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| THE GENERAL ASSEMBLY OF PENNSYLVANIA |
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| HOUSE BILL |
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| INTRODUCED BY GODSHALL, HORNAMAN, MICOZZIE, READSHAW AND SCAVELLO, JUNE 21, 2011 |
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| REFERRED TO COMMITTEE ON FINANCE, JUNE 21, 2011 |
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| AN ACT |
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1 | Amending Title 72 (Taxation and Fiscal Affairs) of the |
2 | Pennsylvania Consolidated Statutes, providing for a natural |
3 | gas severance tax. |
4 | The General Assembly of the Commonwealth of Pennsylvania |
5 | hereby enacts as follows: |
6 | Section 1. Title 72 of the Pennsylvania Consolidated |
7 | Statutes is amended by adding a chapter to read: |
8 | CHAPTER 15 |
9 | NATURAL GAS SEVERANCE TAX |
10 | Sec. |
11 | 1501. Short title of chapter. |
12 | 1502. Definitions. |
13 | 1503. Imposition of tax. |
14 | 1504. Return and payment. |
15 | 1505. Natural gas severance tax registration. |
16 | 1506. Assessments. |
17 | 1507. Time for assessment. |
18 | 1508. Extension of assessment period. |
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1 | 1509. Reassessments. |
2 | 1510. Interest. |
3 | 1511. Penalties. |
4 | 1512. Criminal acts. |
5 | 1513. Abatement of additions or penalties. |
6 | 1514. Bulk and auction sales. |
7 | 1515. Collection upon failure to request reassessment, review |
8 | or appeal. |
9 | 1516. Tax liens. |
10 | 1517. Tax suit reciprocity. |
11 | 1518. Service. |
12 | 1519. Refunds. |
13 | 1520. Refund petition. |
14 | 1521. Rules and regulations. |
15 | 1522. Recordkeeping and meters. |
16 | 1523. Examinations. |
17 | 1524. Unauthorized disclosure. |
18 | 1525. Cooperation with other governments. |
19 | 1526. Bonds. |
20 | 1527. Property Tax Assistance Program. |
21 | 1528. Property Tax Assistance Program Restricted Account. |
22 | § 1501. Short title of chapter. |
23 | This chapter shall be known and may be cited as the Natural |
24 | Gas Severance Tax Act. |
25 | § 1502. Definitions. |
26 | The following words and phrases when used in this chapter |
27 | shall have the meanings given to them in this section unless the |
28 | context clearly indicates otherwise: |
29 | "Accredited laboratory." A facility engaged in the testing |
30 | and calibration of scientific measurement devices and certified |
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1 | by the Department of Environmental Protection as having met the |
2 | Department of Revenue's standards for accreditation. |
3 | "Association." A partnership, limited partnership or any |
4 | other form of unincorporated enterprise owned or conducted by |
5 | two or more persons. |
6 | "Claimant." An individual who seeks assistance under section |
7 | 1527 (relating to Property Tax Assistance Program). |
8 | "Coal bed methane." Gas that can be produced from coal beds, |
9 | coal seams, mined-out areas or gob wells. |
10 | "Corporation." A corporation, joint stock association, |
11 | limited liability company, business trust or any other |
12 | incorporated enterprise organized under the laws of the United |
13 | States, this Commonwealth or any other state, territory or |
14 | foreign country or dependency. |
15 | "Department." The Department of Revenue of the Commonwealth. |
16 | "Household income." As defined in Chapter 13 of the act of |
17 | June 27, 2006 (1st Sp.Sess., P.L.1873, No.1), known as the |
18 | Taxpayer Relief Act. |
19 | "Meter." A device to measure the passage of volumes of gases |
20 | or liquids past a certain point. |
21 | "Municipality." A city, borough, incorporated town or |
22 | township. |
23 | "Natural gas." A fossil fuel consisting of a mixture of |
24 | hydrocarbon gases, primarily methane, possibly including ethane, |
25 | propane, butane, pentane, carbon dioxide, oxygen, nitrogen and |
26 | hydrogen sulfide and other gas species. The term includes |
27 | natural gas from oil fields known as associated gas or casing |
28 | head gas, natural gas fields known as nonassociated gas, coal |
29 | beds, shale beds and other formations. The term does not include |
30 | coal bed methane. |
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1 | "Natural gas well." A bore hole drilled or being drilled for |
2 | the purpose of or to be used for producing natural gas from |
3 | subsurface geological formations. |
4 | "Nonproducing well." A natural gas well that does not |
5 | produce natural gas in excess of 90,000 cubic feet per day. |
6 | "Operator." A person who engages or continues within this |
7 | Commonwealth in the business of severing natural gas for sale, |
8 | profit or commercial use. The term does not include a person who |
9 | severs natural gas from a storage field. |
10 | "Person." A natural person or a corporation, fiduciary, |
11 | association or other entity, including the Commonwealth, its |
12 | political subdivisions, instrumentalities and authorities. When |
13 | the term is used in a provision prescribing and imposing a |
14 | penalty or imposing a fine or imprisonment, or both, the term |
15 | shall include a member of an association and an officer of a |
16 | corporation. |
17 | "Producing well." A natural gas well that produces natural |
18 | gas in excess of 90,000 cubic feet of natural gas per day. |
19 | "Program." The Property Tax Assistance Program established |
20 | in section 1527 (relating to Property Tax Assistance Program). |
21 | "Property tax." A tax levied by a political subdivision on |
22 | real property. |
23 | "Rate." The rate under section 1503(c) (relating to |
24 | imposition of tax). |
25 | "Reporting period." A calendar month in which natural gas is |
