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PRINTER'S NO. 2308
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
1723
Session of
2017
INTRODUCED BY CONKLIN, V. BROWN, DEAN AND THOMAS,
AUGUST 18, 2017
REFERRED TO COMMITTEE ON ENVIRONMENTAL RESOURCES AND ENERGY,
AUGUST 18, 2017
AN ACT
Amending Title 58 (Oil and Gas) of the Pennsylvania Consolidated
Statutes, providing for a natural gas severance fee;
establishing the Natural Gas Severance Fee Account; and
providing for distribution from account.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Part II of Title 58 of the Pennsylvania
Consolidated Statutes is amended by adding a chapter to read:
CHAPTER 29
NATURAL GAS SEVERANCE FEE
Sec.
2901. Definitions.
2902. Imposition of natural gas severance fee.
2903. (Reserved).
2904. Return and payment.
2905. Natural gas severance fee registration.
2906. Meters.
2907. Assessments.
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2908. Time for assessment.
2909. Extension of assessment period.
2910. Reassessments.
2911. Interest.
2912. Penalties.
2913. Criminal acts.
2914. Abatement of additions or penalties.
2915. Bulk and auction sales.
2916. Collection upon failure to request reassessment, review
or appeal.
2917. Tax liens.
2918. Tax suit reciprocity.
2919. Service.
2920. Refunds.
2921. Refund petition.
2922. Rules and regulations.
2923. Recordkeeping.
2924. Examinations.
2925. Unauthorized disclosure.
2926. Cooperation with other governments.
2927. Bonds.
2928. Natural Gas Severance Fee Account established.
2929. Distributions.
§ 2901. Definitions.
The following words and phrases when used in this chapter
shall have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Account." The Natural Gas Severance Fee Account established
in section 2928 (relating to Natural Gas Severance Fee Account
established).
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"Accredited laboratory." A facility engaged in the testing
and calibration of scientific measurement devices and certified
by the Department of Environmental Protection as having met its
standards for accreditation.
"Association." A partnership, limited partnership or any
other form of unincorporated enterprise owned or conducted by
two or more persons.
"Average annual price of natural gas." The arithmetic mean
of the New York Mercantile Exchange (NYMEX) Henry Hub settled
price on the last trading day of each month of a calendar year
as reported by the Wall Street Journal for the 12-month period
ending March 31.
"Base fee." The fee under section 2902 (relating to
imposition of natural gas severance fee).
"Coal bed methane." Gas that can be produced from coal beds,
coal seams, mined-out areas or gob wells.
"Corporation." A corporation, joint stock association,
limited liability company, business trust or any other
incorporated enterprise organized under the laws of the United
States, this Commonwealth or any other state, territory or
foreign country or dependency.
"Department." The Department of Revenue of the Commonwealth.
"Fee." The fee imposed under this chapter.
"Meter." A device to measure the passage of volumes of gases
or liquids past a certain point.
"Municipality." A city, borough, incorporated town or
township.
"Natural gas." A fossil fuel consisting of a mixture of
hydrocarbon gases, primarily methane, possibly including ethane,
propane, butane, pentane, carbon dioxide, oxygen, nitrogen and
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hydrogen sulfide and other gas species. The term includes
natural gas from oil fields known as associated gas or casing
head gas, natural gas fields known as nonassociated gas, coal
beds, shale beds and other formations. The term does not include
coal bed methane.
"Nonproducing site." A point of severance that is not
capable of producing natural gas in paying quantities.
"Paying quantities." Profit to the producer, however small,
over the producer's current operating expenses.
"Person." A natural person or a corporation, fiduciary,
association or other entity, including the Commonwealth, its
political subdivisions, instrumentalities and authorities. When
the term is used in a clause prescribing and imposing a penalty
or imposing a fine or imprisonment, or both, the term shall
include the members, as applied to an association, and the
officers, as applied to a corporation.
"Producer." A person who engages or continues within this
Commonwealth in the business of severing natural gas for sale,
profit or commercial use. The term does not include a person who
severs natural gas from a storage field.
"Producing site." A point of severance capable of producing
natural gas in paying quantities.
