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| THE GENERAL ASSEMBLY OF PENNSYLVANIA |
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| HOUSE BILL |
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| INTRODUCED BY GEORGE, DERMODY, HANNA, FRANKEL, MANN, STURLA, BUXTON, MARKOSEK, BISHOP, K. BOYLE, BRIGGS, V. BROWN, BROWNLEE, BURNS, CALTAGIRONE, CARROLL, COHEN, D. COSTA, CURRY, DALEY, DeLUCA, DePASQUALE, DeWEESE, FABRIZIO, FREEMAN, GALLOWAY, GOODMAN, HARKINS, JOSEPHS, KORTZ, MAHONEY, MIRABITO, MULLERY, MUNDY, MURPHY, MYERS, M. O'BRIEN, PASHINSKI, READSHAW, SANTONI, K. SMITH, STABACK, SWANGER, WAGNER AND YOUNGBLOOD, JULY 26, 2011 |
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| REFERRED TO COMMITTEE ON ENVIRONMENTAL RESOURCES AND ENERGY, JULY 26, 2011 |
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| AN ACT |
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1 | Amending the act of December 19, 1984 (P.L.1140, No.223), |
2 | entitled "An act relating to the development of oil and gas |
3 | and coal; imposing duties and powers on the Department of |
4 | Environmental Resources; imposing notification requirements |
5 | to protect landowners; and providing for definitions, for |
6 | various requirements to regulate the drilling and operation |
7 | of oil and gas wells, for gas storage reservoirs, for various |
8 | reporting requirements, including certain requirements |
9 | concerning the operation of coal mines, for well permits, for |
10 | well registration, for distance requirements, for well casing |
11 | requirements, for safety device requirements, for storage |
12 | reservoir obligations, for well bonding requirements, for a |
13 | Well Plugging Restricted Revenue Account to enforce oil and |
14 | gas well plugging requirements, for the creation of an Oil |
15 | and Gas Technical Advisory Board, for oil and gas well |
16 | inspections, for enforcement and for penalties," further |
17 | providing for definitions and for well permits; providing for |
18 | adoption of wells; further providing for well location |
19 | restrictions; providing for roadway remediation; further |
20 | providing for protection of fresh groundwater and casing |
21 | requirements and for protection of water supplies; providing |
22 | for use of surface impoundments for temporary flowback |
23 | storage, for transportation records and hydraulic fracturing |
24 | fluids and for well control emergency response; further |
25 | providing for well reporting requirements, for bonding, for |
26 | enforcement orders, for penalties and for civil penalties; |
27 | providing for a severance tax and for a Marcellus Shale Job |
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1 | Creation Tax Credit; further providing for well plugging |
2 | funds and for local ordinances; and providing for a |
3 | moratorium. |
4 | The General Assembly of the Commonwealth of Pennsylvania |
5 | hereby enacts as follows: |
6 | Section 1. Section 103 of the act of December 19, 1984 |
7 | (P.L.1140, No.223), known as the Oil and Gas Act, is amended by |
8 | adding definitions to read: |
9 | Section 103. Definitions. |
10 | The following words and phrases when used in this act shall |
11 | have the meanings given to them in this section unless the |
12 | context clearly indicates otherwise: |
13 | "12-digit Hydrologic Unit Code." A subwatershed, generally |
14 | ranging in size from 10,000 to 40,000 acres, as designated by |
15 | the United States Geological Survey and the United States |
16 | Department of Agriculture Natural Resources Conservation |
17 | Service. |
18 | * * * |
19 | "Body of water." A natural or artificial lake, pond, |
20 | reservoir, swamp, marsh or wetland. |
21 | * * * |
22 | "Erosion and sediment control permit." A permit issued by |
23 | the Department of Environmental Protection and required for |
24 | earth disturbance activities associated with oil and gas |
25 | activities. |
26 | "FEMA." The Federal Emergency Management Agency. |
27 | "Flood." A general but temporary condition of partial or |
28 | complete inundation of normally dry land areas from the overflow |
29 | of streams, rivers or other waters of this Commonwealth. |
30 | "Floodplain." The lands adjoining a river or stream that |
31 | have been or may be expected to be inundated by flood waters in |
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1 | a 100-year frequency flood. Unless otherwise specified, the |
2 | boundary of the floodplain is as indicated on maps and flood |
3 | insurance studies provided by the Federal Emergency Management |
4 | Agency or equivalent floodplain maps and studies. In an area |
5 | where no such maps or studies have defined the boundary of the |
6 | 100-year floodplain, it is assumed, absent evidence to the |
7 | contrary, that the floodplain extends from the stream to 100 |
8 | feet from the top of the streambank. |
9 | "Floodway." The channel of the watercourse and portions of |
10 | the adjoining floodplains which are reasonably required to carry |
11 | and discharge the 100-year frequency flood. Unless otherwise |
12 | specified, the boundary of the floodway is as indicated on maps |
13 | and flood insurance studies provided by the Federal Emergency |
14 | Management Agency. In an area where no Federal Emergency |
15 | Management Agency maps or studies have defined the boundary of |
16 | the 100-year frequency floodway, it is assumed, absent evidence |
17 | to the contrary, that the floodway extends from the stream to 50 |
18 | feet from the top of the streambank. |
19 | * * * |
20 | "Stream." A watercourse. |
21 | "Unconventional formation." Formations such as the |
22 | Rhinestreet, Burket, Marcellus, Madata and Utica shale, or other |
23 | formations existing below the base of the Elk Sandstone or its |
24 | geologic equivalent stratigraphic interval. |
25 | "Unconventional well." A well intending to produce or |
26 | producing from an unconventional formation. |
27 | "Watercourse." A channel or conveyance of surface water |
28 | having defined bed and banks, whether natural or artificial, |
29 | with perennial or intermittent flow. |
30 | * * * |
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1 | "Wild trout stream." A stream classified as supporting |
2 | naturally reproducing trout populations by the Fish and Boat |
3 | Commission. |
4 | "Wilderness trout stream." A surface water designated by the |
5 | Fish and Boat Commission to protect and promote native trout |
6 | fisheries and maintain and enhance wilderness aesthetics and |
7 | ecological requirements necessary for the natural reproduction |
8 | of trout. |
9 | * * * |
10 | Section 2. Section 201(a), (b), (e), (f) and (g) of the act, |
11 | amended July 2, 1992 (P.L.365, No.78), are amended and the |
12 | section is amended by adding a subsection to read: |
13 | Section 201. Well permit. |
14 | (a) No person shall drill a well or alter any existing well, |
15 | except for alterations which satisfy the requirements of |
16 | subsection (j), without having first obtained a well permit |
17 | pursuant to subsections (b), (c), (d) and (e). A copy of the |
18 | permit shall be kept at the well site during [drilling or] |
19 | preparation and construction of the well site or access road, |
20 | drilling, operation and alteration of the well. However, no |
21 | person shall be required to obtain a permit to redrill a |
22 | nonproducing well, if: |
23 | (1) the redrilling has been evaluated and approved as |
24 | part of an order from the department authorizing the cleaning |
25 | out and plugging or replugging of a nonproducing well, |
26 | pursuant to section 13(c) of the act of December 18, 1984 |
27 | (P.L.1069, No.214), known as the Coal and Gas Resource |
28 | Coordination Act; and |
29 | (2) the redrilling is incidental to the plugging or |
30 | replugging operation and the well subsequently is plugged |
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1 | within 15 days of redrilling. |
2 | (b) The permit application shall be accompanied by a plat |
3 | prepared by a competent engineer or a competent surveyor, on |
4 | forms to be furnished by the department, showing the political |
5 | subdivision and county in which the tract of land upon which the |
6 | well to be drilled, operated or altered, is located, the name of |
7 | the surface landowner of record and lessor, the name of all |
8 | surface landowners or water purveyors whose water supplies are |
9 | within 1,000 feet, or in the case of an unconventional well |
10 | within 5,000 feet, of the [proposed well location] outer |
11 | boundary of the proposed well pad and access roads, the name of |
12 | the owner of record or operator of all known underlying workable |
13 | coal seams, if any, the acreage in the tract to be drilled, the |
14 | proposed location of the well determined by survey, the courses |
15 | and distances of such location from two or more permanent |
16 | identifiable points or landmarks on said tract boundary corners, |
17 | the proposed angle and direction of such well, if the well is to |
18 | be deviated substantially from a vertical course, the number or |
19 | other identification to be given the well, the workable coal |
20 | seams, if any, underlying the tract of land upon which the well |
21 | is to be drilled, operated or altered, which are to be cased off |
22 | in accordance with section 207, and such information needed by |
23 | the department to administer this act. The applicant shall |
24 | forward, by certified mail, a copy of said plat to each |
25 | political subdivision in which the well is to be located, the |
26 | surface landowner, all surface landowners or water purveyors |
27 | whose water supplies are within 1,000 feet, or in the case of an |
28 | unconventional well within 5,000 feet, of the [proposed well |
29 | location] outer boundary of the proposed well pad and access |
30 | roads, the owner and lessee, if any, of such coal seams, and |
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1 | every coal operator required to be identified on the well permit |
2 | application and shall submit proof of such notification with the |
3 | well permit application. With respect to surface owners, |
4 | notification shall be accomplished under this section by sending |
5 | notice to the persons to whom the tax notices for said surface |
6 | property are sent, as indicated in the assessment books in the |
7 | county in which the property is located. With respect to surface |
8 | landowners or water purveyors whose water supplies are within |
9 | 1,000 feet, or in the case of an unconventional well within |
10 | 5,000 feet, of the [proposed well location] outer boundary of |
11 | the proposed well pad and access roads, notification shall be |
12 | made on forms and in a manner prescribed by the department |
13 | sufficient to identify, for such persons, the rights afforded |
14 | them under section 208 and the advisability of taking their own |
15 | predrilling or prealteration survey. With respect to the |
16 | political subdivision in which the well is to be located, |
17 | notification shall be made on forms and in a manner prescribed |
18 | by the department. If the applicant submits to the department |
19 | written approval of the proposed well location by the political |
20 | subdivision in which the well is to be located, the surface |
21 | landowner and the coal operator, lessee or owner, if any, of the |
22 | coal underlying the proposed well location and no objections are |
23 | raised by the department within 15 days of filing or if no such |
24 | approval has been submitted and no objections are made to such |
25 | proposed well location within 15 days from receipt of such |
26 | notice by the political subdivision in which the well is to be |
27 | located, the surface landowner and the coal operator, lessee or |
28 | owner, if any, or by the department, the same shall be filed and |
29 | become a permanent record of such location, subject to |
30 | inspection at any time by any interested person. The application |
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1 | form to operate an abandoned or orphan well shall notify the |
2 | applicant of its responsibilities to plug the well upon |
3 | abandonment. The application shall be accompanied by an |
4 | inventory of the condition of all State and local roadways which |
5 | the owner will utilize for purposes related to drilling |
6 | activities, including transportation of water, chemicals, |
7 | equipment drilling supplies and waste. The inventory shall be |
8 | provided to the department, the Department of Transportation and |
9 | to the political subdivision in control of the roadway. |
10 | * * * |
11 | (e) The department shall issue a permit within 45 days of |
12 | the submission of a permit application unless the department |
13 | denies the permit application for one or more of the [five] |
14 | reasons set forth below: Provided, however, That the department |
15 | shall have the right to extend such period for 15 days for cause |
16 | shown upon notification to the applicant of the reasons for that |
17 | extension. The department may impose such permit terms and |
18 | conditions as are necessary to assure compliance with this act |
19 | and other laws administered by the department. The department |
20 | shall have the authority to deny a permit to any person for the |
21 | following reasons: |
22 | (1) the well site for which a permit is requested is in |
23 | violation of any of the provisions of this act, or if |
24 | issuance of such permit would result in a violation of this |
25 | act or any other applicable environmental statute, rule or |
26 | regulation; |
27 | (2) the permit application is incomplete; |
28 | (3) unresolved objections to the well location by coal |
29 | mine owner or operator remain; |
30 | (4) the requirements of section 215 have not been met; |
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1 | [or] |
2 | (5) the applicant, with respect to any other well or |
3 | wells which the applicant operates, is in continuing |
4 | violation of this act or any other applicable statute |
5 | administered by the department and the likely result of that |
6 | violation is an unsafe operation or environmental damage. If |
7 | a final determination has been made in the applicant's favor, |
8 | the permit denied shall be reconsidered and the violation |
9 | shall not be a consideration in the awarding of the permit. |
10 | The department may not collect an application fee for the |
11 | reconsideration[. The right of the department to deny a |
12 | permit under this paragraph shall not be effective until a |
13 | final administrative determination has been made of any of |
14 | these violations and no appeal is pending in which a stay has |
15 | been granted.]; |
16 | (6) the applicant failed to pay or file a return under |
17 | section 504-A, unless a valid appeal is in process. The |
18 | Secretary of Revenue shall notify the department of any |
19 | applicant who has failed to pay or file a return and who does |
20 | not have a valid appeal pending; or |
21 | (7) the applicant does not have a reasonable written |
22 | plan to reuse at least 30% of the total water which: |
23 | (i) will be used to hydraulically fracture the well; |
24 | and |
25 | (ii) has returned to the surface as flowback water. |
26 | (f) Upon issuance of a permit, the well operator may proceed |
27 | [with the drilling of] to prepare or construct the well site and |
28 | access roads and drill, operate or alter the well at the exact |
29 | location shown on the plat after providing the department, the |
30 | surface landowner and the local political subdivision in which |
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1 | the well is to be located 24 hours' notice of the date that |