26 | severed. |
27 | "Secretary." The Secretary of Revenue of the Commonwealth. |
28 | "Sever." To extract or otherwise remove natural gas from the |
29 | soil or water of this Commonwealth. |
30 | "Severance." The extraction or other removal of natural gas |
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1 | from the soil or water of this Commonwealth. |
2 | "Severing." Extracting or otherwise removing natural gas |
3 | from the soil or water of this Commonwealth. |
4 | "Storage field." A natural formation or other site that is |
5 | used to store natural gas that did not originate from and has |
6 | been injected into the formation or site. |
7 | "Tax." The natural gas severance tax imposed under this |
8 | chapter. |
9 | "Tax rate adjustment index." The amount calculated under |
10 | section 1503(c) (relating to imposition of tax) by which the |
11 | rate of the tax imposed under section 1503(c) is adjusted |
12 | annually. |
13 | "Taxpayer." A person, including, but not limited to, a well |
14 | operator who is subject to the tax imposed by this chapter. |
15 | "Unit." A thousand cubic feet of natural gas measured at a |
16 | wellhead at a temperature of 60 degrees Fahrenheit and an |
17 | absolute pressure of 14.73 pounds per square inch in accordance |
18 | with American Gas Association Standards and according to Boyle's |
19 | Law for the measurement of gas under varying pressures with |
20 | deviations as follows: |
21 | (1) The average absolute atmospheric pressure shall be |
22 | assumed to be 14.4 pounds to the square inch, regardless of |
23 | elevation or location of point of delivery above sea level or |
24 | variations in atmospheric pressure from time to time. |
25 | (2) The temperature of the gas passing a wellhead meter |
26 | shall be determined by the continuous use of a recording |
27 | thermometer installed to properly record the temperature of |
28 | gas flowing through the wellhead meter. The arithmetic |
29 | average of the temperature recorded each 24-hour day shall be |
30 | used in computing gas volumes. If a recording thermometer is |
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1 | not installed or is installed and not operating properly, an |
2 | average flowing temperature of 60 degrees Fahrenheit shall be |
3 | used in computing gas volume. |
4 | (3) The specific gravity of the gas shall be determined |
5 | by annual tests made by the use of an Edwards or Acme gravity |
6 | balance, or at intervals as found necessary in practice. |
7 | Specific gravity determinations shall be used in computing |
8 | gas volumes. |
9 | (4) The deviation of the natural gas from Boyle's Law |
10 | shall be determined by annual tests or at other shorter |
11 | intervals as found necessary in practice. The apparatus and |
12 | method used in making the test shall be in accordance with |
13 | recommendations of the National Bureau of Standards or Report |
14 | No. 3 of the Gas Measurement Committee of the American Gas |
15 | Association, or amendments thereto. The results of the tests |
16 | shall be used in computing the volume of gas delivered under |
17 | this chapter. |
18 | "Wellhead meter." A meter placed at a producing or |
19 | nonproducing site to measure the volume of natural gas severed |
20 | for which a wellhead meter certification has been issued. |
21 | "Wellhead meter certification." A report issued by an |
22 | accredited laboratory certifying the accuracy of a wellhead |
23 | meter. |
24 | § 1503. Imposition of tax. |
25 | (a) Establishment.--Except as otherwise provided in |
26 | subsection (b), a natural gas severance tax is levied on every |
27 | operator that severs natural gas from a producing well in this |
28 | Commonwealth. |
29 | (b) Exemptions.--The tax shall not be imposed on the |
30 | following: |
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1 | (1) Units severed, sold and delivered by an operator at |
2 | or within five miles of the producing well for the processing |
3 | or manufacture of tangible personal property, as defined |
4 | under section 201 of the act of March 4, 1971 (P.L.6, No.2), |
5 | known as the Tax Reform Code of 1971, within this |
6 | Commonwealth. |
7 | (2) Units provided free of charge to the owner of the |
8 | surface under which the gas is severed if the surface owner |
9 | is the end user of the gas. |
10 | (3) Owners of the surface real property where natural |
11 | gas wells are drilled or operated and have leased the rights |
12 | to recover natural gas from beneath the surface to an |
13 | operator. |
14 | (c) Rate.--The tax imposed in subsection (a) shall be 1.5% |
15 | of the gross value of units severed at the wellhead during a |
16 | reporting period for the first 60 months of production and 5% of |
17 | the gross value of units severed at the wellhead during a |
18 | reporting period thereafter for each producing well. |
19 | § 1504. Return and payment. |
20 | (a) Requirement.--An operator shall file a return with the |
21 | department, on a form prescribed by the department, which shall |
22 | include the number of natural gas units severed by the operator |
23 | for the reporting period and the amount of tax due. |
24 | (b) Filing.--The return required by subsection (a) shall be |
25 | filed with the department within 30 days following the end of a |
26 | reporting period. |
27 | (c) Deadline.--The tax is due on the day the return is |
28 | required to be filed and becomes delinquent if not remitted to |
29 | the department by that date. |
30 | § 1505. Natural gas severance tax registration. |
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1 | (a) Application.--Before an operator severs natural gas in |
2 | this Commonwealth, the operator shall apply to the department |
