Background Information Municipal District of Taber Tax Recovery Land

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1 Background Information Municipal District of Taber Tax Recovery Land -Tax Recovery Lands are lands that at one time were privately owned, cultivated and farmed and were forfeited to the Municipality due to unpaid property taxes during the depression when drought, low prices and poor farming practice forced many off the land. -All Tax Recovery Land was land that was purchased from the crown, cultivated under the terms of the homestead act, forfeited due to unpaid property taxes and for the most part reclaimed by natural process rather than any planned reclamation process. -The inability of landowners to pay taxes, and the decline in municipal services that resulted, led many municipalities to place land forfeited under the tax recovery process in Trust with the Province because of both the volume of land and the inability for municipalities of the day to manage the land with the limited financial resources in place at the time. -Since the 1930 s, the Province of Alberta has managed the Tax Recovery Lands as Public Land on behalf of the municipalities. The land has always been designated as Tax Forfeiture. No municipality has ever surrendered its right to ownership of the land. -Between 1954 and 1996 the Province of Alberta transferred to the Municipal District of Taber a total of 144 quarter sections (approximately 23,000 acres) of tax recovery land that is currently successfully managed for the benefit of the citizens of the Municipal District of Taber. A number of the 23,000 acres currently owned by the municipality are cultivated lands they being cultivated when transferred by the Province to the municipality. -Beginning in 1996, the Municipal District of Taber began examining the transfer of the remaining tax recovery land property from the Province of Alberta to the Municipality. In August 1996 it was agreed by the M.D. of Taber to permit the Province to enter into an additional 10 year lease period with leaseholders. This was done for a number of reasons; to permit leaseholders of the land notification of the transfer of the land back to the municipality and to permit the municipality time to develop policies that will ensure the environmental sustainability of the land. -In August of 1996 individuals who held Tax Recovery Land grazing leases were notified by Sustainable Resource Development that there would be one additional 10 year lease renewal with Public Lands whereupon beginning in 2006 titles to the lands would be transferred to the Municipal District of Taber. -The Municipal District of Taber notified the Province of Alberta in 2005 that the process of transferring tax recovery land back to the municipality may begin. Between October 2006 and July 2009 a total of 16 quarter sections were transferred. Page of 5

2 -In July 2009 a moratorium on nominal sum transfers was enacted by the Treasury Board. All tax recovery land transfers were halted as a result. -The Municipal District of Taber notified the Province of Alberta that tax recovery lands do not meet the definition of a nominal sum transfer as the tax recovery lands are held in trust by the Province and rightfully continue to belong to the Municipal District of Taber. -Within the Municipal District of Taber there are approximately 70,754 acres of tax recovery land that are now leased to local leaseholders by the Province. Approximately 54,845 acres will be transferred, 15,909 are proposed to be retained by the Province due to environmental sensitivity. -It is the intention of the Municipal District of Taber to permit the continued leasing of Tax Recovery Lands by the current leaseholder upon transfer of the titles to the municipality. Over the years these leaseholders have proven their management ability and stewardship as demonstrated by the evident condition of the land. The viability of these leaseholders and their family ranching operations depend upon the ability to seamlessly transition from a Sustainable Resource Development lease to a Municipal District of Taber lease agreement. It is the intention of Municipal Council to make this transition as easy and simple as possible with the view of assuring continued access to the grazing land by the current leaseholder for the long term. The terms of the lease were developed through a working group of leaseholders appointed by their peers and the Council of the M.D. of Taber. Terms of the Municipal District of Taber lease that all current tax recovery land leaseholders will enter include: -The continued ability of leaseholders to operate the land in a sustainable and responsible manner as they have demonstrated during the past years. -An initial 10 year lease period with all existing tax recovery land leaseholders with the option to renew the lease for another 10 year period subject to lease rent review (set initially at $0.70 per acre plus payment of property taxes) and compliance with all lease conditions including adherence to all environmental laws. -First right of refusal of leaseholders of tax recovery land for lease renewal at the end of each subsequent term. -Under current lease agreement provisions between leaseholders of Public Land and the Province leaseholders receive 100% of all surface mineral lease revenue generated by oil and gas exploration on Public Land. -Under the Terms of the Municipal District of Taber Tax Recovery Land Lease Agreement consideration for oil and gas surface lease revenue is considered. The M.D. of Taber lease agreement states that current surface mineral lease revenue remains the same as under the Public Lands Lease until Following 2016 leaseholders of Tax Recovery Land will receive $400 per surface mineral lease in recognition of inconvenience issues. All other revenue derived from mineral surface leases are to be used for municipal purposes for the benefit of the citizens of the municipality as a whole. Page of 5

