| |
|
| |
| THE GENERAL ASSEMBLY OF PENNSYLVANIA |
| |
| SENATE BILL |
|
| |
| |
| INTRODUCED BY FERLO, FONTANA, HUGHES, TARTAGLIONE, LEACH, FARNESE AND DINNIMAN, MARCH 28, 2011 |
| |
| |
| REFERRED TO ENVIRONMENTAL RESOURCES AND ENERGY, MARCH 28, 2011 |
| |
| |
| |
| AN ACT |
| |
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, for well permits, for well |
18 | location restrictions and for protection of water supplies; |
19 | providing for use of surface impoundments for temporary |
20 | flowback storage; and further providing for well reporting |
21 | requirements, for bonding, for enforcement orders, for |
22 | penalties, for civil penalties, for well plugging funds and |
23 | for local ordinances. |
24 | The General Assembly of the Commonwealth of Pennsylvania |
25 | hereby enacts as follows: |
26 | Section 1. Section 103 of the act of December 19, 1984 |
27 | (P.L.1140, No.223), known as the Oil and Gas Act, is amended by |
28 | adding definitions to read: |
|
1 | Section 103. Definitions. |
2 | The following words and phrases when used in this act shall |
3 | have the meanings given to them in this section unless the |
4 | context clearly indicates otherwise: |
5 | "12-digit Hydrologic Unit Code." A subwatershed, generally |
6 | ranging in size from 10,000 to 40,000 acres, as designated by |
7 | the United States Geological Survey and the United States |
8 | Department of Agriculture Natural Resources Conservation |
9 | Service. |
10 | * * * |
11 | "Body of water." A natural or artificial lake, pond, |
12 | reservoir, swamp, marsh or wetland. |
13 | * * * |
14 | "Erosion and sediment control permit." A permit issued by |
15 | the Department of Environmental Protection and required for |
16 | earth disturbance activities associated with oil and gas |
17 | activities. |
18 | "FEMA." The Federal Emergency Management Agency. |
19 | "Flood." A general but temporary condition of partial or |
20 | complete inundation of normally dry land areas from the overflow |
21 | of streams, rivers or other waters of this Commonwealth. |
22 | "Floodplain." The lands adjoining a river or stream that |
23 | have been or may be expected to be inundated by flood waters in |
24 | a 100-year frequency flood. Unless otherwise specified, the |
25 | boundary of the floodplain is as indicated on maps and flood |
26 | insurance studies provided by the Federal Emergency Management |
27 | Agency or equivalent floodplain maps and studies. In an area |
28 | where no such maps or studies have defined the boundary of the |
29 | 100-year floodplain, it is assumed, absent evidence to the |
30 | contrary, that the floodplain extends from the stream to 100 |
|
1 | feet from the top of the streambank. |
2 | "Floodway." The channel of the watercourse and portions of |
3 | the adjoining floodplains which are reasonably required to carry |
4 | and discharge the 100-year frequency flood. Unless otherwise |
5 | specified, the boundary of the floodway is as indicated on maps |
6 | and flood insurance studies provided by the Federal Emergency |
7 | Management Agency. In an area where no Federal Emergency |
8 | Management Agency maps or studies have defined the boundary of |
9 | the 100-year frequency floodway, it is assumed, absent evidence |
10 | to the contrary, that the floodway extends from the stream to 50 |
11 | feet from the top of the streambank. |
12 | * * * |
13 | "Stream." A watercourse. |
14 | "Unconventional formation." Formations such as the |
15 | Rhinestreet, Burket, Marcellus, Madata and Utica shale, or other |
16 | formations existing below the base of the Elk Sandstone or its |
17 | geologic equivalent stratigraphic interval. |
18 | "Unconventional well." A well intending to produce or |
19 | producing from an unconventional formation. |
20 | "Watercourse." A channel or conveyance of surface water |
21 | having defined bed and banks, whether natural or artificial, |
22 | with perennial or intermittent flow. |
23 | * * * |
24 | "Wild trout stream." A stream classified as supporting |
25 | naturally reproducing trout populations by the Fish and Boat |
26 | Commission. |
27 | "Wilderness trout stream." A surface water designated by the |
28 | Fish and Boat Commission to protect and promote native trout |
29 | fisheries and maintain and enhance wilderness aesthetics and |
30 | ecological requirements necessary for the natural reproduction |
|
1 | of trout. |
2 | * * * |
3 | Section 2. Section 201(a), (b), (e), (f) and (g) of the act, |
4 | amended July 2, 1992 (P.L.365, No.78), are amended to read: |
5 | Section 201. Well permit. |
6 | (a) No person shall drill a well or alter any existing well, |
7 | except for alterations which satisfy the requirements of |
8 | subsection (j), without having first obtained a well permit |
9 | pursuant to subsections (b), (c), (d) and (e). A copy of the |
10 | permit shall be kept at the well site during [drilling or] |
11 | preparation and construction of the well site or access road, |
12 | drilling, operation and alteration of the well. However, no |
13 | person shall be required to obtain a permit to redrill a |
14 | nonproducing well, if: |
15 | (1) the redrilling has been evaluated and approved as |
16 | part of an order from the department authorizing the cleaning |
17 | out and plugging or replugging of a nonproducing well, |
18 | pursuant to section 13(c) of the act of December 18, 1984 |
19 | (P.L.1069, No.214), known as the Coal and Gas Resource |
20 | Coordination Act; and |
21 | (2) the redrilling is incidental to the plugging or |
22 | replugging operation and the well subsequently is plugged |
23 | within 15 days of redrilling. |
24 | (b) The permit application shall be accompanied by a plat |
25 | prepared by a competent engineer or a competent surveyor, on |
26 | forms to be furnished by the department, showing the political |
27 | subdivision and county in which the tract of land upon which the |
28 | well to be drilled, operated or altered, is located, the name of |
29 | the surface landowner of record and lessor, the name of all |
30 | surface landowners or water purveyors whose water supplies are |
|
1 | within 1,000 feet, or in the case of an unconventional well |
2 | within 5,000 feet, of the [proposed well location] outer |
3 | boundary of the proposed well pad and access roads, the name of |
4 | the owner of record or operator of all known underlying workable |
5 | coal seams, if any, the acreage in the tract to be drilled, the |
6 | proposed location of the well determined by survey, the courses |
7 | and distances of such location from two or more permanent |
8 | identifiable points or landmarks on said tract boundary corners, |
9 | the proposed angle and direction of such well, if the well is to |
10 | be deviated substantially from a vertical course, the number or |
11 | other identification to be given the well, the workable coal |
12 | seams, if any, underlying the tract of land upon which the well |
13 | is to be drilled, operated or altered, which are to be cased off |
14 | in accordance with section 207, and such information needed by |
15 | the department to administer this act. The applicant shall |
16 | forward, by certified mail, a copy of said plat to each |
17 | political subdivision in which the well is to be located, the |
18 | surface landowner, all surface landowners or water purveyors |
19 | whose water supplies are within 1,000 feet, or in the case of an |
20 | unconventional well within 5,000 feet, of the [proposed well |
21 | location] outer boundary of the proposed well pad and access |
22 | roads, the owner and lessee, if any, of such coal seams, and |
23 | every coal operator required to be identified on the well permit |
24 | application and shall submit proof of such notification with the |
25 | well permit application. With respect to surface owners, |
26 | notification shall be accomplished under this section by sending |
27 | notice to the persons to whom the tax notices for said surface |
28 | property are sent, as indicated in the assessment books in the |
29 | county in which the property is located. With respect to surface |
30 | landowners or water purveyors whose water supplies are within |
|
1 | 1,000 feet, or in the case of an unconventional well within |
2 | 5,000 feet, of the [proposed well location] outer boundary of |
3 | the proposed well pad and access roads, notification shall be |
4 | made on forms and in a manner prescribed by the department |
5 | sufficient to identify, for such persons, the rights afforded |
6 | them under section 208 and the advisability of taking their own |
7 | predrilling or prealteration survey. With respect to the |
8 | political subdivision in which the well is to be located, |
9 | notification shall be made on forms and in a manner prescribed |
10 | by the department. If the applicant submits to the department |
11 | written approval of the proposed well location by the political |
12 | subdivision in which the well is to be located, the surface |
13 | landowner and the coal operator, lessee or owner, if any, of the |
14 | coal underlying the proposed well location and no objections are |
15 | raised by the department within 15 days of filing or if no such |
16 | approval has been submitted and no objections are made to such |
17 | proposed well location within 15 days from receipt of such |
18 | notice by the political subdivision in which the well is to be |
19 | located, the surface landowner and the coal operator, lessee or |
20 | owner, if any, or by the department, the same shall be filed and |
21 | become a permanent record of such location, subject to |
22 | inspection at any time by any interested person. The application |
23 | form to operate an abandoned or orphan well shall notify the |
24 | applicant of its responsibilities to plug the well upon |
25 | abandonment. |
26 | * * * |
27 | (e) The department shall issue a permit within 45 days of |
28 | the submission of a permit application unless the department |
29 | denies the permit application for one or more of the [five] |
30 | reasons set forth below: Provided, however, That the department |
|
1 | shall have the right to extend such period for 15 days for cause |
2 | shown upon notification to the applicant of the reasons for that |
3 | extension. The department may impose such permit terms and |
4 | conditions as are necessary to assure compliance with this act |
5 | and other laws administered by the department. The department |
6 | shall have the authority to deny a permit to any person for the |
7 | following reasons: |
8 | (1) the well site for which a permit is requested is in |
9 | violation of any of the provisions of this act, or if |
10 | issuance of such permit would result in a violation of this |
11 | act or any other applicable environmental statute, rule or |
12 | regulation; |
13 | (2) the permit application is incomplete; |
14 | (3) unresolved objections to the well location by coal |
15 | mine owner or operator remain; |
16 | (4) the requirements of section 215 have not been met; |
17 | [or] |
18 | (5) the applicant, with respect to any other well or |
19 | wells which the applicant operates, is in continuing |
20 | violation of this act or any other applicable statute |
21 | administered by the department and the likely result of that |
22 | violation is an unsafe operation or environmental damage. If |
23 | a final determination has been made in the applicant's favor, |
24 | the permit denied shall be reconsidered and the violation |
25 | shall not be a consideration in the awarding of the permit. |
26 | The department may not collect an application fee for the |
27 | reconsideration[. The right of the department to deny a |
28 | permit under this paragraph shall not be effective until a |
29 | final administrative determination has been made of any of |
30 | these violations and no appeal is pending in which a stay has |
|
1 | been granted.]; |
2 | (6) the applicant failed to pay or file a return under |
3 | section 5A04, unless a valid appeal is in process. The |
4 | Secretary of Revenue shall notify the department of any |
5 | applicant who has failed to pay or file a return and who does |
6 | not have a valid appeal pending; or |
7 | (7) the applicant does not have a reasonable written |
8 | plan to reuse at least 30% of the total water that will be |
9 | used to hydraulically fracture the well. |
10 | (f) Upon issuance of a permit, the well operator may proceed |
11 | [with the drilling of] to prepare or construct the well site and |
12 | access roads and drill, operate or alter the well at the exact |
13 | location shown on the plat after providing the department, the |
14 | surface landowner and the local political subdivision in which |
15 | the well is to be located 24 hours' notice of the date that |
16 | drilling will commence. In noncoal areas where more than one |
17 | well is to be drilled as part of the same development project, |
18 | only the first well of the project need be located by survey. |
19 | The remaining wells of the project shall be shown on the plat in |
20 | a manner prescribed by regulation. Prior to drilling each of the |
21 | additional project wells, the well operator shall notify the |
22 | department of his intention and provide reasonable notice of the |
23 | date drilling will commence. Whenever, before or during the |
24 | drilling of any well which is not within the outside boundaries |
25 | of an operating coal mine, the well operator shall encounter |
26 | conditions of such a nature as to render drilling of the bore |
27 | hole or portions thereof more hazardous than usual, or otherwise |