2 | drilling will commence. In noncoal areas where more than one |
3 | well is to be drilled as part of the same development project, |
4 | only the first well of the project need be located by survey. |
5 | The remaining wells of the project shall be shown on the plat in |
6 | a manner prescribed by regulation. Prior to drilling each of the |
7 | additional project wells, the well operator shall notify the |
8 | department of his intention and provide reasonable notice of the |
9 | date drilling will commence. Whenever, before or during the |
10 | drilling of any well which is not within the outside boundaries |
11 | of an operating coal mine, the well operator shall encounter |
12 | conditions of such a nature as to render drilling of the bore |
13 | hole or portions thereof more hazardous than usual, or otherwise |
14 | impossible, then the well operator shall have the right, upon |
15 | verbal notice to the department, to immediately plug all or |
16 | portions of the bore hole, if drilling has occurred, and to |
17 | commence a new bore hole not more than 50 feet distant if the |
18 | location of the new bore hole does not violate section 205 and |
19 | if, for wells subject to the act of July 25, 1961 (P.L.825, |
20 | No.359), known as the Oil and Gas Conservation Law, the new |
21 | location complies with any existing law, regulation or spacing |
22 | order and if the new bore hole is a minimum of 330 feet distant |
23 | from the nearest lease boundary. Within ten days of commencement |
24 | of the new bore hole, the well operator shall file with the |
25 | department a written notice of intention to plug, a well record, |
26 | a completion report, a plugging certificate for the original |
27 | bore hole and an amended plat for the new bore hole. The well |
28 | operator shall forward a copy of the amended plat to the surface |
29 | landowner identified on the well permit application within ten |
30 | days of commencement of the new well bore. |
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1 | (g) The well permit number and operator's name, address and |
2 | telephone number shall be posted at the drilling site, in a |
3 | conspicuous manner, prior to [commencement of drilling.] |
4 | initiating preparation and during construction of the well site |
5 | or access road, drilling, operation and alteration of the well. |
6 | (g.1) The department shall authorize conservation districts |
7 | to conduct a quarterly review of erosion and sediment control |
8 | permit applications issued on an expedited basis for all earth |
9 | disturbance associated with oil and gas activities. Conservation |
10 | districts shall conduct the review and submit a report to the |
11 | department of their findings. The department shall revoke a |
12 | permit related to the oil and gas operations for which an |
13 | expedited erosion and sediment control permit was issued if a |
14 | finding is made in the report that the erosion and sediment |
15 | control permit application contained a material omission or |
16 | misstatement. |
17 | * * * |
18 | Section 2.1. The act is amended by adding a section to read: |
19 | Section 201.1. Adoption of wells. |
20 | (a) Authorization.--The department may allow a well operator |
21 | to operate an abandoned well or an orphan well. |
22 | (b) Procedure.--The department shall establish a permit |
23 | process to implement this section. |
24 | Section 3. Section 205 of the act is amended to read: |
25 | Section 205. Well location restrictions. |
26 | (a) Wells may not be drilled within 200 feet, or in the case |
27 | of an unconventional well within 1,500 feet, measured |
28 | horizontally from any existing building or existing water well |
29 | without the written consent of the owner thereof. Where the |
30 | distance restriction would deprive the owner of the oil and gas |
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1 | rights of the right to produce or share in the oil or gas |
2 | underlying said surface tract, the well operator may be granted |
3 | a variance from said distance restriction upon submission of a |
4 | plan which shall identify the additional measures, facilities or |
5 | practices to be employed during well site construction, drilling |
6 | and operations. The variance, if granted, shall include such |
7 | additional terms and conditions as the department shall require |
8 | to insure the safety and protection of affected persons and |
9 | property. The provisions may include insurance, bonding and |
10 | indemnification, as well as technical requirements. |
11 | (b) No well site may be prepared or well drilled within |
12 | [100] 500 feet measured horizontally from any [stream, spring or |
13 | body of water as identified on the most current 7 ½ minute |
14 | topographic quadrangle map of the United States Geological |
15 | Survey] watercourse, natural or artificial lake, pond or |
16 | reservoir or within [100 feet of any wetlands greater than one |
17 | acre in size.] the boundary of a wetland or the boundary that |
18 | affects the functions and values of a wetland. However, no well |
19 | may be drilled using hydraulic fracturing or horizontal drilling |
20 | within 2,500 feet of a surface water source, and within 1,000 |
21 | feet of a groundwater source or an exceptional value or high |
22 | quality water source, as designated under 25 Pa. Code 93.4b |
23 | (relating to qualifying as High Quality or Exceptional Value |
24 | Waters), which serves a public water system. The distance from |
25 | the public water supply source, as identified by the department, |
26 | shall be measured as follows: |
27 | (1) For a surface water intake on a lake or reservoir, |
28 | the distance shall be measured from the boundary of the lake |
29 | or reservoir. |
30 | (2) For a surface water intake on a flowing stream, the |
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1 | distance shall be measured from a semicircular radius |
2 | extending upstream of the surface water intake. |
3 | (3) For a groundwater source, the distance shall be |
4 | measured from the wellhead or spring. |
5 | The department may waive such distance restrictions upon |
6 | submission of a plan which shall identify the additional |
7 | measures, facilities or practices to be employed during well |
8 | site construction, drilling and operations. Such waiver, if |
9 | granted, shall impose such permit conditions as are necessary to |
10 | protect the waters of the Commonwealth. |
11 | (c) [The] On making a determination on a well permit, the |
12 | department shall[, on making a determination on a well permit,] |
13 | consider and may deny or condition a well permit based on the |
14 | impact of the proposed well on public resources to include, but |
15 | not be limited to, the following: |
16 | (1) Publicly owned parks, forests, gamelands and |
17 | wildlife areas. |
18 | (2) National or State scenic rivers. |
19 | (3) National natural landmarks. |
20 | (4) Habitats of rare and endangered flora and fauna and |
21 | other critical communities. |
22 | (5) Historical and archaeological sites listed on the |
23 | Federal or State list of historic places. |
24 | (6) Bodies of water and watercourses, including, but not |
25 | limited to, wetlands, wild trout streams and wilderness trout |
26 | streams. |
27 | (7) Sources used for public drinking water supplies. |
28 | (8) Whether the proposed well location is within a |
29 | floodplain. |
30 | (d) The department shall establish additional protective |
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1 | measures for storage of hazardous chemicals and materials |
2 | intended to be used, or that have been used, on an |
3 | unconventional well drilling site within 1,000 feet of a |
4 | watercourse, natural or artificial lake, pond, reservoir, |
5 | wetland or groundwater source that serves a public water system, |
6 | or within 5,000 feet of a surface water source that serves a |
7 | public water system. |
8 | (e) Prior to submitting a permit application to the |
9 | department for a well or well site within a wild trout stream, |
10 | wilderness trout stream or a High Quality or Exceptional Value |
11 | watershed as indicated by the 12-digit Hydrologic Unit Code, the |
12 | applicant shall notify the Pennsylvania Fish and Boat |
13 | Commission. |
14 | Section 3.1. The act is amended by adding a section to read: |
15 | Section 206.1. Roadway remediation. |
16 | (a) Policy.--An owner that receives a permit under this act |
17 | is responsible for roadway remediation. |
18 | (b) Requirements.-- |
19 | (1) The owner shall update the inventory under section |
20 | 201(b) as necessary. |
21 | (2) Upon completion of drilling activity, the owner |
22 | shall restore each roadway in the inventory to at least its |
23 | condition prior to application for the permit, as determined |
24 | by the Department of Transportation. |
25 | (c) Security.--Nothing in this section releases the owner |
26 | from financial security obligations entered into with the |
27 | Commonwealth or a political subdivision. |
28 | Section 3.2. Section 207 of the act is amended by adding a |
29 | subsection to read: |
30 | Section 207. Protection of fresh groundwater; casing |
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1 | requirements. |
2 | * * * |
3 | (e) The department shall inspect each permitted well drilled |
4 | in a formation using hydraulic fracturing or horizontal |
5 | drilling, or both, during each phase of cementing, completing |
6 | and altering. The permittee may not proceed to the next phase of |
7 | the drilling operation until an inspection by the department has |
8 | been performed. The department shall allocate an appropriate |
9 | portion of the well permit fees to fund the inspection and may |
10 | increase the permit fees to meet an increase in the inspection |
11 | costs. |
12 | Section 4. Section 208(a), (c) and (d) of the act are |
13 | amended and the section is amended by adding subsections to |
14 | read: |
15 | Section 208. Protection of water supplies. |
16 | (a) [Any] In addition to the requirements of subsection |
17 | (c.1), a well operator who affects a public or private water |
18 | supply by pollution or diminution shall restore or replace the |
19 | affected supply with an alternate source of water adequate in |
20 | quantity or quality for the purposes served by the supply. The |
21 | department shall ensure the restored or replaced water supply |
22 | meets the applicable water quality standards consistent with the |
23 | Safe Drinking Water Act (Public Law 93-523, 21 U.S.C. § 349 and |
24 | 42 U.S.C. §§ 201 and 300f et seq.), the act of May 1, 1984 |
25 | (P.L.206, No.43), known as the Pennsylvania Safe Drinking Water |
26 | Act, and predrilling or alteration water quality standards as |
27 | determined by the department. The Environmental Quality Board |
28 | shall promulgate regulations necessary to meet the requirements |
29 | of this subsection. |
30 | * * * |
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1 | (b.1) Upon a written request by any landowner residing |
2 | within 5,500 feet but farther than 2,500 feet of a proposed gas |
3 | well using hydraulic fracturing, the well permit applicant shall |
4 | conduct a predrilling or prealteration survey, using a facility |
5 | or laboratory certified by the department, and send a copy of |
6 | the survey by certified mail to the requester. A predrilling or |
7 | prealteration survey shall provide at a minimum the testing |
8 | results for chemicals or chemical compounds known to be commonly |
9 | used for hydraulic fracturing, including all major cations and |
10 | anions, arsenic, benzene, toluene, ethylbenzene, xylenes, |
11 | manganese, dissolved methane, total dissolved solids, chlorides, |
12 | nutrients and radionuclides. |
13 | (b.2) The department shall establish a single Statewide |
14 | toll-free telephone number that persons may use to report cases |
15 | of water contamination. The Statewide toll-free telephone number |
16 | shall be provided in a conspicuous manner in the notification |
17 | required under section 201(b) and on the department's Internet |
18 | website. |
19 | (b.3) The department shall develop appropriate |
20 | administrative responses to calls received on the Statewide |
21 | toll-free number for water contamination. |
22 | (b.4) The department shall establish a website that lists |
23 | the confirmed cases of water supply contamination that result |
24 | from hydraulic fracturing. |
25 | (c) Unless rebutted by one of the five defenses established |
26 | in subsection (d), it shall be presumed that a well operator is |
27 | responsible for the pollution of a water supply that is within |
28 | 1,000 feet, or in the case of an unconventional well within |
29 | 5,000 feet, of the oil or gas well, where the pollution occurred |
30 | within [six] 12 months after [the completion of drilling] the |
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1 | drilling, stimulation or alteration of such well. |
2 | (c.1) If the affected water supply is within the rebuttable |
3 | presumption area as provided in subsection (c) and the |
4 | rebuttable presumption applies and the water user is without a |
5 | readily available alternative source of water, the operator |
6 | shall provide a temporary water supply within 24 hours of being |
7 | contacted by the water user or the department, whichever occurs |
8 | first. The temporary water supply provided under this subsection |
9 | shall be adequate in quantity and quality for the purposes |
10 | served by the supply. |
11 | (c.2) In case of horizontal drilling, the presumption under |
12 | subsection (c) covers the entire length of the horizontal |
13 | drilling and extends an additional 5,000 feet from the end or |
14 | ends of the horizontal well bore. |
15 | (d) In order to rebut the presumption of liability |
16 | established in subsection (c), the well operator must |
17 | affirmatively prove one of the following five defenses: |
18 | (1) The pollution existed prior to the drilling, |
19 | stimulation or alteration [activity] activities as determined |
20 | by a predrilling or prealteration survey. |
21 | (2) The landowner or water purveyor refused to allow the |
22 | operator access to conduct a predrilling or prealteration |
23 | survey. |
24 | (3) The water supply is not within 1,000 feet, or in the |
25 | case of an unconventional well within 5,000 feet, of the |
26 | well. |
27 | (4) The pollution occurred more than [six] 12 months |
28 | after [completion of drilling] the drilling, stimulation or |
29 | alteration activities. |
30 | (5) The pollution occurred as the result of some cause |
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1 | other than the drilling, stimulation or alteration [activity] |
2 | activities. |
3 | * * * |
4 | Section 5. The act is amended by adding sections to read: |
5 | Section 208.1. Use of surface impoundments for temporary |
6 | flowback storage. |
7 | (a) Requirements.--If centralized flowback impoundments are |
8 | used to temporarily store flowback water, the department shall |
9 | require the use of dual liner systems with a leak detection |
10 | system installed between the two liners. |
11 | (b) Prohibitions.-- |
12 | (1) A surface impoundment may not be constructed or used |
13 | within: |
14 | (i) a wild trout stream; |
15 | (ii) an exceptional value or high quality watershed, |
16 | as designated in 25 Pa. Code § 93.4(b) (relating to |
17 | qualifying as High Quality or Exceptional Value Waters); |
18 | or |
19 | (iii) a floodplain. |
20 | (c) Inspection.--The department shall inspect impoundments |
21 | on a monthly basis. |
22 | Section 208.2. Transportation records and hydraulic fracturing |
