228.1.1 CHAPTER TITLE.
This Chapter is known and may be cited as the Severance Tax Law.
228.1.2 GOVERNING DEFINTIONS.
Unless the context otherwise requires, the definitions set forth in this Article govern the construction of this Chapter.
228.1.3 PERSON.
Includes any individual, firm, partnership, joint venture, association, corporation, estate, trust, business trust, receiver, syndicate, or any other group or combination acting as a unit.
228.1.4 OIL.
Shall mean crude oil, condensate, or other mineral oil produced or recovered from the earth as liquid, regardless of specific gravity.
228.1.5 PRODUCER.
Shall mean any person owning, controlling, managing or leasing any oil well and any person who produces or severs oil from the earth in any manner in this City, including any person owning any royalty or other interest in any oil taken from the earth in this City or the proceeds of any such oil, whether produced by him or by some other person, either by lease, contract or otherwise.
228.1.6 OPERATOR.
Shall mean the producer in actual charge of production operations.
228.1.7 PRODUCED.
Shall mean the total gross amount of oil produced and saved, including that attributable to royalty or other interest. Allowance shall be made for any reasonable and bona fide deduction for basic sediment and water, and for correction of temperature to sixty (60) degrees Fahrenheit.
228.1.8 SEVERING.
Shall mean extracting or withdrawing any oil from the earth in this City, whether such extraction or withdrawal is by natural flow, mechanically enforced flow, pumping or any other means.
228.1.9 BARREL.
Shall mean forty-two (42) U. S. gallons of oil.
228.1.10 DIRECTOR.
Shall mean the Director of Finance of the City.
228.1.11 IN THE CITY.
Shall mean the exterior limits of the City of Torrance, and includes all territory within such City limits. A well shall be deemed to be located in the City if the surface location of the well, or the surface of the well itself, is located in the City regardless of where the hole is bottomed.
228.2.1 BARREL RATE.
(Amended by O-2417; O-2496; O-2497; O-2836; O-3231; O-3314)
a) A tax is hereby imposed upon every person producing or severing oil from the earth in the City at the rate of fifteen (15) cents per barrel per well per year.
b) The minimum tax to be paid by any person producing or severing oil from the earth in the City shall be Fifty-Six Dollars and Twenty-Five Cents ($56.25) per well per calendar quarter.
c) Computation of production for purposes of establishing the minimum tax shall be made quarterly from and including the quarter beginning July 1, 1988.
d) If the Consumer Price Index, Urban Wage Earner and Clerical Worker, Los Angeles, Anaheim, Riverside Metropolitan Area, prepared by the United States Bureau of Labor Statistics, Department of Labor for the last calendar month available on October 31, 1990 shall stand at 130.5 (using the price prevailing during the years 1982-84 as a base of 100) then the amount of the taxes in this Division 2 shall remain as written herein.
e) If the said index for said month shall stand at other than 130.5 then the amount of fees provided in this Section shall be increased or decreased a corresponding amount, provided however, the fees shall be rounded to the nearest penny, except as provided in Sections 35.7.3 and 35.8.4
f) The amount of adjustment shall be determined by the Director of Finance who shall provide such adjustment figures annually thereafter.
g) In the event the said bureau shall revise the said index, the Director of Finance shall accept the method of revisions or conversion recommended by the bureau.
h) If the said bureau shall discontinue the preparation of the Consumer Price Index, Urban Wage Earner and Clerical Worker, Los Angeles, Anaheim, Riverside Metropolitan Area, prepared by the United States Bureau of Labor Statistics, Department of Labor, using prices prevailing in the year 1982-84 as a base of 100, and if no transposition table prepared by the Bureau is available which is applicable to the years 1982-84, then the fees shall be increased or decreased on the basis of any other nationally recognized indicator of increases or decreases in consumer product
228.2.2 OPERATIVE DATE.
(Amended by O-3231)
The tax imposed by Section 228.2.1. shall become operative June 1, 1988 shall be paid at the time and in the manner hereinafter provided, and shall be in addition to any and all other taxes.