"Reporting period." Every three successive calendar months
beginning January 1, 2018.
"Secretary." The Secretary of Revenue of the Commonwealth.
"Sever." To extract or otherwise remove natural gas from the
soil or water of this Commonwealth.
"Severance." The extraction or other removal of the natural
gas commodity from the soil or water of this Commonwealth to be
sold to consumers outside of this Commonwealth.
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"Severing." Extracting or otherwise removing the natural gas
commodity from the soil or water of this Commonwealth to be sold
to consumers outside of this Commonwealth.
"Storage field." A natural formation or other site that is
used to store natural gas that did not originate from and has
been injected into the formation or site.
"Stripper well." A producing site or a nonproducing site
that is not capable of producing and does not produce more than
90,000 cubic feet of natural gas per day.
"Taxpayer." A person subject to the fee imposed by this
chapter.
"Unit." A thousand cubic feet of natural gas measured at the
wellhead at a temperature of 60 degrees Fahrenheit and an
absolute pressure of 14.73 pounds per square inch in accordance
with American Gas Association Standards and according to Boyle's
law for the measurement of gas under varying pressures with
deviations as follows:
(1) The average absolute atmospheric pressure shall be
assumed to be 14.4 pounds to the square inch, regardless of
elevation or location of point of delivery above sea level or
variations in atmospheric pressure from time to time.
(2) The temperature of the gas passing the meters shall
be determined by the continuous use of a recording
thermometer installed to properly record the temperature of
gas flowing through the meters. The arithmetic average of the
temperature recorded each 24-hour day shall be used in
computing gas volumes. If a recording thermometer is not
installed, or is installed and not operating properly, an
average flowing temperature of 60 degrees Fahrenheit shall be
used in computing gas volume.
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(3) The specific gravity of the gas shall be determined
annually by tests made by the use of an Edwards or Acme
gravity balance, or at intervals as found necessary in
practice. Specific gravity determinations shall be used in
computing gas volumes.
(4) The deviation of the natural gas from Boyle's law
shall be determined by annual tests or at other shorter
intervals as found necessary in practice. The apparatus and
method used in making the test shall be in accordance with
recommendations of the National Bureau of Standards or Report
No. 3 of the Gas Measurement Committee of the American Gas
Association, or amendments thereto. The results of the tests
shall be used in computing the volume of gas delivered under
this chapter.
"Wellhead meter." A meter placed at a producing or
nonproducing site to measure the volume of natural gas severed
for which a wellhead meter certification has been issued.
"Wellhead meter certification." A report issued by an
accredited laboratory certifying the accuracy of a wellhead
meter.
§ 2902. Imposition of natural gas severance fee.
(a) Establishment.--Beginning January 1, 2018, there shall
be levied a natural gas severance fee on every producer. The fee
shall not be imposed on units severed from a stripper well
unless:
(1) The stripper well is one of multiple producing sites
or nonproducing sites, the combined volumes of gas produced
by all of which sites are measured by a single wellhead meter
as provided in section 2906 (relating to meters).
(2) The combined volumes of gas produced by all the
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producing sites or nonproducing sites described in paragraph
(1) is more than 90,000 cubic feet of natural gas per day.
(a.1) Exemptions.--The fee shall not be imposed on the
following:
(1) Units severed by a producer and sold and delivered
to a manufacturer of tangible personal property, as defined
in section 201(m) of the act of March 4, 1971 (P.L.6, No.2),
known as the Tax Reform Code of 1971, for the manufacturer's
use within this Commonwealth if the units have been severed
from one or more producing sites or nonproducing sites on
property owned by the manufacturer.
(2) Units provided free of charge to the owner of the
surface under which the gas is severed if the surface owner
is the end user of the gas.
(b) Base fee.--The base fee shall be 5¢ per unit severed at
the wellhead.
(c) Effect on royalty payments and recovery of
fee.-- Notwithstanding any other provision of law, the fee
imposed under this section shall not reduce any royalty payments
due under mineral leases, and the producer shall not recover any
portion of the fee paid from the royalty owner through other
means of deduction or reallocation, notwithstanding any
provision in the lease, contract or agreement.
§ 2903. (Reserved).
