in favor of the Commonwealth |
7 | upon the real and personal property of the taxpayer but only |
8 | after the same has been entered and docketed of record by the |
9 | prothonotary of the county where the property is situated. The |
10 | department may, at any time, transmit to the prothonotaries of |
11 | the respective counties certified copies of all liens imposed by |
12 | this section. It shall be the duty of the prothonotary receiving |
13 | the lien to enter and docket the same of record to the office of |
14 | the prothonotary. The lien shall be indexed as judgments are now |
15 | indexed. No prothonotary shall require as a condition precedent |
16 | to the entry of the lien the payment of costs incidental to its |
17 | entry. |
18 | (b) Priority of lien and effect on judicial sale.--Except |
19 | for the costs of the sale and the writ upon which the sale was |
20 | made and real estate taxes and municipal claims against the |
21 | property, a lien imposed under this section shall have priority |
22 | from the date of its recording and shall be fully paid and |
23 | satisfied out of the proceeds of any judicial sale of property |
24 | subject to the lien, before any other obligation, judgment, |
25 | claim, lien or estate to which the property may subsequently |
26 | become subject, but shall be subordinate to mortgages and other |
27 | liens existing and duly recorded or entered of record prior to |
28 | the recording of the lien. |
29 | (c) No discharge by sale on junior lien.--In the case of a |
30 | judicial sale of property subject to a lien imposed under this |
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1 | section, upon a lien or claim over which the lien imposed under |
2 | this section has priority, the sale shall discharge the lien |
3 | imposed under this section to the extent only that the proceeds |
4 | are applied to its payment, and the lien shall continue in full |
5 | force and effect as to the balance remaining unpaid. There shall |
6 | be no inquisition or condemnation upon any judicial sale of real |
7 | estate made by the Commonwealth under the provisions of this |
8 | chapter. The lien shall continue as provided in the act of April |
9 | 9, 1929 (P.L.343, No.176), known as The Fiscal Code, and a writ |
10 | of execution may directly issue upon the lien without the |
11 | issuance and prosecution to judgment of a writ of scire facias, |
12 | provided that not less than ten days before issuance of any |
13 | execution on the lien, notice of the filing and the effect of |
14 | the lien shall be sent by registered mail to the taxpayer at its |
15 | last known post office address, provided further that the lien |
16 | shall have no effect upon any stock of goods, wares or |
17 | merchandise regularly sold or leased in the ordinary course of |
18 | business by the taxpayer against whom the lien has been entered, |
19 | unless and until a writ of execution has been issued and a levy |
20 | made upon said stock of goods, wares and merchandise. |
21 | (d) Duty of prothonotary.--Any willful failure of any |
22 | prothonotary to carry out any duty imposed upon him by this |
23 | section shall be a misdemeanor. Upon conviction, he shall be |
24 | sentenced to pay a fine of not more than $1,000 and costs of |
25 | prosecution or to imprisonment for not more than one year, or |
26 | both. |
27 | (e) Priority.--Except as provided in this chapter, the |
28 | distribution, voluntary or compulsory, in receivership, |
29 | bankruptcy or otherwise of the property or estate of any person, |
30 | all taxes imposed by this chapter which are due and unpaid and |
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1 | are not collectible under the provisions of section 225 of the |
2 | act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code |
3 | of 1971, shall be paid from the first money available for |
4 | distribution in priority to all other claims and liens, except |
5 | as the laws of the United States may give priority to a claim to |
6 | the Federal Government. A person charged with the administration |
7 | or distribution of the property or estate who violates the |
8 | provisions of this section shall be personally liable for the |
9 | taxes imposed by this chapter which are accrued and unpaid and |
10 | chargeable against the person whose property or estate is being |
11 | administered or distributed. |
12 | (f) Other remedies.--Subject to the limitations contained in |
13 | this chapter as to the assessment of taxes, nothing contained in |
14 | this section shall be construed to restrict, prohibit or limit |
15 | the use by the department in collecting taxes due and payable of |
16 | another remedy or procedure available at law or equity for the |
17 | collection of debts. |
18 | § 1517. Tax suit reciprocity. |
19 | The courts of this Commonwealth shall recognize and enforce |
20 | liabilities for natural gas severance taxes lawfully imposed by |
21 | any other state, provided that the other state recognizes and |
22 | enforces the tax set forth in this chapter. |
23 | § 1518. Service. |
24 | A producer is deemed to have appointed the Secretary of the |
25 | Commonwealth its agent for the acceptance of service of process |
26 | or notice in a proceeding for the enforcement of the civil |
27 | provisions of this chapter and service made upon the Secretary |
28 | of the Commonwealth as agent shall be of the same legal force |
29 | and validity as if the service had been personally made upon the |