3 | for a natural gas severance tax registration certificate. |
4 | (b) Application fee.--The department may charge an |
5 | application fee to cover the administrative costs associated |
6 | with the application and registration process, in which case the |
7 | department shall not issue a registration certificate until the |
8 | operator has paid the application fee. |
9 | (c) Declaration.-- |
10 | (1) The operator shall include in its application a |
11 | declaration of all producing wells and nonproducing wells |
12 | used by the operator for the severance of natural gas. The |
13 | declaration shall include copies of wellhead meter |
14 | certifications for each site. |
15 | (2) The operator shall update the declaration when: |
16 | (i) the operator adds or removes a producing well or |
17 | nonproducing well in this Commonwealth; |
18 | (ii) there is a change in the status of a producing |
19 | well or nonproducing well; or |
20 | (iii) the operator uses a different accredited |
21 | laboratory to issue a wellhead meter certification. |
22 | (3) The operator shall update the declaration within 30 |
23 | days after a calendar month in which a change to the |
24 | declaration occurs. |
25 | (d) Issuance.-- |
26 | (1) Except as provided in subsection (e), after the |
27 | receipt of an application, the department shall issue a |
28 | registration certificate under subsection (a). The |
29 | registration certificate shall be nonassignable. |
30 | (2) All registrants shall renew their registration |
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1 | certificates and wellhead meter certifications on a staggered |
2 | renewal system established by the department. |
3 | (3) After the initial staggered renewal period, a |
4 | registration certificate or a wellhead meter certification |
5 | issued shall be valid for a period of five years. |
6 | (e) Refusal, suspension or revocation.-- |
7 | (1) The department may refuse to issue, suspend or |
8 | revoke a registration certificate if the applicant or |
9 | registrant has not filed required State tax reports and paid |
10 | State taxes not subject to a timely perfected administrative |
11 | or judicial appeal or subject to a duly authorized deferred |
12 | payment plan. |
13 | (2) The department shall notify the applicant or |
14 | registrant of any refusal, suspension or revocation. The |
15 | notice shall contain a statement that the refusal, suspension |
16 | or revocation may be made public. The notice shall be made by |
17 | first class mail. |
18 | (3) An applicant or registrant aggrieved by the |
19 | determination of the department may file an appeal under the |
20 | provisions for administrative appeals provided under the act |
21 | of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code |
22 | of 1971. |
23 | (4) 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. |
26 | (5) Notwithstanding sections 274, 353(f), 408(b), 603, |
27 | 702, 802, 904 and 1102 of the Tax Reform Code of 1971 or any |
28 | other provision of law, if no appeal is taken or if an appeal |
29 | is taken and denied at the conclusion of the appeal process, |
30 | the department may disclose, by publication or otherwise, the |
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1 | identity of an operator and the fact that the operator's |
2 | registration certificate has been refused, suspended or |
3 | revoked under this subsection. Disclosure may include the |
4 | basis for refusal, suspension or revocation. |
5 | (f) Violation.-- |
6 | (1) A person severing natural gas in this Commonwealth |
7 | without holding a valid registration certificate under |
8 | subsection (d) shall be guilty of a summary offense and |
9 | shall, upon conviction, be sentenced to pay a fine of not |
10 | less than $300 nor more than $1,500. Each day in which a |
11 | person is guilty of a summary offense under this section |
12 | shall be deemed to be a separate violation. |
13 | (2) In the event the person convicted defaults in the |
14 | payment of the fine, the person shall be sentenced to a term |
15 | of imprisonment of not less than five days nor more than 30 |
16 | days. |
17 | (3) The penalties imposed by this subsection shall be in |
18 | addition to any other penalties imposed by this chapter. |
19 | (4) For purposes of this subsection, the severing of |
20 | natural gas during any calendar day shall constitute a |
21 | separate violation. |
22 | (5) The secretary may designate employees of the |
23 | department to enforce the provisions of this subsection. The |
24 | employees shall exhibit proof of and be within the scope of |
25 | the designation when instituting proceedings as provided by |
26 | the Pennsylvania Rules of Criminal Procedure. |
27 | (g) Failure to obtain registration certificate.--Failure to |
28 | obtain or hold a valid registration certificate does not relieve |
29 | a person from liability for the tax. |
30 | § 1506. Assessments. |
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1 | (a) Authorization and requirement.--The department shall |
2 | make the inquiries, determinations and assessments of the tax, |
3 | including interest, additions and penalties imposed under this |
4 | chapter. |
5 | (b) Notice.--The notice of assessment and demand for payment |
6 | shall be mailed to the taxpayer. The notice shall state the |
7 | basis of the assessment. The department shall send the notice of |
8 | assessment to the taxpayer at its registered address by |
9 | certified mail if the assessment increases the taxpayer's tax |
10 | liability by $300. Otherwise, the notice of assessment may be |
11 | sent by regular mail. |
12 | § 1507. Time for assessment. |
13 | (a) Requirement.-- |
14 | (1) An assessment as provided under section 1506 |