28 | impossible, then the well operator shall have the right, upon |
29 | verbal notice to the department, to immediately plug all or |
30 | portions of the bore hole, if drilling has occurred, and to |
|
1 | commence a new bore hole not more than 50 feet distant if the |
2 | location of the new bore hole does not violate section 205 and |
3 | if, for wells subject to the act of July 25, 1961 (P.L.825, |
4 | No.359), known as the Oil and Gas Conservation Law, the new |
5 | location complies with any existing law, regulation or spacing |
6 | order and if the new bore hole is a minimum of 330 feet distant |
7 | from the nearest lease boundary. Within ten days of commencement |
8 | of the new bore hole, the well operator shall file with the |
9 | department a written notice of intention to plug, a well record, |
10 | a completion report, a plugging certificate for the original |
11 | bore hole and an amended plat for the new bore hole. The well |
12 | operator shall forward a copy of the amended plat to the surface |
13 | landowner identified on the well permit application within ten |
14 | days of commencement of the new well bore. |
15 | (g) The well permit number and operator's name, address and |
16 | telephone number shall be posted at the drilling site, in a |
17 | conspicuous manner, prior to [commencement of drilling] |
18 | initiating preparation and during construction of the well site |
19 | or access road, drilling, operation and alteration of the well. |
20 | * * * |
21 | Section 3. Section 205 of the act is amended to read: |
22 | Section 205. Well location restrictions. |
23 | (a) Wells may not be drilled within 200 feet, or in the case |
24 | of an unconventional well within 1,500 feet, measured |
25 | horizontally from any existing building or existing water well |
26 | without the written consent of the owner thereof. Where the |
27 | distance restriction would deprive the owner of the oil and gas |
28 | rights of the right to produce or share in the oil or gas |
29 | underlying said surface tract, the well operator may be granted |
30 | a variance from said distance restriction upon submission of a |
|
1 | plan which shall identify the additional measures, facilities or |
2 | practices to be employed during well site construction, drilling |
3 | and operations. The variance, if granted, shall include such |
4 | additional terms and conditions as the department shall require |
5 | to insure the safety and protection of affected persons and |
6 | property. The provisions may include insurance, bonding and |
7 | indemnification, as well as technical requirements. |
8 | (b) No well site may be prepared or well drilled within |
9 | [100] 500 feet measured horizontally from any [stream, spring or |
10 | body of water as identified on the most current 7 ½ minute |
11 | topographic quadrangle map of the United States Geological |
12 | Survey] watercourse, natural or artificial lake, pond or |
13 | reservoir or within [100 feet of any wetlands greater than one |
14 | acre in size.] the boundary of a wetland or the boundary that |
15 | affects the functions and values of a wetland. However, no well |
16 | may be drilled using hydraulic fracturing or horizontal drilling |
17 | within 2,500 feet of a surface water source, and within 1,000 |
18 | feet of a groundwater source or an exceptional value water |
19 | source as designated under 25 Pa. Code 93.4b (relating to |
20 | qualifying as High Quality or Exceptional Value Waters), that |
21 | serves a public water system. The distance from the public water |
22 | supply source, as identified by the department, shall be |
23 | measured as follows: |
24 | (1) For a surface water intake on a lake or reservoir, |
25 | the distance shall be measured from the boundary of the lake |
26 | or reservoir. |
27 | (2) For a surface water intake on a flowing stream, the |
28 | distance shall be measured from a semicircular radius |
29 | extending upstream of the surface water intake. |
30 | (3) For a groundwater source, the distance shall be |
|
1 | measured from the wellhead or spring. |
2 | The department may waive such distance restrictions upon |
3 | submission of a plan which shall identify the additional |
4 | measures, facilities or practices to be employed during well |
5 | site construction, drilling and operations. Such waiver, if |
6 | granted, shall impose such permit conditions as are necessary to |
7 | protect the waters of the Commonwealth. |
8 | (c) [The] On making a determination on a well permit, the |
9 | department shall[, on making a determination on a well permit,] |
10 | consider and may deny or condition a well permit based on the |
11 | impact of the proposed well on public resources to include, but |
12 | not be limited to, the following: |
13 | (1) Publicly owned parks, forests, gamelands and |
14 | wildlife areas. |
15 | (2) National or State scenic rivers. |
16 | (3) National natural landmarks. |
17 | (4) Habitats of rare and endangered flora and fauna and |
18 | other critical communities. |
19 | (5) Historical and archaeological sites listed on the |
20 | Federal or State list of historic places. |
21 | (6) Bodies of water and watercourses, including, but not |
22 | limited to, wetlands, wild trout streams and wilderness trout |
23 | streams. |
24 | (7) Sources used for public drinking water supplies. |
25 | (8) Whether the proposed well location is within a |
26 | floodplain. |
27 | (d) The department shall establish additional protective |
28 | measures for storage of hazardous chemicals and materials |
29 | intended to be used, or that have been used, on an |
30 | unconventional well drilling site within 1,000 feet of a |
|
1 | watercourse, natural or artificial lake, pond, reservoir, |
2 | wetland or groundwater source that serves a public water system, |
3 | or within 5,000 feet of a surface water source that serves a |
4 | public water system. |
5 | (e) Prior to submitting a permit application to the |
6 | department for a well or well site within a wild trout stream, |
7 | wilderness trout stream or a High Quality or Exceptional Value |
8 | watershed as indicated by the 12-digit Hydrologic Unit Code, the |
9 | applicant shall notify the Pennsylvania Fish and Boat |
10 | Commission. |
11 | Section 4. Section 208(a), (c) and (d) of the act are |
12 | amended and the section is amended by adding subsections to |
13 | read: |
14 | Section 208. Protection of water supplies. |
15 | (a) [Any] In addition to the requirements of subsection |
16 | (c.1), a well operator who affects a public or private water |
17 | supply by pollution or diminution shall restore or replace the |
18 | affected supply with an alternate source of water adequate in |
19 | quantity or quality for the purposes served by the supply. The |
20 | department shall ensure the restored or replaced water supply |
21 | meets the applicable water quality standards consistent with the |
22 | Safe Drinking Water Act (Public Law 93-523, 21 U.S.C. § 349 and |
23 | 42 U.S.C. §§ 201 and 300f et seq.), the act of May 1, 1984 |
24 | (P.L.206, No.43), known as the Pennsylvania Safe Drinking Water |
25 | Act, and predrilling or alteration water quality standards as |
26 | determined by the department. The Environmental Quality Board |
27 | shall promulgate regulations necessary to meet the requirements |
28 | of this subsection. |
29 | * * * |
30 | (b.1) The department shall establish a single Statewide |
|
1 | toll-free telephone number that persons may use to report cases |
2 | of water contamination. The Statewide toll-free telephone number |
3 | shall be provided in a conspicuous manner in the notification |
4 | required under section 201(b) and on the department's Internet |
5 | website. |
6 | (b.2) The department shall develop appropriate |
7 | administrative responses to calls received on the Statewide |
8 | toll-free number for water contamination. |
9 | (b.3) The department shall establish a website that lists |
10 | the confirmed cases of water supply contamination that result |
11 | from hydraulic fracturing. |
12 | (c) Unless rebutted by one of the five defenses established |
13 | in subsection (d), it shall be presumed that a well operator is |
14 | responsible for the pollution of a water supply that is within |
15 | 1,000 feet, or in the case of an unconventional well within |
16 | 5,000 feet, of the oil or gas well, where the pollution occurred |
17 | within six months after [the completion of drilling] the |
18 | drilling, stimulation or alteration of such well. |
19 | (c.1) If the affected water supply is within the rebuttable |
20 | presumption area as provided in subsection (c) and the |
21 | rebuttable presumption applies and the water user is without a |
22 | readily available alternative source of water, the operator |
23 | shall provide a temporary water supply within 24 hours of being |
24 | contacted by the water user or the department, whichever occurs |
25 | first. The temporary water supply provided under this subsection |
26 | shall be adequate in quantity and quality for the purposes |
27 | served by the supply. |
28 | (d) In order to rebut the presumption of liability |
29 | established in subsection (c), the well operator must |
30 | affirmatively prove one of the following five defenses: |
|
1 | (1) The pollution existed prior to the drilling, |
2 | stimulation or alteration [activity] activities as determined |
3 | by a predrilling or prealteration survey. |
4 | (2) The landowner or water purveyor refused to allow the |
5 | operator access to conduct a predrilling or prealteration |
6 | survey. |
7 | (3) The water supply is not within 1,000 feet, or in the |
8 | case of an unconventional well within 5,000 feet, of the |
9 | well. |
10 | (4) The pollution occurred more than six months after |
11 | [completion of drilling] the drilling, stimulation or |
12 | alteration activities. |
13 | (5) The pollution occurred as the result of some cause |
14 | other than the drilling, stimulation or alteration [activity] |
15 | activities. |
16 | * * * |
17 | Section 5. The act is amended by adding sections to read: |
18 | Section 208.1. Use of surface impoundments for temporary |
19 | flowback storage. |
20 | Where centralized flowback impoundments are used to |
21 | temporarily store flowback water, the department shall require |
22 | the use of dual liner systems with a leak detection system |
23 | installed between the two liners. The department shall inspect |
24 | such impoundments on a monthly basis. |
25 | Section 208.2. Transportation records; hydraulic fracturing |
26 | fluids. |
27 | Each well operator who transports hydraulic fracturing fluids |
28 | shall maintain records of the amount and destination of the |
29 | fluids transported. The records shall be on a form approved by |
30 | the department. |
|
1 | (1) Recordkeeping requirements shall be determined by |
2 | the department and shall include at least the following: |
3 | (i) The number of gallons of hydraulic fracturing |
4 | fluids used in the drilling, stimulation or alteration of |
5 | a well. |
6 | (ii) Upon completion of the well, the name of the |
7 | person or company who transports the hydraulic fracturing |
8 | fluids to a disposal site or a location other than the |
9 | well site. |
10 | (iii) The location where hydraulic fracturing fluids |
11 | were disposed or to which they were transported and the |
12 | volumes that were disposed of at each location. |
13 | (iv) The method of disposal. |
14 | (2) Records shall be retained by the well operator for a |
15 | period of five years. The records shall be made available to |
16 | the department upon request. |
17 | Section 6. Section 212(b) of the act, amended March 22, 2010 |
18 | (P.L.169, No.15), is amended and the section is amended by |
19 | adding subsections to read: |
20 | Section 212. Well reporting requirements. |
21 | * * * |
22 | (b) It shall be the duty of the well operator to keep |
23 | records of any well drilled or altered. A record of the well |
24 | containing such information as required by [regulation] the |
25 | department, including the information required under subsection |
26 | (b.1), shall be filed with the department within 30 days [of |
27 | cessation of drilling] after stimulation of the well. A |
28 | completion report containing such additional information as |
29 | required by regulation shall be filed with the department within |
30 | 30 days after [the completion] stimulation of the well and it |
|
1 | shall be kept on file by the department. Within 90 days after |
2 | the completion of drilling or recompletion of a well, if |
3 | requested by the department, the well operator shall submit a |
4 | copy of the electrical, radioactive or other standard industry |
5 | logs if they have been run. In addition, if requested by the |
6 | department within one year, the well operator shall file a copy |
7 | of drill stem test charts, formation water analysis, porosity, |
8 | permeability or fluid saturation measurements, core analysis and |
9 | lithologic log or sample description or other similar data as |
10 | compiled. No such information shall be required unless the well |
11 | operator has had such information compiled in the ordinary |
12 | course of business. No interpretation of the data is to be |
13 | filed. |
14 | (b.1) Report contents.--The completion report shall contain |
15 | the operator's stimulation record which shall include the |
16 | following: |
17 | (1) A descriptive list of the chemical additives in the |
18 | stimulation fluids, including any acid, biocide, breaker, |
19 | brine, corrosion inhibitor, crosslinker, demulsifier, |
