HB 2129 — An Act amending Title 58 (Oil and Gas) of the Pennsylvania Consolidated Statutes, in unconventional gas well fee, repealing provisions relating to expiration; imposing a natural gas tax; and imposing penalties.

PRINTER'S NO.   2755

                     THE GENERAL ASSEMBLY OF PENNSYLVANIA



                         HOUSE BILL
                         No. 2129
                                                Session of
                                                  2026

     INTRODUCED BY PIELLI, KHAN, SHUSTERMAN, HILL-EVANS, HOHENSTEIN,
        PROBST, WEBSTER, VITALI, CIRESI, BOROWSKI, MALAGARI, CEPEDA-
        FREYTIZ, WAXMAN, KAZEEM, RIVERA, D. WILLIAMS, HANBIDGE AND
        FREEMAN, JANUARY 12, 2026

     REFERRED TO COMMITTEE ON ENERGY, JANUARY 12, 2026


                                     AN ACT
 1   Amending Title 58 (Oil and Gas) of the Pennsylvania Consolidated
 2      Statutes, in unconventional gas well fee, repealing
 3      provisions relating to expiration; imposing a natural gas
 4      tax; and imposing penalties.
 5      The General Assembly of the Commonwealth of Pennsylvania
 6   hereby enacts as follows:
 7      Section 1.    Section 2318 of Title 58 of the Pennsylvania
 8   Consolidated Statutes is repealed:
 9   [§ 2318.    Expiration.
10      (a)     Notice.--The Secretary of the Commonwealth shall, upon
11   the imposition of a severance tax on unconventional gas wells in
12   this Commonwealth, submit for publication in the Pennsylvania
13   Bulletin notice of the imposition.
14      (b)     Date.--This chapter shall expire on the date of the
15   publication of the notice under subsection (a).]
16      Section 2.    Title 58 is amended by adding a part to read:
17                                  PART IV
18                                  TAXATION
 1   Chapter
 2      41.    (Reserved)
 3      43.    Severance Tax
 4                                   CHAPTER 41
 5                                   (Reserved)
 6                                   CHAPTER 43
 7                                 SEVERANCE TAX
 8   Sec.
 9   4301.    Scope of chapter.
10   4302.    Definitions.
11   4303.    Imposition of tax.
12   4304.    Impact fee credits.
13   4305.    Registration.
14   4306.    Meters.
15   4307.    Assessments.
16   4308.    Time for assessment.
17   4309.    Extension of assessment period.
18   4310.    Reassessments.
19   4311.    Interest.
20   4312.    Penalties.
21   4313.    Administration of tax.
22   4314.    Criminal acts.
23   4315.    Abatement of additions or penalties.
24   4316.    Bulk and auction sales.
25   4317.    Collection upon failure to request reassessment, review
26                or appeal.
27   4318.    Tax liens.
28   4319.    Tax suit reciprocity.
29   4320.    Service.
30   4321.    Refunds.

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 1   4322.   Refund petition.
 2   4323.   Rules and regulations.
 3   4324.   Recordkeeping.
 4   4325.   Examinations.
 5   4326.   Unauthorized disclosure.
 6   4327.   Cooperation with other governments.
 7   4328.   Bonds.
 8   4329.   Prohibition.
 9   4330.   Future agreements.
10   4331.   Stripper wells.
11   4332.   Deposit of proceeds.
12   § 4301.    Scope of chapter.
13      This chapter relates to taxation of the severance of natural
14   gas.
15   § 4302.    Definitions.
16      The following words and phrases when used in this chapter
17   shall have the meanings given to them in this section unless the
18   context clearly indicates otherwise:
19      "Department."    The Department of Revenue of the Commonwealth.
20      "Mcf."    A unit of measurement expressed by 1,000 cubic feet.
21      "Natural gas."      As defined in section 2301 (relating to
22   definitions).
23      "Person."     A natural person, corporation, fiduciary,
24   association or other entity. The term includes the Commonwealth
25   and any political subdivision, instrumentality and authority of
26   the Commonwealth.
27      "Producer."    As defined in section 2301.
28      "Reporting period."     A calendar month in which natural gas is
29   severed.
30      "Secretary."     The Secretary of Revenue of the Commonwealth.