15 | (relating to assessments) shall be made within three years |
16 | after the date when the return provided for by section 1504 |
17 | (relating to return and payment) is filed or the end of the |
18 | year in which the tax liability arises, whichever shall occur |
19 | last. |
20 | (2) For the purposes of this subsection and subsection |
21 | (b), a return filed before the last day prescribed for the |
22 | filing period shall be considered as filed on the last day. |
23 | (b) Exception.--If the taxpayer underpays the correct amount |
24 | of the tax due by 25% or more, the tax may be assessed within |
25 | six years after the date the return was filed. |
26 | (c) Intent to evade.--Where no return is filed or where the |
27 | taxpayer files a false or fraudulent return with intent to evade |
28 | the tax, the assessment may be made at any time. |
29 | (d) Erroneous credit or refund.--Within three years of the |
30 | granting of a refund or credit or within the period in which an |
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1 | assessment or reassessment may have been issued by the |
2 | department for the taxable period for which the refund was |
3 | granted, whichever period shall last occur, the department may |
4 | issue an assessment to recover a refund or credit made or |
5 | allowed erroneously. |
6 | § 1508. Extension of assessment period. |
7 | Notwithstanding any other provision of this chapter, the |
8 | assessment period may be extended in the event a taxpayer has |
9 | provided written consent before the expiration of the period |
10 | provided in section 1507 (relating to time for assessment) for a |
11 | tax assessment. The amount of tax due may be assessed at any |
12 | time within the extended period. The period may be extended |
13 | further by subsequent written consents made before the |
14 | expiration of the extended period. |
15 | § 1509. Reassessments. |
16 | A taxpayer against whom an assessment is made may petition |
17 | the department for a reassessment under Article XXVII of the act |
18 | of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of |
19 | 1971. |
20 | § 1510. Interest. |
21 | The department shall assess interest on any delinquent tax at |
22 | the rate prescribed under section 806 of the act of April 9, |
23 | 1929 (P.L.343, No.176), known as The Fiscal Code. |
24 | § 1511. Penalties. |
25 | The department shall enforce the following penalties: |
26 | (1) The penalty against an operator for severing natural |
27 | gas without a natural gas severance tax registration |
28 | certificate shall be $1 for every unit severed without a |
29 | valid registration certificate. The department may assess |
30 | this penalty separately from or in conjunction with any |
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1 | assessment of the natural gas tax. |
2 | (2) The penalty against an operator for failure to |
3 | timely file a return as required under section 1504 (relating |
4 | to return and payment) or for failure to timely pay the tax |
5 | as required by section 1504(c) shall be 5% of the tax |
6 | liability to be reported on the return for each day beyond |
7 | the due date that the return is not filed or tax is not paid. |
8 | (3) In addition to the penalty prescribed under |
9 | paragraph (2), the penalty against an operator for a willful |
10 | failure to file a timely return shall be 200% of the tax |
11 | liability required to be reported on the return. |
12 | § 1512. Criminal acts. |
13 | (a) Fraudulent return.--Any person, with intent to defraud |
14 | the Commonwealth, who willfully makes or causes to be made a |
15 | return required by this chapter which is false, commits a |
16 | misdemeanor of the third degree and shall, upon conviction |
17 | thereof, be sentenced to pay a fine of not more than $2,000 or |
18 | to imprisonment for not more than three years, or both. |
19 | (b) Other crimes.-- |
20 | (1) Except as otherwise provided by subsection (a), a |
21 | person commits a misdemeanor of the third degree and shall, |
22 | upon conviction thereof, be sentenced to pay a fine of not |
23 | more than $1,000 and costs of prosecution or to imprisonment |
24 | for not more than one year, or both, for any of the |
25 | 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 making any incomplete, false or |
8 | fraudulent return or report. |
9 | (vii) Preventing or attempting to prevent the full |
10 | disclosure of the amount of tax due. |
11 | (viii) Providing any person with a false statement |
12 | as to the payment of the tax with respect to any |
13 | pertinent facts. |
14 | (ix) Making, uttering or issuing a false or |
15 | fraudulent statement. |
16 | (2) The penalties imposed by this section shall be in |
17 | addition to other penalties imposed by this chapter. |
18 | § 1513. Abatement of additions or penalties. |
19 | Upon the filing of a petition for reassessment or a petition |
20 | for refund by a taxpayer as provided under this chapter, |
21 | additions or penalties imposed upon the taxpayer by this chapter |
22 | may be waived or abated in whole or in part where the petitioner |
23 | establishes that the petitioner acted in good faith, without |
24 | negligence and with no intent to defraud. |
25 | § 1514. Bulk and auction sales. |
26 | A person who sells or causes to be sold at auction or sells |
27 | or transfers in bulk 51% or more of a stock of goods, wares or |
28 | merchandise of any kind, fixtures, machinery, equipment, |
29 | buildings or real estate involved in a business for which the |
30 | person holds a registration certificate or is required to obtain |
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1 | a registration certificate under the provisions of this chapter, |