20 | friction reducer, get, iron control, oxygen scavenger, pH |
21 | adjusting agent, proppant, scale inhibitor and surfactant. |
22 | (2) The percent by volume of each chemical additive in |
23 | the stimulation fluid. |
24 | (3) A list of the chemicals in the material safety data |
25 | sheets, by name and chemical abstract service number, |
26 | corresponding to the appropriate chemical additive. |
27 | (4) The percent by volume of each chemical list in the |
28 | material safety data sheets. |
29 | (5) The total volume of the base fluid. |
30 | (6) A list of water sources used under the approved |
|
1 | water management plan and the volume of water used. |
2 | (7) The pump rates and pressure used in the well. |
3 | (8) The depth at which potable aquifers are encountered. |
4 | (b.2) Trade secret or confidential proprietary |
5 | information.--When an operator submits its stimulation record |
6 | under subsection (b.1), it may designate specific portions of |
7 | the stimulation record as containing a trade secret or |
8 | confidential proprietary information. The department shall |
9 | prevent disclosure of the designated confidential information to |
10 | the extent permitted by the act of February 14, 2008 (P.L.6, |
11 | No.3), known as the Right-to-Know Law. However, in the event of |
12 | an emergency well, the department shall make available the |
13 | entire completion report to emergency personnel that respond. |
14 | (b.3) List of the chemical constituents.--In addition to |
15 | submitting a stimulation record to the department under |
16 | subsection (b.1) and subject to the protections afforded for |
17 | trade secrets and confidential proprietary information under the |
18 | Right-to-Know Law, the operator shall provide a list of the |
19 | chemical constituents of the chemical additives used to |
20 | hydraulically fracture a well, by name and chemical abstract |
21 | service number, unless the additive does not have a number, to |
22 | the department upon written request of the department. |
23 | * * * |
24 | Section 7. Section 215(a), (c), (d), (d.1) and (f) of the |
25 | act, amended July 2, 1992 (P.L.365, No.78), are amended to read: |
26 | Section 215. Bonding. |
27 | (a) (1) Except as provided in subsection (d) hereof, upon |
28 | filing an application for a well permit and before continuing |
29 | to operate any oil or gas well, the owner or operator thereof |
30 | shall file with the department a bond for the well and the |
|
1 | well site on a form to be prescribed and furnished by the |
2 | department. Any such bond filed with an application for a |
3 | well permit shall be payable to the Commonwealth and |
4 | conditioned that the operator shall faithfully perform all of |
5 | the drilling, water supply replacement, restoration and |
6 | plugging requirements of this act. Any such bond filed with |
7 | the department for a well in existence on the effective date |
8 | of this act shall be payable to the Commonwealth and |
9 | conditioned that the operator shall faithfully perform all of |
10 | the water supply replacement, restoration and plugging |
11 | requirements of this act. The amount of the bond required |
12 | shall be in the [amount of $2,500 per well for at least two |
13 | years following the effective date of this act, after which |
14 | time the bond amount] following amounts and may be adjusted |
15 | by the Environmental Quality Board every [two] three years to |
16 | reflect the projected costs to the Commonwealth of performing |
17 | well plugging[.]: |
18 | (i) For wells less than 2,500 feet in depth: |
19 | (A) $2,500 per well, provided the operator shall |
20 | not be required to provide a bond under this item |
21 | exceeding $35,000 for 25 wells. |
22 | (B) For operating 26 to 50 wells, $35,000 plus |
23 | $2,500 per well, provided the operator may not be |
24 | required to provide a bond under this item exceeding |
25 | $60,000. |
26 | (C) For operating 51 to 100 wells, $60,000 plus |
27 | $2,500 per well, provided the operator may not be |
28 | required to provide a bond under this item exceeding |
29 | $100,000. |
30 | (D) For operating over 100 wells, $100,000 plus |
|
1 | $2,500 per well, provided the operator may not be |
2 | required to provide a bond under this item exceeding |
3 | $250,000. |
4 | (ii) For wells between 2,500 feet and 5,000 feet in |
5 | depth: |
6 | (A) $5,000 per well, provided the operator may |
7 | not be required to provide a bond under this item |
8 | exceeding $70,000 for 25 wells. |
9 | (B) For operating 26 to 50 wells, $70,000 plus |
10 | $5,000 per well, provided the operator may not be |
11 | required to provide a bond under this item exceeding |
12 | $120,000. |
13 | (C) For operating 51 to 100 wells, $120,000 plus |
14 | $5,000 per well, provided the operator may not be |
15 | required to provide a bond under this item exceeding |
16 | $200,000. |
17 | (D) For operating over 100 wells, $200,000 plus |
18 | $5,000 per well, provided the operator may not be |
19 | required to provide a bond under this item exceeding |
20 | $500,000. |
21 | (iii) For wells over 5,000 feet in depth: |
22 | (A) $12,500 per well, provided the operator may |
23 | not be required to provide a bond under this item |
24 | exceeding $220,000 for 25 wells. |
25 | (B) For operating 26 to 50 wells, $220,000 plus |
26 | $12,500 per well, provided the operator may not be |
27 | required to provide a bond under this item exceeding |
28 | $375,000. |
29 | (C) For operating 51 to 100 wells, $375,000 plus |
30 | $12,500 per well, provided the operator may not be |
|
1 | required to provide a bond under this item exceeding |
2 | $625,000. |
3 | (D) For operating over 100 wells, $625,000 plus |
4 | $12,500 per well. |
5 | [(2) In lieu of individual bonds for each well, an owner |
6 | or operator may file a blanket bond, on a form prepared by |
7 | the department, covering all of its wells in Pennsylvania as |
8 | enumerated on the bond form. A blanket bond shall be in the |
9 | amount of $25,000 for at least two years following the |
10 | effective date of this act, after which time the bond amount |
11 | may be adjusted by the Environmental Quality Board every two |
12 | years to reflect the projected costs to the Commonwealth of |
13 | performing well plugging.] |
14 | (3) Liability under such bond shall continue until the |
15 | well has been properly plugged in accordance with this act |
16 | and for a period of one year after filing of the certificate |
17 | of plugging with the department. Each bond shall be executed |
18 | by the operator and a corporate surety licensed to do |
19 | business in the Commonwealth and approved by the secretary. |
20 | The operator may elect to deposit cash, certificates of |
21 | deposit or automatically renewable irrevocable letters of |
22 | credit from financial institutions chartered or authorized to |
23 | do business in Pennsylvania and regulated and examined by the |
24 | Commonwealth or a Federal agency which may be terminated at |
25 | the end of a term only upon the financial institution giving |
26 | 90 days prior written notice to the permittee and the |
27 | department or negotiable bonds of the United States |
28 | Government or the Commonwealth, the Pennsylvania Turnpike |
29 | Commission, the General State Authority, the State Public |
30 | School Building Authority or any municipality within the |
|
1 | Commonwealth, or United States Treasury Bonds issued at a |
2 | discount without a regular schedule of interest payments to |
3 | maturity, otherwise known as Zero Coupon Bonds, having a |
4 | maturity date of not more than ten years after the date of |
5 | purchase and at such maturity date having a value of not less |
6 | than $25,000, with the department in lieu of a corporate |
7 | surety. The cash deposit, certificate of deposit, amount of |
8 | such irrevocable letter of credit or market value of such |
9 | securities shall be equal at least to the sum of the bond. |
10 | The secretary shall, upon receipt of any such deposit of |
11 | cash, letters of credit or negotiable bonds, immediately |
12 | place the same with the State Treasurer, whose duty it shall |
13 | be to receive and hold the same in the name of the |
14 | Commonwealth, in trust, for the purpose for which such |
15 | deposit is made. The State Treasurer shall at all times be |
16 | responsible for the custody and safekeeping of such deposits. |
17 | The operator making deposit shall be entitled from time to |
18 | time to demand and receive from the State Treasurer, on the |
19 | written order of the secretary, the whole or any portion of |
20 | any collateral so deposited, upon depositing with him, in |
21 | lieu thereof, other collateral of the classes herein |
22 | specified having a market value at least equal to the sum of |
23 | the bond, and also to demand, receive and recover the |
24 | interest and income from said negotiable bonds as the same |
25 | becomes due and payable. Where negotiable bonds, deposited as |
26 | aforesaid, mature or are called, the State Treasurer, at the |
27 | request of the owner thereof, shall convert such negotiable |
28 | bonds into such other negotiable bonds of the classes herein |
29 | specified as may be designated by the owner. Where notice of |
30 | intent to terminate a letter of credit is given, the |
|
1 | department shall give the operator 30 days' written notice to |
2 | replace the letter of credit with other acceptable bond |
3 | guarantees as provided herein and, if the owner or operator |
4 | fails to replace the letter of credit within the 30-day |
5 | notification period, the department shall draw upon and |
6 | convert such letter of credit into cash and hold it as a |
7 | collateral bond guarantee. |
8 | * * * |
9 | (c) If the well owner or operator fails or refuses to comply |
10 | with the applicable requirements of this act identified in |
11 | subsection (a), the regulations promulgated hereunder or the |
12 | conditions of the permit relating thereto, the department may |
13 | declare the bond forfeited and shall certify the same to the |
14 | Attorney General, who shall proceed to enforce and collect the |
15 | full amount of the bond and, where the owner or operator has |
16 | deposited cash or securities as collateral in lieu of a |
17 | corporate surety, the department shall declare said collateral |
18 | forfeited and shall direct the State Treasurer to pay the full |
19 | amount of said funds into the Well Plugging Restricted Revenue |
20 | Account or to proceed to sell said security to the extent |
21 | forfeited and pay the proceeds thereof into the Well Plugging |
22 | Restricted Revenue Account. Should any corporate surety or |
23 | financial institution fail to promptly pay, in full, a forfeited |
24 | bond, it shall be disqualified from writing any further bonds |
25 | under the act or any other environmental act administered by the |
26 | department. Any person aggrieved by reason of forfeiting the |
27 | bond or converting collateral, as herein provided, shall have a |
28 | right to appeal to the Environmental Hearing Board in the manner |
29 | provided by law. Upon forfeiture of a [blanket] bond for a |
30 | violation occurring at one or more well sites, the person whose |
|
1 | bond is forfeited shall submit a replacement bond to cover all |
2 | other wells of which he is owner or operator within ten days of |
3 | said forfeiture. Failure to submit said replacement bond |
4 | constitutes a violation of this section as to each of the wells |
5 | owned or operated by said person. |
6 | (d) [(1) Any operator of not more than 200 wells who cannot |
7 | obtain a bond for a well drilled prior to April 18, 1985, as |
8 | required under subsection (a), due to an inability to |
9 | demonstrate sufficient financial resources may, in lieu of |
10 | the bond: |
11 | (i) Submit to the department a fee in the amount of |
12 | $50 per well, or a blanket fee of $500 for ten to 20 |
13 | wells, or a blanket fee of $1,000 for more than 20 wells, |
14 | which shall be a nonrefundable fee paid each year that |
15 | the operator has not filed a bond with the department. |
16 | All fees collected in lieu of a bond under this |
17 | subsection shall be used for the purposes authorized by |
18 | this act. The Environmental Quality Board shall have the |
19 | power, by regulation, to increase the amount of the fees |
20 | established under this subsection. |
21 | (ii) (A) Make phased deposits of collateral to |
22 | fully collateralize the bond. Such payment shall be |
23 | based on the number of wells the operator owns or |
24 | operates. The operator shall make an initial deposit |
25 | and shall, thereafter, make annual deposits in |
26 | accordance with the schedule in clause (B). Interest |
27 | accumulated by the collateral shall become a part of |
28 | the bond until such time as the collateral plus |
29 | accumulated interest equals the amount of the |
30 | required bond. The collateral shall be deposited, in |
|
1 | trust, with the State Treasurer as provided in this |
2 | subsection, or with a bank selected by the department |
3 | which shall act as trustee for the benefit of the |
4 | Commonwealth to guarantee the operator's compliance |
5 | with the drilling, water supply replacement, |
6 | restoration and plugging requirements of this act. |
7 | The operator shall be required to pay all costs of |
8 | the trust. |
9 | (B) An operator of up to ten existing wells who |
10 | does not intend to operate additional wells shall |
11 | deposit $250 per well and shall, thereafter, annually |
12 | deposit $50 per well until the obligations of this |