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 1      "Sever."   Extract or otherwise remove natural gas from the
 2   soil or water of this Commonwealth.
 3      "Storage field."     A natural formation or other site that is
 4   used to store natural gas that did not originate from and has
 5   been transplanted into the formation or site.
 6      "Stripper well."     A natural gas well incapable of producing
 7   more than 90 units of natural gas each day of the calendar month
 8   immediately preceding the reporting period, including production
 9   from all zones and multilateral well bores at a single well,
10   without regard to whether the production is separately metered.
11      "Trigger date."    The date that is 60 days after the effective
12   date of this section.
13      "Unconventional gas well."    As defined in section 2301.
14      "Unit."    One thousand cubic feet of natural gas measured at
15   the wellhead at a temperature of 60º Fahrenheit and an absolute
16   pressure of 14.73 pounds per square inch in accordance with
17   American Gas Association standards and according to Boyle's law
18   for the measurement of gas under varying pressures with
19   deviations as follows:
20          (1)    The average absolute atmospheric pressure shall be
21      assumed to be 14.4 pounds to the square inch, regardless of
22      elevation or location of point of delivery above sea level or
23      variations in atmospheric pressure.
24          (2)    The temperature of the gas passing the meters shall
25      be determined by the continuous use of a recording
26      thermometer installed to properly record the temperature of
27      gas flowing through the meters. The arithmetic average of the
28      temperature recorded each 24-hour day shall be used in
29      computing gas volumes. If a recording thermometer is not
30      installed, or is installed and not operating properly, an

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 1      average flowing temperature of 60º Fahrenheit shall be used
 2      in computing gas volume.
 3             (3)   The specific gravity of the gas shall be determined
 4      annually by tests made by the use of an Edwards or Acme
 5      gravity balance, or at intervals as found necessary in
 6      practice. Specific gravity determinations shall be used in
 7      computing gas volumes.
 8             (4)   The deviation of the natural gas from Boyle's law
 9      shall be determined by annual tests or at other shorter
10      intervals as found necessary in practice. The apparatus and
11      method used in making the test shall be in accordance with
12      recommendations of the National Institute of Standards and
13      Technology or Report No. 3 of the Gas Measurement Committee
14      of the American Gas Association. The results of the tests
15      shall be used in computing the volume of gas delivered under
16      this chapter.
17      "Wellhead meter."     A meter that measures the volume of
18   natural gas severed from an unconventional gas well.
19   § 4303.    Imposition of tax.
20      (a)    Establishment.--Beginning July 1 in the year following
21   the effective date of this section, a natural gas severance tax
22   is levied and payable by every producer on each unconventional
23   gas well.
24      (b)    Effect.--The imposition of the severance tax under
25   subsection (a) shall not affect the collection and distribution
26   of the unconventional gas well fee imposed under Chapter 23
27   (relating to unconventional gas well fee).
28      (c)    Computation.--The severance tax payable under subsection
29   (a) shall be calculated by applying the sum of the base tax rate
30   under subsection (d) and the additional tax rate under

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 1   subsection (e) to the annual market value of natural gas per
 2   unit severed after deduction of postproduction costs.
 3      (d)     Base tax rate.--The base tax rate under this section
 4   shall be 9% of the annual market value of natural gas per unit
 5   severed after deduction of postproduction costs.
 6      (e)     Additional tax rate.--In addition to the base tax rate
 7   under subsection (d), an additional tax rate shall apply as
 8   follows:
 9            (1)   If exports of natural gas from the United States, as
10      calculated by the United States Energy Information
11      Administration, for the imposition period for which the
12      severance tax is owed are greater than or equal to 4,000,000
13      mcf but less than 6,000,000 mcf, the additional tax rate
14      shall be 0.5% of the annual market value of natural gas per
15      unit severed after deduction of postproduction costs.
16            (2)   If exports of natural gas from the United States, as
17      calculated by the United States Energy Information
18      Administration, for the imposition period for which the
19      severance tax is owed are greater than or equal to 6,000,000
20      mcf but less than 8,000,000 mcf, the additional tax rate
21      shall be 1% of the annual market value of natural gas per
22      unit severed after deduction of postproduction costs.
23            (3)   If exports of natural gas from the United States, as
24      calculated by the United States Energy Information
25      Administration, for the imposition period for which the
26      severance tax is owed are greater than or equal to 8,000,000
27      mcf but less than 10,000,000 mcf, the additional tax rate
28      shall be 1.5% of the annual market value of natural gas per
29      unit severed after deduction of postproduction costs.
30            (4)   If exports of natural gas from the United States, as

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 1      calculated by the United States Energy Information
 2      Administration, for the imposition period for which the
 3      severance tax is owed are greater than or equal to 10,000,000
 4      mcf, the additional tax rate shall be 2% of the annual market
 5      value of natural gas per unit severed after deduction of
 6      postproduction costs.
 7      (f)   Payment.--The severance tax imposed under this section
 8   shall be due on the same day the report is due under subsection
 9   (g). The tax shall become delinquent if not remitted to the
10   department on the reporting date.
11      (g)   Report.--Each producer shall, by June 30 of the first
12   fiscal year in which the severance tax is imposed and by June 30
13   of each fiscal year thereafter, submit to the department the
14   payment of the severance tax and a report for the imposition
15   period on a form specified by the department.
16      (h)   Exemptions.--The severance tax imposed under this
17   section shall not be imposed on the following:
18            (1)   natural gas severed, sold and delivered by a
19      producer at or within five miles of the producing site for
20      the processing or manufacture of tangible personal property
21      as defined under section 201 of the act of March 4, 1971
22      (P.L.6, No.2), known as the Tax Reform Code of 1971;
23            (2)   natural gas severed under a natural gas lease and
24      provided to a lessor for no consideration for the lessor's
25      own use;
26            (3)   natural gas severed from a storage field; or
27            (4)   a stripper well.
28      (i)   Volume measurement.--
29            (1)   Except as provided under paragraph (2), for purposes
30      of computing the severance tax, natural gas severed shall be