2 | shall be subject to the provisions of section 1403 of the act of |
3 | April 9, 1929 (P.L.343, No.176), known as The Fiscal Code. |
4 | § 1515. Collection upon failure to request reassessment, review |
5 | or appeal. |
6 | (a) Power of department.--The department may collect the |
7 | tax: |
8 | (1) If an assessment of the tax is not paid within 30 |
9 | days and no petition for reassessment has been filed, after |
10 | notice to the taxpayer. |
11 | (2) Within 60 days of a reassessment, if no petition for |
12 | review has been filed. |
13 | (3) If no appeal has been made, within 30 days of: |
14 | (i) the Board of Finance and Revenue's decision of a |
15 | petition for review; or |
16 | (ii) the expiration of the Board of Finance and |
17 | Revenue's time for acting upon a petition for review. |
18 | (4) In all cases of judicial sales, receiverships, |
19 | assignments or bankruptcies. |
20 | (b) Limitation of defenses.--In a case for the collection of |
21 | taxes under subsection (a), the taxpayer against whom the taxes |
22 | were assessed may not set up a ground of defense that might have |
23 | been determined by the department, the Board of Finance and |
24 | Revenue or the courts, provided that the defense of failure of |
25 | the department to mail notice of assessment or reassessment to |
26 | the taxpayer and the defense of payment of assessment or |
27 | reassessment may be raised in proceedings for collection by a |
28 | motion to stay the proceedings. |
29 | § 1516. Tax liens. |
30 | (a) Lien imposed.-- |
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1 | (1) If a taxpayer neglects or refuses to pay the tax for |
2 | which the taxpayer is liable under this chapter after demand, |
3 | the amount, including interest, addition or penalty, together |
4 | with additional costs that may accrue, shall be a lien in |
5 | favor of the Commonwealth upon the real and personal property |
6 | of the taxpayer, but only after the lien has been entered and |
7 | docketed of record by the prothonotary of the county where |
8 | the property is situated. |
9 | (2) The department may, at any time, transmit to the |
10 | prothonotaries of the respective counties certified copies of |
11 | all liens imposed by this section. |
12 | (3) (i) The prothonotary who receives the lien shall |
13 | enter and docket the same of record to the office of the |
14 | prothonotary. The lien shall be indexed as judgments are |
15 | now indexed. |
16 | (ii) No prothonotary shall require as a condition |
17 | precedent to the entry of the lien the payment of costs |
18 | incidental to its entry. |
19 | (b) Priority of lien and effect on judicial sale.--Except |
20 | for the costs of the sale and the writ upon which the sale was |
21 | made and real estate taxes and municipal claims against the |
22 | property, a lien imposed under this section shall: |
23 | (1) Have priority from the date of its recording and |
24 | shall be fully paid and satisfied out of the proceeds of any |
25 | judicial sale of property subject to the lien, before any |
26 | other obligation, judgment, claim, lien or estate to which |
27 | the property may subsequently become subject. |
28 | (2) Be subordinate to mortgages and other liens existing |
29 | and duly recorded or entered of record prior to the recording |
30 | of the lien. |
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1 | (c) No discharge by sale on junior lien.-- |
2 | (1) In the case of a judicial sale of property subject |
3 | to a lien imposed under this section, upon a lien or claim |
4 | over which the lien imposed under this section has priority, |
5 | the sale shall discharge the lien imposed under this section |
6 | to the extent only that the proceeds are applied to its |
7 | payment, and the lien shall continue in full force and effect |
8 | as to the balance remaining unpaid. |
9 | (2) There shall be no inquisition or condemnation upon |
10 | any judicial sale of real estate made by the Commonwealth |
11 | under the provisions of this chapter. The lien shall continue |
12 | as provided in the act of April 9, 1929 (P.L.343, No.176), |
13 | known as The Fiscal Code, and a writ of execution may |
14 | directly issue upon the lien without the issuance and |
15 | prosecution to judgment of a writ of scire facias, subject to |
16 | the following: |
17 | (i) Not less than ten days before issuance of any |
18 | execution on the lien, notice of the filing and the |
19 | effect of the lien shall be sent by registered mail to |
20 | the taxpayer at its last known post office address. |
21 | (ii) The lien shall have no effect upon any stock of |
22 | goods, wares or merchandise regularly sold or leased in |
23 | the ordinary course of business by the taxpayer against |
24 | whom the lien has been entered, unless and until a writ |
25 | of execution has been issued and a levy made upon the |
26 | stock of goods, wares and merchandise. |
27 | (d) Violation by prothonotary.--A willful failure of a |
28 | prothonotary to carry out any duty imposed on the prothonotary |
29 | by this section shall be a misdemeanor of the third degree and, |
30 | upon conviction thereof, the prothonotary shall be sentenced to |
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1 | pay a fine of not more than $1,000 and costs of prosecution or |
2 | to imprisonment for not more than one year, or both. |
3 | (e) Priority.-- |
4 | (1) Except as otherwise provided in this chapter, the |
5 | distribution, voluntary or compulsory, in receivership, |
6 | bankruptcy or otherwise of the property or estate of any |
7 | person, all taxes which are due and unpaid and are not |
8 | collectible under the provisions of section 225 of the act of |
9 | March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of |