§ 2904. Return and payment.
(a) Return.--A producer shall submit a return and payment of
the fee to the department on a form prescribed by the department
for each reporting period. The return shall include the
following:
(1) The units of production severed by the producer
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during the reporting period.
(2) The number of producing sites of a producer in each
county and municipality.
(3) The amount due for the reporting period.
(b) Filing.--The return required under subsection (a) shall
be filed with the department within 25 days following the end of
a reporting period.
(c) Deadline.--The fee imposed under section 2902 (relating
to imposition of natural gas severance fee) is due on the day
the return is required to be filed and becomes delinquent if not
remitted to the department by that date.
(d) Deposit.--Except as provided in subsection (e), all fees
collected under this chapter shall be deposited into the
account.
(e) Appropriation.--The amount of the proceeds from the fee
imposed by this chapter as shall be necessary for the payment of
refunds, enforcement or administration under this chapter, is
hereby appropriated to the department for those purposes.
§ 2905. Natural gas severance fee registration.
(a) Application.--Before a producer severs natural gas in
this Commonwealth, the producer shall apply to the department
for a natural gas severance fee registration certificate.
(a.1) Application fee.--The department may charge an
application fee to cover the administrative costs associated
with the application and registration process. If the department
charges an application fee, the department shall not issue a
registration certificate until the producer has paid the
application fee.
(a.2) Declaration.--The producer shall include in its
application a declaration of all producing sites and
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nonproducing sites used by the producer for the severance of
natural gas. The declaration shall include copies of wellhead
meter certifications for each site. The producer shall update
the declaration when the producer adds or removes a producing
site or nonproducing site in this Commonwealth or when there is
a change in the status of a producing site or nonproducing site
or when the producer uses a different accredited laboratory to
issue a wellhead meter certification. The producer shall update
the declaration within 30 days after a calendar month in which a
change to the declaration occurs.
(b) Issuance.--Except as provided under subsection (c),
after the receipt of an application, the department shall issue
a registration certificate under subsection (a). The
registration certificate shall be nonassignable. All registrants
shall be required to renew their registration certificates and
wellhead meter certifications on a staggered renewal system
established by the department. After the initial staggered
renewal period, a registration certificate or a wellhead meter
certification issued shall be valid for a period of five years.
(c) Refusal, suspension or revocation.--The department may
refuse to issue, suspend or revoke a registration certificate if
the applicant or registrant has not filed required State tax
reports and paid State taxes not subject to a timely perfected
administrative or judicial appeal or subject to a duly
authorized deferred payment plan. The department shall notify
the applicant or registrant of any refusal, suspension or
revocation. The notice shall contain a statement that the
refusal, suspension or revocation may be made public. The notice
shall be made by first class mail. An applicant or registrant
aggrieved by the determination of the department may file an
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appeal under the provisions for administrative appeals in the
act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code
of 1971. In the case of a suspension or revocation which is
appealed, the registration certificate shall remain valid
pending a final outcome of the appeals process. Notwithstanding
sections 274, 353(f), 408(b), 603, 702, 802, 904 and 1102 of the
Tax Reform Code of 1971 or any other provision of law, if no
appeal is taken or if an appeal is taken and denied at the
conclusion of the appeal process, the department may disclose,
by publication or otherwise, the identity of a producer and the
fact that the producer's registration certificate has been
refused, suspended or revoked under this subsection. Disclosure
may include the basis for refusal, suspension or revocation.
(d) Violation.--A person severing natural gas in this
Commonwealth without holding a valid registration certificate
under subsection (b) commits a summary offense and shall, upon
conviction, be sentenced to pay a fine of not less than $300 nor
more than $1,500. In the event the person convicted defaults in
the payment of the fine, the person shall be sentenced to
imprisonment for not less than five days nor more than 30 days.
The penalties imposed by this subsection shall be in addition to
any other penalties imposed by this chapter. For purposes of
this subsection, the severing of natural gas during any calendar
day shall constitute a separate violation. The secretary may
designate employees of the department to enforce the provisions
of this subsection. The employees shall exhibit proof of and be
within the scope of the designation when instituting proceedings
as provided by the Pennsylvania Rules of Criminal Procedure.
