CONTRACT 2323A Amendment 2323A
ATTACHMENT C
(Form of Amendment to Administrative Agreement Regarding Gas Tax Collection)
AMENDMENT NO. 1
TO THE
ADMINISTRATIVE AGREEMENT REGARDING GAS TAX COLLECTION
(CONTRACT REFERENCE NUMBER: 2323)
BETWEEN
CHEVRON U.S.A. INC.
AND
THE CITY OF EL SEGUNDO
This Amendment No. 1 ("Amendment") is dated and made effective as of April 23, 2013
("Amendment Effective Date") by and between Chevron U.S.A. Inc., a Pennsylvania corporation
("Company" or "Chevron"), and the City of El Segundo, a municipal corporation (the "City" or the "CITY").
This Amendment constitutes an amendment to the ADMINISTRATIVE AGREEMENT REGARDING GAS
TAX COLLECTION between Chevron and the City, dated and made effective as of February 1, 1994
(referred in this Amendment as the "1994 Administrative Agreement"). Company/Chevron and the City
may sometimes be referred to herein individually as a "Party" and collectively as the"Parties."
WHEREAS, the Parties entered into the 1994 Administrative Agreement and an agreement
entitled the "Settlement Agreement and Mutual General Release" in or about February 1994 to resolve a
dispute between the Parties as to how the City's gas utility user tax ordinance applied to Chevron; and
WHEREAS, at the time that the Parties entered into the 1994 Administrative Agreement and the
Settlement Agreement and Mutual General Release, the Parties believed that such agreements were fair,
just, reasonable and advantageous to both Parties, and the Parties further believe that these two
agreements are still fair,just, reasonable and advantageous to both Parties; and
WHEREAS, the City decided to exercise its right to audit, and did conduct an audit in 2012,
pursuant to the terms of the 1994 Administrative Agreement. In particular, the CITY audited CHEVRON's
gas use within the CITY as that term is defined and determined under the 1994 Administrative Agreement
(the "Audit"). The City also conducted the audit pursuant to the Settlement Agreement and Mutual
General Release Agreement between the Parties dated February 1, 1994 and CITY Ordinance No. 1226
(which is part of and provides definitions and exceptions regarding the application of the City's Utility
Users Tax with regard to natural gas usage which is taxed in accordance with Section 3-7-5 of the City
Municipal Code). Chevron does not agree on the methodology used by the auditor in the audit for
comparing taxable gas consumption. However, in the Tax Resolution Agreement and this Amendment,
Chevron and the City agree to apply a methodology, as set forth below, to be used in the future. The
Parties agree that Chevron shall make annual gas users tax payments based upon the methodology that
is consistent with what the auditors determined was equitable—that Chevron's taxable gas payments with
respect to gas that is purchased from a third party (non-equity gas) based upon a pro-rata allocation of
such gas to all of Chevron's taxable and non-taxable gas consumption to determine the amount of gas
utilized for taxable gas consumption; and
WHEREAS, as a result of a tax dispute between the City and Chevron, the Parties have entered
into a Tax Resolution Agreement to fully resolve the tax dispute and Chevron's payment of City taxes and
the Parties now desire to amend the 1994 Administrative Agreement to provide clarifications as to how
the City's gas users tax ordinance is applied to Chevron's El Segundo Refinery.
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Parties do hereby agree to amend the 1994 Administrative Agreement as follows:
Tax Resolution Agreement
City of El Segundo and Chevron U.S.A.Inc. Page 20
2323A
A. Chevron U.S.A. Inc. The City and Chevron agree that the correct and applicable Party
to the 1994 Administrative Agreement is and always has been "Chevron U.S.A. Inc."
B. Term. Paragraph "2" of the 1994 Administrative Agreement is deleted and replaced with
the following:
2. Term. The Parties agree that the new term of this 1994 Administration
Agreement shall be coterminous with the Tax Resolution Agreement entered into
between the City and Chevron on or about April 23, 2013. Accordingly, the Parties
agree that the term of this 1994 Administration Agreement shall be extended up to
and including ending on September 30, 2027, or in the event that the Tax
Resolution Agreement is terminated early or extended in accordance with its terms,
then the term of the 1994 Administration Agreement shall be extended or terminated
so that the 1994 Administration Agreement shall terminate or expire on the same
day as the Tax Resolution Agreement.