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 1      measured at the wellhead meter.
 2             (2)   Natural gas severed prior to the trigger date shall
 3      be measured according to the standards and methods used for
 4      reporting natural gas production to the Department of
 5      Environmental Protection.
 6      (j)    Administration.--The department shall enforce the
 7   provisions of this section and may prescribe, adopt, promulgate
 8   and enforce rules and regulations relating to any matter or
 9   thing pertaining to the administration or enforcement of the
10   provisions of this section and the collection of taxes imposed
11   by this section.
12      (k)    Payment of tax.--A producer may not make the tax imposed
13   under this section on natural gas severed under a lease an
14   obligation, indebtedness or liability of the lessor and may not
15   otherwise require the lessor to reimburse the producer for the
16   amount of the tax.
17   § 4304.    Impact fee credits.
18      (a)    Credits.--Unconventional gas well fees timely paid by a
19   producer for the prior calendar year under Chapter 23 (relating
20   to unconventional gas well fee) shall be allowed as credit
21   against the tax imposed under this chapter.
22      (b)    Initial credit.--The initial credit under subsection (a)
23   shall be prorated based on the number of months in which this
24   chapter was effective during the calendar year for which the
25   unconventional gas well fee was paid. Thereafter, the credit
26   shall be based on the entire unconventional gas well fee paid by
27   a producer on or before April 1 for the preceding calendar year.
28      (c)    Carry back and forward.--A credit under this section may
29   not be carried back or carried forward beyond 12 months after
30   payment of the unconventional gas well fee that is sold,

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 1   assigned or refunded.
 2   § 4305.    Registration.
 3      (a)    Application.--
 4             (1)   Before a producer severs natural gas or continues to
 5      sever natural gas in this Commonwealth after the date
 6      occurring 60 days following the effective date of this
 7      section, the producer shall apply to the department for a
 8      registration certificate.
 9             (2)   The department may charge an application fee to
10      cover the administrative costs associated with the
11      application and registration process. The fee shall not
12      exceed 3¢ per mcf of severed natural gas.
13      (b)    Issuance.--
14             (1)   Except as provided in subsection (c), after the
15      receipt of an application and the required application fee,
16      the department shall issue a registration certificate to the
17      producer. The registration certificate is nonassignable.
18             (2)   A registrant shall renew the registration
19      certificate on a staggered renewal system established by the
20      department. After the initial staggered renewal period, a
21      registration certificate is valid for a period of five years.
22      (c)    Refusal, suspension or revocation.--
23             (1)   The department may refuse to issue, suspend or
24      revoke a registration certificate if the applicant or
25      registrant has not filed required State tax reports and paid
26      State taxes not subject to a timely perfected administrative
27      or judicial appeal or an authorized deferred payment plan.
28             (2)   The department shall notify the applicant or
29      registrant of a refusal, suspension or revocation. The notice
30      shall contain a statement that the refusal, suspension or

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 1    revocation may be made public. The notice shall be made by
 2    first class mail.
 3          (3)   An applicant or registrant aggrieved by the
 4    determination of the department may file an appeal under the
 5    provisions for administrative appeals in the act of March 4,
 6    1971 (P.L.6, No.2), known as the Tax Reform Code of 1971. In
 7    the case of a suspension or revocation that is appealed, the
 8    registration certificate shall remain valid pending a final
 9    outcome of the appeals process. Notwithstanding any other
10    provision of law, if no appeal is taken or if an appeal is
11    taken and denied at the conclusion of the appeal process, the
12    department may disclose, by publication or otherwise, the
13    identity of a producer and the fact that the producer's
14    registration certificate has been refused, suspended or
15    revoked under this subsection. Disclosure may include the
16    basis for refusal, suspension or revocation.
17    (d)   Violation.--
18          (1)   A person that severs natural gas in this
19    Commonwealth in violation of subsection (a) commits a summary
20    offense and shall, upon conviction, be sentenced to pay a
21    fine not less than $300 nor more than $1,500 or, in default
22    of the payment, to imprisonment for not less than five days
23    nor more than 30 days.
24          (2)   For purposes of this subsection, each day in which
25    natural gas is severed shall constitute a separate violation.
26          (3)   The penalties imposed by this subsection shall be in
27    addition to any other penalties imposed by this chapter.
28          (4)   The secretary may designate employees of the
29    department to enforce the provisions of this subsection. The
30    employees shall exhibit proof of and be within the scope of