(e) Failure to obtain registration certificate.--Failure to
obtain or hold a valid registration certificate does not relieve
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a person from liability for the tax imposed by this chapter.
§ 2906. Meters.
(a) General rule.--Except as provided in subsection (b), a
producer shall provide for and maintain a discrete wellhead
meter where natural gas is severed. A producer shall ensure that
the meters are maintained according to industry standards. A
wellhead meter installed after the effective date of this
section shall be a digital meter.
(b) Exception.--If a producer has multiple producing sites
or nonproducing sites, the combined volumes of gas produced by
all of which sites are measured by a single wellhead meter, the
producer shall not be required to provide for a discrete
wellhead meter at any of those producing sites or nonproducing
sites that is also a stripper well.
§ 2907. Assessments.
(a) Authorization and requirement.--The department is
authorized and shall make the inquiries, determinations and
assessments of the fee imposed under this chapter, including
interest, additions and penalties imposed under this chapter.
(b) Notice.--The notice of assessment and demand for payment
shall be mailed to the taxpayer. The notice shall provide the
basis of the assessment. The department shall send the notice of
assessment to the taxpayer at its registered address via
certified mail if the assessment increases the taxpayer's tax
liability by $300. Otherwise, the notice of assessment may be
sent via regular mail.
§ 2908. Time for assessment.
(a) Requirement.--An assessment as provided under section
2907 (relating to assessments) shall be made within three years
after the date when the return provided for by section 2904
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(relating to return and payment) is filed or the end of the year
in which the tax liability arises, whichever shall occur last.
For the purposes of this subsection and subsection (b), a return
filed before the last day prescribed for the filing period shall
be considered as filed on the last day.
(b) Exception.--If the taxpayer underpays the correct amount
of the fee due by 25% or more, the fee may be assessed within
six years after the date the return was filed.
(c) Intent to evade.--Where no return is filed or where the
taxpayer files a false or fraudulent return with intent to evade
the fee imposed by this chapter, the assessment may be made at
any time.
(d) Erroneous credit or refund.--Within three years of the
granting of a refund or credit or within the period in which an
assessment or reassessment may have been issued by the
department for the taxable period for which the refund was
granted, whichever period shall last occur, the department may
issue an assessment to recover a refund or credit made or
allowed erroneously.
§ 2909. Extension of assessment period.
Notwithstanding the provisions of this chapter, the
assessment period may be extended in the event a taxpayer has
provided written consent before the expiration of the period
provided in section 2908 (relating to time for assessment) for a
fee assessment. The amount of fee due may be assessed at any
time within the extended period. The period may be extended
further by subsequent written consents made before the
expiration of the extended period.
§ 2910. Reassessments.
A taxpayer against whom an assessment is made may petition
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the department for a reassessment under Article XXVII of the act
of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of
1971.
§ 2911. Interest.
The department shall assess interest on any delinquent fee at
the rate prescribed under section 806 of the act of April 9,
1929 (P.L.343, No.176), known as The Fiscal Code.
§ 2912. Penalties.
The department shall enforce the following penalties:
(1) A penalty against a producer without a natural gas
severance fee registration certificate. The penalty shall be
$1 for every unit severed without a valid registration
certificate. The department may assess this penalty
separately from or in conjunction with any assessment of the
natural gas severance fee.
(2) A penalty against a producer for failure to timely
file a return as required under section 2904 (relating to
return and payment). The penalty shall be 5% of the fee
liability to be reported on the return for each day beyond
the due date that the return is not filed.
(3) In addition to the penalty under paragraph (2), a
penalty against the producer for a willful failure to timely
file a return. The penalty shall be 200% of the fee liability
required to be reported on the return.
(4) A penalty against a producer for failure to pay the
fee by the deadline under section 2904(c). The penalty shall
be 5% of the amount of fee due for each day beyond the
payment date that the fee is not paid.
§ 2913. Criminal acts.
(a) Fraudulent return.--Any person with intent to defraud
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the Commonwealth, who willfully makes or causes to be made a
return required by this chapter which is false, commits a
misdemeanor and shall, upon conviction, be sentenced to pay a
fine of not more than $2,000 or to imprisonment for not more
than three years, or both.