13 | section are fully met. An operator of 11 to 25 wells |
14 | or an operator of up to ten wells who applies for one |
15 | or more permits for additional wells shall deposit |
16 | $2,000 and shall, thereafter, annually deposit $1,150 |
17 | plus $150 for each additional well to be permitted |
18 | that year until the obligations of this section are |
19 | fully met. An operator of 26 to 50 wells shall |
20 | deposit $3,000 and shall, thereafter, annually |
21 | deposit $1,300 plus $400 for each additional well to |
22 | be permitted that year until the obligations of this |
23 | section are fully met. An operator of 51 to 100 wells |
24 | shall deposit $4,000 and shall, thereafter, annually |
25 | deposit $1,500 plus $400 for each additional well to |
26 | be permitted that year until the obligations of this |
27 | section are fully met. Operators of 101 to 200 wells |
28 | shall deposit $8,000 and shall, thereafter, annually |
29 | deposit $1,600 plus $1,000 for each additional well |
30 | to be permitted that year until the obligations of |
|
1 | this section are fully met. Operators of more than |
2 | 200 wells shall fully bond their wells immediately. |
3 | The department shall reduce the amount of phased |
4 | collateral payments or the period of time over which |
5 | phased collateral payments shall be made on behalf of |
6 | owners or operators who, prior to the effective date |
7 | of this amendatory act, have paid a fee in lieu of |
8 | bond pursuant to subparagraph (i), and who, within |
9 | one year of the effective date of this amendatory |
10 | act, choose to enter the phased collateral program |
11 | pursuant to this subparagraph (ii) rather than to |
12 | continue to make payments in lieu of bond. Payments |
13 | made in lieu of bond prior to the effective date of |
14 | this amendatory act shall not be credited in any |
15 | other manner, nor shall the department be required to |
16 | refund such fees at any time. The Environmental |
17 | Quality Board shall have the power, by regulation, to |
18 | change the annual deposits established under this |
19 | clause if it is found to be necessary to accommodate |
20 | a change in the amount of the bond required under |
21 | this section. |
22 | (2) An operator may continue to pay a fee in lieu of |
23 | bond or make phased deposits of collateral to fully |
24 | collateralize the bond so long as the operator does not miss |
25 | any payments for wells as provided under this subsection and |
26 | so long as the operator remains in compliance with the |
27 | provisions of this act and regulations and permits issued |
28 | thereunder. If an operator has missed any payments for wells |
29 | as provided under this subsection, the operator shall: |
30 | (i) immediately submit the appropriate bond amount |
|
1 | in full; or |
2 | (ii) cease all operations and plug the wells in |
3 | accordance with section 210. |
4 | (d.1) (1) An individual who cannot obtain a bond to drill |
5 | new wells due to an inability to demonstrate financial |
6 | resources may meet the collateral bond requirements of |
7 | subsection (a) by making phased deposits of collateral to |
8 | fully collateralize the bond. Such individuals shall be |
9 | limited to drilling ten new wells per calendar year. The |
10 | individual shall, for each well to be drilled, deposit $500 |
11 | and shall, thereafter, annually deposit 10% of the remaining |
12 | bond amount for a period of ten years. Interest accumulated |
13 | by the collateral shall become a part of the bond until such |
14 | time as the collateral, plus accumulated interest, equals the |
15 | amount of the required bond. The collateral shall be |
16 | deposited, in trust, with the State Treasurer as provided in |
17 | subsection (a) or with a bank selected by the department |
18 | which shall act as trustee for the benefit of the |
19 | Commonwealth, to guarantee the individual's compliance with |
20 | the drilling, water supply replacement, restoration and |
21 | plugging requirements of this act. The individual shall be |
22 | required to pay all costs of the trust. |
23 | (2) Individuals may continue to use phased collateral to |
24 | obtain permits so long as they have not missed any payments |
25 | for wells drilled under this provision and so long as they |
26 | remain in compliance with this act and regulations and |
27 | permits issued thereunder. If an individual has missed any |
28 | payments for wells under this subsection, the operator shall: |
29 | (i) immediately submit the appropriate bond amount |
30 | in full; or |
|
1 | (ii) cease all operations and plug the wells in |
2 | accordance with section 210. |
3 | For the purposes of this subsection an "individual" is defined |
4 | as an applicant who is a natural person doing business under his |
5 | own name.] The Environmental Quality Board shall, by regulation, |
6 | develop an alternative financial assurance requirement in which |
7 | an operator may voluntarily choose to participate. An operator |
8 | participating in the alternative financial assurance requirement |
9 | established pursuant to this paragraph may be exempt from a bond |
10 | specified under subsection (a). The alternative financial |
11 | assurance requirement may require an insurance policy, trust |
12 | fund or financial mechanism but must provide for full coverage |
13 | of an operator's well plugging liability as determined by the |
14 | board. The alternative financial assurance mechanism may only be |
15 | utilized to plug wells upon abandonment and may not be forfeited |
16 | or otherwise recovered for violations of the act. |
17 | * * * |
18 | [(f) Owners or operators who have failed to meet the |
19 | requirements of this section prior to the effective date of this |
20 | amendatory act shall not be required to make payments pursuant |
21 | to this section on a retroactive basis as a condition of |
22 | obtaining a permit under this act nor shall such failure be |
23 | deemed a violation of this act.] |
24 | Section 8. Sections 503(c), 505 and 506 of the act are |
25 | amended to read: |
26 | Section 503. Enforcement orders. |
27 | * * * |
28 | (c) Prior to the suspension or revocation of a well permit |
29 | or registration, the department shall serve written notice upon |
30 | the well operator or its agent of the intention of the |
|
1 | department to suspend or revoke and shall state with specificity |
2 | the statutory provisions, appropriate rule or regulation or |
3 | other reason and the factual circumstances which surround the |
4 | violation upon which the suspension or revocation is to be |
5 | based. The well operator shall have 15 days to request a |
6 | conference with the department to give such cause why such |
7 | action should not be taken. Upon receipt of such written notice, |
8 | the department shall hold a conference and shall, within 15 days |
9 | thereafter, make a decision on whether to suspend or revoke the |
10 | well permit or registration. The department shall provide |
11 | written notice of its decision to revoke to the well operator or |
12 | its agent, which shall become effective upon receipt thereof and |
13 | the operator shall immediately plug the well. |
14 | * * * |
15 | Section 505. Penalties. |
16 | (a) Any person who violates any provisions of the act is |
17 | guilty of a summary offense and, upon conviction thereof, shall |
18 | be sentenced to pay a fine of not more than [$300] $10,000 or |
19 | undergo imprisonment of not more than 90 days, or both. Each |
20 | day's continuance of such violation shall be a separate and |
21 | distinct offense. |
22 | (b) Any person who willfully violates any provisions of this |
23 | act or any order of the department issued pursuant to the |
24 | provisions of this act is guilty of a misdemeanor and, upon |
25 | conviction thereof, shall be sentenced to pay a fine of not more |
26 | than [$5,000] $150,000 or undergo imprisonment of not more than |
27 | one year, or both. Each day's continuance of such violation |
28 | shall be a separate distinct offense. |
29 | (c) The department shall have the authority to institute |
30 | prosecutions against any person or municipality under this act. |
|
1 | Section 506. Civil penalties. |
2 | In addition to proceeding under any other remedy available at |
3 | law or in equity for a violation of a provision of this act or a |
4 | rule or regulation of the department or a permit condition or |
5 | any order of the department, the [Environmental Hearing Board] |
6 | department, after hearing, may assess a civil penalty upon a |
7 | person for such violation. Such a penalty may be assessed |
8 | whether or not the violation was willful. The civil penalty so |
9 | assessed shall not exceed [$25,000, plus $1,000] $100,000, plus |
10 | $10,500 for each day of continued violation. In determining the |
11 | amount of the civil penalty, the [board] department shall |
12 | consider the willfulness of the violation, damage or injury to |
13 | the natural resources of the Commonwealth or their uses, |
14 | endangerment of the safety of others, costs of remedying the |
15 | harm, savings resulting to the person in consequence of such |
16 | violation and other relevant factors. It shall be payable to the |
17 | Commonwealth and shall be collectible in any manner provided at |
18 | law for the collection of debts. If any person liable to pay any |
19 | such penalty neglects or refuses to pay the same after demand, |
20 | the amount, together with interest and any costs that may |
21 | accrue, shall be a lien in favor of the Commonwealth upon the |
22 | property, both real and personal, of such person but only after |
23 | same has been entered and docketed of record by the prothonotary |
24 | of the county where such is situated. The [board] department |
25 | may, at any time, transmit to the prothonotaries of the |
26 | respective counties certified copies of all such liens, and it |
27 | shall be the duty of each prothonotary to enter and docket the |
28 | same of record in his office and to index the same as judgments |
29 | are indexed, without requiring the payment of costs as a |
30 | condition precedent to the entry thereof. |
|
1 | Section 9. The act is amended by adding a chapter to read: |
2 | CHAPTER 5A |
3 | EFFECTS OF NATURAL GAS DRILLING |
4 | Section 5A01. Definitions. |
5 | The following words and phrases when used in this chapter |
6 | shall have the meanings given to them in this section unless the |
7 | context clearly indicates otherwise: |
8 | "Accredited laboratory." A facility engaged in the testing |
9 | and calibration of scientific measurement devices and certified |
10 | by the Department of Environmental Protection as having met the |
11 | department's standards for accreditation. |
12 | "Association." A partnership, limited partnership or any |
13 | other form of unincorporated enterprise owned or conducted by |
14 | two or more persons. |
15 | "Base rate." The rate under section 5A02(b). |
16 | "Coal bed methane." Gas which can be produced from coal |
17 | beds, coal seams, mined-out areas or gob wells. |
18 | "Corporation." A corporation, joint stock association, |
19 | limited liability company, business trust or any other |
20 | incorporated enterprise organized under the laws of this |
21 | Commonwealth, the United States or any other state, territory or |
22 | foreign country or dependency. |
23 | "Department." The Department of Revenue of the Commonwealth. |
24 | "First responder." Professional and volunteer fire service |
25 | personnel, emergency medical personnel, law enforcement |
26 | personnel or State, county or local emergency management |
27 | personnel. |
28 | "Fund." The Natural Gas Severance Tax Fund established under |
29 | section 5A28. |
30 | "Meter." A device to measure the passage of volumes of gases |
|
1 | or liquids past a certain point. |
2 | "Municipality." A city, borough, incorporated town or |
3 | township. |
4 | "Natural gas." A fossil fuel consisting of a mixture of |
5 | hydrocarbon gases, primarily methane, possibly including ethane, |
6 | propane, butane, pentane, carbon dioxide, oxygen, nitrogen and |
7 | hydrogen sulfide and other gas species. The term includes |
8 | natural gas from oil fields known as associated gas or casing |
9 | head gas, natural gas fields known as nonassociated gas, coal |
10 | beds, shale beds and other formations. The term does not include |
11 | coal bed methane. |
12 | "Nonproducing site." A point of severance that is not |
13 | capable of producing natural gas in paying quantities. |
14 | "Paying quantities." Profit to the producer, however small, |
15 | over the producer's current operating expenses. |
16 | "Person." A natural person or a corporation, fiduciary, |
17 | association or other entity, including the Commonwealth, its |
18 | political subdivisions, instrumentalities and authorities. When |
19 | the term is used in a clause prescribing and imposing a penalty |
20 | or imposing a fine or imprisonment, or both, the term shall |
21 | include the members, as applied to an association, and the |
22 | officers, as applied to a corporation. |
23 | "Producer." A person who engages or continues within this |
24 | Commonwealth in the business of severing natural gas for sale, |
25 | profit or commercial use. The term does not include a person who |
26 | severs natural gas from a storage field. |
27 | "Producing site." A point of severance capable of producing |
28 | natural gas in paying quantities. |
29 | "Reporting period." A calendar month in which natural gas is |
30 | severed. |
|
1 | "Secretary." The Secretary of Revenue of the Commonwealth. |