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 1      the designation when instituting proceedings as provided by
 2      the Pennsylvania Rules of Criminal Procedure.
 3      (e)    Failure to obtain registration certificate.--Failure to
 4   obtain or hold a valid registration certificate does not relieve
 5   a person from liability for the tax imposed by this chapter.
 6   § 4306.    Meters.
 7      A producer shall provide for and maintain a discrete wellhead
 8   meter where natural gas is severed. A producer shall ensure that
 9   the meters are maintained according to industry standards. A
10   wellhead meter installed after the effective date of this
11   section shall be a digital meter.
12   § 4307.    Assessments.
13      (a)    Authorization and requirement.--The department shall
14   make inquiries, determinations and assessments of the tax
15   imposed under this chapter, including interest, additions and
16   penalties imposed under this chapter.
17      (b)    Notice.--The notice of assessment and demand for payment
18   shall be mailed to the producer. The notice shall state the
19   basis of the assessment. The department shall send the notice of
20   assessment to the producer at the producer's registered post
21   office address via mail if the assessment increases the
22   producer's tax liability by $300 or more.
23   § 4308.    Time for assessment.
24      (a)    Requirement.--
25             (1)   An assessment as provided under section 4307
26      (relating to assessments) shall be made within three years
27      after the date when the report provided for under section
28      4303(g) (relating to imposition of tax) is filed or the end
29      of the year in which the tax liability arises, whichever
30      shall occur last.

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 1             (2)   For purposes of this subsection and subsection (b),
 2      a return filed before the last day prescribed for the filing
 3      period shall be considered as filed on the last day.
 4      (b)    Exception.--If the producer underpays the correct amount
 5   of the tax due by 25% or more, the tax may be assessed within
 6   six years after the date the return was filed.
 7      (c)    Intent to evade.--Where no return is filed or where the
 8   producer files a false or fraudulent return with intent to evade
 9   the tax imposed by this chapter, the assessment may be made at
10   any time.
11      (d)    Erroneous credit or refund.--Within three years of the
12   granting of a refund or credit or within the period in which an
13   assessment or reassessment may have been issued by the
14   department for the taxable period for which the refund was
15   granted, whichever period shall occur last, the department may
16   issue an assessment to recover a refund or credit made or
17   allowed erroneously.
18   § 4309.    Extension of assessment period.
19      Notwithstanding the provisions of this chapter, the
20   assessment period may be extended in the event a producer has
21   provided written consent before the expiration of the period
22   provided in section 4308 (relating to time for assessment) for a
23   tax assessment. The amount of tax due may be assessed at any
24   time within the extended period. The period may be extended
25   further by subsequent written consents made before the
26   expiration of the extended period.
27   § 4310.    Reassessments.
28      A producer against whom an assessment is made may petition
29   the department for a reassessment under Article XXVII of the act
30   of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of

20260HB2129PN2755                     - 12 -
 1   1971.
 2   § 4311.    Interest.
 3      The department shall assess interest on any delinquent tax at
 4   the rate prescribed under section 806 of the act of April 9,
 5   1929 (P.L.343, No.176), known as The Fiscal Code.
 6   § 4312.    Penalties.
 7      The department shall enforce the following penalties:
 8             (1)   A penalty against a producer without a registration
 9      certificate required under section 4305 (relating to
10      registration). The penalty shall be $1 for every unit severed
11      without a valid registration certificate. The department may
12      assess this penalty separately from or in conjunction with
13      any assessment of the natural gas severance tax.
14             (2)   A penalty against a producer for failure to timely
15      file a return as required under section 4303(g) (relating to
16      imposition of tax). The penalty shall be 5% of the tax
17      liability to be reported on the return for each day beyond
18      the due date that the return is not filed.
19             (3)   In addition to the penalty under paragraph (2), a
20      penalty against the producer for a willful failure to timely
21      file a return. The penalty shall be 200% of the tax liability
22      required to be reported on the return.
23             (4)   A penalty against a producer for failure to timely
24      pay the tax as required under this chapter. The penalty shall
25      be 5% of the amount of tax due for each day beyond the
26      payment date that the tax is not paid.
27   § 4313.    Administration of tax.
28      Unless otherwise specified, Chapters IV, V, VI, VII and VIII
29   of Part VI of Article II of the act of March 4, 1971 (P.L.6,
30   No.2), known as the Tax Reform Code of 1971, shall apply to this