23 | fluids. |
24 | Each well operator who transports hydraulic fracturing fluids |
25 | shall maintain records of the amount and destination of the |
26 | fluids transported. The records shall be on a form approved by |
27 | the department. |
28 | (1) Recordkeeping requirements shall be determined by |
29 | the department and shall include at least the following: |
30 | (i) The number of gallons of hydraulic fracturing |
|
1 | fluids used in the drilling, stimulation or alteration of |
2 | a well and the amount of flowback fluids recovered from |
3 | the well. |
4 | (ii) Upon completion of the well, the name of the |
5 | person or company who transports the hydraulic fracturing |
6 | fluids to a disposal site or a location other than the |
7 | well site. |
8 | (iii) The location where hydraulic fracturing fluids |
9 | were disposed or to which they were transported and the |
10 | volumes that were disposed of at each location. |
11 | (iv) The method of disposal. |
12 | (2) Records shall be retained by the well operator for a |
13 | period of five years. The records shall be made available to |
14 | the department upon request. |
15 | Section 209.1. Well control emergency response. |
16 | (a) The department may enter into contracts with well |
17 | control specialists to provide adequate emergency response for a |
18 | well control emergency. |
19 | (b) A well control specialist providing services under |
20 | subsection (a) may not be held liable for any damages which |
21 | result from its well control response actions. |
22 | (c) The department may recover costs from well operators if |
23 | the department is required to employ the services of a well |
24 | control specialist because the well operator failed to take |
25 | timely action to address a well control event. |
26 | Section 6. Section 212(b) of the act, amended March 22, 2010 |
27 | (P.L.169, No.15), is amended and the section is amended by |
28 | adding subsections to read: |
29 | Section 212. Well reporting requirements. |
30 | * * * |
|
1 | (b) It shall be the duty of the well operator to keep |
2 | records of any well drilled or altered. A record of the well |
3 | containing such information as required by [regulation] the |
4 | department, including the information required under subsection |
5 | (b.1), shall be filed with the department within 30 days [of |
6 | cessation of drilling] after stimulation of the well. A |
7 | completion report containing such additional information as |
8 | required by regulation shall be filed with the department within |
9 | 30 days after [the completion] stimulation of the well and it |
10 | shall be kept on file by the department. Within 90 days after |
11 | the completion of drilling or recompletion of a well, if |
12 | requested by the department, the well operator shall submit a |
13 | copy of the electrical, radioactive or other standard industry |
14 | logs if they have been run. In addition, if requested by the |
15 | department within one year, the well operator shall file a copy |
16 | of drill stem test charts, formation water analysis, porosity, |
17 | permeability or fluid saturation measurements, core analysis and |
18 | lithologic log or sample description or other similar data as |
19 | compiled. No such information shall be required unless the well |
20 | operator has had such information compiled in the ordinary |
21 | course of business. No interpretation of the data is to be |
22 | filed. |
23 | (b.1) Report contents.--The completion report shall contain |
24 | the operator's stimulation record which shall include the |
25 | following: |
26 | (1) A descriptive list of the chemical additives in the |
27 | stimulation fluids, including any acid, biocide, breaker, |
28 | brine, corrosion inhibitor, crosslinker, demulsifier, |
29 | friction reducer, get, iron control, oxygen scavenger, pH |
30 | adjusting agent, proppant, scale inhibitor and surfactant. |
|
1 | (2) The percent by volume of each chemical additive in |
2 | the stimulation fluid. |
3 | (3) A list of the chemicals in the material safety data |
4 | sheets, by name and chemical abstract service number, |
5 | corresponding to the appropriate chemical additive. |
6 | (4) The percent by volume of each chemical list in the |
7 | material safety data sheets. |
8 | (5) The total volume of the base fluid. |
9 | (6) A list of water sources used under the approved |
10 | water management plan and the volume of water used. |
11 | (7) The pump rates and pressure used in the well. |
12 | (8) The depth at which potable aquifers are encountered. |
13 | (b.2) Trade secret or confidential proprietary |
14 | information.--When an operator submits its stimulation record |
15 | under subsection (b.1), it may designate specific portions of |
16 | the stimulation record as containing a trade secret or |
17 | confidential proprietary information. The department shall |
18 | prevent disclosure of the designated confidential information to |
19 | the extent permitted by the act of February 14, 2008 (P.L.6, |
20 | No.3), known as the Right-to-Know Law. However, in the event of |
21 | an emergency well, the department shall make available the |
22 | entire completion report to emergency personnel that respond. |
23 | (b.3) List of the chemical constituents.--In addition to |
24 | submitting a stimulation record to the department under |
25 | subsection (b.1) and subject to the protections afforded for |
26 | trade secrets and confidential proprietary information under the |
27 | Right-to-Know Law, the operator shall provide a list of the |
28 | chemical constituents of the chemical additives used to |
29 | hydraulically fracture a well, by name and chemical abstract |
30 | service number, unless the additive does not have a number, to |
|
1 | the department upon written request of the department. |
2 | * * * |
3 | Section 7. Section 215(a), (c), (d), (d.1) and (f) of the |
4 | act, amended July 2, 1992 (P.L.365, No.78), are amended to read: |
5 | Section 215. Bonding. |
6 | (a) (1) Except as provided in subsection (d) hereof, upon |
7 | filing an application for a well permit and before continuing |
8 | to operate any oil or gas well, the owner or operator thereof |
9 | shall file with the department a bond for the well and the |
10 | well site on a form to be prescribed and furnished by the |
11 | department. Any such bond filed with an application for a |
12 | well permit shall be payable to the Commonwealth and |
13 | conditioned that the operator shall faithfully perform all of |
14 | the drilling, water supply replacement, restoration and |
15 | plugging requirements of this act. Any such bond filed with |
16 | the department for a well in existence on the effective date |
17 | of this act shall be payable to the Commonwealth and |
18 | conditioned that the operator shall faithfully perform all of |
19 | the water supply replacement, restoration and plugging |
20 | requirements of this act. The amount of the bond required |
21 | shall be in the [amount of $2,500 per well for at least two |
22 | years following the effective date of this act, after which |
23 | time the bond amount] following amounts and may be adjusted |
24 | by the Environmental Quality Board every [two] three years to |
25 | reflect the projected costs to the Commonwealth of performing |
26 | well plugging[.]: |
27 | (i) For wells less than 2,500 feet in depth: |
28 | (A) $2,500 per well, provided the operator shall |
29 | not be required to provide a bond under this item |
30 | exceeding $35,000 for 25 wells. |
|
1 | (B) For operating 26 to 50 wells, $35,000 plus |
2 | $2,500 per well, provided the operator may not be |
3 | required to provide a bond under this item exceeding |
4 | $60,000. |
5 | (C) For operating 51 to 100 wells, $60,000 plus |
6 | $2,500 per well, provided the operator may not be |
7 | required to provide a bond under this item exceeding |
8 | $100,000. |
9 | (D) For operating over 100 wells, $100,000 plus |
10 | $2,500 per well, provided the operator may not be |
11 | required to provide a bond under this item exceeding |
12 | $250,000. |
13 | (ii) For wells between 2,500 feet and 5,000 feet in |
14 | depth: |
15 | (A) $5,000 per well, provided the operator may |
16 | not be required to provide a bond under this item |
17 | exceeding $70,000 for 25 wells. |
18 | (B) For operating 26 to 50 wells, $70,000 plus |
19 | $5,000 per well, provided the operator may not be |
20 | required to provide a bond under this item exceeding |
21 | $120,000. |
22 | (C) For operating 51 to 100 wells, $120,000 plus |
23 | $5,000 per well, provided the operator may not be |
24 | required to provide a bond under this item exceeding |
25 | $200,000. |
26 | (D) For operating over 100 wells, $200,000 plus |
27 | $5,000 per well, provided the operator may not be |
28 | required to provide a bond under this item exceeding |
29 | $500,000. |
30 | (iii) For wells over 5,000 feet in depth: |
|
1 | (A) $12,500 per well, provided the operator may |
2 | not be required to provide a bond under this item |
3 | exceeding $220,000 for 25 wells. |
4 | (B) For operating 26 to 50 wells, $220,000 plus |
5 | $12,500 per well, provided the operator may not be |
6 | required to provide a bond under this item exceeding |
7 | $375,000. |
8 | (C) For operating 51 to 100 wells, $375,000 plus |
9 | $12,500 per well, provided the operator may not be |
10 | required to provide a bond under this item exceeding |
11 | $625,000. |
12 | (D) For operating over 100 wells, $625,000 plus |
13 | $12,500 per well. |
14 | [(2) In lieu of individual bonds for each well, an owner |
15 | or operator may file a blanket bond, on a form prepared by |
16 | the department, covering all of its wells in Pennsylvania as |
17 | enumerated on the bond form. A blanket bond shall be in the |
18 | amount of $25,000 for at least two years following the |
19 | effective date of this act, after which time the bond amount |
20 | may be adjusted by the Environmental Quality Board every two |
21 | years to reflect the projected costs to the Commonwealth of |
22 | performing well plugging.] |
23 | (3) Liability under such bond shall continue until the |
24 | well has been properly plugged in accordance with this act |
25 | and for a period of one year after filing of the certificate |
26 | of plugging with the department. Each bond shall be executed |
27 | by the operator and a corporate surety licensed to do |
28 | business in the Commonwealth and approved by the secretary. |
29 | The operator may elect to deposit cash, certificates of |
30 | deposit or automatically renewable irrevocable letters of |
|
1 | credit from financial institutions chartered or authorized to |
2 | do business in Pennsylvania and regulated and examined by the |
3 | Commonwealth or a Federal agency which may be terminated at |
4 | the end of a term only upon the financial institution giving |
5 | 90 days prior written notice to the permittee and the |
6 | department or negotiable bonds of the United States |
7 | Government or the Commonwealth, the Pennsylvania Turnpike |
8 | Commission, the General State Authority, the State Public |
9 | School Building Authority or any municipality within the |
10 | Commonwealth, or United States Treasury Bonds issued at a |
11 | discount without a regular schedule of interest payments to |
12 | maturity, otherwise known as Zero Coupon Bonds, having a |
13 | maturity date of not more than ten years after the date of |
14 | purchase and at such maturity date having a value of not less |
15 | than $25,000, with the department in lieu of a corporate |
16 | surety. The cash deposit, certificate of deposit, amount of |
17 | such irrevocable letter of credit or market value of such |
18 | securities shall be equal at least to the sum of the bond. |
19 | The secretary shall, upon receipt of any such deposit of |
20 | cash, letters of credit or negotiable bonds, immediately |
21 | place the same with the State Treasurer, whose duty it shall |
22 | be to receive and hold the same in the name of the |
23 | Commonwealth, in trust, for the purpose for which such |
24 | deposit is made. The State Treasurer shall at all times be |
25 | responsible for the custody and safekeeping of such deposits. |
26 | The operator making deposit shall be entitled from time to |
27 | time to demand and receive from the State Treasurer, on the |
28 | written order of the secretary, the whole or any portion of |
29 | any collateral so deposited, upon depositing with him, in |
30 | lieu thereof, other collateral of the classes herein |
|
1 | specified having a market value at least equal to the sum of |
2 | the bond, and also to demand, receive and recover the |
3 | interest and income from said negotiable bonds as the same |
4 | becomes due and payable. Where negotiable bonds, deposited as |
5 | aforesaid, mature or are called, the State Treasurer, at the |
6 | request of the owner thereof, shall convert such negotiable |
7 | bonds into such other negotiable bonds of the classes herein |
8 | specified as may be designated by the owner. Where notice of |
9 | intent to terminate a letter of credit is given, the |
10 | department shall give the operator 30 days' written notice to |
11 | replace the letter of credit with other acceptable bond |
12 | guarantees as provided herein and, if the owner or operator |
13 | fails to replace the letter of credit within the 30-day |
14 | notification period, the department shall draw upon and |
15 | convert such letter of credit into cash and hold it as a |
16 | collateral bond guarantee. |
17 | * * * |
18 | (c) If the well owner or operator fails or refuses to comply |
19 | with the applicable requirements of this act identified in |
20 | subsection (a), the regulations promulgated hereunder or the |
21 | conditions of the permit relating thereto, the department may |
22 | declare the bond forfeited and shall certify the same to the |
23 | Attorney General, who shall proceed to enforce and collect the |
24 | full amount of the bond and, where the owner or operator has |
25 | deposited cash or securities as collateral in lieu of a |
26 | corporate surety, the department shall declare said collateral |
27 | forfeited and shall direct the State Treasurer to pay the full |
28 | amount of said funds into the Well Plugging Restricted Revenue |
29 | Account or to proceed to sell said security to the extent |
30 | forfeited and pay the proceeds thereof into the Well Plugging |
|
1 | Restricted Revenue Account. Should any corporate surety or |
2 | financial institution fail to promptly pay, in full, a forfeited |
3 | bond, it shall be disqualified from writing any further bonds |
4 | under the act or any other environmental act administered by the |
5 | department. Any person aggrieved by reason of forfeiting the |
6 | bond or converting collateral, as herein provided, shall have a |
7 | right to appeal to the Environmental Hearing Board in the manner |
8 | provided by law. Upon forfeiture of a [blanket] bond for a |
9 | violation occurring at one or more well sites, the person whose |
10 | bond is forfeited shall submit a replacement bond to cover all |
11 | other wells of which he is owner or operator within ten days of |
12 | said forfeiture. Failure to submit said replacement bond |
13 | constitutes a violation of this section as to each of the wells |
14 | owned or operated by said person. |
15 | (d) [(1) Any operator of not more than 200 wells who cannot |
16 | obtain a bond for a well drilled prior to April 18, 1985, as |
17 | required under subsection (a), due to an inability to |
18 | demonstrate sufficient financial resources may, in lieu of |
19 | the bond: |
20 | (i) Submit to the department a fee in the amount of |
21 | $50 per well, or a blanket fee of $500 for ten to 20 |
22 | wells, or a blanket fee of $1,000 for more than 20 wells, |
