Knee Hill County, Alabama – Knee Hill County Council has written off approximately $68,000 in unpaid oil and gas industry property taxes due to the associated wells entering the orphan well system. The resolution was passed at the regular assembly meeting on October 8th.
Council members heard a presentation from Property Tax Administrator Ragina Nyman about several oil and gas companies that currently owe property taxes to the city.
“The administration is proposing to cancel the 2024 levy on local tax rolls turned over to the Orphan Well Association,” Nyman said in a report to Congress.
“These assets will continue to be assessed annually until they are fully recovered. Once the well is fully reclaimed, the tax records will be invalidated.”
Mr. Nyman’s report cited Manitoc Energy Inc. ($17,235.24), Trident Exploration Alberta ($38,790.68), Lexin Resources Inc. ($10,290.09) and Canyon O&G Corporation ($1,936.27). It points to four oil and gas companies and the amount of unpaid property taxes.
In his presentation, Nyman described these companies as “…companies that are no longer in operation.”
Staff also provided a list of specific tax records totaling 26, all of which Nyman said were turned over to the Orphan Wells Association.
“Once a well is classified as orphan, it is no longer a producing asset,” Nyman’s report states. “This means there is no more revenue coming in, so there are no future tax payments.”
Nyman said during his presentation that there is some positive news. County officials noticed a decrease in similar situations starting in 2023.
The failure to pay property taxes by oil and gas companies operating in Alberta has been a source of controversy for years. Knee Hill and Stettler counties, for example, have been vocal about this issue, citing total property tax losses in the millions of dollars. Estimates from earlier this year put Alberta’s total unpaid oil and gas property taxes at $250 million.
Over the past few years, some oil and gas industry players have made it clear through statements and lobbying efforts that they feel municipal property taxes are too high.
mobile home tax
Nyman also notified council about a mobile home in Torrington’s Hamlet with an unpaid property tax bill. The account was identified as #16 Torrington Mobile Home with an outstanding debt of $191.93 and staff recommended that the taxes be reversed.
During his presentation, Nyman informed council members that the owner of the mobile home had passed away. The property in question has since been occupied by a new mobile home.
county. Carrie Fobbs asked if Knee Hill County could recover unpaid debts from the mobile home park where the mobile home in question is located. Mr. Nyman said that some mobile home owners rent the lots they live on, while others own the lots they live on, and in this situation, the lots are He replied that it belonged to the owner of the mobile home.
Nyman also said that Knee Hill County could use the tax collection powers provided by the Municipal Government Act (MGA), but that would require a legal process and would result in the taxpayer owning the property in question and then selling it. He also said that it was necessary to do so. She compared all of this to less than $200 that taxpayers should pay.
After all, the mobile home in question had already been demolished, suggesting its value was not noteworthy, Nyman noted.
Mr Forbes said he appreciated the clarification as some members of the public did not understand the situation.
City Council members unanimously passed a resolution targeting both the oil and gas company and the Torrington mobile home. The council approves the cancellation of taxes on local tax rolls turned over to the Orphan Well Association and affiliated with Manitoc Energy Inc. and Trident Exploration Inc. (Alberta), Lexin Resources Ltd., and Canyon Oil and Gas Corporation and (mobile home) total cancellation fee of $68,444.21.
Stu Salkeld is a Local Journalism Initiative reporter for the East Central Alberta Review. Title image: Zbynek Burival, UnSplash.