Opinion:BCE-Mach v. Roach, 2022 OK CIV APP 5
Subject matter:Ad Valorem Tax
Date Decided:June 29, 2021; Mandate Issued: March 9, 2022
Trial Court:District Court of Alfalfa County; Judge Angle
Route to this Court:Appeal of district court’s grant of summary judgment to BCE-Mach.
Facts:BCE-Mach and the Alfalfa County Assessor dispute whether BCE-Mach’s saltwater disposal wells are exempt from ad valorem taxation. In Oklahoma, disposal wells are subject to gross production tax in lieu of valorem taxation if the well is part of a producing well’s non-commercial disposal system and is actually necessary and is in use or being used. 68 O.S. § 1001.1. 

In order to comply with Oklahoma law, BCE-Mach disposes of wastewater from oil and gas wells in Alfalfa and Woods County via a non-commercial saltwater disposal system, which consists of a series of interconnected pipelines connected with fourteen (14) saltwater disposal wells at issue in this case. The Assessor contends that  the disposal wells located “off lease” do not qualify for the “in lieu” of exemption for ad valorem taxation and also that four (4) of the wells at issue were not in use during the requisite period of time that the Assessor assessed ad valorem tax on the wells. 

The Assessor presented no evidentiary support for her assertion that four (4) of the wells were not in use during the requisite period of time. The district court granted MCE’s motion for summary judgment, determining that the saltwater disposal system was subject to gross production tax in lieu of ad valorem taxes. The Assessor appealed. 
Standard of Review:De novo review of statutory interpretation and also due to this being a review of summary judgment. .
Analysis: First, the 2013 amendments to 68 O.S. § 1001.1 explicitly overturned prior precedent and the distinction of whether or not a disposal well is located on or off lease is no longer relevant for a disposal well to receive an exemption from ad valorem taxation. 

Second, the Assessor provides no evidence to support her contention that four (4) of the twelve (12) wells at issue were not in use during the relevant time period. The Assessor claims that her deficiencies in evidence are due to lack of discovery in the case. That claim does not satisfy District Court Rule 13(d), which requires that a party opposing summary judgment must submit an affidavit if the party claims it cannot present evidentiary material sufficient to support its opposition to the motion, and only then may the trial court either deny the motion without prejudice or order a continuance of the motion for discovery to be obtained. The Assessor neither submitted such an affidavit nor requested the court for additional time to conduct discovery. 

As a result, there is no dispute to a material fact, and the law supports BCE-Mach’s arguments that its disposal wells are exempt from ad valorem taxation. 
Vote:3-0CONCUR: Swinton, C.J., Pemberton, P.J. (author),  Bell, J.
Other: Petition for certiorari denied 8-0 (Darby, C.J. did not participate). 

BCE-Mach has filed a Motion to Publish Opinion with the Oklahoma Supreme Court based on BCE-Mach’s claim that the opinion has substantial precedential value.