3 -Following 2016 in consideration of new surface mineral leases the leaseholder will receive the payment received by the municipality for inconvenience, loss of use and adverse effect plus $800 in the first year of new surface leases, and $400 per surface lease each year thereafter. -Leaseholders will receive 100% of all revenue derived from seismic activity on lease lands. -The ability for Leaseholders to assign a municipal grazing lease to a family member that ensures the long term sustainability of farms and ranches that depend upon tax recovery land as a land base for their operations. -The ability of both current and future leaseholders of tax recovery land to assign their leasehold rights by way of either public auction or market value based private sale to any assignee will continue as under the Public Lands lease provided they meet the residency requirements contained within the lease agreement, and subject to the payment of an assignment fee based upon the carrying capacity of the grassland ($ per Animal Unit Month) to the municipality. This policy ensures that equity used to purchase leasehold rights is not lost and remains with the leaseholder or their successors. -Consideration for Corporate lessee residency one or more shareholders who hold the majority of shares in a leasehold interest must be residents of the M.D. of Taber in order to meet residency requirements as contained within the lease agreement. -A mechanism to permit current and future leaseholders of tax recovery land to purchase tax recovery land held by them from the M.D. of Taber. This process includes: 1. Adherence to all statutes contained within the Municipal Government Act with respect to sale of public land, 2. A public disclosure of the request to purchase the property, 3. A determination of the market value of the land including public disclosure, 4. The ability of the Municipality to withhold from sale any parcels including those that: a. Are adjacent to a river or water body, b. Have unique environmental or topographical features, c. Have erosive or marginal soils, d. Have a low productivity rating, e. Are determined by the Municipal District of Taber Council to be significant in any way. 5. All grassland that is sold will be sold subject to the registration of a restricted covenant on title prohibiting the breaking of native grass for the purpose of cultivating the land. a. Should the purchaser or their successor in title of the land breach the terms of the memorandum of agreement caveat registered on title at the time of sale by the M.D. of Taber by breaking the grassland for cultivation, the M.D. of Taber will exercise the transfer document signed at the time of sale and transfer the land back to the Municipality for the same price that the lands were originally acquired by the purchaser. Page of 5

4 -Since 1980 only 1 quarter section (160 acres) of municipal land has been sold this parcel is now used by a food processor as a waste water storage lagoon. This grassland was sold for a fair market value of $800 per acre. The presence of the processor has contributed substantially to the economic sustainability of the agricultural sector of the municipality and surrounding communities. The partnership of this processor and the Municipal District of Taber in the development of the waste water storage and water treatment plant was recognized in the year 2000 with an Emerald Award presented by the Alberta Emerald Foundation for Environmental Excellence. The Municipal District of Taber recognizes the environmental, cultural and social value of the Tax Recovery Lands through planning documents and policies including: -The Municipal Development Plan which recognizes that the M.D. of Taber has unique areas that are of local, provincial and national importance and are identified in a report prepared in 1988 by the Oldman River Regional Planning Commission. Environmental protection should be a partnership between all levels of government, interest groups and the public with the following policies outlining the M.D. s commitment. Objectives of the Policy are: (a) To promote environmental awareness within the methods available to a local municipal government. (b) To ensure public awareness of activities within environmentally sensitive areas. -The Municipal Oil and Gas Policy The Municipal District of Taber recognizes the value of both the sensitivity of municipal owned grassland and the contribution that natural resource industry makes to the local economy. Grassland classified as Tax Recovery Land is property that was homesteaded, broke, cultivated and eventually forfeited due to unpaid property taxes to the municipality. This grassland was abandoned and through natural processes grass varieties common to this area reestablished upon the land. Although this land is not native prairie it is intermixed with public land that was never homesteaded and broken and as such certain management practices must be taken to ensure the continued viability of vegetative and wildlife species within both municipal grassland and surrounding native prairie. The environmental sensitivity of the mixed grass and dry mixed grass region of Southern Alberta is well documented. This region contains some of the largest tracts of continuous native prairie found in North America. Fragile grasslands that continue to be held by the Province of Alberta within the M.D. of Taber are a valuable resource. Consideration for leaseholder input and concern will be given at all times. Leaseholders will be included in all on site meetings throughout the development process. Page of 5

5 Summary -The Municipal District of Taber believes and practices the principles of transparency, accountability and public engagement. -The return of Tax Recovery Land to municipal control will strengthen the long term sustainability of the municipality and its ability to provide quality services to all municipal residents into the future. -The interests of current leaseholders of Tax Recovery Land will be protected through a comprehensive lease agreement. -The Municipal District of Taber is prepared to effectively manage and protect municipally owned property. -All assets held by the Municipal District of Taber are managed by Municipal Council for the benefit of all municipal residents. -All Council meetings are open to the public. All Council meeting minutes are published on the Municipal website for viewing. Page of 5