La Mirada Municipal Code Ch. 3.09 Crude Oil Producers' Tax

For purposes of this chapter, certain words and phrases shall be construed as follows:

(1) "Crude oil producer" means every person, partnership, association or corporation conducting, managing, carrying on or engaging in the business or activity of producing crude oil, gas, petroleum or other hydrocarbon substances.

(2) "Tax administrator" means the city manager or his or her designee.

(3) "Wellhead" means the place and/or facility where crude oil is brought to the surface, whether or not such crude oil is removed at that location or transferred to another facility.

(4) "Barrel" means, and shall be measured to consist of, forty-two U.S. gallons of crude petroleum substances corrected for temperature variations in accordance with methods generally approved in the petroleum industry. "Petroleum substances" means crude oil remaining after the removal therefrom of water and other impurities by preliminary processing in the vicinity of the wellhead site preparatory to the shipment thereof.

(5) "City" means the corporate boundaries of the city as they now exist or may exist in the future.

(Ord. 348 § 1 (part), 1983).

Every crude oil producer who engages in the business of producing oil from any well or wells located within this city shall pay a tax for each well operated by such crude oil producer for the purpose of producing crude oil, gas or other petroleum substances, computed as follows:

(1) An annual tax of one hundred fifty dollars per wellhead, which amount is referred to in this chapter as the "wellhead tax"; and

(2) A quarterly tax of eleven cents times the number of barrels of oil produced from the wellhead during each calendar quarter of the calendar year, which amount is referred to in this chapter as the "per-barrel tax."

(Ord. 348 § 1 (part), 1983).

For the purposes of determining the wellhead and per-barrel tax, the following provisions shall apply:

(1) A wellhead is located within this city if any portion of wellhead is located within the city, regardless of the surface location of the well, the producing interval thereof, or where the hold of the well may be bottomed.

(2) The calendar quarter of each year shall consist of the following:

First quarter - January, February and March;

Second quarter - April, May and June;

Third quarter - July, August and September; and

Fourth quarter - October, November and December.

(3) If oil produced from two or more wells is commingled without the production of the respective wells being separately measured, each well whose production has been so commingled shall be considered as having produced an equal part of the total.

(Ord. 348 § 1 (part), 1983).

All taxes under this chapter shall be due and payable and shall become delinquent, as follows:

(1) The wellhead tax shall be due and payable on or before July 1st of each year. Such wellhead tax shall be delinquent thirty days following such due date, except in this event that the effective date of the ordinance codified in this chapter is after July 1st, a prorated wellhead tax shall be delinquent sixty days following the effective date of the ordinance codified in this chapter; and

(2) The amount of the per-barrel tax shall be due and payable on the first day of the month next succeeding each calendar quarter, and shall become delinquent if not paid on or before the last day of said month. In the event that the effective date of the ordinance codified in this chapter is during a calendar quarter, the tax administrator may assess a prorated tax, due and payable at the next succeeding due date.

(Ord. 348 § 1 (part), 1983).

(a) Every crude oil producer required to make tax returns under this chapter shall on or before the last day of April, July, October and January file with the tax administrator a report, upon a form provided by the tax administrator, setting forth such information as the tax administrator shall require, including the following:

(1) The name or other identification of all wells located in the city operated by the crude oil producer during the calendar quarter involved;

(2) The number of barrels of oil produced and shipped from each of the wells during the quarter; and

(3) The computation of the amount of the per-barrel tax with respect to such production due the city.

(b) At the time of filing the report, the producer shall also pay to the tax administrator any additional tax which may be shown to be due. The report must be signed by the person required to have a business license as per this code or by a managing officer or agent thereof and shall include a declaration substantially as follows:

"I declare under penalty of perjury that I am authorized to make and file the foregoing statement, and that to the best of my knowledge and belief it is a true, correct and complete statement made in good faith for the period stated."

The statement shall not be conclusive against the city as to the information set forth therein, nor shall the filing of a statement preclude the city from collecting by appropriate action any additional tax that is later determined to be due and payable.