23 | which shall be a nonrefundable fee paid each year that |
24 | the operator has not filed a bond with the department. |
25 | All fees collected in lieu of a bond under this |
26 | subsection shall be used for the purposes authorized by |
27 | this act. The Environmental Quality Board shall have the |
28 | power, by regulation, to increase the amount of the fees |
29 | established under this subsection. |
30 | (ii) (A) Make phased deposits of collateral to |
|
1 | fully collateralize the bond. Such payment shall be |
2 | based on the number of wells the operator owns or |
3 | operates. The operator shall make an initial deposit |
4 | and shall, thereafter, make annual deposits in |
5 | accordance with the schedule in clause (B). Interest |
6 | accumulated by the collateral shall become a part of |
7 | the bond until such time as the collateral plus |
8 | accumulated interest equals the amount of the |
9 | required bond. The collateral shall be deposited, in |
10 | trust, with the State Treasurer as provided in this |
11 | subsection, or with a bank selected by the department |
12 | which shall act as trustee for the benefit of the |
13 | Commonwealth to guarantee the operator's compliance |
14 | with the drilling, water supply replacement, |
15 | restoration and plugging requirements of this act. |
16 | The operator shall be required to pay all costs of |
17 | the trust. |
18 | (B) An operator of up to ten existing wells who |
19 | does not intend to operate additional wells shall |
20 | deposit $250 per well and shall, thereafter, annually |
21 | deposit $50 per well until the obligations of this |
22 | section are fully met. An operator of 11 to 25 wells |
23 | or an operator of up to ten wells who applies for one |
24 | or more permits for additional wells shall deposit |
25 | $2,000 and shall, thereafter, annually deposit $1,150 |
26 | plus $150 for each additional well to be permitted |
27 | that year until the obligations of this section are |
28 | fully met. An operator of 26 to 50 wells shall |
29 | deposit $3,000 and shall, thereafter, annually |
30 | deposit $1,300 plus $400 for each additional well to |
|
1 | be permitted that year until the obligations of this |
2 | section are fully met. An operator of 51 to 100 wells |
3 | shall deposit $4,000 and shall, thereafter, annually |
4 | deposit $1,500 plus $400 for each additional well to |
5 | be permitted that year until the obligations of this |
6 | section are fully met. Operators of 101 to 200 wells |
7 | shall deposit $8,000 and shall, thereafter, annually |
8 | deposit $1,600 plus $1,000 for each additional well |
9 | to be permitted that year until the obligations of |
10 | this section are fully met. Operators of more than |
11 | 200 wells shall fully bond their wells immediately. |
12 | The department shall reduce the amount of phased |
13 | collateral payments or the period of time over which |
14 | phased collateral payments shall be made on behalf of |
15 | owners or operators who, prior to the effective date |
16 | of this amendatory act, have paid a fee in lieu of |
17 | bond pursuant to subparagraph (i), and who, within |
18 | one year of the effective date of this amendatory |
19 | act, choose to enter the phased collateral program |
20 | pursuant to this subparagraph (ii) rather than to |
21 | continue to make payments in lieu of bond. Payments |
22 | made in lieu of bond prior to the effective date of |
23 | this amendatory act shall not be credited in any |
24 | other manner, nor shall the department be required to |
25 | refund such fees at any time. The Environmental |
26 | Quality Board shall have the power, by regulation, to |
27 | change the annual deposits established under this |
28 | clause if it is found to be necessary to accommodate |
29 | a change in the amount of the bond required under |
30 | this section. |
|
1 | (2) An operator may continue to pay a fee in lieu of |
2 | bond or make phased deposits of collateral to fully |
3 | collateralize the bond so long as the operator does not miss |
4 | any payments for wells as provided under this subsection and |
5 | so long as the operator remains in compliance with the |
6 | provisions of this act and regulations and permits issued |
7 | thereunder. If an operator has missed any payments for wells |
8 | as provided under this subsection, the operator shall: |
9 | (i) immediately submit the appropriate bond amount |
10 | in full; or |
11 | (ii) cease all operations and plug the wells in |
12 | accordance with section 210. |
13 | (d.1) (1) An individual who cannot obtain a bond to drill |
14 | new wells due to an inability to demonstrate financial |
15 | resources may meet the collateral bond requirements of |
16 | subsection (a) by making phased deposits of collateral to |
17 | fully collateralize the bond. Such individuals shall be |
18 | limited to drilling ten new wells per calendar year. The |
19 | individual shall, for each well to be drilled, deposit $500 |
20 | and shall, thereafter, annually deposit 10% of the remaining |
21 | bond amount for a period of ten years. Interest accumulated |
22 | by the collateral shall become a part of the bond until such |
23 | time as the collateral, plus accumulated interest, equals the |
24 | amount of the required bond. The collateral shall be |
25 | deposited, in trust, with the State Treasurer as provided in |
26 | subsection (a) or with a bank selected by the department |
27 | which shall act as trustee for the benefit of the |
28 | Commonwealth, to guarantee the individual's compliance with |
29 | the drilling, water supply replacement, restoration and |
30 | plugging requirements of this act. The individual shall be |
|
1 | required to pay all costs of the trust. |
2 | (2) Individuals may continue to use phased collateral to |
3 | obtain permits so long as they have not missed any payments |
4 | for wells drilled under this provision and so long as they |
5 | remain in compliance with this act and regulations and |
6 | permits issued thereunder. If an individual has missed any |
7 | payments for wells under this subsection, the operator shall: |
8 | (i) immediately submit the appropriate bond amount |
9 | in full; or |
10 | (ii) cease all operations and plug the wells in |
11 | accordance with section 210. |
12 | For the purposes of this subsection an "individual" is defined |
13 | as an applicant who is a natural person doing business under his |
14 | own name.] The Environmental Quality Board shall, by regulation, |
15 | develop an alternative financial assurance requirement in which |
16 | an operator may voluntarily choose to participate. An operator |
17 | participating in the alternative financial assurance requirement |
18 | established pursuant to this paragraph may be exempt from a bond |
19 | specified under subsection (a). The alternative financial |
20 | assurance requirement may require an insurance policy, trust |
21 | fund or financial mechanism but must provide for full coverage |
22 | of an operator's well plugging liability as determined by the |
23 | board. The alternative financial assurance mechanism may only be |
24 | utilized to plug wells upon abandonment and may not be forfeited |
25 | or otherwise recovered for violations of the act. |
26 | * * * |
27 | [(f) Owners or operators who have failed to meet the |
28 | requirements of this section prior to the effective date of this |
29 | amendatory act shall not be required to make payments pursuant |
30 | to this section on a retroactive basis as a condition of |
|
1 | obtaining a permit under this act nor shall such failure be |
2 | deemed a violation of this act.] |
3 | Section 8. Sections 503(c), 505 and 506 of the act are |
4 | amended to read: |
5 | Section 503. Enforcement orders. |
6 | * * * |
7 | (c) Prior to the suspension or revocation of a well permit |
8 | or registration, the department shall serve written notice upon |
9 | the well operator or its agent of the intention of the |
10 | department to suspend or revoke and shall state with specificity |
11 | the statutory provisions, appropriate rule or regulation or |
12 | other reason and the factual circumstances which surround the |
13 | violation upon which the suspension or revocation is to be |
14 | based. The well operator shall have 15 days to request a |
15 | conference with the department to give such cause why such |
16 | action should not be taken. Upon receipt of such written notice, |
17 | the department shall hold a conference and shall, within 15 days |
18 | thereafter, make a decision on whether to suspend or revoke the |
19 | well permit or registration. The department shall provide |
20 | written notice of its decision to revoke to the well operator or |
21 | its agent, which shall become effective upon receipt thereof and |
22 | the operator shall immediately plug the well. |
23 | * * * |
24 | Section 505. Penalties. |
25 | (a) Any person who violates any provisions of the act is |
26 | guilty of a summary offense and, upon conviction thereof, shall |
27 | be sentenced to pay a fine of not more than [$300] $10,000 or |
28 | undergo imprisonment of not more than 90 days, or both. Each |
29 | day's continuance of such violation shall be a separate and |
30 | distinct offense. |
|
1 | (b) Any person who willfully violates any provisions of this |
2 | act or any order of the department issued pursuant to the |
3 | provisions of this act is guilty of a misdemeanor and, upon |
4 | conviction thereof, shall be sentenced to pay a fine of not more |
5 | than [$5,000] $150,000 or undergo imprisonment of not more than |
6 | one year, or both. Each day's continuance of such violation |
7 | shall be a separate distinct offense. |
8 | (c) The department shall have the authority to institute |
9 | prosecutions against any person or municipality under this act. |
10 | Section 506. Civil penalties. |
11 | (a) In addition to proceeding under any other remedy |
12 | available at law or in equity for a violation of a provision of |
13 | this act or a rule or regulation of the department or a permit |
14 | condition or any order of the department, the [Environmental |
15 | Hearing Board] department, [after hearing,] may assess a civil |
16 | penalty upon a person for such violation under subsection (b). |
17 | Such a penalty may be assessed whether or not the violation was |
18 | willful. The civil penalty so assessed shall not exceed |
19 | [$25,000, plus $1,000] $100,000, plus $10,500 for each day of |
20 | continued violation. In determining the amount of the civil |
21 | penalty, the [board] department shall consider the willfulness |
22 | of the violation, damage or injury to the natural resources of |
23 | the Commonwealth or their uses, endangerment of the safety of |
24 | others, costs of remedying the harm, savings resulting to the |
25 | person in consequence of such violation and other relevant |
26 | factors. [It shall be payable to the Commonwealth and shall be |
27 | collectible in any manner provided at law for the collection of |
28 | debts.] |
29 | (b) The following shall apply to civil penalties for |
30 | violations of this act: |
|
1 | (1) The department may make an initial assessment of a |
2 | civil penalty upon a person for the violation by informing |
3 | the person in writing within a period of time prescribed by |
4 | rules and regulations of the amount of the penalty initially |
5 | assessed. The person charged with the violation shall have 30 |
6 | days to: |
7 | (i) pay the proposed penalty in full; or |
8 | (ii) file an appeal with the department if the |
9 | person wishes to contest either the amount or the fact of |
10 | the violation. If the person files an appeal he shall: |
11 | (A) forward the proposed amount to the |
12 | department for placement in an escrow account with |
13 | the State Treasurer or any Pennsylvania bank; or |
14 | (B) post an appeal bond in the amount of the |
15 | proposed penalty. The bond shall be executed by a |
16 | surety licensed to do business in this Commonwealth |
17 | and shall be satisfactory to the department. |
18 | (2) The initial assessment shall become final if the |
19 | amount or the appeal bond is not forwarded to the department |
20 | or if no appeal is filed with the department within 30 days |
21 | of the written notice to the person of the initial |
22 | assessment. If the initial assessment becomes final or a |
23 | timely appeal is not filed, the person charged with the |
24 | violation and suffering the assessment shall be considered to |
25 | have waived all legal rights to contest the fact of the |
26 | violation or the amount of the penalty. |
27 | (3) If through administrative or judicial review of the |
28 | penalty assessed it is determined that no violation occurred |
29 | or that the amount of the penalty should be reduced, the |
30 | department shall, within 30 days of the determination, remit |
|
1 | the appropriate amount to the person or municipality, with |
2 | any interest accumulated by the escrow deposit. |
3 | (4) If any person liable to pay any [such penalty] |
4 | assessment neglects or refuses to pay the same after demand, |
5 | the amount, together with interest and any costs that may |
6 | accrue, shall be a lien in favor of the Commonwealth upon the |
7 | property, both real and personal, of such person but only |
8 | after same has been entered and docketed of record by the |
9 | prothonotary of the county where such is situated. The |
10 | [board] department may, at any time, transmit to the |
11 | prothonotaries of the respective counties certified copies of |
12 | all such liens, and it shall be the duty of each prothonotary |
13 | to enter and docket the same of record in his office and to |
14 | index the same as judgments are indexed, without requiring |
15 | the payment of costs as a condition precedent to the entry |
16 | thereof. |
17 | Section 9. The act is amended by adding chapters to read: |
18 | CHAPTER 5-A |
19 | SEVERANCE TAX |
20 | Section 501-A. Scope of chapter. |
21 | This chapter relates to natural gas severance tax. |
22 | Section 502-A. Definitions. |
23 | The following words and phrases when used in this chapter |
24 | shall have the meanings given to them in this section unless the |
25 | context clearly indicates otherwise: |
26 | "Account." The Natural Gas Severance Tax Account. |
27 | "Accredited laboratory." A facility engaged in the testing |
28 | and calibration of scientific measurement devices and certified |
29 | by the Department of Environmental Protection as having met the |
30 | department's standards for accreditation. |
|
1 | "Association." A partnership, limited partnership or any |
2 | other form of unincorporated enterprise owned or conducted by |
3 | two or more persons. |
4 | "Base rate adjustment index." The amount calculated under |
5 | section 503-A(b) by which the rate of the tax imposed under |
6 | section 503-A(a) is adjusted annually. |
7 | "Corporation." A corporation, joint stock association, |
8 | limited liability company, business trust or any other |
9 | incorporated enterprise organized under the laws of this |
10 | Commonwealth, the United States or any other state, territory or |
11 | foreign country or dependency. |
12 | "Department." The Department of Revenue of the Commonwealth. |
13 | "Meter." A device to measure the passage of volumes of gases |
14 | or liquids past a certain point. |
15 | "Municipality." A city, borough, incorporated town or |
16 | township. |
17 | "Natural gas." A fossil fuel consisting of a mixture of |
18 | hydrocarbon gases, primarily methane, possibly including ethane, |
19 | propane, butane, pentane, carbon dioxide, oxygen, nitrogen and |
20 | hydrogen sulfide and other gas species. The term includes |
21 | natural gas from oil fields known as associated gas or casing |