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 1   chapter.
 2   § 4314.    Criminal acts.
 3      (a)     Fraudulent return.--Any person with intent to defraud
 4   the Commonwealth, who willfully makes or causes to be made a
 5   return required under this chapter that is false, is guilty of a
 6   misdemeanor and shall, upon conviction, be sentenced to pay a
 7   fine of not more than $2,000 or to imprisonment for not more
 8   than three years, or both.
 9      (b)     Other crimes.--
10             (1)    Except as otherwise provided under subsection (a), a
11      person is guilty of a misdemeanor and shall, upon conviction,
12      be sentenced to pay a fine of not more than $1,000 and costs
13      of prosecution or to imprisonment for not more than one year,
14      or both, for any of the following:
15                    (i)    Willfully failing to timely remit the tax to the
16             department.
17                    (ii)    Willfully failing or neglecting to timely file
18             a return or report required by this chapter.
19                    (iii)    Refusing to timely pay a tax, penalty or
20             interest imposed or provided for by this chapter.
21                    (iv)    Willfully failing to preserve the person's
22             books, papers and records as directed by the department.
23                    (v)    Refusing to permit the department or the
24             person's authorized agents to examine the person's books,
25             records or papers.
26                    (vi)    Knowingly making any incomplete, false or
27             fraudulent return or report.
28                    (vii)    Preventing or attempting to prevent the full
29             disclosure of the amount of natural gas severance tax
30             due.

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 1                   (viii)   Providing any person with a false statement
 2             as to the payment of the tax imposed under this chapter
 3             with respect to any pertinent facts.
 4                   (ix)   Making, uttering or issuing a false or
 5             fraudulent statement.
 6             (2)   The penalties imposed under this section shall be in
 7      addition to other penalties imposed under this chapter.
 8   § 4315.    Abatement of additions or penalties.
 9      Upon the filing of a petition for reassessment or a petition
10   for refund by a producer as provided under this chapter,
11   additions or penalties imposed upon the producer by this chapter
12   may be waived or abated, in whole or in part, where the
13   petitioner establishes that he acted in good faith, without
14   negligence and with no intent to defraud.
15   § 4316.    Bulk and auction sales.
16      A person that sells or causes to be sold at auction, or that
17   sells or transfers in bulk, 51% or more of a stock of goods,
18   wares or merchandise of any kind, fixtures, machinery,
19   equipment, buildings or real estate involved in a business for
20   which the person holds a registration certificate or is required
21   to obtain a registration certificate under the provisions of
22   this chapter shall be subject to the provisions of section 1403
23   of the act of April 9, 1929 (P.L.343, No.176), known as The
24   Fiscal Code.
25   § 4317.    Collection upon failure to request reassessment, review
26                   or appeal.
27      (a)    Power of department.--The department may collect the tax
28   imposed under this chapter:
29             (1)   If an assessment of the tax is not paid within 30
30      days after notice to the producer when no petition for

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 1      reassessment has been filed.
 2             (2)   Within 60 days of the reassessment, if no petition
 3      for review has been filed.
 4             (3)   If no appeal has been made, within 30 days of:
 5                   (i)    the Board of Finance and Revenue's decision of a
 6             petition for review; or
 7                   (ii)   the expiration of the Board of Finance and
 8             Revenue's time for acting upon the petition.
 9             (4)   In all cases of judicial sales, receiverships,
10      assignments or bankruptcies.
11      (b)    Prohibition.--In a case for the collection of taxes
12   under subsection (a), the producer against whom the taxes were
13   assessed may not set up a ground of defense that might have been
14   determined by the department, the Board of Finance and Revenue
15   or the courts, provided that the defense of failure of the
16   department to mail notice of assessment or reassessment to the
17   producer and the defense of payment of assessment or
18   reassessment may be raised in proceedings for collection by a
19   motion to stay the proceedings.
20   § 4318.    Tax liens.
21      (a)    Lien imposed.--
22             (1)   If a producer neglects or refuses to pay the tax
23      imposed under this chapter for which the producer is liable
24      under this chapter after demand, the amount, including
25      interest, addition or penalty, together with additional costs
26      that may accrue, shall be a lien in favor of the Commonwealth
27      upon the real and personal property of the producer, but only
28      after the same has been entered and docketed of record by the
29      prothonotary of the county where the property is situated.
30             (2)   The department may, at any time, transmit to the

20260HB2129PN2755                        - 16 -
 1    prothonotaries of the respective counties certified copies of
 2    the liens imposed under this section.
 3          (3)   The prothonotary receiving the lien shall enter and
 4    docket the lien of record to the office of the prothonotary.
 5    The lien shall be indexed as judgments are now indexed. No
 6    prothonotary may require as a condition precedent to the
 7    entry of the lien the payment of costs incidental to its
 8    entry.
 9    (b)   Priority of lien and effect on judicial sale.--
10          (1)   A lien imposed under this section shall have
11    priority from the date of its recording and shall be fully
12    paid and satisfied out of the proceeds of any judicial sale
13    of property subject to the lien, before any other obligation,
14    judgment, claim, lien or estate to which the property may
15    subsequently become subject except as follows:
16                (i)    the costs of the sale;
17                (ii)    the writ upon which the sale was made;
18                (iii)    real estate taxes; and
19                (iv)    municipal claims against the property.
20          (2)   The lien shall be subordinate to mortgages and other
21    liens existing and duly recorded or entered of record prior
22    to the recording of the lien.
23    (c)   No discharge by sale on junior lien.--
24          (1)   In the case of a judicial sale of property subject
25    to a lien imposed under this section, upon a lien or claim
26    over which the lien imposed under this section has priority,
27    the sale shall discharge the lien imposed under this section
28    to the extent only that the proceeds are applied to its
29    payment, and the lien shall continue in full force and effect
30    as to the balance remaining unpaid.

