1301. Guidelines for Ascertaining The Fair Market Value of Pipelines
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1 Chapter 13. Pipelines Guidelines for Ascertaining The Fair Market Value of Pipelines A. General 1. Pipelines, except those regulated pipelines, which are assessed as public service properties as provided by R.S. 47:1851(K), are to be assessed by parish assessors. Two separate classes of pipelines are identified because of differences in function, design and quality. The two classes are "lease lines", which are generally of lower quality, subject to changes in routes, etc.; and, "other pipelines", which are generally larger and of higher quality. 2. Both classes of pipelines are to be assessed in the taxing district where located. A copy of LAT Form 14 is to be provided the pipeline owner. Surface equipment associated with pipelines (compressor stations, booster stations, etc.) are to be reported separately on LAT Form 5. Surface pipeline related equipment is to be valued individually at cost factored to current value less physical deterioration. Pipelines are to be valued for assessment purposes at cost less physical deterioration. A cost schedule is provided for the various sizes of "other pipelines" (See Tables 1307.A and 1307.B). Represented in these schedules is the cost-new, as of the appropriate assessment date, for the different size pipelines. This cost is to be reduced for the appropriate allowance for physical deterioration (See Table 1307.C), based on the age of the pipeline, by multiplying replacement cost by the appropriate percent good factor. Functional and/or economic obsolescence shall be considered in the analysis of fair market value as substantiated by the taxpayer in writing. Consistent with Louisiana R.S. 47:1957, the assessor may request additional documentation. B. Lease lines. The category "lease lines" represents pipelines which are generally in the 2 inches to 6 inches size range. These pipelines are considered to be subject to changes in routes due to equipment and well requirements; and, generally are not of the same quality as "other pipelines". These lines are generally associated with wells and surface equipment on the oil and gas production field. Fiberglass and plastic lines which are now being used in some areas are also covered in this category. Refer to oil and gas properties section, surface equipment (See Table 907.C-1) for "lease lines". C. Other pipelines. The category "other pipelines" is generally represented by the larger gathering and transmission pipelines, but includes all lines, other than plastic, 2 inches and larger in diameter. This class of pipelines is normally of better quality, requiring more rigid controls, and not subject to changes in routes as are "lease lines". Tables 1307.A and 1307.B describe the cost-new per mile for various size pipelines in the "other pipelines" category. AUTHORITY NOTE: Promulgated in accordance with R.S. 47:1837 and R.S. PL - 1 (2009)
2 47:2323. Tax Commission, LR 8:102 (February 1982), amended LR 10:940 (November 1984), LR 12:36 (January 1986), LR 13:188 (March 1987), LR 13:764 (December 1987), LR 15:1097 (December 1989), amended by the Department of Revenue, Tax Commission, LR 24:488 (March 1998), LR 35: (March 2009) Instructions for Reporting "Other Pipelines" A. A separate LAT Form 14 must be used for each ward and tax district (viz., levee districts, drainage districts, special district, etc. - ward). An attachment in lieu of the form is permitted only if information is in the same sequence. The LAT Form 14 may be reproduced and used as an attachment. However, all attachments must be properly identified and attached to the original which is signed and dated. B. If information is not complete and the LAT Form 14 is not properly prepared, report will be returned for further compliance. AUTHORITY NOTE: Promulgated in accordance with R.S. 47:1837 and R.S. 47:2326. Tax Commission, LR 8:102 (February 1982) Reporting Procedures A. Each pipe size, type and length in miles must be reported separately. B. Each form will cover four listings with sufficient space provided to indicate location of each, viz: from lease or facility to junctions of lines of other companies or to lines assessed by the Tax Commission, from ward line to ward line (according to taxing districts), etc. C. Use schedules adopted by the Louisiana Tax Commission and report cost per mile, calculate and extend "total replacement cost". D. Year installed will determine tax age and percent good, unless conditions warrant change. E. Refer to current cost tables (1307.A and 1307.B) and depreciation guidelines (Table 1307.C), adopted by the Louisiana Tax Commission. Yearly depreciation will be allowed according to actual age, on an economic life of 26.5 years, however, as long as pipeline is in place and subject to operation, the remaining percent good shall not be lower than that allowed for the maximum actual age shown in Table PL - 2 (2011)
3 1307.C. F. Assessment will be based on fair market value. Functional and/or economic obsolescence shall be considered in the analysis of fair market value as substantiated by the taxpayer in writing. Consistent with Louisiana R.S. 47:1957, the assessor may request additional documentation. G. Pipeline sales, properly documented, should be considered by the assessor as the fair market value, provided the sale meets all tests relative to it being a valid sale. AUTHORITY NOTE: Promulgated in accordance with R.S. 47:1837. Tax Commission, LR 8:102 (February 1982), amended LR 10:940 (November 1984), LR 17:1213 (December 1991), amended by the Department of Revenue, Tax Commission, LR 24:488 (March 1998), LR 25:316 (February 1999), LR 26:508 (March 2000), LR 35:498 (March 2009), LR 36:778 (April 2010), LR 37: PL - 3 (2009)
4 1307. Pipeline Transportation Tables Diameter (inches) Table 1307.A Current Costs for Other Pipelines (Onshore) Cost Per Mile PL - 4 (2018) 15% of Cost Per Mile 2 $ 169,690 $ 25, ,410 30, ,700 35, ,550 41, ,160 49, ,930 58, ,530 69, ,910 81, ,380 96, , , , , ,058, , ,249, , ,476, , ,743, , ,059, , ,431, , ,872, , ,392, , ,006, , ,731, , ,587, , ,599, , ,794,510 1,169,180 Note: Excludes river and canal crossings.
5 Diameter (inches) Table 1307.B Current Costs for Other Pipelines (Offshore) Cost Per Mile 15% of Cost Per Mile 2 $ 986,640 $ 148, , , , , ,011, , ,036, , ,068, , ,108, , ,154, , ,208, , ,269, , ,337, , ,412, , ,495, , ,585, , ,682, , ,787, , ,898, , ,017, , ,143, , ,277, , ,417, , ,565, , ,720, , ,882, ,400 PL - 5 (2018)
6 Table 1307.C Pipeline Transportation Allowance for Physical Deterioration (Depreciation) Actual Age (Yrs) 26.5 Year Life Percent Good and older 20 * * Reflects residual or floor rate. Note: obsolescence. See 1305.G (page PL-3) for method of recognizing economic PL - 6 (2017)
7 AUTHORITY NOTE: Promulgated in accordance with R.S. 47:1837 and R.S. 47:2323. Tax Commission, LR 8:102 (February 1982), amended LR 10:941 (November 1984), LR 12:36 (January 1986), LR 16:1063 (December 1990), amended by the Department of Revenue, Tax Commission, LR 24:489 (March 1998), LR 25:316 (February 1999), LR 26:509 (March 2000), LR 27:426 (March 2001), LR 31:719 (March 2005), LR 32:432 (March 2006), LR 33:494 (March 2007), LR 34:684 (April 2008), LR 35:499 (March 2009), LR 36:778 (April 2010), amended by the Division of Administration, Tax Commission, LR 37:1401 (May 2011), LR 38:809 (March 2012), LR 39:496 (March 2013), LR 40:537 (March 2014), LR 41:680 (April 2015), LR 42:748 (May 2016), LR 43:655 (April 2017). PL - 7 (2018)
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