22 | head gas, natural gas fields known as nonassociated gas, coal |
23 | beds, shale beds and other formations. The term does not include |
24 | "coalbed methane" which, for the purpose of this chapter, shall |
25 | mean gas which can be produced from coal beds, coal seams, mined |
26 | out areas or gob wells. |
27 | "Nonproducing site." A point of severance that is not |
28 | capable of producing natural gas in paying quantities. |
29 | "Paying quantities." Profit to the producer, however small, |
30 | over the producer's current operating expenses. |
|
1 | "Person." A natural person or a corporation, fiduciary, |
2 | association or other entity, including the Commonwealth, its |
3 | political subdivisions, instrumentalities and authorities. When |
4 | the term is used in a clause prescribing and imposing a penalty |
5 | or imposing a fine or imprisonment, or both, the term shall |
6 | include the members, as applied to an association, and the |
7 | officers, as applied to a corporation. |
8 | "Producer." A person who engages or continues within this |
9 | Commonwealth in the business of severing natural gas for sale, |
10 | profit or commercial use. The term does not include a person who |
11 | severs natural gas from a storage field. |
12 | "Producing site." A point of severance capable of producing |
13 | natural gas in paying quantities. |
14 | "Reporting period." A period of three successive calendar |
15 | months beginning with the first day of July and ending on the |
16 | 30th day of September and each succeeding three successive |
17 | calendar months. |
18 | "Secretary." The Secretary of Revenue of the Commonwealth. |
19 | "Sever," "severance" or "severing." The extraction or other |
20 | removal of natural gas from the soil or water of this |
21 | Commonwealth. |
22 | "Storage field." A natural formation or other site that is |
23 | used to store natural gas that did not originate from the |
24 | storage field and has been injected into the formation or site. |
25 | "Stripper well." A producing site or a nonproducing site |
26 | that is not capable of producing and does not produce more than |
27 | 60,000 cubic feet of natural gas per day. |
28 | "Tax." The tax imposed under this chapter. |
29 | "Taxpayer." A person subject to the tax imposed by this |
30 | chapter. |
|
1 | "Unit." A thousand cubic feet of natural gas measured at the |
2 | wellhead at a temperature of 60 degrees Fahrenheit and an |
3 | absolute pressure of 14.73 pounds per square inch in accordance |
4 | with American Gas Association Standards and according to Boyle's |
5 | Law for the measurement of gas under varying pressures with |
6 | deviations as follows: |
7 | (1) The average absolute atmospheric pressure shall be |
8 | assumed to be 14.4 pounds to the square inch, regardless of |
9 | elevation or location of point of delivery above sea level or |
10 | variations in atmospheric pressure from time to time. |
11 | (2) The temperature of the gas passing the meters shall |
12 | be determined by the continuous use of a recording |
13 | thermometer installed to properly record the temperature of |
14 | gas flowing through the meters. The arithmetic average of the |
15 | temperature recorded each 24-hour day shall be used in |
16 | computing gas volumes. If a recording thermometer is not |
17 | installed, or if installed and not operating properly, an |
18 | average flowing temperature of 60 degrees Fahrenheit shall be |
19 | used in computing gas volume. |
20 | (3) The specific gravity of the gas shall be determined |
21 | annually by tests made by the use of an Edwards or Acme |
22 | gravity balance, or at intervals as found necessary in |
23 | practice. Specific gravity determinations shall be used in |
24 | computing gas volumes. |
25 | (4) The deviation of the natural gas from Boyle's Law |
26 | shall be determined by annual tests or at other shorter |
27 | intervals as found necessary in practice. The apparatus and |
28 | method used in making the test shall be in accordance with |
29 | recommendations of the National Bureau of Standards or Report |
30 | No. 3 of the Gas Measurement Committee of the American Gas |
|
1 | Association, or amendments thereto. The results of the tests |
2 | shall be used in computing the volume of gas delivered under |
3 | this chapter. |
4 | "Wellhead meter." A meter placed at a producing or |
5 | nonproducing site to measure the volume of natural gas severed |
6 | for which a wellhead meter certification has been issued. |
7 | "Wellhead meter certification." A report issued by an |
8 | accredited laboratory certifying the accuracy of a wellhead |
9 | meter. |
10 | Section 503-A. Imposition of tax. |
11 | (a) Establishment.--There is levied a natural gas severance |
12 | tax on every producer. |
13 | (a.1) Stripper wells.--The tax shall not be imposed on units |
14 | severed from a stripper well unless the following are true: |
15 | (1) The stripper well is one of multiple producing sites |
16 | or nonproducing sites, the combined volumes of gas produced |
17 | by all of which sites are measured by a single wellhead meter |
18 | as provided in section 505.1-A. |
19 | (2) The combined volumes of gas produced by all the |
20 | producing sites or nonproducing sites described in paragraph |
21 | (1) is more than 60,000 cubic feet of natural gas per day. |
22 | (a.2) Exemptions.--The tax shall not be imposed on the |
23 | following: |
24 | (1) units severed, sold and delivered by a producer at |
25 | or within five miles of the producing site for the processing |
26 | or manufacture of tangible personal property, as defined |
27 | under section 201 of the act of March 4, 1971 (P.L.6, No.2), |
28 | known as the Tax Reform Code of 1971, within this |
29 | Commonwealth; or |
30 | (2) units provided free of charge to the owner of the |
|
1 | surface under which the gas is severed if the surface owner |
2 | is the end user of the gas. |
3 | (b) Rate.--Subject to the provisions of section 503.1-A, the |
4 | rate shall be 30¢ per unit severed at the wellhead. |
5 | Section 503.1-A. Natural gas base rate adjustment. |
6 | (a) Annual adjustment.--The rate of tax imposed under |
7 | section 503-A shall be adjusted annually by the amount of the |
8 | base rate adjustment index as calculated under subsection (c), |
9 | provided that the tax rate shall never be less than 30¢ per unit |
10 | severed. The adjusted tax rate shall be effective for the next |
11 | year. |
12 | (b) Determination of adjustment.--On or before April 30 of |
13 | each year following the effective date of this section, the |
14 | secretary shall calculate and determine the amount of the base |
15 | rate adjustment index. |
16 | (c) Calculation of adjustment.--The base rate adjustment |
17 | index shall be determined as follows: |
18 | (1) If 5% of the average of the New York Mercantile |
19 | Exchange (NYMEX) Henry Hub settled prices on the last trading |
20 | day of each month, as reported by the Wall Street Journal for |
21 | the previous 12-month period ending March 31, is less than |
22 | 30¢, the base rate adjustment index shall be zero and the |
23 | adjusted tax rate shall be 30¢. |
24 | (2) If 5% of the average of the NYMEX Henry Hub settled |
25 | prices on the last trading day of each month, as reported by |
26 | the Wall Street Journal for the previous 12-month period |
27 | ending March 31, is greater than 30¢, the base rate |
28 | adjustment index shall be 50% of the difference between 5% of |
29 | the average of the NYMEX Henry Hub settled prices on the last |
30 | trading day of each month, as reported in the Wall Street |
|
1 | Journal for the previous 12-month period ending March 31, and |
2 | 30¢. The adjusted tax rate shall be the resulting base rate |
3 | adjustment index plus 30¢. |
4 | (d) Publication of adjustment.--The secretary shall forward |
5 | the amount of the base rate adjustment index and the adjusted |
6 | tax rate, as determined under subsection (c), to the Legislative |
7 | Reference Bureau for publication in the Pennsylvania Bulletin by |
8 | May 1 of each year and shall simultaneously provide the |
9 | information to producers as required by written notice. Failure |
10 | of the amount of the base rate adjustment index and the adjusted |
11 | tax rate to be published or provided to producers as required by |
12 | this subsection shall not affect the effectiveness of the |
13 | adjusted tax rate under subsection (b). |
14 | (e) Discontinuance of data.--If publication of the NYMEX |
15 | Henry Hub average monthly gas price data is discontinued, the |
16 | tax rate then in effect shall not be adjusted until a comparable |
17 | method for determining the base rate adjustment index is adopted |
18 | by the General Assembly in legislation. |
19 | (f) Other adjustments.--If the base data of the NYMEX Henry |
20 | Hub average monthly gas price is substantially revised, the |
21 | secretary shall, when determining the amount of the base rate |
22 | adjustment index under subsection (c), make appropriate changes |
23 | to ensure that the base rate adjustment index is reasonably |
24 | consistent with the result which would have been attained had |
25 | such substantial revision not been made. If the secretary is |
26 | unable to make reasonable changes sufficient to ensure a |
27 | consistent result, the tax rate then in effect shall not be |
28 | adjusted until a comparable method for determining the base rate |
29 | adjustment index is adopted by the General Assembly in |
30 | legislation. |
|
1 | (g) Application of rate determinations.--The provisions of |
2 | this section shall affect only the determination of the rate of |
3 | the tax on the severance units of natural gas imposed in section |
4 | 503-A. The provisions of this section are not intended, nor |
5 | shall they be construed, to affect any other determination |
6 | whatsoever, including, but not limited to, the determination of |
7 | royalty due under mineral leases. Notwithstanding any other |
8 | provision of law, the tax imposed by this chapter shall not |
9 | reduce any royalty payments due under mineral leases and the |
10 | producer may not recover any portion of the tax paid from the |
11 | royalty owner through other means of deduction or reallocation, |
12 | notwithstanding any provision in the lease, contract or |
13 | agreement. |
14 | Section 504-A. Return and payment. |
15 | (a) Requirement.--Every producer is required to file a |
16 | return with the department, on a form to be prescribed by the |
17 | department, which shall include all of the following: |
18 | (1) The number of severed natural gas units for each |
19 | reporting period. |
20 | (2) The number of producing sites in each county and |
21 | municipality. |
22 | (3) The amount of tax due under section 503-A. |
23 | (b) Filing.--The return required by subsection (a) shall be |
24 | filed with the department within 50 days following the end of a |
25 | reporting period. |
26 | (c) Deadline.--The tax imposed under section 503-A is due on |
27 | the day the return is required to be filed and becomes |
28 | delinquent if not remitted to the department by that date. |
29 | Section 505-A. Natural gas severance tax registration. |
30 | (a) Application.--Before a producer severs natural gas in |
|
1 | this Commonwealth, the producer shall apply to the department |
2 | for a natural gas severance tax registration certificate. |
3 | (a.1) Application fee.--The department may charge an |
4 | application fee to cover the administrative costs associated |
5 | with the application and registration process. If the department |
6 | charges an application fee, the department shall not issue a |
7 | registration certificate until the producer has paid the |
8 | application fee. |
9 | (a.2) Declaration.--The producer shall include in its |
10 | application a declaration of all producing sites and |
11 | nonproducing sites used by the producer for the severance of |
12 | natural gas. The declaration shall include copies of wellhead |
13 | meter certifications for each site. The producer is required to |
14 | update the declaration when the producer adds or removes a |
15 | producing site or nonproducing site in this Commonwealth or when |
16 | there is a change in the status of a producing site or |
17 | nonproducing site or when the producer uses a different |
18 | accredited laboratory to issue a wellhead meter certification. |
19 | The producer shall update the declaration within 30 days after a |
20 | calendar month in which a change to the declaration occurs. |
21 | (b) Issuance.--Except as provided in subsection (c), after |
22 | the receipt of an application, the department shall issue a |
23 | registration certificate under subsection (a). The registration |
24 | certificate shall be nonassignable. All registrants shall be |
25 | required to renew their registration certificates and wellhead |
26 | meter certifications on a staggered renewal system established |
27 | by the department. After the initial staggered renewal period, a |
28 | registration certificate or a wellhead meter certification |
29 | issued shall be valid for a period of five years. |
30 | (c) Refusal, suspension or revocation.--The department may |
|
1 | refuse to issue, suspend or revoke a registration certificate if |
2 | the applicant or registrant has not filed required State tax |
3 | reports and paid State taxes not subject to a timely perfected |
4 | administrative or judicial appeal or subject to a duly |
5 | authorized deferred payment plan. The department shall notify |
6 | the applicant or registrant of any refusal, suspension or |
7 | revocation. The notice shall contain a statement that the |
8 | refusal, suspension or revocation may be made public. The notice |
9 | shall be made by first class mail. An applicant or registrant |
10 | aggrieved by the determination of the department may file an |
11 | appeal under the provisions for administrative appeals in the |
12 | act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code |
13 | of 1971. In the case of a suspension or revocation which is |
14 | appealed, the registration certificate shall remain valid |
15 | pending a final outcome of the appeals process. Notwithstanding |
16 | sections 274, 353(f), 408(b), 603, 702, 802, 904 and 1102 of the |
17 | Tax Reform Code of 1971 or any other provision of law, if no |
18 | appeal is taken or if an appeal is taken and denied at the |
19 | conclusion of the appeal process the department may disclose, by |
20 | publication or otherwise, the identity of a producer and the |
21 | fact that the producer's registration certificate has been |
22 | refused, suspended or revoked under this subsection. Disclosure |
23 | may include the basis for refusal, suspension or revocation. |
24 | (d) Violation.--A person severing natural gas in this |
25 | Commonwealth without holding a valid registration certificate |
26 | under subsection (b) shall be guilty of a summary offense and |
27 | shall, upon conviction, be sentenced to pay a fine of not less |
28 | than $300 nor more than $1,500. In the event the person |
29 | convicted defaults, he shall be sentenced to imprisonment for |
30 | not less than five days nor more than 30 days. The penalties |
|
1 | imposed by this subsection shall be in addition to any other |
2 | penalties imposed by this chapter. For purposes of this |
3 | subsection, the severing of natural gas during any calendar day |
4 | shall constitute a separate violation. The secretary may |
5 | designate employees of the department to enforce the provisions |
6 | of this subsection. The employees shall exhibit proof of and be |
7 | within the scope of the designation when instituting proceedings |
8 | as provided by the Pennsylvania Rules of Criminal Procedure. |