10 | 1971, shall be paid from the first money available for |
11 | distribution in priority to all other claims and liens, |
12 | except as the laws of the United States may give priority to |
13 | a claim to the Federal Government. |
14 | (2) A person required to administer or distribute the |
15 | property or estate who violates the provisions of this |
16 | section shall be personally liable for the taxes which are |
17 | accrued and unpaid and chargeable against the person whose |
18 | property or estate is being administered or distributed. |
19 | (f) Construction.--Subject to the limitations contained in |
20 | this chapter as to the assessment of taxes, nothing contained in |
21 | this section shall be construed to restrict, prohibit or limit |
22 | the use by the department in collecting taxes due and payable of |
23 | another remedy or procedure available at law or equity for the |
24 | collection of debts. |
25 | § 1517. Tax suit reciprocity. |
26 | The courts of this Commonwealth shall recognize and enforce |
27 | liabilities for natural gas severance or extraction taxes |
28 | lawfully imposed by any other state, provided that the other |
29 | state recognizes and enforces the tax imposed under this |
30 | chapter. |
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1 | § 1518. Service. |
2 | (a) Appointment of Secretary of the Commonwealth.--An |
3 | operator is deemed to have appointed the Secretary of the |
4 | Commonwealth its agent for the acceptance of service of process |
5 | or notice in a proceeding for the enforcement of the civil |
6 | provisions of this chapter and service made upon the Secretary |
7 | of the Commonwealth as agent shall be of the same legal force |
8 | and validity as if the service had been personally made upon the |
9 | operator. |
10 | (b) Substituted service.-- |
11 | (1) Where service cannot be made upon the operator in |
12 | the manner provided by other laws of this Commonwealth |
13 | relating to service of process, service may be made upon the |
14 | Secretary of the Commonwealth. |
15 | (2) In that case, a copy of the process or notice shall |
16 | be personally served upon any agent or representative of the |
17 | operator who may be found within this Commonwealth or, where |
18 | no agent or representative may be found, a copy of the |
19 | process or notice shall be sent by registered mail to the |
20 | operator at the last known address of its principal place of |
21 | business, home office or residence. |
22 | § 1519. Refunds. |
23 | (a) General rule.--Pursuant to Article XXVII of the act of |
24 | March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of |
25 | 1971, the department shall refund all taxes, interest and |
26 | penalties paid to the Commonwealth under the provisions of this |
27 | chapter to which the Commonwealth is not rightfully entitled. |
28 | (b) Payment of refunds.-- |
29 | (1) Subject to the provisions of paragraph (2), the |
30 | refunds shall be paid to the person or the person's heirs, |
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1 | successors, assigns or other personal representatives who |
2 | paid the tax. |
3 | (2) No refund shall be made under this section regarding |
4 | a payment made by reason of an assessment where a taxpayer |
5 | has filed a petition for reassessment under section 2702 of |
6 | the Tax Reform Code of 1971 to the extent the petition is |
7 | adverse to the taxpayer by a decision which is no longer |
8 | subject to further review or appeal. |
9 | (c) Construction.--Nothing in this chapter shall be |
10 | construed to prohibit a taxpayer who has filed a timely petition |
11 | for reassessment from amending it to a petition for refund where |
12 | the petitioner paid the tax assessed. |
13 | § 1520. Refund petition. |
14 | (a) General rule.--Except as provided for in subsection (b), |
15 | the refund or credit of tax, interest or penalty provided for by |
16 | section 1519 (relating to refunds) shall be made only where the |
17 | person who has paid the tax files a petition for refund with the |
18 | department under Article XXVII of the act of March 4, 1971 |
19 | (P.L.6, No.2), known as the Tax Reform Code of 1971, within the |
20 | time limits of section 3003.1 of the Tax Reform Code of 1971. |
21 | (b) Natural gas severance tax.-- |
22 | (1) A refund or credit of tax, interest or penalty paid |
23 | as a result of an assessment made by the department under |
24 | section 1505 (relating to natural gas severance tax |
25 | registration) shall be made only where the person who has |
26 | paid the tax files with the department a petition for a |
27 | refund under Article XXVII of the Tax Reform Code of 1971 |
28 | within the time limits of section 3003.1 of the Tax Reform |
29 | Code of 1971. |
30 | (2) The filing of a petition for refund under the |
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1 | provisions of this subsection shall not affect the abatement |
2 | of interest, additions or penalties to which the person may |
3 | be entitled by reason of the person's payment of the |
4 | assessment. |
5 | § 1521. Rules and regulations. |
6 | The department shall enforce the provisions of this chapter |
7 | and may prescribe, adopt, promulgate and enforce rules and |
8 | regulations not inconsistent with the provisions of this chapter |
9 | relating to any matter or thing pertaining to the administration |
10 | and enforcement of the provisions of this chapter and the |
11 | collection of taxes, penalties and interest imposed by this |
12 | chapter. The department may prescribe the extent, if any, to |
13 | which any of the rules and regulations shall be applied without |
14 | retroactive effect. |
15 | § 1522. Recordkeeping and meters. |
16 | (a) Duty to maintain records.-- |