30 | producer. Where service cannot be made upon the producer in the |
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1 | manner provided by other laws of this Commonwealth relating to |
2 | service of process, service may be made upon the Secretary of |
3 | the Commonwealth. In that case, a copy of the process or notice |
4 | shall be personally served upon any agent or representative of |
5 | the producer who may be found within this Commonwealth or, where |
6 | no agent or representative may be found, a copy of the process |
7 | or notice shall be sent via registered mail to the producer at |
8 | the last known address of its principal place of business, home |
9 | office or residence. |
10 | § 1519. Refunds. |
11 | Under Article XXVII of the act of March 4, 1971 (P.L.6, |
12 | No.2), known as the Tax Reform Code of 1971, the department |
13 | shall refund all taxes, interest and penalties paid to the |
14 | Commonwealth under the provisions of this chapter to which the |
15 | Commonwealth is not rightfully entitled. The refunds shall be |
16 | made to the person or the person's heirs, successors, assigns or |
17 | other personal representatives who paid the tax, provided that |
18 | no refund shall be made under this section regarding a payment |
19 | made by reason of an assessment where a taxpayer has filed a |
20 | petition for reassessment under section 2702 of the Tax Reform |
21 | Code of 1971 to the extent the petition is adverse to the |
22 | taxpayer by a decision which is no longer subject to further |
23 | review or appeal. Nothing in this chapter shall prohibit a |
24 | taxpayer who has filed a timely petition for reassessment from |
25 | amending it to a petition for refund where the petitioner paid |
26 | the tax assessed. |
27 | § 1520. Refund petition. |
28 | (a) General rule.--Except as provided for in subsection (b), |
29 | the refund or credit of tax, interest or penalty provided for by |
30 | section 1519 (relating to refunds) shall be made only where the |
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1 | person who has paid the tax files a petition for refund with the |
2 | department under Article XXVII of the act of March 4, 1971 |
3 | (P.L.6, No.2), known as the Tax Reform Code of 1971, within the |
4 | time limits of section 3003.1 of the Tax Reform Code of 1971. |
5 | (b) Natural gas severance tax.--A refund or credit of tax, |
6 | interest or penalty paid as a result of an assessment made by |
7 | the department under section 1505 (relating to natural gas |
8 | severance tax registration) shall be made only where the person |
9 | who has paid the tax files with the department a petition for a |
10 | refund with the department under Article XXVII within the time |
11 | limits of section 3003.1 of the Tax Reform Code of 1971. The |
12 | filing of a petition for refund, under the provisions of this |
13 | subsection, shall not affect the abatement of interest, |
14 | additions or penalties to which the person may be entitled by |
15 | reason of his payment of the assessment. |
16 | § 1521. Rules and regulations. |
17 | The department is charged with the enforcement of the |
18 | provisions of this chapter and is authorized and empowered to |
19 | prescribe, adopt, promulgate and enforce rules and regulations |
20 | not inconsistent with the provisions of this chapter relating to |
21 | any matter or thing pertaining to the administration and |
22 | enforcement of the provisions of this chapter and the collection |
23 | of taxes, penalties and interest imposed by this chapter. The |
24 | department may prescribe the extent, if any, to which any of the |
25 | rules and regulations shall be applied without retroactive |
26 | effect. |
27 | § 1522. Recordkeeping. |
28 | (a) General rule.--Every person liable for any tax imposed |
29 | by this chapter, or for the collection of such tax, shall keep |
30 | records, including those enumerated in subsection (b), render |
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1 | statements, make returns and comply with the rules and |
2 | regulations as the department may prescribe regarding matters |
3 | pertinent to the person's business. Whenever it is necessary, |
4 | the department may require a person, by notice served upon the |
5 | person or by regulations, to make returns, render statements or |
6 | keep records as the department deems sufficient to show whether |
7 | or not a person is liable to pay tax under this chapter. |
8 | (a.1) Records.--Records to be maintained are: |
9 | (1) Wellhead meter charts for each reporting period and |
10 | the meter calibration and maintenance records. If turbine |
11 | meters are in use, the maintenance records will be made |
12 | available to the department upon request. |
13 | (2) Records, statements and other instruments furnished |
14 | to a producer by a person to whom the producer delivers for |
15 | sale, transport or delivery of natural gas. |
16 | (3) Records, statements and other instruments as the |
17 | department may prescribe by regulation. |
18 | (b) Records of nonresidents.--A nonresident who does |
19 | business in this Commonwealth as a producer shall keep adequate |
20 | records of the business and of the tax due as a result. The |
21 | records shall be retained within this Commonwealth unless |
22 | retention outside this Commonwealth is authorized by the |
23 | department. The department may require a taxpayer who desires to |
24 | retain records outside this Commonwealth to assume reasonable |