9 | (e) Failure to obtain registration certificate.--Failure to |
10 | obtain or hold a valid registration certificate does not relieve |
11 | a person from liability for the tax imposed by this chapter. |
12 | Section 505.1-A. Meters. |
13 | (a) General rule.--Except as provided in subsection (b), a |
14 | producer shall provide for and maintain a discrete wellhead |
15 | meter where natural gas is severed. A producer shall ensure that |
16 | the meters are maintained according to industry standards. Any |
17 | wellhead meter installed after the effective date of this |
18 | section shall be a digital meter. |
19 | (b) Exception.--If a producer has multiple producing sites |
20 | or nonproducing sites, the combined volumes of gas produced by |
21 | all of which sites are measured by a single wellhead meter, the |
22 | producer shall not be required to provide for a discrete |
23 | wellhead meter at any of those producing sites or nonproducing |
24 | sites that is also a stripper well. |
25 | Section 506-A. Assessments. |
26 | (a) Authorization and requirement.--The department is |
27 | authorized and shall make the inquiries, determinations and |
28 | assessments of the natural gas severance tax, including |
29 | interest, additions and penalties imposed under this chapter. |
30 | (b) Notice.--The notice of assessment and demand for payment |
|
1 | shall be mailed to the taxpayer. The notice shall set forth the |
2 | basis of the assessment. The department shall send the notice of |
3 | assessment to the taxpayer at its registered address via |
4 | certified mail if the assessment increases the taxpayer's tax |
5 | liability by $300. Otherwise, the notice of assessment may be |
6 | sent via regular mail. |
7 | Section 507-A. Time for assessment. |
8 | (a) Requirement.--An assessment as provided under section |
9 | 506-A shall be made within three years after the date when the |
10 | return provided for by section 504-A is filed or the end of the |
11 | year in which the tax liability arises, whichever shall occur |
12 | last. For the purposes of this subsection and subsection (b), a |
13 | return filed before the last day prescribed for the filing |
14 | period shall be considered as filed on the last day. |
15 | (b) Exception.--If the taxpayer underpays the correct amount |
16 | of the tax due by 25% or more, the tax may be assessed within |
17 | six years after the date the return was filed. |
18 | (c) Intent to evade.--Where no return is filed or where the |
19 | taxpayer files a false or fraudulent return with intent to evade |
20 | the tax imposed by this chapter, the assessment may be made at |
21 | any time. |
22 | (d) Erroneous credit or refund.--Within three years of the |
23 | granting of a refund or credit or within the period in which an |
24 | assessment or reassessment may have been issued by the |
25 | department for the taxable period for which the refund was |
26 | granted, whichever period shall last occur, the department may |
27 | issue an assessment to recover a refund or credit made or |
28 | allowed erroneously. |
29 | Section 508-A. Extension of assessment period. |
30 | Notwithstanding the provisions of this chapter, the |
|
1 | assessment period may be extended in the event a taxpayer has |
2 | provided written consent before the expiration of the period |
3 | provided in section 507-A for a tax assessment. The amount of |
4 | tax due may be assessed at any time within the extended period. |
5 | The period may be extended further by subsequent written |
6 | consents made before the expiration of the extended period. |
7 | Section 509-A. Reassessments. |
8 | A taxpayer against whom an assessment is made may petition |
9 | the department for a reassessment under Article XXVII of the act |
10 | of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of |
11 | 1971. |
12 | Section 510-A. Interest. |
13 | The department shall assess interest on any delinquent tax at |
14 | the rate prescribed under section 806 of the act of April 9, |
15 | 1929 (P.L.343, No. 176), known as The Fiscal Code. |
16 | Section 511-A. Penalties. |
17 | The department shall enforce the following penalties: |
18 | (1) A penalty against a producer without a natural gas |
19 | severance tax registration certificate. The penalty shall be |
20 | $1 for every unit severed without a valid registration |
21 | certificate. The department may assess this penalty |
22 | separately from or in conjunction with any assessment of the |
23 | natural gas severance tax. |
24 | (2) A penalty against a producer for failure to timely |
25 | file a return as required under section 504-A. The penalty |
26 | shall be 5% of the tax liability to be reported on the return |
27 | for each day beyond the due date that the return is not |
28 | filed. |
29 | (3) In addition to the penalty under paragraph (2), a |
30 | penalty against the producer for a willful failure to timely |
|
1 | file a return. The penalty shall be 200% of the tax liability |
2 | required to be reported on the return. |
3 | (4) A penalty against a producer for failure to timely |
4 | pay the tax as required by section 504-A(c). The penalty |
5 | shall be 5% of the amount of tax due for each day beyond the |
6 | payment date that the tax is not paid. |
7 | Section 512-A. Criminal acts. |
8 | (a) Fraudulent return.--Any person with intent to defraud |
9 | the Commonwealth, who willfully makes or causes to be made a |
10 | return required by this chapter which is false, is guilty of a |
11 | misdemeanor and shall, upon conviction, be sentenced to pay a |
12 | fine of not more than $2,000 or to imprisonment for not more |
13 | than three years, or both. |
14 | (b) Other crimes.-- |
15 | (1) Except as otherwise provided by subsection (a), a |
16 | person is guilty of a misdemeanor and shall, upon conviction, |
17 | be sentenced to pay a fine of not more than $1,000 and costs |
18 | of prosecution or to imprisonment for not more than one year, |
19 | or both, for any of the following: |
20 | (i) Willfully failing to timely remit the tax to the |
21 | department. |
22 | (ii) Willfully failing or neglecting to timely file |
23 | a return or report required by this chapter. |
24 | (iii) Refusing to timely pay a tax, penalty or |
25 | interest imposed or provided for by this chapter. |
26 | (iv) Willfully failing to preserve its books, papers |
27 | and records as directed by the department. |
28 | (v) Refusing to permit the department or its |
29 | authorized agents to examine its books, records or |
30 | papers. |
|
1 | (vi) Knowingly make any incomplete, false or |
2 | fraudulent return or report. |
3 | (vii) Preventing or attempting to prevent the full |
4 | disclosure of the amount of natural gas severance tax |
5 | due. |
6 | (viii) Providing any person with a false statement |
7 | as to the payment of natural gas severance tax with |
8 | respect to any pertinent facts. |
9 | (ix) Making, uttering or issuing a false or |
10 | fraudulent statement. |
11 | (2) The penalties imposed by this section shall be in |
12 | addition to other penalties imposed by this chapter. |
13 | Section 513-A. Abatement of additions or penalties. |
14 | Upon the filing of a petition for reassessment or a petition |
15 | for refund by a taxpayer as provided under this chapter, |
16 | additions or penalties imposed upon the taxpayer by this chapter |
17 | may be waived or abated in whole or in part where the petitioner |
18 | establishes that he acted in good faith, without negligence and |
19 | with no intent to defraud. |
20 | Section 514-A. Bulk and auction sales. |
21 | A person that sells or causes to be sold at auction, or that |
22 | sells or transfers in bulk, 51% or more of a stock of goods, |
23 | wares or merchandise of any kind, fixtures, machinery, |
24 | equipment, buildings or real estate involved in a business for |
25 | which the person holds a registration certificate or is required |
26 | to obtain a registration certificate under the provisions of |
27 | this chapter shall be subject to the provisions of section 1403 |
28 | of the act of April 9, 1929 (P.L.343, No.176), known as The |
29 | Fiscal Code. |
30 | Section 515-A. Collection upon failure to request reassessment, |
|
1 | review or appeal. |
2 | (a) Power of department.--The department may collect the tax |
3 | imposed under this chapter: |
4 | (1) If an assessment of the tax is not paid within 30 |
5 | days after notice to the taxpayer when no petition for |
6 | reassessment has been filed. |
7 | (2) Within 60 days of the reassessment, if no petition |
8 | for review has been filed. |
9 | (3) If no appeal has been made, within 30 days of: |
10 | (i) the Board of Finance and Revenue's decision of a |
11 | petition for review; or |
12 | (ii) the expiration of the board's time for acting |
13 | upon the petition. |
14 | (4) In all cases of judicial sales, receiverships, |
15 | assignments or bankruptcies. |
16 | (b) Prohibition.--In a case for the collection of taxes |
17 | under subsection (a), the taxpayer against whom they were |
18 | assessed shall not be permitted to set up a ground of defense |
19 | that might have been determined by the department, the Board of |
20 | Finance and Revenue or the courts, provided that the defense of |
21 | failure of the department to mail notice of assessment or |
22 | reassessment to the taxpayer and the defense of payment of |
23 | assessment or reassessment may be raised in proceedings for |
24 | collection by a motion to stay the proceedings. |
25 | Section 516-A. Tax liens. |
26 | (a) Lien imposed.--If any taxpayer neglects or refuses to |
27 | pay the tax imposed under this chapter for which the taxpayer is |
28 | liable under this chapter after demand, the amount, including |
29 | interest, addition or penalty, together with additional costs |
30 | that may accrue, shall be a lien in favor of the Commonwealth |
|
1 | upon the real and personal property of the taxpayer but only |
2 | after the same has been entered and docketed of record by the |
3 | prothonotary of the county where the property is situated. The |
4 | department may, at any time, transmit to the prothonotaries of |
5 | the respective counties certified copies of all liens imposed by |
6 | this section. It shall be the duty of the prothonotary receiving |
7 | the lien to enter and docket the same of record to the office of |
8 | the prothonotary. The lien shall be indexed as judgments are now |
9 | indexed. No prothonotary shall require as a condition precedent |
10 | to the entry of the lien the payment of costs incidental to its |
11 | entry. |
12 | (b) Priority of lien and effect on judicial sale.--Except |
13 | for the costs of the sale and the writ upon which the sale was |
14 | made and real estate taxes and municipal claims against the |
15 | property, a lien imposed under this section shall have priority |
16 | from the date of its recording and shall be fully paid and |
17 | satisfied out of the proceeds of any judicial sale of property |
18 | subject to the lien, before any other obligation, judgment, |
19 | claim, lien or estate to which the property may subsequently |
20 | become subject, but shall be subordinate to mortgages and other |
21 | liens existing and duly recorded or entered of record prior to |
22 | the recording of the lien. |
23 | (c) No discharge by sale on junior lien.--In the case of a |
24 | judicial sale of property subject to a lien imposed under this |
25 | section, upon a lien or claim over which the lien imposed under |
26 | this section has priority, the sale shall discharge the lien |
27 | imposed under this section to the extent only that the proceeds |
28 | are applied to its payment, and the lien shall continue in full |
29 | force and effect as to the balance remaining unpaid. There shall |
30 | be no inquisition or condemnation upon any judicial sale of real |
|
1 | estate made by the Commonwealth under the provisions of this |
2 | chapter. The lien shall continue as provided in the act of April |
3 | 9, 1929 (P.L.343, No.176), known as The Fiscal Code, and a writ |
4 | of execution may directly issue upon the lien without the |
5 | issuance and prosecution to judgment of a writ of scire facias, |
6 | provided that not less than ten days before issuance of any |
7 | execution on the lien, notice of the filing and the effect of |
8 | the lien shall be sent by registered mail to the taxpayer at its |
9 | last known post office address, provided further that the lien |
10 | shall have no effect upon any stock of goods, wares or |
11 | merchandise regularly sold or leased in the ordinary course of |
12 | business by the taxpayer against whom the lien has been entered, |
13 | unless and until a writ of execution has been issued and a levy |
14 | made upon said stock of goods, wares and merchandise. |
15 | (d) Duty of prothonotary.--Any willful failure of any |
16 | prothonotary to carry out any duty imposed upon him by this |
17 | section shall be a misdemeanor. Upon conviction, he shall be |
18 | sentenced to pay a fine of not more than $1,000 and costs of |
19 | prosecution or to imprisonment for not more than one year, or |
20 | both. |
21 | (e) Priority.--Except as provided in this chapter, the |
22 | distribution, voluntary or compulsory, in receivership, |
23 | bankruptcy or otherwise of the property or estate of any person, |
24 | all taxes imposed by this chapter which are due and unpaid and |
25 | are not collectible under the provisions of section 225 of the |
26 | act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code |
27 | of 1971, shall be paid from the first money available for |
28 | distribution in priority to all other claims and liens, except |
29 | as the laws of the United States may give priority to a claim to |
30 | the Federal Government. A person charged with the administration |
|
1 | or distribution of the property or estate who violates the |
2 | provisions of this section shall be personally liable for the |
3 | taxes imposed by this chapter which are accrued and unpaid and |
4 | chargeable against the person whose property or estate is being |
5 | administered or distributed. |
6 | (f) Other remedies.--Subject to the limitations contained in |
7 | this chapter as to the assessment of taxes, nothing contained in |
8 | this section shall be construed to restrict, prohibit or limit |
9 | the use by the department in collecting taxes due and payable of |
10 | another remedy or procedure available at law or equity for the |
11 | collection of debts. |
12 | Section 517-A. Tax suit reciprocity. |
13 | The courts of this Commonwealth shall recognize and enforce |
14 | liabilities for natural gas severance taxes lawfully imposed by |
15 | any other state, provided that the other state recognizes and |
16 | enforces the tax set forth in this chapter. |
17 | Section 518-A. Service. |
18 | A producer is deemed to have appointed the Secretary of the |
19 | Commonwealth its agent for the acceptance of service of process |
20 | or notice in a proceeding for the enforcement of the civil |
21 | provisions of this chapter and service made upon the Secretary |
22 | of the Commonwealth as agent shall be of the same legal force |
23 | and validity as if the service had been personally made upon the |
24 | producer. Where service cannot be made upon the producer in the |
25 | manner provided by other laws of this Commonwealth relating to |
26 | service of process, service may be made upon the Secretary of |
27 | the Commonwealth. In that case, a copy of the process or notice |
28 | shall be personally served upon any agent or representative of |
29 | the producer who may be found within this Commonwealth or, where |
30 | no agent or representative may be found, a copy of the process |
|
1 | or notice shall be sent via registered mail to the producer at |