2 | "Sever." To extract or otherwise remove natural gas from the |
3 | soil or water of this Commonwealth. |
4 | "Severance." The extraction or other removal of natural gas |
5 | from the soil or water of this Commonwealth. |
6 | "Severing." Extracting or otherwise removing natural gas |
7 | from the soil or water of this Commonwealth. |
8 | "Storage field." A natural formation or other site that is |
9 | used to store natural gas that did not originate from and has |
10 | been injected into the formation or site. |
11 | "Stripper well." A producing site or a nonproducing site |
12 | that is not capable of producing and does not produce more than |
13 | 60,000 cubic feet of natural gas per day. |
14 | "Tax." The tax imposed under this chapter. |
15 | "Tax rate adjustment index." The amount calculated under |
16 | section 5A03(c) by which the rate of the tax imposed under |
17 | section 5A02(b) is adjusted annually. |
18 | "Taxpayer." A person subject to the tax imposed by this |
19 | chapter. |
20 | "Unit." A thousand cubic feet of natural gas measured at the |
21 | wellhead at a temperature of 60 degrees Fahrenheit and an |
22 | absolute pressure of 14.73 pounds per square inch in accordance |
23 | with American Gas Association Standards and according to Boyle's |
24 | Law for the measurement of gas under varying pressures with |
25 | deviations as follows: |
26 | (1) The average absolute atmospheric pressure shall be |
27 | assumed to be 14.4 pounds to the square inch, regardless of |
28 | elevation or location of point of delivery above sea level or |
29 | variations in atmospheric pressure from time to time. |
30 | (2) The temperature of the gas passing the meters shall |
|
1 | be determined by the continuous use of a recording |
2 | thermometer installed to properly record the temperature of |
3 | gas flowing through the meters. The arithmetic average of the |
4 | temperature recorded each 24-hour day shall be used in |
5 | computing gas volumes. If a recording thermometer is not |
6 | installed, or is installed and not operating properly, an |
7 | average flowing temperature of 60 degrees Fahrenheit shall be |
8 | used in computing gas volume. |
9 | (3) The specific gravity of the gas shall be determined |
10 | annually by tests made by the use of an Edwards or Acme |
11 | gravity balance, or at intervals as found necessary in |
12 | practice. Specific gravity determinations shall be used in |
13 | computing gas volumes. |
14 | (4) The deviation of the natural gas from Boyle's Law |
15 | shall be determined by annual tests or at other shorter |
16 | intervals as found necessary in practice. The apparatus and |
17 | method used in making the test shall be in accordance with |
18 | recommendations of the National Bureau of Standards or Report |
19 | No. 3 of the Gas Measurement Committee of the American Gas |
20 | Association, or amendments thereto. The results of the tests |
21 | shall be used in computing the volume of gas delivered under |
22 | this chapter. |
23 | "Wellhead meter." A meter placed at a producing or |
24 | nonproducing site to measure the volume of natural gas severed |
25 | for which a wellhead meter certification has been issued. |
26 | "Wellhead meter certification." A report issued by an |
27 | accredited laboratory certifying the accuracy of a wellhead |
28 | meter. |
29 | Section 5A02. Imposition of tax. |
30 | (a) Establishment.--Beginning July 1, 2011, there shall be |
|
1 | levied a natural gas severance tax on every producer. The tax |
2 | shall not be imposed on units severed from a stripper well |
3 | unless the following apply: |
4 | (1) The stripper well is one of multiple producing sites |
5 | or nonproducing sites where the combined volumes of gas |
6 | produced by all of such sites are measured by a single |
7 | wellhead meter as provided in section 5A06. |
8 | (2) The combined volumes of gas produced by all the |
9 | producing sites or nonproducing sites described in paragraph |
10 | (1) is more than 60,000 cubic feet of natural gas per day. |
11 | (a.1) Exemptions.--The tax shall not be imposed on the |
12 | following: |
13 | (1) Units severed by a producer and sold and delivered |
14 | to a manufacturer of tangible personal property, as defined |
15 | in section 201(m) of the act of March 4, 1971 (P.L.6, No.2), |
16 | known as the Tax Reform Code of 1971, for the manufacturer's |
17 | use within this Commonwealth if the units have been severed |
18 | from one or more producing sites or nonproducing sites on |
19 | property owned by the manufacturer. |
20 | (2) Units provided free of charge to the owner of the |
21 | surface under which the gas is severed if the surface owner |
22 | is the end user of the gas. |
23 | (b) Rate.--Subject to the provisions of section 5A03 |
24 | (relating to tax rate adjustment), the rate shall be 24¢ per |
25 | unit severed at the wellhead. |
26 | Section 5A03. Tax rate adjustment. |
27 | (a) Annual adjustment.--The tax rate shall be adjusted |
28 | annually by the amount of the tax rate adjustment index as |
29 | calculated under subsection (c), provided that the tax rate |
30 | shall never be less than the base rate. The adjusted tax rate |
|
1 | shall be effective for the next year. |
2 | (b) Determination of adjustment.--On or before April 30 of |
3 | each year following the effective date of this section, the |
4 | secretary shall calculate and determine the amount of the tax |
5 | rate adjustment index. |
6 | (c) Calculation of adjustment.--The tax rate adjustment |
7 | index shall be determined as follows: |
8 | (1) If 6% of the average of New York Mercantile Exchange |
9 | (NYMEX) Henry Hub settled price on the last trading day of |
10 | the month, as reported by the Wall Street Journal for the |
11 | previous 12-month period ending March 31, is less than the |
12 | base rate, the tax rate adjustment index shall be zero and |
13 | the adjusted tax rate shall be the base rate. |
14 | (2) If 6% of the average of the NYMEX Henry Hub settled |
15 | price on the last trading day of the month, as reported by |
16 | the Wall Street Journal for the previous 12-month period |
17 | ending March 31, is greater than the base rate, the tax rate |
18 | adjustment index shall be 50% of the difference between 6% of |
19 | the average of the NYMEX Henry Hub settled price on the last |
20 | trading day of the month, as reported in the Wall Street |
21 | Journal for the previous 12-month period ending March 31, and |
22 | the base rate. The adjusted tax rate shall be the resulting |
23 | tax rate adjustment index plus the base rate. |
24 | (d) Publication of adjustment.--The secretary shall forward |
25 | the amount of the tax rate adjustment index and the adjusted tax |
26 | rate, as determined under subsection (c), to the Legislative |
27 | Reference Bureau for publication in the Pennsylvania Bulletin by |
28 | May 1 of each year and shall simultaneously provide the |
29 | information to producers by written notice. Failure of the |
30 | amount of the tax rate adjustment index and the adjusted tax |
|
1 | rate to be published or provided to producers as required by |
2 | this subsection shall not affect the effectiveness of the |
3 | adjusted tax rate under subsection (b). |
4 | (e) Discontinuance of data.--If publication of the NYMEX |
5 | Henry Hub average monthly gas price data is discontinued, the |
6 | tax rate then in effect shall not be adjusted until a comparable |
7 | method for determining the tax rate adjustment index is adopted |
8 | by the General Assembly in legislation. |
9 | (f) Other adjustments.--If the base data of the NYMEX Henry |
10 | Hub average monthly gas price is substantially revised, the |
11 | secretary shall, when determining the amount of the tax rate |
12 | adjustment index under subsection (c), make appropriate changes |
13 | to ensure that the tax rate adjustment index is reasonably |
14 | consistent with the result which would have been attained had |
15 | the substantial revision not been made. If the secretary is |
16 | unable to make reasonable changes sufficient to ensure a |
17 | consistent result, the tax rate then in effect shall not be |
18 | adjusted until a comparable method for determining the tax rate |
19 | adjustment index is adopted by the General Assembly in |
20 | legislation. |
21 | Section 5A04. Return and payment. |
22 | (a) Requirement.--Every producer is required to file a |
23 | return with the department, on a form prescribed by the |
24 | department, which shall include all of the following: |
25 | (1) The number of natural gas units severed by the |
26 | producer for the reporting period. |
27 | (2) The number of producing sites used by the producer |
28 | for the severance of natural gas in each county and |
29 | municipality. |
30 | (3) The amount of tax due under section 5A02. |
|
1 | (b) Filing.--The return required by subsection (a) shall be |
2 | filed with the department within 15 days following the end of a |
3 | reporting period. |
4 | (c) Deadline.--The tax imposed under section 5A02 is due on |
5 | the day the return is required to be filed and becomes |
6 | delinquent if not remitted to the department by that date. |
7 | Section 5A05. Natural gas severance tax registration. |
8 | (a) Application.--Before a producer severs natural gas in |
9 | this Commonwealth, the producer shall apply to the department |
10 | for a natural gas severance tax registration certificate. |
11 | (a.1) Application fee.--The department may charge an |
12 | application fee to cover the administrative costs associated |
13 | with the application and registration process. If the department |
14 | charges an application fee, the department shall not issue a |
15 | registration certificate until the producer has paid the |
16 | application fee. |
17 | (a.2) Declaration.--The producer shall include in its |
18 | application a declaration of all producing sites and |
19 | nonproducing sites used by the producer for the severance of |
20 | natural gas. The declaration shall include copies of wellhead |
21 | meter certifications for each site. The producer is required to |
22 | update the declaration when the producer adds or removes a |
23 | producing site or nonproducing site in this Commonwealth or when |
24 | there is a change in the status of a producing site or |
25 | nonproducing site or when the producer uses a different |
26 | accredited laboratory to issue a wellhead meter certification. |
27 | The producer shall update the declaration within 30 days after a |
28 | calendar month in which a change to the declaration occurs. |
29 | (b) Issuance.--Except as provided in subsection (c), after |
30 | the receipt of an application and payment of the fee imposed |
|
1 | under subsection (a.1), the department shall issue a |
2 | registration certificate. The registration certificate shall be |
3 | nonassignable. All registrants shall be required to renew their |
4 | registration certificates and wellhead meter certifications on a |
5 | staggered renewal system established by the department. After |
6 | the initial staggered renewal period, a registration certificate |
7 | or a wellhead meter certification issued shall be valid for a |
8 | period of five years. |
9 | (c) Refusal, suspension or revocation.--The department may |
10 | refuse to issue, suspend or revoke a registration certificate if |
11 | the applicant or registrant has not filed required State tax |
12 | reports and paid State taxes not subject to a timely perfected |
13 | administrative or judicial appeal or subject to a duly |
14 | authorized deferred payment plan. The department shall notify |
15 | the applicant or registrant of any refusal, suspension or |
16 | revocation. The notice shall contain a statement that the |
17 | refusal, suspension or revocation may be made public. The notice |
18 | shall be made by first class mail. An applicant or registrant |
19 | aggrieved by the determination of the department may file an |
20 | appeal under the provisions for administrative appeals in the |
21 | act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code |
22 | of 1971. In the case of a suspension or revocation which is |
23 | appealed, the registration certificate shall remain valid |
24 | pending a final outcome of the appeals process. Notwithstanding |
25 | sections 274, 353(f), 408(b), 603, 702, 802, 904 and 1102 of the |
26 | Tax Reform Code of 1971 or any other provision of law, if no |
27 | appeal is taken or if an appeal is taken and denied at the |
28 | conclusion of the appeal process the department may disclose, by |
29 | publication or otherwise, the identity of a producer and the |
30 | fact that the producer's registration certificate has been |
|
1 | refused, suspended or revoked under this subsection. Disclosure |
2 | may include the basis for refusal, suspension or revocation. |
3 | (d) Violation.--A person severing natural gas in this |
4 | Commonwealth without holding a valid registration certificate |
5 | under subsection (b) shall be guilty of a summary offense and |
6 | shall, upon conviction, be sentenced to pay a fine of not less |
7 | than $300 nor more than $1,500. In the event the person |
8 | convicted defaults in the payment of the fine, he shall be |
9 | sentenced to imprisonment for not less than five days nor more |
10 | than 30 days. The penalties imposed by this subsection shall be |
11 | in addition to any other penalties imposed by this chapter. For |
12 | purposes of this subsection, the severing of natural gas during |
13 | any calendar day shall constitute a separate violation. The |
14 | secretary may designate employees of the department to enforce |
