[HISTORY: Adopted and amended as indicated in text (Ch. 156
of the 1984 Code).]
[1970, ch. 711, sec. 527-1]
A.
Levy; computation. There is hereby levied a distribution and production
tax on the business or occupation of collecting, distributing and
producing natural gas or other gases taken from the earth in Allegany
County computed as follows: A tax shall be paid on the gas produced
and saved for commercial purposes within Allegany County, accounting
from January 1, 1969, equivalent to 7% of the wholesale market value
thereof as and when produced, provided that the amount of such tax
shall never be less than 11/150 of 1% per 1,000 cubic feet.
B.
Exceptions. In calculating the tax herein levied, there shall be
excluded the following:
C.
Calculation of tax. The market value of gas produced in Allegany
County shall be the value thereof at the mouth of the well; however,
in case gas is sold for cash only, the tax shall be computed on the
producer's gross cash receipts. In all cases where the whole
or a part of the consideration for the sale of gas is a portion of
the products extracted from the producer's gas or a portion of
the residue gas, or both, the tax shall be computed on the gross value
of all things of value received by the producer, including any bonus
or premium, provided that, notwithstanding any other provision herein
to the contrary, where gas is processed for the liquid hydrocarbon
content and the residue gas is returned by cycling methods, as distinguished
from repressuring or pressure maintenance methods, to some gas-producing
formation, the taxable value of such gas shall be 3/5 of the gross
value of all liquids extracted, separated and saved from such gas,
such value to be determined upon separation and extraction and prior
to absorption, refining or processing of such hydrocarbons, and the
quantity of the products shall be measured by the total yield of the
processing plant from such gas.
E.
First purchaser; payments. The first purchaser of gas shall pay the
total tax on all gas purchased, making the payments of tax to the
County Commissioners of Allegany County by legal tender or cashier's
check payable to said County Commissioners. The first purchaser shall
be entitled to deduct the proportionate amount of the tax chargeable
to the producer and royalty owner from the amount due the producer
from whom such gas is purchased, and such producer shall be entitled
to deduct the proportionate amount of the tax chargeable to any other
producer owning an interest in such gas from the amount due such other
producer and shall be entitled to deduct the proportionate amount
of the tax chargeable to any royalty owner from the amount due such
royalty owner, and such moneys so deducted from payments due producers
for the payment of this tax shall be held by the purchaser in trust
for the use and benefit of Allegany County and shall not be co-mingled
with any other funds held by said purchaser and shall be remitted
to the County Commissioners, together with the purchaser's proportion
of said tax, in accordance with the terms and provisions of this chapter,
and it shall be the duty of each such purchaser to keep accurate records
of all such gas purchased.
F.
Due date; report; responsibility for payment. The tax herein levied
shall be due and payable at the office of the County Commissioners
of Allegany County on the last day of April, July, October and January
of each calendar year, based on the amount of gas produced, saved
and collected during the calendar quarter ending on the last day of
March, June, September and December, respectively, and on or before
such date, each purchaser shall make and deliver to the County Commissioners
a verified report, on forms prescribed by them, showing the gross
amount of gas produced and collected, less the exclusions and at the
pressure base set out herein, upon which the tax herein levied accrues,
together with details as to amount of gas, from what leases said gas
was produced and collected, the correct names and addresses of the
producer and purchaser of said gas and such other information as the
County Commissioners may require. In no event shall a producer or
purchaser be relieved of responsibility for the tax until same shall
have been paid, provided that in the event the amount of the tax herein
levied as the producer's proportion thereof shall be withheld
by a purchaser from payments due a producer and said purchaser fails
to make payment of the tax to the County Commissioners as provided
herein and said producer pays said tax himself, the producer may bring
legal action against such purchaser to recover the amount of tax so
withheld, together with penalties and interest which may have accrued
by failure to make such payment, and shall be entitled to reasonable
attorney's fees and court costs incurred by legal action.
G.