2 | the last known address of its principal place of business, home |
3 | office or residence. |
4 | Section 519-A. Refunds. |
5 | Under Article XXVII of the act of March 4, 1971 (P.L.6, |
6 | No.2), known as the Tax Reform Code of 1971, the department |
7 | shall refund all taxes, interest and penalties paid to the |
8 | Commonwealth under the provisions of this chapter to which the |
9 | Commonwealth is not rightfully entitled. The refunds shall be |
10 | made to the person or the person's heirs, successors, assigns or |
11 | other personal representatives who paid the tax, provided that |
12 | no refund shall be made under this section regarding a payment |
13 | made by reason of an assessment where a taxpayer has filed a |
14 | petition for reassessment under section 2702 of the Tax Reform |
15 | Code of 1971 to the extent the petition is adverse to the |
16 | taxpayer by a decision which is no longer subject to further |
17 | review or appeal. Nothing in this chapter shall prohibit a |
18 | taxpayer who has filed a timely petition for reassessment from |
19 | amending it to a petition for refund where the petitioner paid |
20 | the tax assessed. |
21 | Section 520-A. Refund petition. |
22 | (a) General rule.--Except as provided for in subsection (b), |
23 | the refund or credit of tax, interest or penalty provided for by |
24 | section 519-A shall be made only where the person who has paid |
25 | the tax files a petition for refund with the department under |
26 | Article XXVII of the act of March 4, 1971 (P.L.6, No.2), known |
27 | as the Tax Reform Code of 1971, within the time limits of |
28 | section 3003.1 of the Tax Reform Code of 1971. |
29 | (b) Natural gas severance tax.--A refund or credit of tax, |
30 | interest or penalty paid as a result of an assessment made by |
|
1 | the department under section 506-A, shall be made only where the |
2 | person who has paid the tax files with the department a petition |
3 | for a refund with the department under Article XXVII within the |
4 | time limits of section 3003.1 of the Tax Reform Code of 1971. |
5 | The filing of a petition for refund, under the provisions of |
6 | this subsection, shall not affect the abatement of interest, |
7 | additions or penalties to which the person may be entitled by |
8 | reason of his payment of the assessment. |
9 | Section 521-A. Rules and regulations. |
10 | The department is charged with the enforcement of the |
11 | provisions of this chapter and is authorized and empowered to |
12 | prescribe, adopt, promulgate and enforce rules and regulations |
13 | not inconsistent with the provisions of this chapter relating to |
14 | any matter or thing pertaining to the administration and |
15 | enforcement of the provisions of this chapter and the collection |
16 | of taxes, penalties and interest imposed by this chapter. The |
17 | department may prescribe the extent, if any, to which any of the |
18 | rules and regulations shall be applied without retroactive |
19 | effect. |
20 | Section 522-A. Recordkeeping. |
21 | (a) General rule.--Every person liable for any tax imposed |
22 | by this chapter, or for the collection of such tax, shall keep |
23 | records, including those enumerated in subsection (b), render |
24 | statements, make returns and comply with the rules and |
25 | regulations as the department may prescribe regarding matters |
26 | pertinent to the person's business. Whenever it is necessary, |
27 | the department may require a person, by notice served upon the |
28 | person or by regulations, to make returns, render statements or |
29 | keep records as the department deems sufficient to show whether |
30 | or not a person is liable to pay tax under this chapter. |
|
1 | (a.1) Records.--Records to be maintained are: |
2 | (1) Wellhead meter charts for each reporting period and |
3 | the meter calibration and maintenance records. If turbine |
4 | meters are in use, the maintenance records will be made |
5 | available to the department upon request. |
6 | (2) Records, statements and other instruments furnished |
7 | to a producer by a person to whom the producer delivers for |
8 | sale, transport or delivery of natural gas. |
9 | (3) Records, statements and other instruments as the |
10 | department may prescribe by regulation. |
11 | (b) Records of nonresidents.--A nonresident who does |
12 | business in this Commonwealth as a producer shall keep adequate |
13 | records of the business and of the tax due as a result. The |
14 | records shall be retained within this Commonwealth unless |
15 | retention outside this Commonwealth is authorized by the |
16 | department. The department may require a taxpayer who desires to |
17 | retain records outside this Commonwealth to assume reasonable |
18 | out-of-State audit expenses. |
19 | (c) Keeping of separate records.--A producer who is engaged |
20 | in another business or businesses which do not involve the |
21 | severing of natural gas taxable under this chapter, shall keep |
22 | separate books and records of the businesses so as to show the |
23 | taxable severing of natural gas under this chapter separately |
24 | from other business activities not taxable hereunder. If any |
25 | person fails to keep separate books and records, the person |
26 | shall be liable for a penalty equaling 100% of tax due under |
27 | this chapter for the period where separate records were not |
28 | maintained. |
29 | Section 523-A. Examinations. |
30 | The department or any of its authorized agents are authorized |
|
1 | to examine the books, papers and records of any taxpayer in |
2 | order to verify the accuracy and completeness of any return made |
3 | or, if no return was made, to ascertain and assess the tax |
4 | imposed by this chapter. The department may require the |
5 | preservation of all books, papers and records for any period |
6 | deemed proper by it but not to exceed three years from the end |
7 | of the calendar year to which the records relate. Every taxpayer |
8 | is required to give to the department or its agent the means, |
9 | facilities and opportunity for examinations and investigation |
10 | under this section. The department is further authorized to |
11 | examine any person, under oath, concerning the taxable severing |
12 | of natural gas by any taxpayer or concerning any other matter |
13 | relating to the enforcement or administration of this chapter, |
14 | and to this end may compel the production of books, papers and |
15 | records and the attendance of all persons whether as parties or |
16 | witnesses whom it believes to have knowledge of relevant |
17 | matters. The procedure for the hearings or examinations shall be |
18 | the same as that provided by the act of April 9, 1929 (P.L.343, |
19 | No. 176), known as The Fiscal Code. |
20 | Section 524-A. Unauthorized disclosure. |
21 | Any information gained by the department as a result of any |
22 | return, examination, investigation, hearing or verification |
23 | required or authorized by this chapter shall be confidential |
24 | except for official purposes and except in accordance with |
25 | proper judicial order or as otherwise provided by law, and any |
26 | person unlawfully divulging the information shall be guilty of a |
27 | misdemeanor and shall, upon conviction, be sentenced to pay a |
28 | fine of not more than $1000 and costs of prosecution or to |
29 | imprisonment for not more than one year, or both. |
30 | Section 525-A. Cooperation with other governments. |
|
1 | Notwithstanding the provisions of section 517-A, the |
2 | department may permit the Commissioner of the Internal Revenue |
3 | Service of the United States, the proper officer of any state or |
4 | the authorized representative of either of them to inspect the |
5 | tax returns of any taxpayer, or may furnish to the commissioner |
6 | or officer or to either of their authorized representative an |
7 | abstract of the return of any taxpayer, or supply him with |
8 | information concerning any item contained in any return or |
9 | disclosed by the report of any examination or investigation of |
10 | the return of any taxpayer. This permission shall be granted |
11 | only if the laws of the United States or another state grant |
12 | substantially similar privileges to the proper officer of the |
13 | Commonwealth charged with the administration of this chapter. |
14 | Section 526-A. Bonds. |
15 | (a) Taxpayer to file bond.--The department may require a |
16 | nonresident natural person or any foreign corporation, |
17 | association, fiduciary or other entity, not authorized to do |
18 | business within this Commonwealth or not having an established |
19 | place of business in this Commonwealth and subject to the tax |
20 | imposed by section 503-A, to file a bond issued by a surety |
21 | company authorized to do business in this Commonwealth and |
22 | approved by the Insurance Commissioner as to solvency and |
23 | responsibility, in amounts as it may fix, to secure the payment |
24 | of any tax or penalties due or which may become due from a |
25 | nonresident natural person, corporation, association, fiduciary |
26 | or other entity whenever it deems it necessary to protect the |
27 | revenues obtained under this chapter. The department may also |
28 | require a bond of a person petitioning the department for |
29 | reassessment in the case of any assessment over $500 or where, |
30 | in its opinion, the ultimate collection is in jeopardy. For a |
|
1 | period of three years, the department may require a bond of any |
2 | person who has, on three or more occasions within a 12-month |
3 | period, either filed a return or made payment to the department |
4 | more than 30 days late. In the event the department determines a |
5 | taxpayer is required to file a bond, it shall give notice to the |
6 | taxpayer specifying the amount of the bond required. The |
7 | taxpayer shall file the bond within five days after notice is |
8 | given by the department unless, within five days, the taxpayer |
9 | shall request in writing a hearing before the secretary or his |
10 | representative. At the hearing, the necessity, propriety and |
11 | amount of the bond shall be determined by the secretary or the |
12 | secretary's representative. The determination shall be final and |
13 | the taxpayer shall comply with it within 15 days after notice is |
14 | mailed to the taxpayer. |
15 | (b) Securities in lieu of bond.--In lieu of the bond |
16 | required by this section securities approved by the department |
17 | or cash in a prescribed amount may be deposited. The securities |
18 | or cash shall be kept in the custody of the department. The |
19 | department may apply the securities or cash to the tax imposed |
20 | by this chapter and interest or penalties due without notice to |
21 | the depositor. The securities may be sold by the department to |
22 | pay the tax and/or interest or penalties due at public or |
23 | private sale upon five days' written notice to the depositor. |
24 | (c) Failure to file bond.--The department may file a lien |
25 | under section 516-A against any taxpayer who fails to file a |
26 | bond when required to do so under this section. All funds |
27 | received upon execution of the judgment on the lien shall be |
28 | refunded to the taxpayer with 3% interest, should a final |
29 | determination be made that it does not owe any payment to the |
30 | department. |
|
1 | Section 527-A. Accounts established. |
2 | (a) Natural Gas Severance Tax Account.-- |
3 | (1) The Natural Gas Severance Tax Account is established |
4 | as a restricted account within the General Fund. |
5 | (2) The proceeds of the tax imposed under section 503-A, |
6 | penalties and interest imposed under this chapter, less the |
7 | amounts appropriated under section 529-A, shall be deposited |
8 | into the account. |
9 | (3) The money in the account shall only be used in |
10 | accordance with section 528-A. |
11 | (b) Local Government Services Account.-- |
12 | (1) The Local Government Services Account is established |
13 | as a restricted account within the General Fund. |
14 | (2) The allocation under section 528-A shall be |
15 | deposited into the Local Government Services Account and |
16 | shall be distributed as provided by law. |
17 | (c) Oil and Gas Environmental Disaster Recovery Account.-- |
18 | (1) The Oil and Gas Environmental Disaster Recovery |
19 | Account is established as a restricted account within the |
20 | General Fund. |
21 | (2) The money in the account shall only be used to |
22 | provide moneys to fund recovery costs associated with an |
23 | environmental disaster occurring as a result of oil and gas |
24 | drilling within this Commonwealth and shall only be expended |
25 | by special appropriation by the General Assembly. |
26 | Section 528-A. Transfers and distributions. |
27 | On the first business day of July each fiscal year, the State |
28 | Treasurer shall make the following transfers and distributions |
29 | of the money in the Natural Gas Severance Tax Account |
30 | established under section 527-A(a): |
|
1 | (1) Thirty-five percent to the Local Government Services |
2 | Account established under section 527-A(b), to be further |
3 | distributed by the State Treasurer as follows: |
4 | (i) Thirty percent to counties with producing sites. |
5 | The money under this subparagraph shall be distributed to |
6 | each eligible county based on a formula that divides the |
7 | number of producing sites in the county by the total |
8 | number of producing sites in all the counties in this |
9 | Commonwealth with the resulting percentage multiplied |
10 | times the money available for distribution. |
11 | (ii) Forty percent to municipalities with producing |
12 | sites. The money under this subparagraph shall be |
13 | distributed to each eligible municipality based on a |
14 | formula that divides the number of producing sites in the |
15 | municipality by the total number of producing sites in |
16 | all municipalities in this Commonwealth with the |
17 | resulting percentage multiplied times the money available |
18 | for distribution. |
19 | (iii) Twenty percent to municipalities with no |
20 | producing sites located in a county with producing sites. |
21 | The money under this subparagraph shall be distributed to |
22 | each eligible municipality based on a formula that |
23 | divides the number of producing sites in the county by |
24 | the total number of producing sites in all counties in |
25 | this Commonwealth with the resulting percentage |
26 | multiplied times the money available for distribution. |
27 | The State Treasurer shall distribute an equal share to |
28 | each eligible municipality within the same county. |
29 | (iv) Ten percent to the Pennsylvania Emergency |
30 | Management Agency to be distributed to fire and ambulance |
|
1 | services in counties with producing sites in accordance |
2 | with the procedures established in 35 Pa.C.S. Ch. 78 |
3 | (relating to grants to volunteer fire companies and |
4 | volunteer services). |
5 | (v) Only producing sites on which the tax is levied |
6 | under section 503-A(a) shall be included in any of the |
7 | calculations made under this paragraph. |
8 | (2) Twenty percent to the Pennsylvania Infrastructure |
9 | Investment Authority. The funds under this paragraph shall be |
10 | used solely for the construction or upgrade of wastewater |
11 | treatment plants. Fifty percent of the money received under |
12 | this paragraph shall be used for wastewater treatment plants |
13 | that treat water from hydraulic fracturing during gas |
14 | drilling. |
15 | (3) Fifteen percent to the Environmental Stewardship |
16 | Fund. |
17 | (4) Ten percent to the Department of Transportation for |
18 | the reconstruction, maintenance and repair of State roadways |