17 | (1) Every person liable for the tax or for the |
18 | collection of the tax shall keep records, including those |
19 | enumerated in subsection (b), render statements, make returns |
20 | and comply with the rules and regulations as the department |
21 | may prescribe regarding matters pertinent to the person's |
22 | business. |
23 | (2) Whenever it is necessary, the department may require |
24 | a person, by notice served upon the person or by regulations, |
25 | to make returns, render statements or keep records as the |
26 | department deems sufficient to show whether or not the person |
27 | is liable to pay the tax. |
28 | (b) Records.--Every person liable for the tax shall maintain |
29 | the following records: |
30 | (1) Wellhead meter charts for each reporting period and |
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1 | the meter calibration and maintenance records. If turbine |
2 | meters are in use, the maintenance records shall be made |
3 | available to the department upon request. |
4 | (2) Records, statements and other instruments furnished |
5 | to an operator by a person to whom the operator delivers for |
6 | sale, transport or delivery of natural gas. |
7 | (3) Records, statements and other instruments as the |
8 | department may prescribe by regulation. |
9 | (c) Records of nonresidents.-- |
10 | (1) A nonresident who does business in this Commonwealth |
11 | as an operator shall keep adequate records of the business |
12 | and of the tax due as a result. The records shall be retained |
13 | within this Commonwealth unless retention outside this |
14 | Commonwealth is authorized by the department. |
15 | (2) The department may require a taxpayer who desires to |
16 | retain records outside this Commonwealth to assume reasonable |
17 | out-of-State audit expenses. |
18 | (d) Keeping of separate records.-- |
19 | (1) An operator who is engaged in another business which |
20 | does not involve the severing of natural gas taxable under |
21 | this chapter shall keep separate books and records of the |
22 | businesses so as to show the taxable severing of natural gas |
23 | under this chapter separately from other business activities |
24 | not taxable under this chapter. |
25 | (2) If any person fails to keep separate books and |
26 | records, the person shall be liable for a penalty equaling |
27 | 100% of tax due for the period where separate records were |
28 | not maintained. |
29 | (e) Type of meters required.--An operator shall provide for |
30 | and maintain, according to industry standards, a discrete |
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1 | wellhead meter where natural gas is severed. Any wellhead meter |
2 | installed after the effective date of this section shall be a |
3 | digital meter. |
4 | § 1523. Examinations. |
5 | (a) Powers of department.--The department or any of its |
6 | authorized agents may: |
7 | (1) Examine the books, papers and records of any |
8 | taxpayer in order to verify the accuracy and completeness of |
9 | any return made or, if no return was made, to ascertain and |
10 | assess the tax. |
11 | (2) Require the preservation of all books, papers and |
12 | records for any period deemed proper by it but not to exceed |
13 | three years from the end of the calendar year to which the |
14 | records relate. |
15 | (3) Examine any person, under oath, concerning the |
16 | taxable severing of natural gas by any taxpayer or concerning |
17 | any other matter relating to the enforcement or |
18 | administration of this chapter, and to this end may compel |
19 | the production of books, papers and records and the |
20 | attendance of all persons whether as parties or witnesses |
21 | whom it believes to have knowledge of relevant matters. The |
22 | procedure for the hearings or examinations shall be the same |
23 | as that provided by the act of April 9, 1929 (P.L.343, No. |
24 | 176), known as The Fiscal Code. |
25 | (b) Duties of taxpayers.--Every taxpayer shall provide the |
26 | department or its agent with the means, facilities and |
27 | opportunity for examinations and investigations under this |
28 | section. |
29 | § 1524. Unauthorized disclosure. |
30 | (a) General rule.--Any information gained by the department |
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1 | as a result of any return, examination, investigation, hearing |
2 | or verification required or authorized by this chapter shall be |
3 | confidential except for official purposes and except in |
4 | accordance with proper judicial order or as otherwise provided |
5 | by law. |
6 | (b) Penalty for violation.--Any person unlawfully divulging |
7 | the information commits a misdemeanor of the third degree and |
8 | shall, upon conviction thereof, be sentenced to pay a fine of |
9 | not more than $1,000 and costs of prosecution or to a term of |
10 | imprisonment for not more than one year, or both. |
11 | § 1525. Cooperation with other governments. |
12 | (a) General rule.--Notwithstanding the provisions of section |
13 | 1517 (relating to tax suit reciprocity), the department may |
14 | permit the Commissioner of the Internal Revenue Service of the |
15 | United States, the proper officer of any state or the authorized |
16 | representative of either of them to inspect the tax returns of |
17 | any taxpayer, or may furnish to the commissioner or officer or |
18 | to either of their authorized representative an abstract of the |
19 | return of a taxpayer, or supply any of them with information |
20 | concerning any item contained in a return or disclosed by the |
21 | report of an examination or investigation of the return of a |
22 | taxpayer. |
23 | (b) Applicability.--Subsection (a) shall apply only when the |
