Changing Tides in the Assessment and Taxation Landscape: Review Of Municipal Government Act Amendments: Assessment And Taxation Alvin R. Kosak Adina Preda Partner Senior Associate

OVERVIEW Designated Industrial Property Role of the Provincial Assessor and the Municipal Assessor Control and Access to Information concerning Designated Industrial Property 2

OVERVIEW Municipality’s right to file an Assessment Complaint about Designated Industrial Property Jurisdiction of LARBs, CARBs and the MGB Appeal of the LARB, CARB and MGB Decisions 3

OVERVIEW The maximum 5 to 1 Tax Ratio Brownfield tax incentives 4

DESIGNATED INDUSTRIAL PROPERTY (“DIP”) Facilities regulated by the Alberta Energy Regulator, Alberta Utilities Commission, or the National Energy Board; Linear Property; Property designated as a major plant by the Regulations; Land and improvements that contain the designated industrial property 5

THE ROLE OF THE PROVINCIAL ASSESSOR/MUNICIPAL ASSESSOR Provincial Assessor: responsible for assessment of designated industrial property Municipal Assessor: responsible for assessment of all other property in a municipality 6

DESIGNATED INDUSTRIAL PROPERTY – PRACTICAL CONSIDERATIONS If municipality utilizes a contract assessor, the scope of the contract services will need to be revisited 7

DESIGNATED INDUSTRIAL PROPERTY – PRACTICAL CONSIDERATIONS The Provincial assessor is the legal custodian of designated industrial property assessment information 8

DESIGNATED INDUSTRIAL PROPERTY – PRACTICAL CONSIDERATIONS Potential issues where a municipality files an assessment complaint respecting designated industrial property 9

ASSESSMENT REVIEW BOARDS Municipal Government Board (“MGB”) Has jurisdiction to hear complaints about assessments for designated industrial property 10

ASSESSMENT REVIEW BOARDS Local Assessment Review Board (“LARB”) Has jurisdiction to hear complaints concerning: residential property with 3 or fewer dwelling units farm land local improvement tax 11

ASSESSMENT REVIEW BOARDS Composite Assessment Review Board (“CARB”) Residential property with 4 or more dwelling units Non-residential property that is not farmland or designated industrial property Property tax notices, business tax notices and improvement tax notices A designated officer’s decision respecting a brownfield tax incentive tax exemption or deferral 12

APPOINTMENT OF LARB AND CARB MEMBERS Municipal Council must: Appoint at least 3 persons as members of the LARB, and 2 persons as members of the CARB Designate one of these members as the chair of the LARB and CARB respectively 13

APPOINTMENT OF LARB AND CARB MEMBERS The Chair of the LARB or CARB must convene a panel of members to hear a complain 14

APPEAL OF DECISIONS OF ASSESSMENT REVIEW BOARDS Judicial Review, rather than Statutory Appeal 60 days, rather than 30 days after date of decision Leave to Appeal is no longer required Scope of appeal is wide: No longer limited to questions of jurisdiction or law Can now appeal findings of fact, or mixed fact and law 15

MAXIMUM TAX RATE RATIO: WHAT IT IS New section 358.1 Imposes “cap”: non- residential tax rate cannot be more than 5 times higher than residential tax rate 16

MAXIMUM TAX RATE RATIO: WHAT IT IS Grandfathering provision applicable to “non-conforming municipality” Any municipality with tax ratio higher than 5:1 as of May 31, 2016 17

MAXIMUM TAX RATE RATIO: WHAT IT MEANS Non-conforming municipalities No ability to raise non-residential tax rate without also raising residential tax rate Possibility that “grandfathering” provision will be phased out 18

MAXIMUM TAX RATE RATIO: WHAT IT MEANS Conforming municipalities Ensure that future tax rates conform to 5:1 ratio All municipalities Ensure accuracy of non-residential property assessment 19

BROWNFIELD PROPERTY TAX INCENTIVES Brownfield property – minimum requirements (s. 364.1): Industrial or commercial property (except designated industrial property); and Property that, in the opinion of the municipal council: Is or possibly is contaminated; is vacant, derelict or under-utilized, and is suitable for development or redevelopment for the general benefit of the municipality 20

BROWNFIELD PROPERTY TAX INCENTIVES Brownfield property tax incentives can be granted in one of two ways:  1) By bylaw 2) By agreement 21

BYLAW STREAM Contents of bylaw: must identify brownfield properties in respect of which an application can be made may set (additional) criteria to qualify for exemption or deferral of taxes 22

BYLAW STREAM Contents of Bylaw (con’t): must specify the taxation year(s) during which identified properties may qualify for an exemption or deferral must specify any conditions which, if breached, will result in cancellation of the exemption or deferral (and the taxation years in which the condition(s) apply) 23

BYLAW STREAM Procedural requirements Administrative requirements before second reading, Council must give notice of and then hold a public hearing with respect to the proposed bylaw (MGA, sections 606 and 230) Administrative requirements after bylaw is passed, owner of brownfield property identified in the bylaw can apply for an exemption or deferral 24

BYLAW STREAM – ADMINISTRATIVE PROCESS Application for exemption is reviewed by a designated officer if satisfied that the property meets the requirements of the bylaw, designated officer may issue a certificate granting the exemption or deferral 25

BYLAW STREAM – ADMINISTRATIVE PROCESS If the designated officer determines that property has ceased to meet the requirements of the bylaw, the officer must cancel the exemption or deferral for the taxation year in which the requirements are not met. If not cancelled, the exemption or deferral remains in force subject to conditions and criteria on which it was granted 26

BYLAW STREAM – COMPLAINTS If the designated officer refuses to grant an exemption or deferral, notice of and reasons for the refusal must be given to property owner Property owner has right of complaint to CARB (within 60 days) 27

AGREEMENT STREAM - REQUIREMENTS Council may enter into an agreement with the owner of a brownfield property  full or partial exemptions or deferrals of tax Agreement must state:  Taxation years to which the exemption or deferral applies (not retroactive);  Conditions on which the exemption or deferral is granted; and  Consequences, rights and remedies arising in the event of any breach 28

AGREEMENT STREAM - REQUIREMENTS Before voting on a resolution to enter into an agreement of this nature, Council must give notice of and hold a public hearing with respect to the proposed agreement There is no right of complaint 29

BROWNFIELD INCENTIVES – PRACTICAL CONSIDERATIONS Council has more direct control over exemptions under agreement stream Downside: investment of Council resources (reviewing agreements, public hearings) Bylaw stream may be more efficient but will require more administrative resources Appointment of designated officer, process for vetting applications under bylaw, etc. 30

BROWNFIELD INCENTIVES – PRACTICAL CONSIDERATIONS Under both streams, consider on- going compliance issues Monitoring for breach of conditions Enforcement if breach 31

ALVIN R. KOSAK ADINA PREDA akosak@brownleelaw.com (780) 497-4882 apreda@brownleelaw.com (780) 497-4894