Delinquent tax; penalty. Unless such payment of tax on all gas produced
and collected during any quarter or fractional part thereof shall
be made on or before the date due as hereinabove specified, such payment
shall become delinquent, and a penalty of 10% of the amount of the
tax shall be added. Such tax and penalty shall bear interest at the
rate of 6% per annum from the date due until the date paid.
H.
Producer's proportion of tax. The producer's proportion
of the tax herein levied shall be borne ratably by all interested
parties, including royalty interests, lessor's interest or any
other interest, whether by lease, contract or otherwise, except the
purchaser's interest, and the purchaser is hereby authorized
and required to withhold from any payment due any interested parties
the proportionate tax due and remit the same as above provided.
I.
Operator's responsibilities. The operator of each well from
which gas is produced, saved and collected in Allegany County shall
also make and deliver to the County Commissioners of Allegany County
on or before the due date of the payments provided above a report
of all gas produced and sold from each well during the preceding quarter,
together with details as to amounts of gas, the name or location of
the well, the correct names and addresses of the producer and purchaser
of said gas and such other information as the County Commissioners
may require.
J.
Legal effect of tax. The tax hereby imposed is in lieu of all other
County taxes upon the gas, the property rights attached thereto or
inherent therein and the values created thereby upon all leases or
rights to develop and operate any lands for gas, the values created
thereby and the property right attached thereto. Nothing in this section
is intended to affect taxation by the State of Maryland.
[1970, ch. 711, sec. 572-2]
As used in this chapter, the following terms shall have the
meanings indicated:
Shall apply to any person in the business of purchasing or
producing gas for resale to domestic and industrial consumers and
shall include any person who has voluntarily submitted to the regulations
of the Federal Power Commission or the Public Service Commission regulations
of the State of Maryland.
The owner, operator or manager of any means of transporting
gas or any instrumentality that may now be used or come into use for
such purpose.
Any gas and/or vapor indigenous to an oil stratum and produced
from such stratum with oil.
The volume of gas expressed in cubic feet and computed at
a base pressure of four ounces per square inch above the average barometric
pressure of 14.4 pounds per square inch, a standard base and flowing
temperature of 60° F. Correction shall be made for pressure according
to Boyle's Law and for specific gravity according to tests made
by the balance method.
Any person purchasing gas from the producer, and shall include
any producer which is a utility retailing gas in Allegany County and
any producer who does not sell his gas in Allegany County but transports
it outside of the County before sale.
Natural and casing-head gas or other gas taken from the earth
or waters, regardless of whether produced from a gas well or from
a well also productive of oil, distillate and/or condensate or other
product.
The person having the active management and operation of
the well.
Includes any person, firm, concern, receiver, trustee, executor,
administrator, agent, institution, association, partnership, company,
corporation and persons acting under declarations of trust, as well
as the trustees acting under such declarations of trust.
Any person owning, controlling, managing or leasing any gas
well and/or any person who produces in any manner any gas by taking
it from the earth or waters in Allegany County, and shall include
any person owning any royalty or other interest in any gas or its
value, whether produced by him or by some other person on his behalf,
either by lease, contract or otherwise.
The total gross amount of gas produced, including all royalty
or other interest; that is, the amount for the purpose of the tax
imposed by this chapter shall be measured or determined by meter readings
showing 100% of the full volume expressed in cubic feet.
Any report required to be furnished in this chapter or that
may be required by the County Commissioners in the administration
of this chapter.
Includes all persons owning any mineral rights under any
producing leasehold within Allegany County, other than the working
interest, which working interest is that of the person having the
management and operation of the well.
Any person who purchases gas for any purpose whatsoever when
said gas is purchased from any person other than the producer.
Any person subject to the tax herein levied.
[1970, ch. 711, sec. 572-3]
A.
Erroneous payment. When it shall appear that a taxpayer to whom the
provisions of this chapter shall apply has erroneously paid more taxes
than were due during any tax-paying period, either on account of a
mistake of fact or law, it shall be the duty of the Director of Finance,
upon order of the County Commissioners, to credit the total amount
of taxes due by such taxpayer for the current period with the total
amount of taxes so erroneously paid or to make refund in a proper
case.