228.2.3 TAX ON PRODUCER.
The tax imposed by Section 228.2.1. is imposed upon each producer of oil in respect to his interest in the oil or the proceeds therefrom, at the time of severance. The operator shall collect or withhold from each producer the amount of the tax due with respect to the oil produced or severed by the operator and shall return and remit all taxes payable for himself and the other producers in accordance with this part.
228.2.4 RESPONSIBILITY OF PURCHASER.
In the event that the oil produced or severed is sold to any person under a contract requiring the purchaser to make payments directly to those owning any royalty or other interests in the oil or the proceeds therefrom, the purchaser shall be regarded as the operator as respects the requirement of the collection or withholding tax to the Director. Nothing contained herein shall be construed as to relieving the producer in actual charge of production operations from liability for the payment of the entire amount of the tax.
228.2.5 TAX A DEBT.
The tax required to be collected or withheld by the operator from each producer constitutes a debt owed by the operator to the City and the operator shall be personally liable for the payment of any amount of tax required to be collected or withheld by him in the event of his failure to collect or withhold as required herein.
228.3.1 APPLICATION FOR PERMIT.
a) It shall be unlawful, after May 31, 1971, for any person to act as an operator in the City without first securing a permit as prescribed herein.
b) An application for a permit shall be made to the Director upon a form prescribed by the Director. The application shall be signed by the applicant individually if a natural person; in the case of an association or partnership, by a member or partner thereof; and in the case of a corporation, by an executive officer thereof or some person specifically authorized by the corporation to sign the application, to which shall be attached the written evidence of his authority.
228.3.2 PERMIT FEE.
At the time of making an application for each permit, the applicant shall pay to the Director a permit fee of Five Dollars ($5.00).
228.3.3 ISSUANCE OF PERMIT.
Upon the payment of such permit fee and compliance with other requirements imposed herein, the Director shall issue to each applicant a permit to act as an operator.
228.3.4 ASSIGNABILITY OF PERMIT.
A permit is not assignable and shall be valid only for the person in whose name it is issued.
228.3.5 DURATION OF PERMIT.
A permit issued under this Chapter shall be valid and effective without further payment of fees until suspended or revoked by the City.
228.3.6 REVOCATION OF PERMIT.
Whenever the holder of a permit fails to comply with any provision of this Chapter or any rule or regulation of the Director prescribed and adopted under this Chapter, the Director, upon hearing, after giving the holder ten (10) days notice in writing of the time and place of the hearing to show cause why his permit should not be revoked, may revoke or suspend the permit. The notice may be served personally or by mail in the manner prescribed in Section 228.5.6. for the service of a notice of a deficiency determination.
228.3.7 ISSUANCE OF PERMIT AFTER REVOCATION.
A fee of Five Dollars ($5.00) shall be collected by the Director for the renewal or issuance of a permit to an operator whose permit has been previously suspended or revoked.
228.3.8 OPERATION WITHOUT PERMIT.
Any person who acts as an operator in the City without a permit, or after a permit has been suspended or revoked, and each officer of any corporation which so acts, is guilty of a misdemeanor.
228.4.1 DATE PAYABLE.
The taxes imposed by this Chapter are due and payable on or before the 20th day of the month following the calendar quarter in which oil is produced or severed.
228.4.2 QUARTERLY FILING.
(Amended by O-2325)
Every operator shall, on or before the 20th day of July, 1971, and on or before the last day of the month following every calendar quarter thereafter, file with the Director on forms prescribed by the Director a return showing such information as the Director may require to carry out the purposes of this part.
228.4.3 REMITTANCE.
The operator shall transmit with each return a remittance payable to the Director for the amount of taxes due, including the amount required to be collected or withheld.
228.4.4 LESS THAN QUARTERLY FILING.
If the Director deems it necessary, in order to insure the payment of the taxes imposed by this Chapter or to facilitate the administration of this Chapter, he may require returns and payment of the taxes to be made for other than quarterly periods.
228.4.5 EXTENSIONS.
The Director, for good cause, may extend for not to exceed one (1) month the time for making any return required by this Chapter. The extension may be granted at any time, provided that a request therefor is filed with the Director within or prior to the period for which the extension may be granted.
