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Resolution 25-03F

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

January 1, 2003
Expiry Date:
December 1, 2006
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 WHEREAS in 1998, the Linear Property Assessment Manual was amended to include the W code as recommended by the Pipeline Transition Committee; AND WHEREAS the application of the additional depreciation on pipe with a W code as outlined in the 2001 Linear Property Assessment Manual was recently unsuccessfully appealed to the Municipal Government Board; AND WHEREAS the decision of the Municipal Government Board results in a continued reduction of pipeline assessment for many Alberta municipalities;

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.

Member Background:

Prior to 1998, all active pipelines were assessed at 100% of value as outlined in the applicable Linear Assessment Property Manual in each respective year. In 1998, the Pipeline Transition Committee recommended that additional depreciation be allowed on pipelines so that when there are producing and non-producing wells within a Legal Sub-Division (LSD), all pipelines are granted a 90% reduction (depreciation). For example, if there are six wells in a LSD owned by six different companies with six different pipelines, and one of the six wells is non-producing, the pipelines connected to the other five wells are granted a 90% reduction. This change to the Linear Property Assessment Manual has resulted in the loss of millions of dollars in pipeline linear assessments from assessment rolls across the province. Some active pipelines are now being granted a 90% reduction. Companies have the ability to discontinue pipeline(s) connected to a non-producing well through the AEUB, which would then allow the 90% reduction on specific pipelines, and not other pipelines that are operational within the same LSD.

RMA Background:

Resolution 29-02F, endorsed by delegates at the fall 2002 convention, urges the Government of Alberta to amend legislation, regulations and guidelines to authorize the current practice of applying different levels of depreciation to pipelines, depending upon whether they are attached to non-producing wells or to abandoned wells. The province has indicated that this issue is under review as part of the total review of rates and depreciation factors for all regulated industrial property assessment and the government intends to implement the new regulated rates and depreciation standards for the 2004 tax year.

Provincial Ministries:
Municipal Affairs
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