(Ord. 348 § 1 (part), 1983).

Every crude oil producer required to make remittance under this chapter shall keep full, true and accurate records as to the amount of oil produced and shipped or sold by such producer from wells located within the city and shall, upon demand of the tax administrator, make the records, together with any shipment documents or sales invoices pertaining to such oil, available for the inspection of the tax administrator at all reasonable times.

(Ord. 348 § 1 (part), 1983).

(a) Any crude oil producer who fails to remit any payment on or before a period of fifteen days following the date on which the remittance first became delinquent shall pay a delinquency penalty of ten percent of the amount of the tax and an additional ten percent penalty for each thirty-day period or fraction thereof of delinquency thereafter. The total delinquency shall not exceed fifty percent of the tax imposed.

(b) If the tax administrator determines that the nonpayment of any remittance due under this chapter is due to fraud, a penalty of twenty-five percent of the amount of the tax shall be added thereto in addition to the penalties stated in subsection (a).

(c) Every penalty imposed under the provisions of this chapter shall become a part of the tax herein required to be paid.

(Ord. 348 § 1 (part), 1983).

If any crude oil producer required to remit the tax imposed by this chapter fails to file a return, the tax administrator shall proceed in such manner as he or she may deem best to obtain facts and information on which to base his or her estimate of the tax due. As soon as the tax administrator obtains such facts and information on which to base the assessment of any tax imposed by this chapter and payable by any crude oil producer who has failed or refused to make such report and remittance, he or she shall proceed to determine and assess against such producer the tax, interest and penalties provided for by this chapter.

(Ord. 348 § 1 (part), 1983).

If the tax administrator has reasonable cause to believe the return or returns of the amount of tax required to be paid to the city by any crude oil producer are erroneous, he or she shall compute and determine the amount required to be paid upon the basis of the facts contained in the return or returns or upon the basis of any information within his or her possession or that may come into his or her possession. One or more deficiency determinations may be made of the amount due for one or more periods.

(Ord. 348 § 1 (part), 1983).

In making a determination pursuant to Sections 3.09.070 and 3.09.080, the tax administrator may offset any overpayments for a period or periods together with interest at the legal rate on the overpayments against underpayments for another period or periods and against any penalties on such underpayments.

(Ord. 348 § 1 (part), 1983).

The tax administrator shall give to the producer written notice of any determinations made pursuant to Sections 3.09.070 and 3.09.080. This notice may be served personally or by depositing in the United States Postal Service, postage prepaid, and addressed to the producer at his address as it appears in the records of the tax administrator. In case of service by mail or any notice required under this chapter, the service is complete at the time of deposit of the notice.

(Ord. 348 § 1 (part), 1983).

Whenever the amount of any tax, interest or penalty has been overpaid or paid more than once or has been erroneously or illegally collected or received by the city under this chapter, it may be refunded as provided herein; provided, that a claim in writing therefor, stating under penalty of perjury the specific grounds upon which the claim is found, is filed with the tax administrator within one year of the date of payment. The claim shall be on forms furnished by the tax administrator.

(Ord. 348 § 1 (part), 1983).

Any tax collected under the provisions of this chapter by a producer which has not been paid to the city shall be deemed a debt owed by the producer to the city. Any producer owing money to the city under the provisions of this chapter shall be liable in an action brought in the name of the city for the recovery of such amount.

(Ord. 348 § 1 (part), 1983).

Any producer aggrieved by any decision of the tax administrator with respect to the amount of such tax, interest and penalties, if any, may appeal to the council by filing a notice of appeal with the city clerk within fifteen days of the serving or mailing of the determination of tax due. The council shall fix a time and place for hearing such appeal, and the city clerk shall give notice in writing to such producer at his last known place of address. The findings of the council shall be final and conclusive. Any amount found to be due shall be immediately due and payable upon the service of notice.

(Ord. 348 § 1 (part), 1983).