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 1            (2)   There shall be no inquisition or condemnation upon
 2      any judicial sale of real estate made by the Commonwealth
 3      under the provisions of this chapter.
 4            (3)   The lien shall continue as provided in the act of
 5      April 9, 1929 (P.L.343, No.176), known as The Fiscal Code,
 6      and a writ of execution may directly issue upon the lien
 7      without the issuance and prosecution to judgment of a writ of
 8      scire facias, provided that not less than 10 days before
 9      issuance of any execution on the lien, notice of the filing
10      and the effect of the lien shall be sent by registered mail
11      to the producer's last known post office address. The lien
12      shall have no effect upon any stock of goods, wares or
13      merchandise regularly sold or leased in the ordinary course
14      of business by the producer against whom the lien has been
15      entered, unless and until a writ of execution has been issued
16      and a levy made upon the stock of goods, wares and
17      merchandise.
18      (d)   Penalty.--A prothonotary who intentionally violates this
19   section commits a misdemeanor of the third degree and shall,
20   upon conviction, be sentenced to pay a fine of not more than
21   $1,000 and costs of prosecution or to imprisonment for not more
22   than one year, or both.
23      (e)   Priority.--
24            (1)   Except as provided in this chapter, in the case of
25      the distribution, voluntary or compulsory, in receivership,
26      bankruptcy or otherwise of the property or estate of a
27      person, all taxes imposed by this chapter that are due and
28      unpaid and are not collectible under the provisions of
29      section 225 of the act of March 4, 1971 (P.L.6, No.2), known
30      as the Tax Reform Code of 1971, shall be paid from the first

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 1      money available for distribution in priority to all other
 2      claims and liens, except as the laws of the United States may
 3      give priority to a claim to the Federal Government.
 4             (2)   A person charged with the administration or
 5      distribution of the property or estate who violates the
 6      provisions of this section shall be personally liable for the
 7      taxes imposed by this chapter that are accrued and unpaid and
 8      chargeable against the person whose property or estate is
 9      being administered or distributed.
10      (f)    Other remedies.--Subject to the limitations contained in
11   this chapter as to the assessment of taxes, nothing contained in
12   this section may be construed to restrict, prohibit or limit the
13   use by the department in collecting taxes due and payable of
14   another remedy or procedure available at law or equity for the
15   collection of debts.
16   § 4319.    Tax suit reciprocity.
17      The courts of this Commonwealth shall recognize and enforce
18   liabilities for natural gas severance or extraction taxes
19   lawfully imposed by any other state, if the other state
20   recognizes and enforces the tax imposed under this chapter.
21   § 4320.    Service.
22      A producer is deemed to have appointed the Secretary of the
23   Commonwealth as the producer's agent for the acceptance of
24   service of process or notice in a proceeding for the enforcement
25   of the civil provisions of this chapter. Service made upon the
26   Secretary of the Commonwealth as agent shall be of the same
27   legal force and validity as if the service had been personally
28   made on the producer. Where service cannot be made upon the
29   producer in the manner provided by other laws of this
30   Commonwealth relating to service of process, service may be made

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 1   upon the Secretary of the Commonwealth. In that case, a copy of
 2   the process or notice shall be personally served upon any agent
 3   or representative of the producer who may be found within this
 4   Commonwealth or, where no agent or representative may be found,
 5   a copy of the process or notice shall be sent via registered
 6   mail to the producer at the last known address of the producer's
 7   principal place of business, home office or residence.
 8   § 4321.   Refunds.
 9      (a)    Taxes, interest and penalties.--Under Article XXVII of
10   the act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform
11   Code of 1971, the department shall refund all taxes, interest
12   and penalties paid to the Commonwealth under the provisions of
13   this chapter to which the Commonwealth is not rightfully
14   entitled. The refunds shall be made to the person or the
15   person's heirs, successors, assigns or other personal
16   representatives who paid the tax, provided that no refund may be
17   made under this section regarding a payment made by reason of an
18   assessment where a producer has filed a petition for
19   reassessment under section 2702 of the Tax Reform Code of 1971
20   to the extent the petition is adverse to the producer by a
21   decision that is no longer subject to further review or appeal.
22      (b)    Construction.--Nothing in this chapter may be construed
23   to prohibit a producer that has filed a timely petition for
24   reassessment from amending it to a petition for refund where the
25   petitioner paid the tax assessed.
26   § 4322.   Refund petition.
27      (a)    Petition.--Except as provided in subsection (b), the
28   refund or credit of tax, interest or penalty provided under
29   section 4321 (relating to refunds) shall be made only where the
30   person who has paid the tax files a petition for refund with the