(b) Other crimes.--
(1) Except as otherwise provided by subsection (a), a
person commits a misdemeanor and shall, upon conviction, be
sentenced to pay a fine of not more than $1,000 and costs of
prosecution or to imprisonment for not more than one year, or
both, for any of the following:
(i) Willfully failing to timely remit the fee to the
department.
(ii) Willfully failing or neglecting to timely file
a return or report required by this chapter.
(iii) Refusing to timely pay a fee, penalty or
interest imposed or provided for by this chapter.
(iv) Willfully failing to preserve its books, papers
and records as directed by the department.
(v) Refusing to permit the department or its
authorized agents to examine its books, records or
papers.
(vi) Knowingly making any incomplete, false or
fraudulent return or report.
(vii) Preventing or attempting to prevent the full
disclosure of the amount of natural gas severance fee
due.
(viii) Providing any person with a false statement
as to the payment of the fee imposed under this chapter
with respect to any pertinent facts.
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(ix) Making, uttering or issuing a false or
fraudulent statement.
(2) The penalties imposed by this section shall be in
addition to other penalties imposed by this chapter.
§ 2914. Abatement of additions or penalties.
Upon the filing of a petition for reassessment or a petition
for refund by a taxpayer as provided under this chapter,
additions or penalties imposed upon the taxpayer by this chapter
may be waived or abated in whole or in part where the petitioner
establishes that he acted in good faith, without negligence and
with no intent to defraud.
§ 2915. Bulk and auction sales.
A person that sells or causes to be sold at auction, or that
sells or transfers in bulk, 51% or more of a stock of goods,
wares or merchandise of any kind, fixtures, machinery,
equipment, buildings or real estate involved in a business for
which the person holds a registration certificate or is required
to obtain a registration certificate under the provisions of
this chapter shall be subject to the provisions of section 1403
of the act of April 9, 1929 (P.L.343, No.176), known as The
Fiscal Code.
§ 2916. Collection upon failure to request reassessment, review
or appeal.
(a) Power of department.--The department may collect the fee
imposed under this chapter:
(1) If an assessment of the fee is not paid within 30
days after notice to the taxpayer when no petition for
reassessment has been filed.
(2) Within 60 days of the reassessment, if no petition
for review has been filed.
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(3) If no appeal has been made, within 30 days of:
(i) the Board of Finance and Revenue's decision of a
petition for review; or
(ii) the expiration of the board's time for acting
upon the petition.
(4) In all cases of judicial sales, receiverships,
assignments or bankruptcies.
(b) Prohibition.--In a case for the collection of fees under
subsection (a), the taxpayer against whom they were assessed
shall not be permitted to set up a ground of defense that might
have been determined by the department, the Board of Finance and
Revenue or the courts, provided that the defense of failure of
the department to mail notice of assessment or reassessment to
the taxpayer and the defense of payment of assessment or
reassessment may be raised in proceedings for collection by a
motion to stay the proceedings.
§ 2917. Tax liens.
(a) Lien imposed.--If a taxpayer neglects or refuses to pay
the fee imposed under this chapter for which the taxpayer is
liable under this chapter after demand, the amount, including
interest, addition or penalty, together with additional costs
that may accrue, shall be a lien in favor of the Commonwealth
upon the real and personal property of the taxpayer but only
after the same has been entered and docketed of record by the
prothonotary of the county where the property is situated. The
department may, at any time, transmit to the prothonotaries of
the respective counties certified copies of all liens imposed by
this section. It shall be the duty of the prothonotary receiving
the lien to enter and docket the same of record to the office of
the prothonotary. The lien shall be indexed as judgments are now
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indexed. No prothonotary shall require as a condition precedent
to the entry of the lien the payment of costs incidental to its
entry.
(b) Priority of lien and effect on judicial sale.--Except
for the costs of the sale and the writ upon which the sale was
made and real estate taxes and municipal claims against the
property, a lien imposed under this section shall have priority
from the date of its recording and shall be fully paid and
satisfied out of the proceeds of any judicial sale of property
subject to the lien, before any other obligation, judgment,
claim, lien or estate to which the property may subsequently
become subject, but shall be subordinate to mortgages and other
liens existing and duly recorded or entered of record prior to
the recording of the lien.
