Oryx Energy Co. v. County of Kern

Oryx Energy Company (hereinafter Oryx) was the lessee and the United States of America was the lessor of three mineral leases during the tax years 1983-1984, 1985-1986 and 1986-1987. The leases granted to Oryx the right to take oil and gas from the federally owned land, and required Oryx to pay to the United States government a rent or “royalty” of approximately 13 percent of the value of the gross production obtained from each leasehold. The Oryx leaseholds were subject to a property tax levied by the County of Kern (hereinafter the County). The County would assess the value of the taxable property and then tax the property in an amount equal to a specified percentage of the assessed value. The specified percentage, or tax rate, would vary from year-to-year, but for each of the three years in question it was approximately 1 percent.

Oryx applied to the County Assessment Appeals Board for a change in the values at which the Oryx leaseholds had been assessed, but the board refused to reduce those assessed values. Oryx paid the taxes and filed claims with the County for what Oryx contended were overpayments of its tax. The County would not issue a refund, and Oryx filed…