25 | out-of-State audit expenses. |
26 | (c) Keeping of separate records.--A producer who is engaged |
27 | in another business or businesses which do not involve the |
28 | severing of natural gas taxable under this chapter, shall keep |
29 | separate books and records of the businesses so as to show the |
30 | taxable severing of natural gas under this chapter separately |
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1 | from other business activities not taxable hereunder. If any |
2 | person fails to keep separate books and records, the person |
3 | shall be liable for a penalty equaling 100% of tax due under |
4 | this chapter for the period where separate records were not |
5 | maintained. |
6 | § 1523. Examinations. |
7 | The department or any of its authorized agents are authorized |
8 | to examine the books, papers and records of any taxpayer in |
9 | order to verify the accuracy and completeness of any return made |
10 | or, if no return was made, to ascertain and assess the tax |
11 | imposed by this chapter. The department may require the |
12 | preservation of all books, papers and records for any period |
13 | deemed proper by it but not to exceed three years from the end |
14 | of the calendar year to which the records relate. Every taxpayer |
15 | is required to give to the department or its agent the means, |
16 | facilities and opportunity for examinations and investigation |
17 | under this section. The department is further authorized to |
18 | examine any person, under oath, concerning the taxable severing |
19 | of natural gas by any taxpayer or concerning any other matter |
20 | relating to the enforcement or administration of this chapter, |
21 | and to this end may compel the production of books, papers and |
22 | records and the attendance of all persons whether as parties or |
23 | witnesses whom it believes to have knowledge of relevant |
24 | matters. The procedure for the hearings or examinations shall be |
25 | the same as that provided by the act of April 9, 1929 (P.L.343, |
26 | No.176), known as The Fiscal Code. |
27 | § 1524. Unauthorized disclosure. |
28 | Any information gained by the department as a result of any |
29 | return, examination, investigation, hearing or verification |
30 | required or authorized by this chapter shall be confidential |
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1 | except for official purposes and except in accordance with |
2 | proper judicial order or as otherwise provided by law, and any |
3 | person unlawfully divulging the information shall be guilty of a |
4 | misdemeanor and shall, upon conviction, be sentenced to pay a |
5 | fine of not more than $1000 and costs of prosecution or to |
6 | imprisonment for not more than one year, or both. |
7 | § 1525. Cooperation with other governments. |
8 | Notwithstanding the provisions of section 1517 (relating to |
9 | tax suit reciprocity), the department may permit the |
10 | Commissioner of the Internal Revenue Service, the proper officer |
11 | of any state or the authorized representative of either of them |
12 | to inspect the tax returns of any taxpayer, or may furnish to |
13 | the commissioner or officer or to either of their authorized |
14 | representatives an abstract of the return of any taxpayer or |
15 | supply him with information concerning any item contained in any |
16 | return or disclosed by the report of any examination or |
17 | investigation of the return of any taxpayer. This permission |
18 | shall be granted only if the laws of the United States or |
19 | another state grant substantially similar privileges to the |
20 | proper officer of the Commonwealth charged with the |
21 | administration of this chapter. |
22 | § 1526. Bonds. |
23 | (a) Taxpayer to file bond.--The department may require a |
24 | nonresident natural person or any foreign corporation, |
25 | association, fiduciary or other entity not authorized to do |
26 | business within this Commonwealth or not having an established |
27 | place of business in this Commonwealth and subject to the tax |
28 | imposed by section 1503 (relating to imposition of tax), to file |
29 | a bond issued by a surety company authorized to do business in |
30 | this Commonwealth and approved by the Insurance Commissioner as |
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1 | to solvency and responsibility, in amounts as it may fix, to |
2 | secure the payment of any tax or penalties due or which may |
3 | become due from a nonresident natural person, corporation, |
4 | association, fiduciary or other entity whenever it deems it |
5 | necessary to protect the revenues obtained under this chapter. |
6 | The department may also require a bond of a person petitioning |
7 | the department for reassessment in the case of any assessment |
8 | over $500 or where, in its opinion, the ultimate collection is |
9 | in jeopardy. For a period of three years, the department may |
10 | require a bond of any person who has, on three or more occasions |
11 | within a 12-month period, either filed a return or made payment |
12 | to the department more than 30 days late. In the event that the |
13 | department determines a taxpayer is required to file a bond, it |
14 | shall give notice to the taxpayer specifying the amount of the |
15 | bond required. The taxpayer shall file the bond within five days |
16 | after notice is given by the department unless, within five |