C. Payment of Tax. Paragraph "4" of the 1994 Administrative Agreement is deleted and
replaced with the following:
4. Payment of Tax. Chevron agrees to make its annual gas users tax payments
based upon the following agreed upon methodology which is consistent with the
1994 Administrative Agreement and El Segundo Municipal Code Section 3-7-5,
including subsection (d) which was added pursuant to Ordinance 1226. In this
regard, the Parties agree that the gas users tax shall only apply to natural gas and
shall not apply to gas that Chevron does not purchase from third parties (e.g.,
Chevron refinery produced process gas, Chevron produced gas or gas that is
produced or owned by an Affiliate (as that term is defined the Tax Resolution
Agreement). The Parties further agree that gas that is used for non-utility purposes
(such as feedstock use for the production of hydrogen) and gas used for electric co-
generation purposes are also not subject to the City's gas users tax. Chevron shall
pay the gas users tax for each year based upon a pro-rata allocation of third party
(also known as non-equity) natural gas to all of Chevron's taxable and non-taxable
gas consumption to determine the amount of gas utilized for taxable gas
consumption in accordance with Section 2(D) of the Parties' Tax Resolution
Agreement, El Segundo Municipal Code Section 3-7-5, including Subsection (d)
thereof which was adopted pursuant to City Ordinance No. 1226.
D. Annual Adjustment. Paragraph "6" of the 1994 Administrative Agreement is deleted
and replaced with the following:
6. Statute of Limitation on Assessments. Chevron acknowledges that City will
conduct audits of UUT Gas Tax payments during the term of the 1994 Administrative
Agreement (as extended by this Amendment) and agrees to cooperate with City auditors.
City agrees that in addition to following the other terms of this Agreement a three year
statute of limitations shall strictly apply to additional UUT Gas Tax assessments. The
three year statute of limitations period begins to run the day after Chevron pays its annual
UUT Gas Tax payment to the City.
E. Notification of Change of Notices to Chevron. The Parties agree that with respect to
any notices provided under this Administrative Agreement that need to be provided from the City
to Chevron, the City shall direct such notices in accordance with the 1994 Administrative
Agreement to the following addresses:
(i) To the following personnel at the El Segundo Refinery:
Tax Resolution Agreement
City of El Segundo and Chevron U.S.A.Inc. Page 21
2323A
General Manager— El Segundo Refinery
Finance Manager— El Segundo Refinery
Public Affairs Manager— El Segundo Refinery
324 West El Segundo Blvd.
El Segundo, CA 90245
(ii) Attention: Corporate Tax-- Managing Tax Counsel
Chevron U.S.A. Inc.
6001 Bollinger Canyon Rd.
San Ramon, CA 94583
Attn: Manager, State & Local Tax Counsel
(iii) Attention: Chevron Downstream Law Dept.
Chevron U.S.A. Inc.
6001 Bollinger Canyon Road, Buidling
San Ramon, CA 94583
Attn: VP General Counsel
F. Effect of the Amendment. Except as expressly amended, supplemented and modified
herein, nothing in this Amendment in any way alters or amends the restrictions, rights or
obligations under the 1994 Administrative Agreement that are not expressly amended
herein, and all other provisions in the 1994 Administrative Agreement are hereby ratified,
confirmed and remain in full force and effect. This Amendment shall prevail and control
with respect to any inconsistency between the interpretation of the 1994 Administrative
Agreement, this Amendment and any other addendum or prior amendment.
IN WITNESS WHEREOF,the Parties have executed this Amendment through their authorized
representatives as evidenced by the signatures below.
CITY OF EL SEGUNDO CHEVRON U.S.A. INC.