228.4.6 EXTENSION INTEREST.
Any person to whom an extension is granted shall pay, in addition to the tax, interest at the rate of one-half (1/2) of one (1) percent per month, or fraction thereof, from the date on which the tax would otherwise have been due to the date of payment.
228.5.1 AMOUNT OF DEFICIENCY.
If the Director is not satisfied with a return filed or the amount of taxes paid by or on behalf of any person, he may compute and determine the amount required to be paid upon the basis of the facts contained in the return or upon the basis of any information that may come into his possession. One or more deficiency determinations may be made of the amount due for one or for more than one (1) quarter. When a business is discontinued a determination may be made at any time thereafter, within the periods specified in Sec. 228.5.7. whether the determination is issued prior to the date of the liability as otherwise specified in this part.
228.5.2 INTEREST.
The amount of the determination, exclusive of penalties, shall bear interest at the rate of one-half (1/2) of one (1) percent per month, or fraction thereof, from the 20th day after the close of the quarter for which the determination is made until the date of payment.
228.5.3 OVERPAYMENTS.
In making a determination the Director may off set overpayments for any month or months together with interest on the overpayments against underpayments for another month or months, against penalties, and against interest on underpayments.
228.5.4 NEGLIGENCE PENALTY.
If any part of the deficiency for which a deficiency determination is made is due to negligence or intentional disregard of this part or authorized rules and regulations, a penalty of ten (10) percent of the amount of the determination shall be added thereto.
228.5.5 FRAUD PENALTY.
If any part of the deficiency for which a deficiency determination is made is due to fraud or an intent to evade this part or authorized rules and regulations, a penalty of twenty-five (25) percent of the amount of the determination shall be added thereto.
228.5.6 NOTICE OF DETERMINATION.
The Director shall give to the person written notice of his determination. The notice may be served personally or by mail; if by mail, service shall be made pursuant to Section 1013 of the Code of Civil Procedure and shall be addressed to the person at his address as it appears in the records of the Director, but the service shall be deemed complete at the time of deposit of the notice in the mail without extension of time for any reason.
228.5.7 EXCEPTIONS.
Except in the case of fraud, intent to evade the tax, or failure to make a return, every notice of a deficiency determination shall be given within three (3) years after the date when the amount should have been reported.
228.6.1 ESTIMATE OF AMOUNT DUE.
(Amended by O-2325)
If a return is not made, the Director shall make an estimate of the amount due from any person liable for the tax. The estimate shall be made for the quarter or quarters in respect to which a return was not made and shall be based upon any information available to the Director. The Director shall add to the estimated amount interest at the rate of one-half (1/2) of one (1) percent per month or fraction thereof, and penalty equal to ten (10) percent of the amount of principal and interest due. One or more determinations may be made for one or for more than one (1) quarter.
228.6.2 OVERPAYMENTS.
In making a determination the Director may offset overpayments for any quarter or quarters together with interest on the overpayments, against underpayments for another month or months, and against interest and penalties on the underpayments.
228.6.3 FRAUD PENALTY.
If the failure of a person to file a return is due to fraud or intent to evade the tax a penalty of twenty-five (25) percent of the amount required to be paid by the person, exclusive of penalties, shall be added thereto in addition to the ten (10) percent penalty provided in Sec. 228.6.1.
228.6.4 NOTICE OF DETERMINATION.
Promptly after making his determination the Director shall give to the person against whom the determination is made written notice of his estimate and determination, and of the penalty. The notice shall be served personally or by mail in the manner prescribed for service of notice of a deficiency determination.
228.7.1 DETERMINATION OF AMOUNT.
If the Director believes that the collection of any amount of tax due from any person under this part will be jeopardized by delay, he shall thereupon make a determination of the amount, noting the fact upon the determination. The amount determined is immediately due and payable.
228.7.2 FINALIZATION OF DETERMINATION.
If the amount specified in the determination is not paid within ten (10) days after service of notice thereof upon the person against whom the determination is made, the determination becomes final at the expiration of that period unless a petition for redetermination is filed within the ten (10) days, and the delinquency penalty and interest provided in Article 9 of this Chapter shall attach to the amount specified.