20260HB2129PN2755                   - 20 -
 1   department under Article XXVII of the act of March 4, 1971
 2   (P.L.6, No.2), known as the Tax Reform Code of 1971, within the
 3   time limits of section 3003.1 of the Tax Reform Code of 1971.
 4      (b)    Natural gas severance tax.--
 5             (1)   A refund or credit of tax, interest or penalty paid
 6      as a result of an assessment made by the department under
 7      section 4307 (relating to assessments) shall be made only
 8      where the person who has paid the tax files a petition for a
 9      refund with the department under Article XXVII of the Tax
10      Reform Code of 1971 within the time limits of section 3003.1
11      of the Tax Reform Code of 1971.
12             (2)   The filing of a petition for refund under the
13      provisions of this subsection shall not affect the abatement
14      of interest, additions or penalties to which the person may
15      be entitled by reason of payment of the assessment.
16   § 4323.    Rules and regulations.
17      The department shall enforce the provisions of this chapter
18   and shall promulgate rules and regulations to administer and
19   enforce the provisions of this chapter and the collection of
20   taxes, penalties and interest imposed by this chapter. The
21   department may prescribe the extent, if any, to which any of the
22   rules and regulations shall be applied without retroactive
23   effect.
24   § 4324.    Recordkeeping.
25      (a)    Duties.--A person liable for any tax imposed by this
26   chapter, or for the collection of the tax, shall keep records,
27   including those enumerated in subsection (b), render statements,
28   make returns and comply with the rules and regulations as the
29   department may prescribe regarding matters pertinent to the
30   person's business. Whenever it is necessary, the department may

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 1   require a person, by notice served upon the person or by
 2   regulations, to make returns, render statements or keep records
 3   as the department deems sufficient to show whether a person is
 4   liable to pay tax under this chapter.
 5      (b)   Records.--Records to be maintained are:
 6            (1)   Wellhead meter charts for each reporting period and
 7      the meter calibration and maintenance records. If turbine
 8      meters are in use, the maintenance records shall be made
 9      available to the department upon request.
10            (2)   Records, statements and other instruments furnished
11      to a producer by a person to whom the producer delivers for
12      sale, transport or delivery of natural gas.
13            (3)   Records, statements and other instruments as the
14      department may prescribe by regulation.
15      (c)   Records of nonresidents.--
16            (1)   A nonresident who does business in this Commonwealth
17      as a producer shall keep adequate records of the business and
18      of the tax due as a result. The records shall be retained
19      within this Commonwealth unless retention outside this
20      Commonwealth is authorized by the department.
21            (2)   The department may require a producer that desires
22      to retain records outside this Commonwealth to assume
23      reasonable out-of-State audit expenses.
24      (d)   Keeping of separate records.--
25            (1)   A producer that is engaged in another business or
26      businesses that do not involve the severing of natural gas
27      taxable under this chapter shall keep separate books and
28      records of the businesses so as to show the taxable severing
29      of natural gas under this chapter separately from other
30      business activities not taxable under this chapter.

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 1             (2)   If a person fails to keep separate books and
 2      records, the person shall be liable for a penalty equaling
 3      100% of tax due under this chapter for the period where
 4      separate records were not maintained.
 5   § 4325.    Examinations.
 6      (a)    Right to examine.--
 7             (1)   The department or any of its authorized agents may
 8      examine the books, papers, records and locations of a
 9      producer in order to verify the accuracy and completeness of
10      a return made or, if no return was made, to ascertain and
11      assess the tax imposed by this chapter. The department may
12      require the preservation of all books, papers and records for
13      any period deemed proper by the department but not to exceed
14      three years from the end of the calendar year to which the
15      records relate.
16             (2)   A producer shall give to the department or its agent
17      the means, facilities and opportunity for examinations and
18      investigations under this section.
19             (3)   The department may examine a person, under oath,
20      concerning the taxable severing of natural gas by a producer
21      or concerning any other matter relating to the enforcement or
22      administration of this chapter, and to this end may compel
23      the production of books, papers and records and the
24      attendance of all persons whether as parties or witnesses
25      believed to have knowledge of relevant matters.
26      (b)    Procedure.--The procedure for the hearings or
27   examinations shall be the same as that provided under the act of
28   April 9, 1929 (P.L.343, No.176), known as The Fiscal Code.
29   § 4326.    Unauthorized disclosure.
30      (a)    Confidentiality.--Information gained by the department

