Pennsylvania SB 910: An Act amending the act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971, providing for natural gas severance tax; and repealing expiration provision relating to unconventional gas well fees.

Bill Text

PRINTER'S NO. 1037
THE GENERAL ASSEMBLY OF PENNSYLVANIA
SENATE BILL
No. 910
Session of
2025
INTRODUCED BY HAYWOOD, HUGHES, KEARNEY, KANE AND SAVAL,
JULY 8, 2025
REFERRED TO FINANCE, JULY 8, 2025
AN ACT
Amending the act of March 4, 1971 (P.L.6, No.2), entitled "An
act relating to tax reform and State taxation by codifying
and enumerating certain subjects of taxation and imposing
taxes thereon; providing procedures for the payment,
collection, administration and enforcement thereof; providing
for tax credits in certain cases; conferring powers and
imposing duties upon the Department of Revenue, certain
employers, fiduciaries, individuals, persons, corporations
and other entities; prescribing crimes, offenses and
penalties," providing for natural gas severance tax; and
repealing expiration provision relating to unconventional gas
well fees.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. The act of March 4, 1971 (P.L.6, No.2), known as
the Tax Reform Code of 1971, is amended by adding an article to
read:
ARTICLE X-A
NATURAL GAS SEVERANCE TAX
Section 1001-A. Definitions.
The following words and phrases when used in this article
shall have the meanings given to them in this section unless the
context clearly indicates otherwise:
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"Department." The Department of Revenue of the Commonwealth.
"Natural gas." A fossil fuel consisting of a mixture of
hydrocarbon gases, primarily methane, possibly including ethane,
propane, butane, pentane, carbon dioxide, oxygen, nitrogen and
hydrogen sulfide and other gas species. The term includes
natural gas from oil fields known as associated gas or casing
head gas, natural gas fields known as nonassociated gas, coal
beds, shale beds and other formations. The term does not include
coal bed methane.
"Producer." A person who engages or continues within this
Commonwealth in the business of severing natural gas for sale,
profit or commercial use. The term does not include a person who
severs natural gas from a storage field.
"Producing site." A point of severance capable of producing
natural gas in paying quantities.
"Reporting period." A calendar month in which natural gas is
severed.
"Sever." To extract or otherwise remove natural gas from the
soil or water of this Commonwealth.
"Severance." The extraction or other removal of natural gas
from the soil or water of this Commonwealth.
"Severing." Extracting or otherwise removing natural gas
from the soil or water of this Commonwealth.
"Unit." A thousand cubic feet of natural gas measured at the
wellhead at a temperature of 60 degrees Fahrenheit and an
absolute pressure of 14.73 pounds per square inch in accordance
with American Gas Association standards and according to Boyle's
Law for the measurement of gas under varying pressures with
deviations as follows:
(1) The average absolute atmospheric pressure shall be
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assumed to be 14.4 pounds to the square inch, regardless of
elevation or location of point of delivery above sea level or
variations in atmospheric pressure from time to time.
(2) The temperature of the gas passing the meters shall
be determined by the continuous use of a recording
thermometer installed to properly record the temperature of
gas flowing through the meters. The arithmetic average of the
temperature recorded each 24-hour day shall be used in
computing gas volumes. If a recording thermometer is not
installed, or is installed and not operating properly, an
average flowing temperature of 60 degrees Fahrenheit shall be
used in computing gas volume.
(3) The specific gravity of the gas shall be determined
annually by tests made by the use of an Edwards or Acme
gravity balance or at intervals as found necessary in
practice. Specific gravity determinations shall be used in
computing gas volumes.
(4) The deviation of the natural gas from Boyle's Law
shall be determined by annual tests or at other shorter
intervals as found necessary in practice. The apparatus and
method used in making the test shall be in accordance with
the Report No. 3 of the Gas Measurement Committee of the
American Gas Association or recommendations of the National
Bureau of Standards or amendments to the report or
recommendations. The results of the tests shall be used in
computing the volume of gas delivered.
Section 1002-A. Imposition of tax.
(a) Establishment.--Beginning January 1, 2026, a natural gas
severance tax shall be levied on every producer.
(b) Rate.--For the 2026 calendar year and each calendar year
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thereafter, the tax shall be imposed on the gross value of the
units severed at the wellhead during a reporting period at a
rate of 6.5%.
Section 1003-A. Return and payment.
(a) Requirement.--A producer shall file a return with th