(c) No discharge by sale on junior lien.--In the case of a
judicial sale of property subject to a lien imposed under this
section, upon a lien or claim over which the lien imposed under
this section has priority, the sale shall discharge the lien
imposed under this section to the extent only that the proceeds
are applied to its payment, and the lien shall continue in full
force and effect as to the balance remaining unpaid. There shall
be no inquisition or condemnation upon any judicial sale of real
estate made by the Commonwealth under the provisions of this
chapter. The lien shall continue as provided in the act of April
9, 1929 (P.L.343, No.176), known as The Fiscal Code, and a writ
of execution may directly issue upon the lien without the
issuance and prosecution to judgment of a writ of scire facias,
provided that not less than 10 days before issuance of any
execution on the lien, notice of the filing and the effect of
the lien shall be sent by registered mail to the taxpayer at its
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last known post office address, provided further that the lien
shall have no effect upon any stock of goods, wares or
merchandise regularly sold or leased in the ordinary course of
business by the taxpayer against whom the lien has been entered,
unless and until a writ of execution has been issued and a levy
made upon the stock of goods, wares and merchandise.
(d) Duty of prothonotary.--A willful failure of a
prothonotary to carry out a duty imposed upon the prothonotary
by this section shall be a misdemeanor. Upon conviction, the
offender shall be sentenced to pay a fine of not more than
$1,000 and costs of prosecution or to imprisonment for not more
than one year, or both.
(e) Priority.--Except as provided in this chapter, the
distribution, voluntary or compulsory, in receivership,
bankruptcy or otherwise of the property or estate of any person,
all fees imposed by this chapter which are due and unpaid and
are not collectible under the provisions of section 225 of the
act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code
of 1971, shall be paid from the first money available for
distribution in priority to all other claims and liens, except
as the laws of the United States may give priority to a claim to
the Federal Government. A person charged with the administration
or distribution of the property or estate who violates the
provisions of this section shall be personally liable for the
taxes imposed by this chapter which are accrued and unpaid and
chargeable against the person whose property or estate is being
administered or distributed.
(f) Other remedies.--Subject to the limitations contained in
this chapter as to the assessment of fees, nothing contained in
this section shall be construed to restrict, prohibit or limit
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the use by the department in collecting fees due and payable of
another remedy or procedure available at law or equity for the
collection of debts.
§ 2918. Tax suit reciprocity.
The courts of this Commonwealth shall recognize and enforce
liabilities for natural gas severance or extraction fees
lawfully imposed by any other state, provided that the other
state recognizes and enforces the fee imposed under this
chapter.
§ 2919. Service.
A producer is deemed to have appointed the Secretary of the
Commonwealth its agent for the acceptance of service of process
or notice in a proceeding for the enforcement of the civil
provisions of this chapter, and service made upon the Secretary
of the Commonwealth as agent shall be of the same legal force
and validity as if the service had been personally made upon the
producer. Where service cannot be made upon the producer in the
manner provided by other laws of this Commonwealth relating to
service of process, service may be made upon the Secretary of
the Commonwealth. In that case, a copy of the process or notice
shall be personally served upon any agent or representative of
the producer who may be found within this Commonwealth, or,
where no agent or representative may be found, a copy of the
process or notice shall be sent via registered mail to the
producer at the last known address of its principal place of
business, home office or residence.
§ 2920. Refunds.
Under Article XXVII of the act of March 4, 1971 (P.L.6,
No.2), known as the Tax Reform Code of 1971, the department
shall refund all fees, interest and penalties paid to the
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Commonwealth under the provisions of this chapter to which the
Commonwealth is not rightfully entitled. The refunds shall be
made to the person or the person's heirs, successors, assigns or
other personal representatives who paid the fee, provided that
no refund shall be made under this section regarding a payment
made by reason of an assessment where a taxpayer has filed a
petition for reassessment under section 2702 of the Tax Reform
Code of 1971 to the extent the petition is adverse to the
taxpayer by a decision which is no longer subject to further
review or appeal. Nothing in this chapter shall prohibit a
taxpayer who has filed a timely petition for reassessment from
amending it to a petition for refund where the petitioner paid
the fee assessed.
