WHEREAS Alberta Municipal Affairs uses the AEUB records accumulated from the oil & gas companies to determine the linear assessment, despite many errors in the oil & gas company reporting; AND WHEREAS when Alberta Municipal Affairs requests information on permitted pipelines from the oil and gas companies there are no consequences for not responding to the request; AND WHEREAS it is the Industry’s responsibility to submit the information to maintain the records at AEUB, pipelines get registered as Permitted ‘P’ for 12 months then automatically change to Operational ‘O’;
THEREFORE BE IT RESOLVED that the Alberta Association of Municipal Districts and Counties urge the Government of Alberta to make any amendments necessary to legislation, regulations and guidelines that when a pipeline is commissioned, the company must also change their records at AEUB to Operational ‘O’ or face a financial penalty
In recent years Alberta Municipal Affairs has gone from oil & gas companies reporting their linear property assets (self reporting) to Alberta Municipal Affairs, to Alberta Municipal Affairs only using the AEUB records to arrive at linear assessments. Prior to this change the County would notify Alberta Municipal Affairs of what was found in the field and the assessment would be corrected. Alberta Municipal Affairs and the Municipalities do not have the authority to correct errors. Only the oil & gas companies can have the errors corrected at the AEUB and some refuse to do so as it will adversely affect their assessment and taxation. If an oil company registers a well as flowing rather than pumping, the difference would be a loss of approximately $30,000.00 per well in County assessment. (For Northern Sunrise County that means a potential loss of over $46 million in assessment dollars) Oil Companies are not required to notify the AEUB when a pump is placed on a well. The AEUB is only concerned about production of wells. In the last few years Alberta Municipal Affairs, ignored such requests until Municipal Government Board (MGB) Order #125 which Alberta Municipal Affairs have appealed for a review/ rehearing to MGB. The MGB Order #125 ruled in favor of the County instructing Alberta Municipal Affairs to change the flowing wells to pumping, making the assessment fair and equitable. Because Alberta Municipal Affairs felt that the MGB was prejudiced in their ruling, Board Order #125 has been rescinded and the original panel of the MGB has been “directed to reopen the hearing and provide opportunity for the parties to present argument and evidence as to whether or not the relevant portions of the Guidelines conflict with the Act and any related effect on the merits of the complaint”. When registering new pipelines AEUB now automatically codes them to status ‘P’ for 12 months instead of 6 months as before. After 12 months the pipeline code automatically changes to ‘O’ operational. The ‘P’ status, pipelines are not assessed by Alberta Municipal Affairs unless they are operational or capable of operating as of Oct 31st prior to the taxation year. Companies are requested to respond by Dec 31st to a departmental survey as to which pipelines are operational. If the pipeline is operating then it is assessed; if not operating it is not assessed. There are no consequences to the Companies for not responding to the survey. Instead they enjoy a tax holiday for one year at the expense of the municipality and provincial school funding. We recommend that Alberta Municipal Affairs continue to use the AEUB records, however, companies should be financially penalized for not correcting errors in AEUB records. Alberta Sustainable Resource Development charges back rent at double the rate when a farmer uses crown land without a lease license or permit. Alberta Municipal Affairs should follow this example. Alberta Municipal Affairs should assess as per field findings when it is determined that the AEUB records are in error to arrive at a fair and equitable assessment.
In May 2008, Bill 16 was passed through the legislature. This bill amended the Municipal Government Act to define capable of being used and construction in order to provide clarity for assessment purposes. Resolution 16-06F also deals with the issue of the ability of the AUC to maintain updates on their records to a level needed for assessment. The AAMDC will continue to pursue this matter with Municipal Affairs and the AUC.