[Amended 1-15-1982 by Bill No. 14-81, effective 3-31-1983; 9-17-1982 by Bill No. 7-82, effective 9-30-1982]
B.
Responsibility of first purchaser for payment. The tax hereby levied
shall be paid by the first purchaser purchasing the same from the
producer, who shall make deduction as aforesaid; provided, however,
that the failure of first purchaser from the payment of same, where
the first purchaser does not account for and pay said tax, and it
shall be the duty of every person purchasing gas produced in Allegany
County to satisfy himself or itself that the tax on said gas has been
or will be paid by the persons primarily liable therefor.
[1970, ch. 711, sec. 572-4]
The County Commissioners may, through the County Auditors or
other auditors and/or other technical assistants employed for the
purpose of verifying reports and investigating the affairs of producers
and/or purchasers, determine whether the tax is being properly reported
and paid. They shall have the power to enter upon the premises necessary
in determining the correct tax liability and to examine or cause to
be examined any books or records of any person subject to a tax under
this chapter and to secure any other information directly or indirectly
concerned in the enforcement of this chapter and to promulgate and
enforce, according to law, rules and regulations pertinent to the
enforcement of this chapter, which shall have full force and effect
of law.
[1970, ch. 711, sec. 572-5]
If the County Commissioners are satisfied that the values used
in computing the tax do not represent the market value of such gas
at the mouth of the well, they shall forthwith so notify the taxpayers
concerned, and it shall be the duty of the County Commissioners to
set a date for a hearing thereon, giving each taxpayer concerned not
less than 10 days' written notice thereof, and to call before
them by proper process such persons as, in their judgment, may know
the market value of such gas at the mouth of the well, who shall testify
under oath as to the market value thereof, and each taxpayer shall
have the right to be heard and present evidence. The County Commissioners,
after hearing the evidence, shall fix the market value of such gas
at the mouth of the well by written findings in accordance with the
evidence so introduced, and their findings in such case or cases shall
be final unless the taxpayer concerned shall pay the tax herein levied
upon the market value so fixed by the County Commissioners under protest
within 60 days after such taxpayer has been notified in writing of
said findings, or, in the event that said taxpayer does not pay the
tax based on the values so determined by the County Commissioners
within 60 days after having been notified of such findings, the findings
of the County Commissioners shall be final unless such taxpayer shall
within 60 days appeal to the Circuit Court of Allegany County. Upon
such appeal, the trial shall be de novo, but the findings of the County
Commissioners shall be taken as prima facie evidence of the market
value of such gas at the mouth of the well, and the burden of proof
shall rest upon the taxpayer to establish a lower market value.
[1970, ch. 711, sec. 572-6]
In the event that any person engaged in the business of producing
or purchasing any gas in Allegany County shall become delinquent in
the payment of the proper taxes herein imposed or fails to file required
reports with the County Commissioners, the County Commissioners shall
have the right to enjoin any such person who is at fault from producing
gas until the delinquent tax is paid or said reports are filed.
[1970, ch. 711, sec. 572-7]
Any person, firm, association or corporation, whose failure,
omission, default or violation it may be, shall be subject to a penalty
of not less than $100 nor more than $1,000 for failure or omission
to keep the records required herein or for the violation of any of
the other provisions hereof, and each day's violation shall constitute
a separate offense. Allegany County shall have a prior lien for all
delinquent taxes, penalties and interests on all property and equipment
used by the purchaser of gas in the business of purchasing gas, and
if any purchaser of gas shall fail to remit the proper taxes, penalties
and interest due or any of them, the County Commissioners may employ
auditors or other persons to ascertain the correct amount due, and
the purchaser of gas shall be liable, as an additional penalty, for
the reasonable expenses of the reasonable value of such services of
representatives of the County Commissioners incurred in such investigation
and audit, provided that all funds collected for audits and examinations
shall be placed in a Natural Gas Audit Fund of Allegany County and
shall constitute a revolving fund, which may be used from time to
time by the County Commissioners in making such audits, in addition
to the general appropriation made for such purposes, and all of said
funds to be placed in said funds are hereby appropriated for such
purpose. The County Commissioners of Allegany County are hereby authorized
to collect all delinquent taxes, penalties and other amounts due and
to enforce all liens under this chapter by civil suit.