17 | days, the taxpayer shall request in writing a hearing before the |
18 | Secretary of Revenue or his representative. At the hearing, the |
19 | necessity, propriety and amount of the bond shall be determined |
20 | by the secretary or the secretary's representative. The |
21 | determination shall be final and the taxpayer shall comply with |
22 | it within 15 days after notice is mailed to the taxpayer. |
23 | (b) Securities in lieu of bond.--In lieu of the bond |
24 | required by this section, securities approved by the department |
25 | or cash in a prescribed amount may be deposited. The securities |
26 | or cash shall be kept in the custody of the department. The |
27 | department may apply the securities or cash to the tax imposed |
28 | by this chapter and interest or penalties due without notice to |
29 | the depositor. The securities may be sold by the department to |
30 | pay the tax and interest or penalties due at public or private |
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1 | sale upon five days' written notice to the depositor. |
2 | (c) Failure to file bond.--The department may file a lien |
3 | under section 1516 (relating to tax liens) against any taxpayer |
4 | who fails to file a bond when required to do so under this |
5 | section. All funds received upon execution of the judgment on |
6 | the lien shall be refunded to the taxpayer with 3% interest |
7 | should a final determination be made that it does not owe any |
8 | payment to the department. |
9 | § 1527. Funds established. |
10 | (a) Natural Gas Severance Tax Fund.-- |
11 | (1) The Natural Gas Severance Tax Fund is established as |
12 | a separate fund in the State Treasury. |
13 | (2) The proceeds of the natural gas severance tax, |
14 | penalties and interest imposed by this chapter, less the |
15 | amounts appropriated under section 1529 (relating to |
16 | appropriation), shall be deposited into the fund. |
17 | (3) The money in the fund shall only be used in |
18 | accordance with section 1528 (relating to administration of |
19 | fund). |
20 | (b) Local Government Services Fund.-- |
21 | (1) The Local Government Services Fund is established as |
22 | a separate fund in the State Treasury. |
23 | (2) The allocation under section 1528(a)(3) shall be |
24 | deposited into the Local Government Services Fund and shall |
25 | be distributed as provided by law. |
26 | § 1528. Administration of fund. |
27 | (a) Transfers.--The State Treasurer shall make the following |
28 | transfers from the fund on July 1 of every year: |
29 | (1) Forty-five percent to the General Fund. |
30 | (2) Twenty-two percent to the Environmental Stewardship |
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1 | Fund. |
2 | (3) Twenty percent to the Local Government Services Fund |
3 | established in the State Treasury, to be distributed as |
4 | follows: |
5 | (i) Thirty percent to be allocated to counties where |
6 | there is severance of natural gas units. The funds shall |
7 | be distributed by the State Treasurer to each eligible |
8 | county based on a formula that divides the number of |
9 | producing sites in the county by the total number of |
10 | producing sites in all counties with the resulting |
11 | percentage multiplied times the funds available for |
12 | distribution. |
13 | (ii) Sixty percent to be allocated to municipalities |
14 | in counties where there is severance of natural gas |
15 | units. The funds shall be distributed by the State |
16 | Treasurer to each eligible municipality as follows: |
17 | (A) Each municipality with a producing site |
18 | shall be given two credits per producing site. |
19 | (B) Each municipality where there is no |
20 | producing site shall receive one credit. |
21 | (C) The number of credits for each municipality |
22 | shall be divided by the total number of credits for |
23 | all municipalities in counties with producing sites. |
24 | The resulting percentage is multiplied times the |
25 | funds available for distribution. |
26 | (iii) Ten percent to be allocated to the |
27 | Pennsylvania Emergency Management Agency to be |
28 | distributed to volunteer fire and ambulance services in |
29 | counties where natural gas is severed in accordance with |
30 | the procedures established in the act of July 31, 2003 |
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1 | (P.L.73, No.17), known as the Volunteer Fire Company and |
2 | Volunteer Ambulance Service Grant Act. |
3 | (4) Two percent to the Hazardous Sites Cleanup Fund. |
4 | (5) Three percent to the Conservation District Fund for |
5 | distribution to county conservation districts pursuant to |
6 | guidelines established by the State Conservation Commission. |
7 | (b) Distributions.--The State Treasurer shall make the |
8 | following distributions from the fund on July 1 of every year: |
9 | (1) Two percent to the Pennsylvania Game Commission. |
10 | (2) Four percent to the Pennsylvania Fish and Boat |
11 | Commission. |
12 | (3) Two percent to the Department of Public Welfare to |
13 | provide cash and crisis grants to low-income households under |
14 | the Low Income Home Energy Assistance Program. |
15 | § 1529. Appropriation. |
16 | The amount of the proceeds from the tax imposed by this |
17 | chapter as shall be necessary for the payment of refunds, |
18 | enforcement or administration under this chapter is hereby |
19 | appropriated for such purposes. |
20 | Section 2. This act shall take effect July 1, 2010. |
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