24 | laws of the United States or another state grant substantially |
25 | similar privileges to the proper officer of the Commonwealth |
26 | charged with the administration of this chapter. |
27 | § 1526. Bonds. |
28 | (a) Taxpayer to file bond.-- |
29 | (1) The department may require a nonresident natural |
30 | person or any foreign corporation, association, fiduciary or |
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1 | other entity not authorized to do business within this |
2 | Commonwealth or not having an established place of business |
3 | in this Commonwealth and subject to the tax to file a bond |
4 | issued by a surety company authorized to do business in this |
5 | Commonwealth and approved by the Insurance Commissioner as to |
6 | solvency and responsibility, in amounts as it may fix, to |
7 | secure the payment of any tax or penalties due or which may |
8 | become due from a nonresident natural person, corporation, |
9 | association, fiduciary or other entity whenever it deems it |
10 | necessary to protect the revenues obtained under this |
11 | chapter. |
12 | (2) The department may also require a bond of a person |
13 | petitioning the department for reassessment in the case of an |
14 | assessment over $500 or where, in the department's opinion, |
15 | the ultimate collection is in jeopardy. |
16 | (3) For a period of three years, the department may |
17 | require a bond of any person who has, on three or more |
18 | occasions within a 12-month period, either filed a return or |
19 | made payment to the department more than 30 days late. |
20 | (4) (i) In the event the department determines a |
21 | taxpayer must file a bond, the department shall give |
22 | notice to the taxpayer specifying the amount of the bond |
23 | required. |
24 | (ii) The taxpayer shall file the bond within five |
25 | days after notice is given by the department unless, |
26 | within five days, the taxpayer requests in writing a |
27 | hearing before the secretary or the secretary's |
28 | representative. |
29 | (iii) At the hearing, the necessity, propriety and |
30 | amount of the bond shall be determined by the secretary |
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1 | or the secretary's representative. |
2 | (iv) The determination shall be final and the |
3 | taxpayer shall comply with the determination within 15 |
4 | days after notice is mailed to the taxpayer. |
5 | (b) Securities in lieu of bond.-- |
6 | (1) In lieu of the bond required by this section, |
7 | securities approved by the department or cash in a prescribed |
8 | amount may be deposited. |
9 | (2) The securities or cash shall be kept in the custody |
10 | of the department. The department may apply the securities or |
11 | cash to the tax and interest or penalties due without notice |
12 | to the depositor. The securities may be sold by the |
13 | department to pay the tax, interest or penalties, or any |
14 | combination thereof, due at public or private sale upon five |
15 | days' written notice to the depositor. |
16 | (c) Failure to file bond.-- |
17 | (1) The department may file a lien under section 1516 |
18 | (relating to tax liens) against a taxpayer who fails to file |
19 | a bond when required to do so under this section. |
20 | (2) All funds received upon execution of the judgment on |
21 | the lien shall be refunded to the taxpayer with 3% interest, |
22 | if the department makes a final determination that the |
23 | taxpayer does not owe any payment to the department. |
24 | § 1527. Property Tax Assistance Program. |
25 | (a) Establishment.-- |
26 | (1) The Property Tax Assistance Program is established |
27 | in the department to assist eligible claimants in the payment |
28 | of property tax. |
29 | (2) The proceeds of the tax imposed under section 1503 |
30 | (relating to imposition of tax) and penalties and interest |
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1 | imposed under this chapter, less the amounts appropriated |
2 | under section 1528(b) (relating to Property Tax Assistance |
3 | Program Restricted Account), shall be deposited into the |
4 | Property Tax Assistance Program Restricted Account |
5 | established in section 1528(a) and used for the program. |
6 | (b) Eligibility.--To be eligible for participation in the |
7 | program, a claimant must be over 65 years of age and have an |
8 | annual household income of not more than $50,000. |
9 | (c) Application.--In order to participate in the program, a |
10 | claimant must submit to the department all of the following |
11 | within 45 days of the date the claimant's property tax is due: |
12 | (1) An application on a form prescribed by the |
13 | department establishing eligibility under subsection (b). |
14 | (2) The property tax bill for which assistance is |
15 | sought. |
16 | (d) Determination.--Within 45 days of receipt of an |
17 | application from a claimant under subsection (c), the department |
18 | shall determine the claimant's eligibility. If the claimant is |
19 | eligible, the department shall make a payment to the claimant |
20 | or, if the claimant is determined to be ineligible, the |
21 | department shall notify the claimant of such determination. |
22 | § 1528. Property Tax Assistance Program Restricted Account. |
23 | (a) Establishment.--The Property Tax Assistance Program |
24 | Restricted Account is established within the Property Tax Relief |
25 | Fund. |
26 | (b) Use of restricted account.--The moneys of the restricted |
27 | account established in subsection (a) are appropriated to the |
28 | department on a continuing basis for the payment of refunds and |
29 | the enforcement and administration of the program. |
30 | Section 2. This act shall take effect in 120 days. |
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