[1970, ch. 711, sec. 572-8]
A.
Filing suit.
(1)
Admissible evidence. If any purchaser of natural and/or casing-head
gas fails or refuses to pay any tax, penalty or interest within the
time and manner provided by this chapter and it becomes necessary
to bring suit or to intervene in any manner for the establishment
or collection of said claim in any judicial proceedings, any report
filed in the office of the County Commissioners by such purchaser
or producer or representative of said purchaser or producer or a copy
thereof certified to by the County Commissioners showing the amount
of gas produced on which tax, penalties or interest have not been
paid or any audit made by the County Commissioners or their representatives
from the books of said purchaser when filed and sworn to by such representative
as being made from the records of said purchaser, such report or audit
shall be admissible in evidence in such proceedings and shall be prima
facie evidence of the contents thereof; provided, however, that the
incorrectness of said report or audit may be shown, and provided further
that such report or audit may be admitted in evidence only against
the party by or from whom it was made.
(2)
Prima facie evidence. In the event that the County Commissioners shall file suit or claim for taxes provided for in Subsection A(1) hereof and attach or file as an exhibit any report or audit of said purchaser or producer and an affidavit made by the County Commissioners or their representative that the taxes shown to be due by said report or audit are past due and unpaid and that all payments and credits have been allowed, then unless the party resisting the same shall file an answer in the same form and manner as required by law, said audit or report shall be taken as prima facie evidence thereof.
B.
Production or removal prohibited. Upon notice from the County Commissioners,
it shall be unlawful for any person to produce or remove any natural
and/or casing-head gas from any lease in Allegany County whenever
the owner or operator of said lease has failed to file reports as
required under the provisions of this chapter.
C.
Transfer of interest. Whenever any lease producing natural and/or
casing-head gas changes hands or any purchaser of gas transfers his
interest, it shall be the duty of the owner or operator of said lease
and any such purchaser of gas to note on his last report that said
lease or interest has been sold or transferred, showing the effective
date of said change and the name and address of the individual, firm,
association, joint-stock company, syndicate, copartnership, corporation,
agency or receiver who will operate said lease or who bought said
interest and will be responsible for the filing of reports provided
for in this chapter. It further shall be the duty of the new owner
or operator of said lease or interest to note on his first report
that said lease or interest has been acquired, showing the effective
date of said change and the name and address of the individual, firm,
association, joint-stock company, syndicate, copartnership, corporation,
agency or receiver formerly owning and/or operating said lease or
interest.
[1970, ch. 711, sec. 572-9]
A.
Criminal penalty. Whoever shall, as a producer or purchaser or as
agent or representative of a producer or purchaser, knowingly make
any false entries or fail to make any proper entries in the books
required by this chapter with intent to defraud Allegany County, or
whoever, as such, shall knowingly make a false or incomplete report
as required by the provisions of this chapter, or whoever, as such,
shall knowingly fail or refuse to make the report required to be made,
or whoever, as such, shall destroy, mutilate or secrete any of the
records required to be kept by the provisions of this chapter, or
whoever, as such, shall hide or secrete with intent to defraud any
of the property upon which a lien is created hereunder shall be guilty
of a misdemeanor and, upon conviction thereof, shall be fined in a
sum of not less than $100 nor more than $1,000 or be confined in the
County jail for not more than 12 months, or be subject to both such
fine and imprisonment.
B.
Civil penalty. In addition thereto, such producer or purchaser or
agent thereof shall forfeit to Allegany County for any said offense
or the violation of any of the provisions hereof or any rule or regulation
a penalty of $1,000 for each such offense, to be recovered by Allegany
County in a civil suit. The penalties prescribed in this section,
both criminal and civil, are in addition to any and all other penalties
prescribed in this chapter.
[1970, ch. 711, sec. 572-10]
All receipts from the tax imposed by this chapter shall be accounted
for and paid into the general fund of Allegany County.