By: By: �1'. / 4,J,?.. '
Carl Jacobson Pri a-{: Cr . . _
Mayor Title. + M 77.1g1/►r,+ "w
Date: 7_5 API 13 Date: InT};
,A ST:
Tra• Weav t,
City Clerk
APPROVED AS TO FORM: MARK D. HENSLEY, 't Atto ey
By:
Tax Resolution Agreement
City of El Segundo and Chevron U.S.A.Inc. Page 22
2323A
ATTACHMENT D
(Identification of Real Property Parcels Currently Owned or Leased by Chevron
in the City of El Segundo)
(attached)
Tax Resolution Agreement
City of El Segundo and Chevron U.S.A.Inc. Page 23
2323A
ATTACHMENT D
PARCEL TRA OWNER1
4131-013-008 3710 CHEVRON USA INC
4131-013-009 3710 CHEVRON USA INC
4135-001-011 3710 CHEVRON USA INC
4135-001-012 3710 CHEVRON USA INC
4135-001-013 3710 CHEVRON USA
4135-001-014 3710 CHEVRON USA
4135-001-015 3710 CHEVRON USA
4135-001-016 3710 CHEVRON USA
4135-001-017 3710 CHEVRON USA
4135-001-018 3710 CHEVRON USA
4135-001-019 3710 CHEVRON USA
4135-001-020 3710 CHEVRON USA
4135-002-004 3710 CHEVRON USA INC
4135-002-019 3710 CHEVRON USA INC
4136-026-003 3710 CHEVRON USA INC
4136-026-004 3710 CHEVRON USA INC
4136-026-005 3710 CHEVRON USA INC
4136-026-006 3710 CHEVRON USA INC
4136-026-007 3710 CHEVRON USA INC
4136-026-008 3710 CHEVRON USA INC
4136-026-009 3710 CHEVRON USA INC
4136-026-010 3710 CHEVRON USA INC
4136-026-011 3710 CHEVRON USA INC
4136-026-012 3710 CHEVRON USA INC
4136-026-013 3710 CHEVRON USA INC
4136-026-014 3710 CHEVRON USA INC
4136-026-015 3710 CHEVRON USA INC
4136-026-016 3710 CHEVRON USA INC
4136-026-017 3710 CHEVRON USA INC
4136-026-018 3710 CHEVRON USA INC
4136-026-019 3710 CHEVRON USA INC
4136-026-020 3710 CHEVRON USA INC
4136-026-021 3710 CHEVRON USA INC
4136-027-010 3710 CHEVRON USA INC
4136-028-013 3710 CHEVRON USA INC
4136-028-014 3710 CHEVRON USA INC
4136-029-009 3710 CHEVRON USA INC
4136-029-010 3710 CHEVRON USA INC
4136-029-011 3710 CHEVRON USA INC
4136-030-009 3710 CHEVRON USA INC
4136-030-010 3710 CHEVRON USA INC
4136-030-011 3710 CHEVRON USA INC
4136-030-012 3710 CHEVRON USA INC
4136-030-013 3710 CHEVRON USA INC
4136-030-014 3710 CHEVRON USA INC
4138-013-021 9851 CHEVRON USA INC
2323A
4138-015-014 9851 CHEVRON USA INC
4138-016-004 3715 CHEVRON USA INC
4138-016-007 3710 CHEVRON USA INC
4138-016-008 3715 CHEVRON USA INC
4138-016-012 3710 CHEVRON USA INC
4138-016-013 3715 CHEVRON USA INC
4138-016-015 3710 CHEVRON USA INC
4138-029-003 3715 CHEVRON USA INC
4139-002-018 3710 CHEVRON USA INC
4139-027-050 3710 CHEVRON USA INC
UNSECURED
4138-007-053 08398 CHEVRON PRODUCTS COMPANY
4138-016-015 03710 CHEVRON PRODUCTS COMPANY
4138-016-015 03710 CHEVRON PRODUCTS COMPANY
4138-016-015 03710 CHEVRON PRODUCTS COMPANY
4138-016-015 03710 CHEVRON PRODUCTS COMPANY
4138-016-015 03710 CHEVRON USA INC
4138-016-015 03710 CHEVRONTEXACO CORPORATION
CROSS REFERENCE
09851 CHEVRON U S A INC
4137-002-000 03710 CHEVRON U S A INC
4137-002-000 03710 CHEVRON USA INC
4138-016-015 03710 CHEVRON USA INC
4138-016-015 03710 CHEVRON USA INC