§ 2921. Refund petition.
(a) General rule.--Except as provided for in subsection (b),
the refund or credit of tax, interest or penalty provided for by
section 2920 (relating to refunds) shall be made only where the
person who has paid the tax files a petition for refund with the
department under Article XXVII of the act of March 4, 1971
(P.L.6, No.2), known as the Tax Reform Code of 1971, within the
time limits of section 3003.1 of the Tax Reform Code of 1971.
(b) Natural gas severance fee.--A refund or credit of fees,
interest or penalty paid as a result of an assessment made by
the department under section 2905 (relating to natural gas
severance fee registration) shall be made only where the person
who has paid the fee files with the department a petition for a
refund with the department under Article XXVII of the Tax Reform
Code of 1971 within the time limits of section 3003.1 of the Tax
Reform Code of 1971. The filing of a petition for refund, under
the provisions of this subsection, shall not affect the
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abatement of interest, additions or penalties to which the
person may be entitled by reason of his payment of the
assessment.
§ 2922. Rules and regulations.
The department is charged with the enforcement of the
provisions of this chapter and is authorized and empowered to
prescribe, adopt, promulgate and enforce rules and regulations
not inconsistent with the provisions of this chapter relating to
any matter or thing pertaining to the administration and
enforcement of the provisions of this chapter and the collection
of fees, penalties and interest imposed by this chapter. The
department may prescribe the extent, if any, to which any of the
rules and regulations shall be applied without retroactive
effect.
§ 2923. Recordkeeping.
(a) General rule.--Every person liable for any fee imposed
by this chapter, or for the collection of the fee, shall keep
records, including those enumerated in subsection (b), render
statements, make returns and comply with the rules and
regulations as the department may prescribe regarding matters
pertinent to the person's business. Whenever it is necessary,
the department may require a person, by notice served upon the
person or by regulations, to make returns, render statements or
keep records as the department deems sufficient to show whether
or not a person is liable to pay fees under this chapter.
(a.1) Records.--Records to be maintained are:
(1) Wellhead meter charts for each reporting period and
the meter calibration and maintenance records. If turbine
meters are in use, the maintenance records will be made
available to the department upon request.
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(2) Records, statements and other instruments furnished
to a producer by a person to whom the producer delivers for
sale, transport or delivery of natural gas.
(3) Records, statements and other instruments as the
department may prescribe by regulation.
(b) Records of nonresidents.--A nonresident who does
business in this Commonwealth as a producer shall keep adequate
records of the business and of the fee due as a result. The
records shall be retained within this Commonwealth unless
retention outside this Commonwealth is authorized by the
department. The department may require a taxpayer who desires to
retain records outside this Commonwealth to assume reasonable
out-of-State audit expenses.
(c) Keeping of separate records.--A producer who is engaged
in another business or businesses which do not involve the
severing of natural gas under this chapter shall keep separate
books and records of the businesses so as to show the severing
of natural gas under this chapter separately from other business
activities not subject to this chapter. If a person fails to
keep separate books and records, the person shall be liable for
a penalty equaling 100% of fees due under this chapter for the
period where separate records were not maintained.
§ 2924. Examinations.
The department or any of its authorized agents are authorized
to examine the books, papers and records of a taxpayer in order
to verify the accuracy and completeness of a return made or, if
no return was made, to ascertain and assess the fee imposed by
this chapter. The department may require the preservation of all
books, papers and records for any period deemed proper by it but
not to exceed three years from the end of the calendar year to
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which the records relate. Every taxpayer is required to give to
the department or its agent the means, facilities and
opportunity for examinations and investigations under this
section. The department is further authorized to examine any
person, under oath, concerning the taxable severing of natural
gas by any taxpayer or concerning any other matter relating to
the enforcement or administration of this chapter and, to this
end, may compel the production of books, papers and records and
the attendance of all persons whether as parties or witnesses
whom it believes to have knowledge of relevant matters. The
procedure for the hearings or examinations shall be the same as
that provided by the act of April 9, 1929 (P.L.343, No.176),
known as The Fiscal Code.