15 | the provisions of this subsection. The employees shall exhibit |
16 | proof of and be within the scope of the designation when |
17 | instituting proceedings as provided by the Pennsylvania Rules of |
18 | Criminal Procedure. |
19 | (e) Failure to obtain registration certificate.--Failure to |
20 | obtain or hold a valid registration certificate does not relieve |
21 | a person from liability for the tax imposed by this chapter. |
22 | Section 5A06. Wellhead meters. |
23 | (a) General rule.--Except as provided in subsection (b), a |
24 | producer shall provide for and maintain a discrete wellhead |
25 | meter where natural gas is severed. A producer shall ensure that |
26 | the wellhead meters are maintained according to industry |
27 | standards. Any wellhead meter installed after the effective date |
28 | of this section shall be a digital meter. |
29 | (b) Exception.--If a producer has multiple producing sites |
30 | or nonproducing sites where the combined volumes of gas produced |
|
1 | by all of such sites are measured by a single wellhead meter, |
2 | the producer shall not be required to provide for a discrete |
3 | wellhead meter at any of those producing sites or nonproducing |
4 | sites that is also a stripper well. |
5 | Section 5A07. Assessments. |
6 | (a) Authorization and requirement.--The department is |
7 | authorized and shall make the inquiries, determinations and |
8 | assessments of the tax imposed under this chapter, including |
9 | interest, additions and penalties imposed under this chapter. |
10 | (b) Notice.--The notice of assessment and demand for payment |
11 | shall be mailed to the taxpayer. The notice shall set forth the |
12 | basis of the assessment. The department shall send the notice of |
13 | assessment to the taxpayer at its registered address via |
14 | certified mail if the assessment increases the taxpayer's tax |
15 | liability by $300. Otherwise, the notice of assessment may be |
16 | sent via regular mail. |
17 | Section 5A08. Time for assessment. |
18 | (a) Requirement.--An assessment as provided under section |
19 | 5A07 shall be made within three years after the date when the |
20 | return provided for by section 5A04 is filed or the end of the |
21 | year in which the tax liability arises, whichever shall occur |
22 | last. For the purposes of this subsection and subsection (b), a |
23 | return filed before the last day prescribed for the filing |
24 | period shall be considered as filed on the last day. |
25 | (b) Exception.--If the taxpayer underpays the correct amount |
26 | of the tax due by 25% or more, the assessment shall be made |
27 | within six years after the date the return was filed. |
28 | (c) Intent to evade.--Where no return is filed or where the |
29 | taxpayer files a false or fraudulent return with intent to evade |
30 | the tax imposed by this chapter, the assessment may be made at |
|
1 | any time. |
2 | (d) Erroneous credit or refund.--Within three years of the |
3 | granting of a refund or credit or within the period in which an |
4 | assessment or reassessment may have been issued by the |
5 | department for the taxable period for which the refund was |
6 | granted, whichever period shall last occur, the department may |
7 | issue an assessment to recover a refund or credit made or |
8 | allowed erroneously. |
9 | Section 5A09. Extension of assessment period. |
10 | Notwithstanding the provisions of this chapter, the |
11 | assessment period may be extended in the event a taxpayer has |
12 | provided written consent before the expiration of the period |
13 | provided in section 5A08 for a tax assessment. The amount of tax |
14 | due may be assessed at any time within the extended period. The |
15 | period may be extended further by subsequent written consents |
16 | made before the expiration of the extended period. |
17 | Section 5A10. Reassessments. |
18 | A taxpayer against whom an assessment is made may petition |
19 | the department for a reassessment under Article XXVII of the act |
20 | of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of |
21 | 1971. |
22 | Section 5A11. Interest. |
23 | The department shall assess interest on any delinquent tax at |
24 | the rate prescribed under section 806 of the act of April 9, |
25 | 1929 (P.L.343, No.176), known as The Fiscal Code. |
26 | Section 5A12. Penalties. |
27 | The department shall enforce the following penalties: |
28 | (1) A penalty against a producer without a natural gas |
29 | severance tax registration certificate. The penalty shall be |
30 | $1 for every unit severed without a valid registration |
|
1 | certificate. The department may assess this penalty |
2 | separately from or in conjunction with any assessment of the |
3 | natural gas severance tax. |
4 | (2) A penalty against a producer for failure to timely |
5 | file a return as required under section 5A04. The penalty |
6 | shall be 5% of the tax liability to be reported on the return |
7 | for each day beyond the due date that the return is not |
8 | filed. |
9 | (3) In addition to the penalty under paragraph (2), a |
10 | penalty against the producer for a willful failure to timely |
11 | file a return. The penalty shall be 200% of the tax liability |
12 | required to be reported on the return. |
13 | (4) A penalty against a producer for failure to timely |
14 | pay the tax as required by section 5A04(c). The penalty shall |
15 | be 5% of the amount of tax due for each day beyond the |
16 | payment date that the tax is not paid. |
17 | Section 5A13. Criminal acts. |
18 | (a) Fraudulent return.--Any person with intent to defraud |
19 | the Commonwealth, who willfully makes or causes to be made a |
20 | return required by this chapter which is false, is guilty of a |
21 | misdemeanor and shall, upon conviction, be sentenced to pay a |
22 | fine of not more than $2,000 or to imprisonment for not more |
23 | than three years, or both. |
24 | (b) Other crimes.-- |
25 | (1) Except as otherwise provided by subsection (a), a |
26 | person is guilty of a misdemeanor and shall, upon conviction, |
27 | be sentenced to pay a fine of not more than $1,000 and costs |
28 | of prosecution or to imprisonment for not more than one year, |
29 | or both, for any of the following: |
30 | (i) Willfully failing to timely remit the tax to the |
|
1 | department. |
2 | (ii) Willfully failing or neglecting to timely file |
3 | a return or report required by this chapter. |
4 | (iii) Refusing to timely pay a tax, penalty or |
5 | interest imposed or provided for by this chapter. |
6 | (iv) Willfully failing to preserve its books, papers |
7 | and records as directed by the department. |
8 | (v) Refusing to permit the department or its |
9 | authorized agents to examine its books, records or |
10 | papers. |
11 | (vi) Knowingly making any incomplete, false or |
12 | fraudulent return or report. |
13 | (vii) Preventing or attempting to prevent the full |
14 | disclosure of the amount of natural gas severance tax |
15 | due. |
16 | (viii) Providing any person with a false statement |
17 | as to the payment of the tax imposed under this chapter |
18 | with respect to any pertinent facts. |
19 | (ix) Making, uttering or issuing a false or |
20 | fraudulent statement. |
21 | (2) The penalties imposed by this section shall be in |
22 | addition to other penalties imposed by this chapter. |
23 | Section 5A14. Abatement of additions or penalties. |
24 | Upon the filing of a petition for reassessment or a petition |
25 | for refund by a taxpayer as provided under this chapter, |
26 | additions or penalties imposed upon the taxpayer by this chapter |
27 | may be waived or abated in whole or in part where the petitioner |
28 | establishes that he acted in good faith, without negligence and |
29 | with no intent to defraud. |
30 | Section 5A15. Bulk and auction sales. |
|
1 | A person that sells or causes to be sold at auction, or that |
2 | sells or transfers in bulk, 51% or more of a stock of goods, |
3 | wares or merchandise of any kind, fixtures, machinery, |
4 | equipment, buildings or real estate involved in a business for |
5 | which the person holds a registration certificate or is required |
6 | to obtain a registration certificate under the provisions of |
7 | this chapter shall be subject to the provisions of section 1403 |
8 | of the act of April 9, 1929 (P.L.343, No.176), known as The |
9 | Fiscal Code. |
10 | Section 5A16. Collection upon failure to request reassessment, |
11 | review or appeal. |
12 | (a) Power of department.--The department may collect the tax |
13 | imposed under this chapter: |
14 | (1) If an assessment of the tax is not paid within 30 |
15 | days after notice to the taxpayer when no petition for |
16 | reassessment has been filed. |
17 | (2) Within 60 days of the reassessment, if no petition |
18 | for review has been filed. |
19 | (3) If no appeal has been made, within 30 days of: |
20 | (i) the Board of Finance and Revenue's decision of a |
21 | petition for review; or |
22 | (ii) the expiration of the board's time for acting |
23 | upon the petition. |
24 | (4) In all cases of judicial sales, receiverships, |
25 | assignments or bankruptcies. |
26 | (b) Prohibition.--In a case for the collection of taxes |
27 | under subsection (a), the taxpayer against whom they were |
28 | assessed shall not be permitted to set up a ground of defense |
29 | that might have been determined by the department, the Board of |
30 | Finance and Revenue or the courts, provided that the defense of |
|
1 | failure of the department to mail notice of assessment or |
2 | reassessment to the taxpayer and the defense of payment of |
3 | assessment or reassessment may be raised in proceedings for |
4 | collection by a motion to stay the proceedings. |
5 | Section 5A17. Tax liens. |
6 | (a) Lien imposed.--If any taxpayer neglects or refuses to |
7 | pay the tax imposed under this chapter for which the taxpayer is |
8 | liable under this chapter after demand, the amount, including |
9 | interest, addition or penalty, together with additional costs |
10 | that may accrue, shall be a lien in favor of the Commonwealth |
11 | upon the real and personal property of the taxpayer but only |
12 | after the same has been entered and docketed of record by the |
13 | prothonotary of the county where the property is situated. The |
14 | department may, at any time, transmit to the prothonotaries of |
15 | the respective counties certified copies of all liens imposed by |
16 | this section. It shall be the duty of the prothonotary receiving |
17 | the lien to enter and docket the same of record to the office of |
18 | the prothonotary. The lien shall be indexed as judgments are now |
19 | indexed. No prothonotary shall require as a condition precedent |
20 | to the entry of the lien the payment of costs incidental to its |
21 | entry. |
22 | (b) Priority of lien and effect on judicial sale.--Except |
23 | for the costs of the sale and the writ upon which the sale was |
24 | made and real estate taxes and municipal claims against the |
25 | property, a lien imposed under this section shall have priority |
26 | from the date of its recording and shall be fully paid and |
27 | satisfied out of the proceeds of any judicial sale of property |
28 | subject to the lien, before any other obligation, judgment, |
29 | claim, lien or estate to which the property may subsequently |
30 | become subject, but shall be subordinate to mortgages and other |
|
1 | liens existing and duly recorded or entered of record prior to |
2 | the recording of the lien. |
3 | (c) No discharge by sale on junior lien.--In the case of a |
4 | judicial sale of property subject to a lien imposed under this |
5 | section, upon a lien or claim over which the lien imposed under |
6 | this section has priority, the sale shall discharge the lien |
7 | imposed under this section to the extent only that the proceeds |
8 | are applied to its payment, and the lien shall continue in full |
9 | force and effect as to the balance remaining unpaid. There shall |
10 | be no inquisition or condemnation upon any judicial sale of real |
11 | estate made by the Commonwealth under the provisions of this |
12 | chapter. The lien shall continue as provided in the act of April |
13 | 9, 1929 (P.L.343, No.176), known as The Fiscal Code, and a writ |
14 | of execution may directly issue upon the lien without the |
15 | issuance and prosecution to judgment of a writ of scire facias, |
16 | provided that not less than ten days before issuance of any |
17 | execution on the lien, notice of the filing and the effect of |
18 | the lien shall be sent by registered mail to the taxpayer at its |
19 | last known post office address, provided further that the lien |
20 | shall have no effect upon any stock of goods, wares or |
21 | merchandise regularly sold or leased in the ordinary course of |
22 | business by the taxpayer against whom the lien has been entered, |
23 | unless and until a writ of execution has been issued and a levy |
24 | made upon the stock of goods, wares and merchandise. |
25 | (d) Duty of prothonotary.--Any willful failure of any |
26 | prothonotary to carry out any duty imposed upon him by this |
27 | section shall be a misdemeanor. Upon conviction, he shall be |
28 | sentenced to pay a fine of not more than $1,000 and costs of |
29 | prosecution or to imprisonment for not more than one year, or |
30 | both. |
|
1 | (e) Priority.--Except as provided in this chapter, the |
2 | distribution, voluntary or compulsory, in receivership, |
3 | bankruptcy or otherwise of the property or estate of any person, |