228.7.3 PETITION FOR REDETERMINATION.
The person against whom a jeopardy determination is made may petition for the redetermination thereof pursuant to Article 8 of this Chapter. He shall, however, file the petition for redetermination with the Director within ten (10) days after the service upon him of notice of the determination. The person shall at the time of filing the petition for redetermination deposit with the Director such security as he may deem necessary to insure compliance with this Chapter. The security may be sold by the Director at public sale if it becomes necessary in order to recover any amount due under this part. Notice of the sale may be served upon the person who deposited the security personally or by mail in the same manner as prescribed for service of notice of a deficiency determination. Upon any such sale, the surplus, if any, above the amount due under this part shall be returned to the person who deposited the security.
228.8.1 THIRTY DAY PERIOD.
Any person against whom a determination is made under Articles 5 or 6 of this Chapter may petition for a redetermination within thirty (30) days after service upon the person of notice thereof. If a petition for redetermination is not filed within the thirty (30) day period, the determination becomes final at the expiration of the period.
228.8.2 HEARING FOR RECONSIDERATION.
If a petition for redetermination is filed within the thirty (30) day period, the Director shall reconsider the determination and, if the person has so requested in his petition, shall grant him an oral hearing and give him ten (10) days notice of the time and place of the hearing. The board may continue the hearing from time to time as may be necessary.
228.8.3 FINAL DECISION.
The order or decision of the Director upon a petition for redetermination becomes final thirty (30) days after mailing of notice thereof.
228.8.4 PAYABLE UPON FINALIZATION.
All determinations made by the Director under Article 2 or 3 of this Chapter are due and payable at the time they become final. If they are not paid when due and payable, a penalty of ten (10) percent of the amount of the determination, exclusive of interest and penalties, shall be added thereto.
228.8.5 NOTICE OF DETERMINATION.
Any notice required by this Article shall be served personally or by mail in the manner prescribed for service of notice of a deficiency determination.
228.9.1 INTEREST AND PENALTY.
Any person who fails to pay any tax, except taxes determined by the Director under Article 5 or 6 of this Chapter, within the time required shall pay a penalty of ten (10) percent of the amount of the tax, in addition to the tax, plus interest at the rate of one-half (1/2) of one (1) percent per month, or fraction thereof, from the date on which the tax became due and payable until the date of payment.
228.10.1 SECURITY LIMITS.
The Director, whenever he deems it necessary to insure compliance with this Chapter, may require any person subject thereto to deposit with him such security as the Director may determine. The amount of security shall be fixed by the Director, but shall not be greater than twice the estimated quarterly liability of the person for the tax ascertained in such manner as the Director may deem proper. The total amount of security required of any person shall never be less than One Hundred Dollars ($100.00) nor more than One Thousand Dollars ($1,000.00). Within the limitations prescribed herein, the Director may increase or reduce the amount of security at any time.
228.10.2 BONDS.
The security shall be in the form of a bond or bonds executed by the person from whom the taxes imposed under this Chapter are required to be paid as principal, and a corporation such as mentioned in Section 1056 of the Code of Civil Procedure in this State as surety, in such form as the Director prescribes, payable to the City conditioned upon the payment of all taxes, penalties, and other obligations of the person arising under this part.
228.10.3 DEPOSITING OF BONDS.
In lieu of a bond a person, under such conditions as the Director may prescribe, may deposit with the City Treasurer an amount of lawful money equivalent to the amount of the bond or bonds or he may deposit bonds or other obligations of the United States, the State of California, or any county of this state of an actual market value not less than the amount of the bond or bonds fixed by the board.
228.10.4 SALE AND PAYMENT.
Upon receipt of a certificate of the Director setting forth the amount of a person’s delinquencies, the City Treasurer shall pay to the Director the amount so certified from the money deposited with him by the person or from the amounts received from the sale of bonds or other obligations deposited with the Treasurer by the person. Securities deposited with the Treasurer which have a prevailing market price may be sold by him for the purposes of this Section at private sale at a price not lower than the market price thereof.
228.11.1 CREDIT FOR OVERPAYMENT.
If the Director determines that any amount not required to be paid under this Chapter has been paid more than once or has been erroneously or illegally collected or computed, the excess amount collected or paid shall be credited on any amounts then due and payable from the person under this Chapter, and the balance shall be refunded to the person, or his successors, administrators, executors, or assigns.
