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Resolution 24-05F

Linear Property Assessment Depreciation on Pipelines with a 'W' Code

January 1, 2005
Expiry Date:
December 1, 2008
Active Status:
Municipal Governance and Finances
Vote Results:

WHEREAS in 1998 the Pipeline Transition Committee recommended the inclusion of the ‘W’ code for additional depreciation of pipe and the Linear Municipal Guideline for Pipeline was amended by Alberta Municipal Affairs; AND WHEREAS the Municipal Government Board has upheld this guideline resulting in a continued reduction of pipeline assessment for many Alberta municipalities and provincial school funding; AND WHEREAS code ‘W’ causes unfair and inequitable assessment among similar property with some wells assessed at 100 per cent and pipeline from the same wells assessed at 10 per cent;

Operative Clause:

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 to remove the ‘W’ code from the additional depreciation table within the Linear Property Assessment Manual regardless of pipeline assessment rate review.

Member Background:

Extra depreciation given to pipeline assessments known as code ‘W’ have been discussed at previous conventions in Resolution #29-02F and Resolution #25-03F. Code ‘W’ has successfully been upheld by the Municipal Government Board however, the unfairness and inequity caused by Code ‘W’ within the assessment of the pipeline issue has yet to be dealt with. Northern Sunrise County has some wells assessed at 100% and the pipelines coming from these same wells are assessed at 10%. (Code ‘W’ gives the pipelines 90% depreciation) Code ‘W’ refers to the pipelines that are receiving obsolescence (extra depreciation) of 90% and are only being assessed 10%. For Northern Sunrise County this means a loss of $13.5 million in assessment for the 2005 tax year. This factor was introduced for one year in 1998 so the oil & gas companies had time to get their records in order at the AEUB. Alberta Municipal Affairs applies this factor when a pipeline starting location falls in the same LSD (40 acres) that has an abandoned well. Alberta Municipal Affairs do not relate a well to its pipeline. So it is feasible to have two similar pipelines, one assessed at 10% and the other assessed at 100% regardless of volume of flow in the pipe. Northern Sunrise County has 47 producing wells that are assessed at 100 percent but the pipelines coming from those wells are only assessed at 10%. Wells also receive extra depreciation for lack of volume (low producers), of the 1536 producing wells in the County there is an average extra depreciation of 11%. Of the 65 producing wells that have Code ‘W’ pipelines from them, they have an average extra depreciation of 14%. This is only a difference of 3% on the wells and yet the pipeline allowance for Code ‘W’ is 90% depreciation reduction. There is also an inequity when Code ‘W’ is applied on operational pipelines and given 90% extra depreciation. The same reduction is also given on Code ‘D’ (pipeline that has a discontinued [purged, capped, made leak-proof] status as contained in the AEUB records).


As of the 2006 assessment year, the Code W was removed from the assessment process.

Provincial Ministries:
Municipal Affairs
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