4 | all taxes imposed by this chapter which are due and unpaid and |
5 | are not collectible under the provisions of section 225 of the |
6 | act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code |
7 | of 1971, shall be paid from the first money available for |
8 | distribution in priority to all other claims and liens, except |
9 | as the laws of the United States may give priority to a claim to |
10 | the Federal Government. A person charged with the administration |
11 | or distribution of the property or estate who violates the |
12 | provisions of this section shall be personally liable for the |
13 | taxes imposed by this chapter which are accrued and unpaid and |
14 | chargeable against the person whose property or estate is being |
15 | administered or distributed. |
16 | (f) Other remedies.--Subject to the limitations contained in |
17 | this chapter as to the assessment of taxes, nothing contained in |
18 | this section shall be construed to restrict, prohibit or limit |
19 | the use by the department in collecting taxes due and payable of |
20 | another remedy or procedure available at law or equity for the |
21 | collection of debts. |
22 | Section 5A18. Tax suit reciprocity. |
23 | The courts of this Commonwealth shall recognize and enforce |
24 | liabilities for natural gas severance or extraction taxes |
25 | lawfully imposed by any other state, provided that the other |
26 | state recognizes and enforces the tax imposed under this |
27 | chapter. |
28 | Section 5A19. Service. |
29 | A producer is deemed to have appointed the Secretary of the |
30 | Commonwealth its agent for the acceptance of service of process |
|
1 | or notice in a proceeding for the enforcement of the civil |
2 | provisions of this chapter and service made upon the Secretary |
3 | of the Commonwealth as agent shall be of the same legal force |
4 | and validity as if the service had been personally made upon the |
5 | producer. Where service cannot be made upon the producer in the |
6 | manner provided by other laws of this Commonwealth relating to |
7 | service of process, service may be made upon the Secretary of |
8 | the Commonwealth. In that case, a copy of the process or notice |
9 | shall be personally served upon any agent or representative of |
10 | the producer who may be found within this Commonwealth or, where |
11 | no agent or representative may be found, a copy of the process |
12 | or notice shall be sent via registered mail to the producer at |
13 | the last known address of its principal place of business, home |
14 | office or residence. |
15 | Section 5A20. Refunds. |
16 | The department shall refund all taxes, interest and penalties |
17 | paid to the Commonwealth under the provisions of this chapter to |
18 | which the Commonwealth is not rightfully entitled. The refunds |
19 | shall be made in accordance with section 3003.1 of the act of |
20 | March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of |
21 | 1971, to the person or the person's heirs, successors, assigns |
22 | or other personal representatives who paid the tax. No refund |
23 | shall be made under this section regarding a payment made by |
24 | reason of an assessment where a taxpayer filed a petition for |
25 | reassessment under section 2702 of the Tax Reform Code of 1971 |
26 | which was denied and is no longer subject to further review or |
27 | appeal. Nothing in this chapter shall prohibit a taxpayer who |
28 | has filed a timely petition for reassessment from amending it to |
29 | a petition for refund where the petitioner paid the tax |
30 | assessed. |
|
1 | Section 5A21. Refund petition. |
2 | (a) General rule.--Except as provided for in subsection (b), |
3 | the refund or credit of tax, interest or penalty provided for by |
4 | section 5A20 shall be made only where the person who has paid |
5 | the tax files a petition for refund with the department under |
6 | section 3003.1 of the Tax Reform Code of 1971. |
7 | (b) Natural gas severance tax.--A refund or credit of tax, |
8 | interest or penalty paid as a result of an assessment made by |
9 | the department under section 5A05 shall be made only where the |
10 | person who has paid the tax files with the department a petition |
11 | for a refund with the department under Article XXVII of the Tax |
12 | Reform Code of 1971 within the time limits of section 3003.1 of |
13 | the act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform |
14 | Code of 1971. The filing of a petition for refund, under the |
15 | provisions of this subsection, shall not affect the abatement of |
16 | interest, additions or penalties to which the person may be |
17 | entitled by reason of his payment of the assessment. |
18 | Section 5A22. Rules and regulations. |
19 | The department is charged with the enforcement of the |
20 | provisions of this chapter and is authorized and empowered to |
21 | prescribe, adopt, promulgate and enforce rules and regulations |
22 | not inconsistent with the provisions of this chapter relating to |
23 | any matter or thing pertaining to the administration and |
24 | enforcement of the provisions of this chapter and the collection |
25 | of taxes, penalties and interest imposed by this chapter. The |
26 | department may prescribe the extent, if any, to which any of the |
27 | rules and regulations shall be applied without retroactive |
28 | effect. |
29 | Section 5A23. Recordkeeping. |
30 | (a) General rule.--Every person liable for any tax imposed |
|
1 | by this chapter, or for the collection of the tax, shall keep |
2 | records, including those enumerated in subsection (a.1), render |
3 | statements, make returns and comply with the rules and |
4 | regulations as the department may prescribe regarding matters |
5 | pertinent to the person's business. Whenever it is necessary, |
6 | the department may require a person, by notice served upon the |
7 | person or by regulations, to make returns, render statements or |
8 | keep records as the department deems sufficient to show whether |
9 | or not a person is liable to pay tax under this chapter. |
10 | (a.1) Records.--Records to be maintained are: |
11 | (1) Wellhead meter charts for each reporting period and |
12 | the meter calibration and maintenance records. If turbine |
13 | meters are in use, the maintenance records will be made |
14 | available to the department upon request. |
15 | (2) Records, statements and other instruments furnished |
16 | to a producer by a person to whom the producer delivers for |
17 | sale, transport or delivery of natural gas. |
18 | (3) Records, statements and other instruments as the |
19 | department may prescribe by regulation. |
20 | (b) Records of nonresidents.--A nonresident who does |
21 | business in this Commonwealth as a producer shall keep adequate |
22 | records of the business and of the tax due as a result. The |
23 | records shall be retained within this Commonwealth unless |
24 | retention outside this Commonwealth is authorized by the |
25 | department. The department may require a taxpayer who desires to |
26 | retain records outside this Commonwealth to assume reasonable |
27 | out-of-State audit expenses. |
28 | (c) Keeping of separate records.--A producer who is engaged |
29 | in another business or businesses which do not involve the |
30 | severing of natural gas taxable under this chapter shall keep |
|
1 | separate books and records of the businesses so as to show the |
2 | taxable severing of natural gas under this chapter separately |
3 | from other business activities not taxable hereunder. If any |
4 | person fails to keep separate books and records, the person |
5 | shall be liable for a penalty equaling 100% of tax due under |
6 | this chapter for the period where separate records were not |
7 | maintained. |
8 | Section 5A24. Examinations. |
9 | The department or any of its authorized agents are authorized |
10 | to examine the books, papers and records of any taxpayer in |
11 | order to verify the accuracy and completeness of any return made |
12 | or, if no return was made, to ascertain and assess the tax |
13 | imposed by this chapter. The department may require the |
14 | preservation of all books, papers and records for any period |
15 | deemed proper by it but not to exceed three years from the end |
16 | of the calendar year to which the records relate. Every taxpayer |
17 | is required to give to the department or its agent the means, |
18 | facilities and opportunity for examinations and investigation |
19 | under this section. The department is further authorized to |
20 | examine any person, under oath, concerning the taxable severing |
21 | of natural gas by any taxpayer or concerning any other matter |
22 | relating to the enforcement or administration of this chapter, |
23 | and to this end may compel the production of books, papers and |
24 | records and the attendance of all persons whether as parties or |
25 | witnesses whom it believes to have knowledge of relevant |
26 | matters. The procedure for the hearings or examinations shall be |
27 | the same as that provided by the act of April 9, 1929 (P.L.343, |
28 | No. 176), known as The Fiscal Code. |
29 | Section 5A25. Unauthorized disclosure. |
30 | Any information gained by the department as a result of any |
|
1 | return, examination, investigation, hearing or verification |
2 | required or authorized by this chapter shall be confidential |
3 | except for official purposes and except in accordance with |
4 | proper judicial order or as otherwise provided by law, and any |
5 | person unlawfully divulging the information shall be guilty of a |
6 | misdemeanor and shall, upon conviction, be sentenced to pay a |
7 | fine of not more than $1,000 and costs of prosecution or to |
8 | imprisonment for not more than one year, or both. |
9 | Section 5A26. Cooperation with other governments. |
10 | Notwithstanding the provisions of section 5A18, the |
11 | department may permit the Commissioner of the Internal Revenue |
12 | Service of the United States, the proper officer of any state or |
13 | the authorized representative of either of them to inspect the |
14 | tax returns of any taxpayer, or may furnish to the commissioner |
15 | or officer or to either of their authorized representative an |
16 | abstract of the return of any taxpayer, or supply him with |
17 | information concerning any item contained in any return or |
18 | disclosed by the report of any examination or investigation of |
19 | the return of any taxpayer. This permission shall be granted |
20 | only if the laws of the United States or another state grant |
21 | substantially similar privileges to the proper officer of the |
22 | Commonwealth charged with the administration of this chapter. |
23 | Section 5A27. Bonds. |
24 | (a) Taxpayer to file bond.--The department may require a |
25 | nonresident natural person or any foreign corporation, |
26 | association, fiduciary or other entity, not authorized to do |
27 | business within this Commonwealth or not having an established |
28 | place of business in this Commonwealth and subject to the tax |
29 | imposed by section 5A02, to file a bond issued by a surety |
30 | company authorized to do business in this Commonwealth and |
|
1 | approved by the Insurance Commissioner as to solvency and |
2 | responsibility, in amounts as it may fix, to secure the payment |
3 | of any tax or penalties due or which may become due from a |
4 | nonresident natural person, corporation, association, fiduciary |
5 | or other entity whenever it deems it necessary to protect the |
6 | revenues obtained under this chapter. The department may also |
7 | require a bond of a person petitioning the department for |
8 | reassessment in the case of any assessment over $500 or where, |
9 | in its opinion, the ultimate collection is in jeopardy. For a |
10 | period of three years, the department may require a bond of any |
11 | person who has, on three or more occasions within a 12-month |
12 | period, either filed a return or made payment to the department |
13 | more than 30 days late. In the event the department determines a |
14 | taxpayer is required to file a bond, it shall give notice to the |
15 | taxpayer specifying the amount of the bond required. The |
16 | taxpayer shall file the bond within five days after notice is |
17 | given by the department unless, within five days, the taxpayer |
18 | shall request in writing a hearing before the secretary or his |
19 | representative. At the hearing, the necessity, propriety and |
20 | amount of the bond shall be determined by the secretary or the |
21 | secretary's representative. The determination shall be final and |
22 | the taxpayer shall comply with it within 15 days after notice is |
23 | mailed to the taxpayer. |
24 | (b) Securities in lieu of bond.--In lieu of the bond |
25 | required by this section, securities approved by the department |
26 | or cash in a prescribed amount may be deposited. The securities |
27 | or cash shall be kept in the custody of the department. The |
28 | department may apply the securities or cash to the tax imposed |
29 | by this chapter and interest or penalties due without notice to |
30 | the depositor. The securities may be sold by the department to |
|
1 | pay the tax and/or interest or penalties due at public or |
2 | private sale upon five days' written notice to the depositor. |
3 | (c) Failure to file bond.--The department may file a lien |
4 | under section 5A17 against any taxpayer who fails to file a bond |
5 | when required to do so under this section. All funds received |
6 | upon execution of the judgment on the lien shall be refunded to |