228.11.2 FILING PERIOD.
No refund shall be allowed or approved after three (3) years from the 20th day after the close of the quarterly period for which the overpayment was made, or, with respect to a determination made under Articles 5 and 6 of this Chapter, after six (6) months from the date the determination becomes final, or after six (6) months from the date of overpayment, whichever period expires the later, unless a claim therefor is filed with the Director within such period. No credit shall be approved or allowed after the expiration of such period unless a claim for credit is filed with the board within such period.
228.11.3 GROUNDS OF CLAIM.
Every claim for refund or credit shall be in writing and shall state the specific grounds upon which it is founded.
228.11.4 WAIVER OF CLAIM.
Failure to file a claim within the time prescribed in this Article constitutes a waiver of all demands against the City on account of the overpayment.
228.11.5 NOTICE OF DISALLOWANCE.
Within thirty (30) days after disallowing any claim in whole or in part, the Director shall serve written notice of his action on the claimant in the manner prescribed for the service of a deficiency determination.
228.11.6 INTEREST ON OVERPAYMENT.
Interest shall be computed, allowed, and paid upon any overpayment of any amount of tax at the rate of one-half (1/2) of one (1) percent per month from the 20th day of the calendar month following the quarterly period for which the overpayment was made, but no refund or credit shall be made of any interest imposed upon the claimant with respect to the amount being refunded or credited.
The interest shall be paid:
a) In the case of a refund, to the 20th day of the calendar month following the date upon which the claimant is notified by the Director that a claim may be filed.
b) In the case of a credit, to the same date as that to which interest is computed on the tax or amount against which the credit is applied.
228.11.7 DISALLOWANCE OF INTEREST.
If the Director determines that any overpayment has been made intentionally or by reason of carelessness, he shall not allow any interest thereon.
228.12.1 AUTHORITY OF DIRECTOR.
The Director is authorized to bring suit in the name of and on behalf of the City in any Court of competent jurisdiction to collect all sums due the City under this Chapter and to obtain any legal or equitable relief therefore.
228.12.2 DUTY OF CITY ATTORNEY.
The City Attorney shall prosecute any such action and may incur costs and expenses therefor.
228.13.1 ENFORCEMENT BY DIRECTOR.
The Director shall enforce the provisions of this Chapter and may prescribe, adopt, and enforce rules and regulations relating to the administration and enforcement of this Chapter. The Director may prescribe the extent to which any ruling or regulation shall be applied without retroactive effect.
228.13.2 REPRESENTATIVES OF DIRECTOR.
The Director may designate representatives of his department to conduct hearings or perform any other duties imposed by this Chapter.
228.13.3 RECORDS OF TRANSACTIONS.
Every operator and producer and every person dealing in or transporting oil shall keep such records, receipts, charts, invoices, and other pertinent papers and information with respect to producing or severing oil on such form as the Director may require.
228.13.4 EXAMINATION FOR VERIFICATION.
The Director or his representative may examine the books, papers, records, files, meters, charts, and equipment of any operator or producer to verify the accuracy of any return made, or if no return is made, to ascertain and determine the amount required to be paid under this part.
228.13.5 CONFIDENTIALITY OF RECORDS.
It is unlawful for the Director or any person having an administrative duty under this Chapter to make known in any manner whatever the business affairs, operations, or information obtained by an investigation of records and equipment of any person visited or examined in the discharge of official duty, or the amount or source of income, profits, losses, expenditures, or any particular thereof, set forth or disclosed in any report, or to permit any report or copy thereof or any book containing any abstract or particulars thereof to be seen or examined by any person. However, the Director may authorize examination of the records maintained by the Director under this Chapter by County or State officers, by tax officers of another State, by the Federal Government, or by any officer of the City.
228.14.1 PAYMENT OF REMITTANCE.
(Amended by O-3079)
All amounts required to be paid to the City under this Chapter shall be paid to the Director in the form of remittances payable to the City of Torrance. The Director shall transmit the payments to the City Treasurer to be deposited in the City Treasury to the General Fund.