Article Summary: Energy & Natural Resources State Legislative Update: Pennsylvania & West Virginia (February 2026)
This February 2026 update summarizes energy and natural-resources legislative items in Pennsylvania and West Virginia, plus a brief federal snapshot. It highlights proposed severance taxes in Pennsylvania and multiple West Virginia proposals affecting royalty withholding, oil and gas documents, oversight fees, and levies.
- Pennsylvania bills: SB910 proposes a 6.5% natural gas severance tax; HB2129 proposes a 9% base tax with an export-related additional tax and an Impact Fee credit.
- West Virginia bills: Proposals address withholding on royalty payments, standardization rules for oil and gas documents, oversight fee caps, and a levy tied to a Black Lung program.
- Federal snapshot: HR26 and HR1555 are noted as bills under consideration in the 119th United States Congress.
Here’s a look at the February 2026 legislative update, including items in Pennsylvania, West Virginia, and the United States Congress.
Pennsylvania
Pennsylvania’s legislative session opened on January 6 and is set to adjourn November 30.
SB910: Proposed Natural Gas Severance Tax
SB910, introduced on July 8, 2025, proposes a natural gas severance tax in the Commonwealth and was set to take effect on January 1, 2026. The tax would be imposed at a rate of 6.5% on the gross value of natural gas severed at the wellhead.
Producers will be required to file a return with the Department of Revenue, providing details on the natural gas severed and the amount of tax due. Revenues generated from the tax would be allocated to the General Fund. The act becomes effective 60 days after its passage.
HB2129: Proposed Unconventional Gas Well Severance Tax
Meanwhile, HB2129 proposed that beginning July 1 in the year following the effective date of passage, a natural gas severance tax be levied and payable by every producer on each unconventional gas well.
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Base tax rate: 9% of the annual market value of natural gas per MCF severed, after deduction of postproduction costs.
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Additional export tax: An additional tax would apply for exports of natural gas from the U.S., based on total export volume:
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4,000,000 MCF to <6,000,000 MCF: 0.5% of the annual market value of natural gas
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6,000,000 MCF to <8,000,000 MCF: 1.0%
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8,000,000 MCF to <10,000,000 MCF: 1.5%
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≥10,000,000 MCF: 2.0%
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Credit: Unconventional gas well Impact Fees paid by the producer for the prior calendar year would be allowed as a credit.
West Virginia
West Virginia’s legislative session opened on January 14 and is set to close March 14.
SB405 / HB4741: Withholding on Royalty Payments (Nonresident Mineral Owners)
SB405 would require withholding from natural resources royalty payments for nonresident mineral owners. The withholding would be optional for payments to lessors that receive less than $1,000 annually.
HB4741 would require withholding on natural resources royalty payments made to a lessor.
There are requirements for reporting and payment to the Tax Commission, with the cadence to be determined, as well as annual statements to the lessors. The updated provisions apply to all taxable years beginning after December 31, 2026. Two bills submitted during the last legislative session contained the same language.
HB4030: Standardization Rules for Oil and Gas Documents
HB4030 requires the Office of Oil and Gas to adopt rules no later than July 1, 2026 with respect to the standardization of leases, deeds or contracts relating to oil and gas, consistent in format with the purpose of making the terms of these documents less confusing to the landowners.
The rules would also provide that all leases, deeds or contracts relating to oil and gas, or renewals or extensions of any of these documents dated after July 1, 2026, conform to these rules.
HB4109: Annual Oversight Fees (Cap Removal Proposal)
HB4109 proposes to remove the cap on the number of gas and other types of wells for which operators are required to pay annual oversight fees.
SB110: West Virginia Black Lung Program (Proposed)
SB110 proposes the creation of the West Virginia Black Lung Program and provides for compensation for pain and suffering related to occupational pneumoconiosis.
The bill would also impose an additional levy on individuals or entities engaged in severing, extracting, producing or commercially using coal, natural gas or oil. In addition, the levy would apply to those generating electricity through wind or solar power. The amount of the levy would be equal to one-tenth of the existing tax currently imposed on each of these activities.
United States Congress
The following bills are under consideration in the 119th United States Congress.
HR26: Protecting American Energy Production Act
HR26, the Protecting American Energy Production Act, prohibits the President from placing a moratorium on hydraulic fracturing. It passed the House on February 7, 2025.
HR1555
HR1555 would amend the Mineral Leasing Act to provide that the Secretary may not require a federal drilling permit for oil and gas exploration and production activities conducted on non-federal surface estate when the United States holds less than 50% of the subsurface mineral estate being accessed, provided the operator submits a state permit to the Secretary.
Notes
Ohio: No legislative updates.
This update is based on legislative and regulatory information available at the time of publication and is not intended as legal, tax or accounting advice.
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