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 1   as a result of a return, examination, investigation, hearing or
 2   verification required or authorized under this chapter shall be
 3   confidential except for official purposes and except in
 4   accordance with proper judicial order or as otherwise provided
 5   by law.
 6      (b)    Penalty.--Any person unlawfully divulging the
 7   information shall be guilty of a misdemeanor and shall, upon
 8   conviction, be sentenced to pay a fine of not more than $1,000
 9   and costs of prosecution or to imprisonment for not more than
10   one year, or both.
11   § 4327.    Cooperation with other governments.
12      Notwithstanding the provisions of section 4319 (relating to
13   tax suit reciprocity), the department may permit the
14   Commissioner of the Internal Revenue Service, the proper officer
15   of any state or the authorized representative of either of them
16   to inspect the tax returns of a producer, or may furnish to the
17   commissioner or officer or to either of their authorized
18   representatives an abstract of the return of a producer, or
19   supply the officer or the officer's authorized representative
20   with information concerning any item contained in a return or
21   disclosed by the report of any examination or investigation of
22   the return of a producer. This permission shall be granted only
23   if the laws of the United States or another state grant
24   substantially similar privileges to the proper officer of the
25   Commonwealth charged with the administration of this chapter.
26   § 4328.    Bonds.
27      (a)    Producer to file bond.--
28             (1)   The department may require a nonresident natural
29      person, or any foreign corporation, association, fiduciary or
30      other entity, not authorized to do business within this

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 1    Commonwealth or not having an established place of business
 2    in this Commonwealth and subject to the tax imposed by
 3    section 4303 (relating to imposition of tax), to file a bond
 4    issued by a surety company authorized to do business in this
 5    Commonwealth and approved by the Insurance Commissioner as to
 6    solvency and responsibility, in amounts as the department may
 7    fix, to secure the payment of any tax or penalties due or
 8    that may become due from a nonresident natural person,
 9    corporation, association, fiduciary or other entity whenever
10    the department deems it necessary to protect the revenues
11    obtained under this chapter.
12        (2)   The department may also require a bond of a person
13    petitioning the department for reassessment in the case of
14    any assessment over $500 or where, in the department's
15    opinion, the ultimate collection is in jeopardy.
16        (3)   For a period of three years, the department may
17    require a bond of any person that has, on three or more
18    occasions within a 12-month period, either filed a return or
19    made payment to the department more than 30 days late.
20        (4)   In the event the department determines a producer is
21    required to file a bond, the department shall give notice to
22    the producer specifying the amount of the bond required.
23        (5)   The producer shall file the bond within five days
24    after notice is given by the department unless, within five
25    days, the producer requests in writing a hearing before the
26    secretary or the secretary's representative.
27        (6)   At the hearing, the necessity, propriety and amount
28    of the bond shall be determined by the secretary or the
29    secretary's representative.
30        (7)   The determination shall be final and the producer

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 1      shall comply within 15 days after notice is mailed to the
 2      producer.
 3      (b)    Securities in lieu of bond.--
 4             (1)   In lieu of the bond required under this section,
 5      securities approved by the department or cash in a prescribed
 6      amount may be deposited. The securities or cash shall be kept
 7      in the custody of the department.
 8             (2)   The department may:
 9                   (i)    Apply the securities or cash to the tax imposed
10             under this chapter and interest or penalties due without
11             notice to the depositor.
12                   (ii)   Sell the securities to pay the tax and interest
13             or penalties due at public or private sale upon five
14             days' written notice to the depositor.
15      (c)    Failure to file bond.--
16             (1)   The department may file a lien under section 4318
17      (relating to tax liens) against any producer who fails to
18      file a bond when required to do so under this section.
19             (2)   All funds received upon execution of the judgment on
20      the lien shall be refunded to the producer with 3% interest
21      should a final determination be made that the producer does
22      not owe any payment to the department.
23   § 4329.    Prohibition.
24      A producer may not make the tax imposed under section 4303
25   (relating to imposition of tax) on natural gas severed under a
26   natural gas lease, an obligation, indebtedness or liability of a
27   landowner, leaseholder or other person in possession of real
28   property upon which the removal or extraction occurs and shall
29   not otherwise require the landowner to pay or reimburse the
30   producer for the amount of the tax.

20260HB2129PN2755                        - 26 -
 1   § 4330.   Future agreements.
 2      On or after the effective date of this section, a provision
 3   of an agreement in violation of section 4329 (relating to
 4   prohibition) is declared to be illegal, contrary to public
 5   policy and null and void.
 6   § 4331.   Stripper wells.
 7      Notwithstanding the definition of "stripper well" in section
 8   2301 (relating to definitions) or any other provision of Chapter
 9   23 (relating to unconventional gas well fee) to the contrary, a
10   stripper well shall only be exempt from the payment of the
11   unconventional gas well fee due under Chapter 23 if the well was
12   incapable of producing more than 90 units of natural gas each
13   day of every calendar month in a calendar year.
14   § 4332.   Deposit of proceeds.
15      The proceeds of the tax imposed under section 4303 (relating
16   to imposition of tax) and penalties and interest imposed under
17   this chapter shall be deposited into the General Fund.
18      Section 3.   This act shall take effect immediately.




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