19 | and bridges affected by Marcellus Shale gas drilling |
20 | activities. The funds under this paragraph shall be allocated |
21 | in addition to any funds normally and customarily allocated |
22 | to the reconstruction, maintenance and repair of roadways and |
23 | bridges by the Department of Transportation. |
24 | (5) Six percent to the Liquid Fuels Tax Fund for the |
25 | reconstruction, maintenance and repair of State roadways and |
26 | bridges. The funds under this paragraph shall be: |
27 | (i) Allocated in addition to and not in lieu of any |
28 | funds normally and customarily allocated to the |
29 | reconstruction, maintenance and repair of roads and |
30 | bridges by the Department of Transportation. |
|
1 | (ii) Distributed equally among all the 67 counties |
2 | of this Commonwealth. |
3 | (6) Three percent to the Conservation District Fund for |
4 | distribution to county conservation districts pursuant to |
5 | guidelines established by the State Conservation Commission. |
6 | (7) Three percent to the Pennsylvania Fish and Boat |
7 | Commission. |
8 | (8) Two percent to the Pennsylvania Game Commission. |
9 | (9) Two percent to the Department of Public Welfare to |
10 | provide cash crisis grants to low-income households under the |
11 | Low Income Home Energy Assistance Program. |
12 | (10) Two percent to the Hazardous Sites Cleanup Fund. |
13 | (11) Two percent to the Oil and Gas Environmental |
14 | Disaster Recovery Account established under section 527-A(c). |
15 | Section 529-A. 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 | CHAPTER 5-B |
21 | MARCELLUS SHALE JOB CREATION TAX CREDIT |
22 | Section 501-B. Definitions. |
23 | The following words and phrases when used in this chapter |
24 | shall have the meanings given to them in this section unless the |
25 | context clearly indicates otherwise: |
26 | "Base period." As follows: |
27 | (1) Except as set forth in paragraph (2), the three |
28 | years immediately preceding the date on which a company may |
29 | begin creating new jobs which may be eligible for job |
30 | creation tax credits. |
|
1 | (2) If a company has been in business in this |
2 | Commonwealth for less than three years, the period which it |
3 | has been in business in this Commonwealth. |
4 | "Department." The Department of Community and Economic |
5 | Development of the Commonwealth. |
6 | "Job creation tax credits." Tax credits for job creation for |
7 | which the department has issued a certificate under this |
8 | chapter. |
9 | "New job." A full-time job, the average hourly rate, |
10 | excluding benefits, for which must be at least 350% of the |
11 | Federal minimum wage, created within a municipality located in |
12 | this Commonwealth by a company within three years from the start |
13 | date. The term includes a job which was previously held by a |
14 | nonresident and is filled by a resident. The term does not |
15 | include a temporary or seasonal job. |
16 | "Nonresident." An individual who does not reside in this |
17 | Commonwealth. |
18 | "Qualified apprenticeship training program." A program |
19 | registered with the Apprenticeship and Training council within |
20 | the Department of Labor and Industry that is in compliance with |
21 | applicable Federal and State laws and regulations and which |
22 | requires at least 2,000 but not more than 10,000 hours of on- |
23 | the-job apprenticeship training. |
24 | "Resident." Any natural person who is considered a resident |
25 | of this Commonwealth under the act of March 4, 1971 (P.L.6, |
26 | No.2), known as the Tax Reform Code of 1971. |
27 | "Start date." The date on which a company may begin creating |
28 | new jobs which may be eligible for job creation tax credits. |
29 | "Year one." A one-year period immediately following the |
30 | start date. |
|
1 | "Year three." A one-year period immediately following the |
2 | end of year two. |
3 | "Year two." A one-year period immediately following the end |
4 | of year one. |
5 | Section 502-B. Eligibility. |
6 | In order to be eligible to receive job creation tax credits |
7 | under this chapter, a company must demonstrate to the department |
8 | the following: |
9 | (1) The company's financial stability and the project's |
10 | financial viability. |
11 | (2) The company's express intent to maintain operations |
12 | in this Commonwealth for a period of five years from the date |
13 | the company submits its tax credit certificate to the |
14 | Department of Revenue. |
15 | (3) The company is in conformity with industry laws and |
16 | regulations overseen and enforced by the Department of |
17 | Environmental Protection. |
18 | Section 503-B. Application process. |
19 | (a) Application.--A company must complete and submit to the |
20 | department a job creation tax credit application along with a |
21 | copy of the permit issued by the Department of Environmental |
22 | Protection providing that the company has obtained the necessary |
23 | permit allowing the company to drill in this Commonwealth or a |
24 | statement from the Department of Environmental Protection |
25 | stating the same. The Department of Environmental Protection |
26 | shall notify the Department of Labor and Industry, the |
27 | Department of Revenue and the department upon suspension or |
28 | revocation of drilling permits or other changes that affect the |
29 | company's ability to continuously drill in this Commonwealth. |
30 | (b) Applicant priority.--The department shall give priority |
|
1 | to eligible applicants that will place the following workers in |
2 | new jobs: |
3 | (1) Workers who have completed a qualified |
4 | apprenticeship training program or a job training program |
5 | approved by the Department of Labor and Industry. |
6 | (2) Dislocated workers under the act of December 18, |
7 | 2001 (P.L.949, No.114), known as the Workforce Development |
8 | Act, who meet any one of the following conditions: |
9 | (i) Have been terminated or laid off or have |
10 | received notice of termination or layoff, and are |
11 | eligible for or have exhausted unemployment compensation |
12 | benefits. |
13 | (ii) Are unlikely to return to the industry or |
14 | occupation in which the individuals were employed. |
15 | (iii) Have been terminated or received notice of |
16 | termination as a result of the permanent closure or |
17 | relocation of a plant, facility or plant operation in |
18 | which the individuals were employed. |
19 | (iv) Are chronically unemployed. |
20 | (v) Have limited opportunities of employment in the |
21 | geographic area in which the individuals reside. |
22 | (vi) Are individuals who may face substantial |
23 | barriers to employment because of age or disability. |
24 | (3) Workers who have been unemployed for at least six |
25 | months. |
26 | (4) Underemployed workers who require skill training to |
27 | meet industry demands or increase employment opportunities. |
28 | (c) Approval.--If the department approves the company's |
29 | application, the department and the company shall execute a |
30 | commitment letter containing the following: |
|
1 | (1) A description of the project. |
2 | (2) The number of new jobs to be created. |
3 | (3) The amount of private capital investment in the |
4 | project. |
5 | (4) The maximum job creation tax credit amount the |
6 | company may claim. |
7 | (5) A signed statement that the company intends to |
8 | maintain its operation in this Commonwealth for five years |
9 | from the start date. |
10 | (6) A signed statement from the company that the company |
11 | will provide to the department a list of workers which |
12 | satisfies the requirements of subsection (b) for which the |
13 | company will claim tax credit, including documentation of |
14 | each worker's status as a resident of this Commonwealth. |
15 | (7) Such other information as the department deems |
16 | appropriate. |
17 | (d) Commitment letter.--After a commitment letter has been |
18 | signed by both the Commonwealth and the company, the company |
19 | shall receive a job creation tax credit certificate and filing |
20 | information. |
21 | Section 504-B. Tax credits. |
22 | (a) Maximum amount.--A company may claim a tax credit of |
23 | $2,500 per new job created and up to the maximum job creation |
24 | tax credit amount specified in the commitment letter. |
25 | (b) Determination of new jobs created.-- |
26 | (1) New jobs shall be deemed created in year one to the |
27 | extent that the company's average employment by quarter |
28 | during year one exceeds the company's average employment |
29 | level during the company's base period, as adjusted for any |
30 | job held by a nonresident during the period which is no |
|
1 | longer held by a nonresident. |
2 | (2) New jobs shall be deemed created in year two to the |
3 | extent that the company's average employment by quarter |
4 | during year two exceeds the company's average employment by |
5 | quarter during year one. |
6 | (3) New jobs shall be deemed created in year three to |
7 | the extent that the company's average employment by quarter |
8 | during year three exceeds the company's average employment by |
9 | quarter during year two. |
10 | (c) Applicable taxes.--A company may apply the tax credit to |
11 | 100% of the company's corporate net income tax, capital stock |
12 | and franchise tax or the capital stock and franchise tax of a |
13 | shareholder of the company if the company is a Pennsylvania S |
14 | corporation, personal income tax or the personal income tax of |
15 | shareholders of a Pennsylvania S corporation or any combination |
16 | thereof. |
17 | (d) Tax credit term.--A company may claim the job creation |
18 | tax credit for each new job created, as approved by the |
19 | department, for a period determined by the department but not to |
20 | exceed five years from the date the company first submits a job |
21 | creation tax credit certificate. |
22 | (e) Availability of tax credits.--Each fiscal year, |
23 | $25,000,000 in tax credits shall be made available to the |
24 | department and may be awarded by the department in accordance |
25 | with this chapter. |
26 | Section 505-B. Prohibitions. |
27 | The following actions with regard to job creation tax credits |
28 | are prohibited: |
29 | (1) Approval of jobs that have been created prior to the |
30 | start date, unless the job was held by a nonresident who has |
|
1 | been replaced by a resident. |
2 | (2) The assignment, transfer or use of credits by any |
3 | other company, provided, however, that tax credits may be |
4 | assigned in whole or in part to an affiliated entity. As used |
5 | in this paragraph, the term "affiliated entity" means an |
6 | entity which is part of the same "affiliated group," as |
7 | defined by section 1504(a)(1) of the Internal Revenue Code of |
8 | 1986 (Public Law 99-514, 26 U.S.C. § 1504(a)(1)), as the |
9 | company awarded the credit. |
10 | Section 506-B. Penalties. |
11 | (a) Failure to create jobs.--A company which receives job |
12 | creation tax credits and fails to create the approved number of |
13 | new jobs within three years of the start date will be required |
14 | to refund to the Commonwealth the total amount of credit or |
15 | credits granted. |
16 | (b) Waiver.--The department may waive the penalties outlined |
17 | in subsection (a) if it is determined that a company's |
18 | operations were not maintained or the new jobs were not created |
19 | because of circumstances beyond the company's control. Such |
20 | circumstances include natural disasters or unforeseen industry |
21 | trends. |
22 | Section 507-B. Annual reports. |
23 | (a) Contents.--The department shall provide an annual report |
24 | on job creation tax credits which at a minimum shall include: |
25 | (1) A list of all job creation tax credit certificates |
26 | provided during the previous fiscal year. |
27 | (2) The name and location of each company receiving job |
28 | creation tax credit certificates. |
29 | (3) An analysis of the job creation tax credits' ability |
30 | to create jobs in this Commonwealth. |
|
1 | (4) Any other information that may be deemed relevant by |
2 | the department. |
3 | (b) Submission.--The annual report shall be submitted to the |
4 | Governor, the Majority Leader of the Senate, the Minority Leader |
5 | of the Senate, the Majority Leader of the House of |
6 | Representatives and the Minority Leader of the House of |
7 | Representatives by March 1 of the first full year following the |
8 | effective date of this section and March 1 of each year |
9 | thereafter. |
10 | Section 508-B. Notice of availability of tax credits. |
11 | The department shall publish notice of the availability of |
12 | the job creation tax credit on its publicly accessible Internet |
13 | website and make information available annually to the |
14 | Department of Labor and Industry Workforce Investment Board for |
15 | distribution to local boards. |
16 | Section 10. Sections 601(a) and 602 of the act, amended July |
17 | 2, 1992 (P.L.365, No.78), are amended to read: |
18 | Section 601. Well plugging funds. |
19 | (a) All fines, civil penalties, permit and registration fees |
20 | collected under this act are hereby appropriated to the |
21 | Department of Environmental [Resources] Protection to carry out |
22 | the purposes of this act. |
23 | * * * |
24 | Section 602. Local ordinances. |
25 | Except with respect to ordinances adopted pursuant to the act |
26 | of July 31, 1968 (P.L.805, No.247), known as the Pennsylvania |
27 | Municipalities Planning Code, [and], the act of October 4, 1978 |
28 | (P.L.851, No.166), known as the Flood Plain Management Act, and |
29 | the act of March 31, 1927 (P.L.98, No.69), referred to as the |
30 | Second Class City Zoning Law, all local ordinances and |
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1 | enactments purporting to regulate oil and gas well operations |
2 | regulated by this act are hereby preempted and superseded to the |
3 | extent the ordinances and enactments regulate the method of oil |
4 | and gas well operations. No ordinances or enactments adopted |
5 | pursuant to the aforementioned acts shall contain provisions |
6 | which impose conditions, requirements or limitations on the |
7 | [same features] method of oil and gas well operations regulated |
8 | by this act or that accomplish the same purposes as set forth in |
9 | this act. [The Commonwealth, by this enactment, hereby preempts |
10 | and supersedes the regulation of oil and gas wells as herein |
11 | defined.] Nothing in this act shall affect the traditional power |
12 | of local government to regulate zoning and land development of |
13 | oil and gas activities as well as other aspects, such as the |
14 | time and the place of operations to protect the health, safety |
15 | and welfare of the general public through local ordinances and |
16 | enactments. |
17 | Section 11. The act is amended by adding a section to read: |
18 | Section 604.1. Moratorium. |
19 | (a) Notwithstanding any other provision of law, there is |
20 | hereby established a moratorium on the new leasing and the |
21 | issuance of new well permits under this act for any State forest |
22 | land not under a lease agreement by September 1, 2010, for the |
23 | natural gas drilling on State forest lands in the Marcellus |
24 | Shale formation in this Commonwealth. The purpose of the |
25 | moratorium shall be to provide additional time to review the |
26 | permitting process and guidelines and regulations to protect the |
27 | public land, health and safety. |
28 | (b) The moratorium shall expire two years after the |
29 | effective date of this section. |
30 | Section 12. This act shall take effect in 60 days. |
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