7 | the taxpayer with 3% interest, should a final determination be |
8 | made that it does not owe any payment to the department. |
9 | Section 5A28. Funds and accounts established. |
10 | (a) Natural Gas Severance Tax Fund.-- |
11 | (1) The Natural Gas Severance Tax Fund is established as |
12 | a restricted account within the General Fund. |
13 | (2) The proceeds of the tax imposed under section 5A02 |
14 | and penalties and interest imposed under this chapter, less |
15 | the amounts transferred to the department under section 5A32, |
16 | shall be deposited into the fund. |
17 | (3) The money in the fund shall only be used in |
18 | accordance with sections 5A29 and 5A30. |
19 | (b) Local Government Services Account.--The Local Government |
20 | Services Account is established as a restricted account within |
21 | the fund. |
22 | (c) Oil and Gas Emergency Response Account.--The Oil and Gas |
23 | Emergency Response Account is established as a restricted |
24 | account within the fund. |
25 | Section 5A29. Transfers and distributions. |
26 | The State Treasurer shall make the following distributions |
27 | from the money deposited into the fund at the end of each month |
28 | as follows: |
29 | (1) Thirty percent to the Local Government Services |
30 | Account established under 5A28(b) and shall be distributed as |
|
1 | provided in section 5A30. |
2 | (2) Thirty percent to the Environmental Stewardship Fund |
3 | established under 27 Pa.C.S. § 6104 (relating to fund). |
4 | (3) Thirty percent to the Hazardous Sites Cleanup Fund |
5 | established under section 901 of the act of October 18, 1988 |
6 | (P.L.756, No.108), known as the Hazardous Sites Cleanup Act. |
7 | (4) Ten percent, but not more than $11,000,000 per |
8 | fiscal year, to the Oil and Gas Emergency Response Account |
9 | established under 5A28(c), and shall be distributed as |
10 | provided in section 5A31. In the event more than $11,000,000 |
11 | is collected in any fiscal year the excess proceeds shall be |
12 | distributed equally among paragraphs (1), (2) and (3). |
13 | Section 5A30. Distributions from local government services |
14 | account. |
15 | (a) Quarterly distributions.--On the last business day of |
16 | each period of three calendar months, the State Treasurer shall |
17 | make the following distributions from the money in the Local |
18 | Government Services Account: |
19 | (1) Fifty percent shall be distributed as follows: |
20 | (i) Thirty-five percent to counties with producing |
21 | sites to be used as provided in subsection (c). The money |
22 | under this subparagraph shall be distributed to each |
23 | eligible county based on the following formula: |
24 | (A) Divide: |
25 | (I) the number of producing sites in the |
26 | county; by |
27 | (II) the total number of producing sites in |
28 | all the counties in this Commonwealth. |
29 | (B) Multiply: |
30 | (I) the quotient under clause (A); by |
|
1 | (II) the amount of money available for |
2 | distribution under this subparagraph. |
3 | (ii) Fifty percent to municipalities with producing |
4 | sites. The money under this subparagraph shall be |
5 | distributed to each eligible municipality based on the |
6 | following formula: |
7 | (A) Divide: |
8 | (II) the number of producing sites in the |
9 | municipality; by |
10 | (II) the total number of producing sites in |
11 | all municipalities in this Commonwealth. |
12 | (B) Multiply: |
13 | (I) the quotient under clause (A); by |
14 | (II) the amount of money available for |
15 | distribution under this clause. |
16 | (C) The amount distributed to a municipality |
17 | shall not exceed 50% of the municipality's total |
18 | budget for fiscal year 2010-2011, adjusted for |
19 | inflation in subsequent years by an amount not to |
20 | exceed an annual cost-of-living adjustment calculated |
21 | by applying the Annual Percent Change in the Consumer |
22 | Price Index for all Urban Consumers immediately prior |
23 | to the date the adjustment is due to take effect. The |
24 | amount distributed under this clause shall be used |
25 | for the following purposes: |
26 | (I) Reconstruction, maintenance and repair |
27 | of municipal roadways and bridges, which the |
28 | municipality has determined have been or are |
29 | being used extensively to transport natural gas |
30 | or equipment related to the production of natural |
|
1 | gas. |
2 | (II) Preservation and improvement of |
3 | municipal water supplies. |
4 | (III) Maintenance and capital improvements |
5 | to municipal waste and sewage systems. |
6 | (IV) Preservation and reclamation of the |
7 | surface waters of the municipality. |
8 | (V) Other lawful purposes reasonably related |
9 | to the health, welfare and safety consequences of |
10 | severing natural gas in the municipality. |
11 | Any funds not distributed to the municipalities in a |
12 | county because of the budgetary limitations under |
13 | clause (A) shall be distributed to the county to be |
14 | used solely for grants to municipalities to defer the |
15 | cost of regional cooperation endeavors undertaken by |
16 | the municipalities within the county. |
17 | (iii) Fifteen percent to municipalities with no |
18 | producing sites located in a county with producing sites. |
19 | The money under this subparagraph shall be distributed to |
20 | each eligible municipality based on the following |
21 | formula: |
22 | (A) Divide: |
23 | (I) the number of producing sites in the |
24 | county; by |
25 | (II) the total number of producing sites in |
26 | all counties in this Commonwealth. |
27 | (B) Multiply: |
28 | (I) the quotient under clause (A); by |
29 | (II) the amount of money available for |
30 | distribution under this clause. |
|
1 | (C) The State Treasurer shall distribute an |
2 | equal share to each eligible municipality within the |
3 | same county. The amount distributed to a municipality |
4 | shall not exceed 50% of the municipality's total |
5 | budget for fiscal year 2010-2011, adjusted for |
6 | inflation in subsequent years by an amount not to |
7 | exceed an annual cost-of-living adjustment calculated |
8 | by applying the Annual Percent Change in the Consumer |
9 | Price Index for all Urban Consumers immediately prior |
10 | to the date the adjustment is due to take effect and |
11 | shall be used for the following purposes: |
12 | (I) Reconstruction, maintenance and repair |
13 | of municipal roadways and bridges, which the |
14 | municipality has determined have been, or are |
15 | being, used extensively to transport natural gas |
16 | or equipment related to the production of natural |
17 | gas. |
18 | (II) Preservation and improvement of |
19 | municipal water supplies. |
20 | (III) Maintenance and capital improvements |
21 | to municipal waste and sewage systems. |
22 | (IV) Preservation and reclamation of surface |
23 | waters of the municipality. |
24 | (V) Other lawful purposes reasonably related |
25 | to the health, welfare and safety consequences of |
26 | severing natural gas in municipalities within the |
27 | county. |
28 | Any funds not distributed to the municipalities in a |
29 | county because of the budgetary limitations under |
30 | clause (B) shall be distributed to the county to be |
|
1 | used solely for grants to municipalities to defer the |
2 | cost of regional cooperation endeavors undertaken by |
3 | the municipalities within the county. |
4 | (2) Fifty percent shall be distributed to the |
5 | Commonwealth Financing Authority to fund eligible projects |
6 | under 64 Pa.C.S. § 1551 (relating to Business in Our Sites |
7 | Program). |
8 | (b) Limitations.--Only producing sites and nonproducing |
9 | sites on which the tax is levied under section 5A02(a) during |
10 | the three-month period for which transfers and distributions are |
11 | made shall be included in any of the calculations made under |
12 | subsection (a) for that three-month period. |
13 | (c) Administration of funds by counties.-- |
14 | (1) The governing body of each county receiving |
15 | distributions under subsection (a)(1)(i) shall administer the |
16 | funds received. The governing body shall give priority to the |
17 | reconstruction, repair and maintenance of county roadways and |
18 | bridges, which the governing body has determined have been or |
19 | are being used to transport natural gas or equipment related |
20 | to the production of natural gas. A simple majority vote of |
21 | all of the members of the governing body shall be required |
22 | for any action under this paragraph. |
23 | (2) The Department of Community and Economic Development |
24 | shall have the authority to audit a county's use of such |
25 | funds and each county receiving funds shall make their |
26 | financial records and other documents relating to its use of |
27 | funds available to the Department of Community and Economical |
28 | Development. |
29 | (d) Administration of funds by municipalities.-- |
30 | (1) The governing body of a municipality receiving |
|
1 | distributions under subsection (a)(2) or (3) shall administer |
2 | the funds received. |
3 | (2) The Department of Community and Economic Development |
4 | shall have the authority to audit a municipality's use of the |
5 | funds. Each municipality receiving funds shall make financial |
6 | records and other documents relating to its use of the funds |
7 | available to the Department of Community and Economic |
8 | Development. |
9 | (f) Administration.--The department shall make the |
10 | calculations required for the transfers and distributions under |
11 | this section and shall submit the calculations to the State |
12 | Treasurer in sufficient time for the State Treasurer to make the |
13 | transfers and distributions as required by this section. |
14 | Section 5A31. Distributions from the Oil and Gas Emergency |
15 | Response Account. |
16 | (a) Well emergency response and grant program.--One million |
17 | dollars shall be distributed to the Office of the State Fire |
18 | Commission for the development of a training program for oil and |
19 | gas well emergency response, for oil and gas well emergency |
20 | response training of first responders and for the administration |
21 | of the grant program under subsection (b). |
22 | (b) Purchase or repair of equipment.--Ten million dollars |
23 | shall be distributed to the Office of the State Fire |
24 | Commissioner for a grant program for the purchase or repair of |
25 | equipment necessary for oil and gas well emergency response by |
26 | first responders. Only first responders in counties with |
27 | producing sites shall be eligible for grants under this section. |
28 | Section 5A32. Administration of costs. |
29 | Annually, the State Treasurer shall transfer from the fund an |
30 | amount not to exceed $3,000,000 to the department to be used for |
|
1 | costs associated with the enforcement or administration of this |
2 | chapter. |
3 | Section 10. Sections 601(a) and 602 of the act, amended July |
4 | 2, 1992 (P.L.365, No.78), are amended to read: |
5 | Section 601. Well plugging funds. |
6 | (a) All fines, civil penalties, permit and registration fees |
7 | collected under this act are hereby appropriated to the |
8 | Department of Environmental [Resources] Protection to carry out |
9 | the purposes of this act. |
10 | * * * |
11 | Section 602. Local ordinances. |
12 | Except with respect to ordinances adopted pursuant to the act |
13 | of July 31, 1968 (P.L.805, No.247), known as the Pennsylvania |
14 | Municipalities Planning Code, [and], the act of October 4, 1978 |
15 | (P.L.851, No.166), known as the Flood Plain Management Act, and |
16 | the act of March 31, 1927 (P.L.98, No.69), referred to as the |
17 | Second Class City Zoning Law, all local ordinances and |
18 | enactments purporting to regulate oil and gas well operations |
19 | regulated by this act are hereby preempted and superseded to the |
20 | extent the ordinances and enactments regulate the method of oil |
21 | and gas well operations. No ordinances or enactments adopted |
22 | pursuant to the aforementioned acts shall contain provisions |
23 | which impose conditions, requirements or limitations on the |
24 | [same features] method of oil and gas well operations regulated |
25 | by this act or that accomplish the same purposes as set forth in |
26 | this act. [The Commonwealth, by this enactment, hereby preempts |
27 | and supersedes the regulation of oil and gas wells as herein |
28 | defined.] Nothing in this act shall affect the traditional power |
29 | of local government to regulate zoning and land development of |
30 | oil and gas activities as well as other aspects, such as the |
|
1 | time and the place of operations to protect the health, safety |
2 | and welfare of the general public through local ordinances and |
3 | enactments. |
4 | Section 11. The act is amended by adding a section to read: |
5 | Section 604.1. Moratorium. |
6 | (a) Notwithstanding any other provision of law, there is |
7 | hereby established a moratorium on the new leasing and the |
8 | issuance of new well permits under this act for any State forest |
9 | land not under a lease agreement by September 1, 2010, for the |
10 | natural gas drilling on State forest lands in the Marcellus |
11 | Shale formation in this Commonwealth. The purpose of the |
12 | moratorium shall be to provide additional time to review the |
13 | permitting process and guidelines and regulations to protect the |
14 | public land, health and safety. |
15 | (b) The moratorium shall expire two years after the |
16 | effective date of this section. |
17 | Section 12. This act shall take effect in 60 days. |
|