§ 2925. Unauthorized disclosure.
Any information gained by the department as a result of any
return, examination, investigation, hearing or verification
required or authorized by this chapter shall be confidential
except for official purposes and except in accordance with
proper judicial order or as otherwise provided by law, and any
person unlawfully divulging the information commits a
misdemeanor and shall, upon conviction, be sentenced to pay a
fine of not more than $1,000 and costs of prosecution or to
imprisonment for not more than one year, or both.
§ 2926. Cooperation with other governments.
Notwithstanding the provisions of section 2918 (relating to
tax suit reciprocity), the department may permit the
Commissioner of the Internal Revenue Service of the United
States, the proper officer of any state or the authorized
representative of either of them to inspect the returns of any
taxpayer, or may furnish to the commissioner or officer or to
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either of their authorized representatives an abstract of the
return of any taxpayer, or supply him with information
concerning any item contained in any return or disclosed by the
report of any examination or investigation of the return of any
taxpayer. This permission shall be granted only if the laws of
the United States or another state grant substantially similar
privileges to the proper officer of the Commonwealth charged
with the administration of this chapter.
§ 2927. Bonds.
(a) Taxpayer to file bond.--The department may require a
nonresident natural person or any foreign corporation,
association, fiduciary or other entity, not authorized to do
business within this Commonwealth or not having an established
place of business in this Commonwealth and subject to the tax
imposed under section 2902 (relating to imposition of natural
gas severance fee), to file a bond issued by a surety company
authorized to do business in this Commonwealth and approved by
the Insurance Commissioner as to solvency and responsibility, in
amounts as it may fix, to secure the payment of any tax or
penalties due or which may become due from a nonresident natural
person, corporation, association, fiduciary or other entity
whenever it deems it necessary to protect the revenues obtained
under this chapter. The department may also require a bond of a
person petitioning the department for reassessment in the case
of any assessment over $500 or where, in its opinion, the
ultimate collection is in jeopardy. For a period of three years,
the department may require a bond of any person who has, on
three or more occasions within a 12-month period, either filed a
return or made payment to the department more than 30 days late.
In the event the department determines a taxpayer is required to
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file a bond, it shall give notice to the taxpayer specifying the
amount of the bond required. The taxpayer shall file the bond
within five days after notice is given by the department unless,
within five days, the taxpayer shall request in writing a
hearing before the secretary or the secretary's representative.
At the hearing, the necessity, propriety and amount of the bond
shall be determined by the secretary or the secretary's
representative. The determination shall be final and the
taxpayer shall comply with it within 15 days after notice is
mailed to the taxpayer.
(b) Securities in lieu of bond.--In lieu of the bond
required by this section, securities approved by the department
or cash in a prescribed amount may be deposited. The securities
or cash shall be kept in the custody of the department. The
department may apply the securities or cash to the fee imposed
by this chapter and interest or penalties due without notice to
the depositor. The securities may be sold by the department to
pay the fee or interest or penalties due at public or private
sale upon five days' written notice to the depositor.
(c) Failure to file bond.--The department may file a lien
under section 2917 (relating to tax liens) against a taxpayer
who fails to file a bond when required to do so under this
section. All funds received upon execution of the judgment on
the lien shall be refunded to the taxpayer with 3% interest,
should a final determination be made that it does not owe any
payment to the department.
§ 2928. Natural Gas Severance Fee Account established.
(a) Establishment.--The Natural Gas Severance Fee Account is
established as a restricted account within the General Fund.
(b) Use.--The money in the account shall be distributed to
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the Department of Environmental Protection for the Natural Gas
Energy Development Program under Chapter 27 (relating to Natural
Gas Energy Development Program).
(c) Nonlapse.--The money in the fund is continuously
appropriated into the fund. This appropriation shall not lapse
at the end of any fiscal year.
§ 2929. Distributions.
Thirty business days following the end of each reporting
period, the State Treasurer shall make the distributions of the
money in the account as specified under this chapter.
Section 2. This act shall take effect immediately.
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