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Volume 59, No. 3

53/2016

The British Columbia Gazette,

Part II

March 8, 2016

B.C. Reg. 53/2016 , deposited March 2, 2016, under the ASSESSMENT ACT [sections 20, 20.1 and 74]. Order in Council 127/2016, approved and ordered March 1, 2016.

On the recommendation of the undersigned, the Lieutenant Governor, by and with the advice and consent of the Executive Council, orders as follows:

(

a) the Depreciation of Dams, Power Plants and Substations Regulation, B.C. Reg. 395/99, is repealed;

(

b) the Depreciation of Industrial Improvements Regulation, B.C. Reg. 379/88, is repealed;

(

c) the attached Depreciation of Industrial and Electrical Power Generating Facility Improvements Regulation is made.

— P. FASSBENDER, Minister of Community, Sport and Cultural Development and Minister Responsible for TransLink ; T. WAT, Presiding Member of the Executive Council .

DEPRECIATION OF INDUSTRIAL AND ELECTRICAL POWER GENERATING FACILITY IMPROVEMENTS REGULATION

Contents

Definitions

Major industrial plants other than major LNG plants

Major LNG plants that have not commenced operation

Major LNG plants that have commenced operation

Dams

Power plants

Substations

Depreciation in relation to certain electrical power generating facilities

Closure allowances

Rounding down amounts

Schedule 1 – Depreciation Rates for Industrial Improvements

Schedule 2 – Depreciation Rates for Major LNG Improvements

Schedule 3 – Depreciation Rates for Dam Improvements

Schedule 4 – Depreciation Rates for Power Plant Improvements

Schedule 5 – Depreciation Rates for Substation Improvements

Definitions

1 In this regulation:

“Act” means the Assessment Act ;

“chronological age” means,

(

a) in relation to an industrial improvement or part of an industrial improvement that is part of a major industrial plant, the number of years determined by subtracting from the year in which the new assessment roll is completed whichever of the following years applies:

(

i) in the case of an industrial improvement or part of an industrial improvement that was constructed or installed before the plant commenced operation, the year in which the plant commenced operation;

(ii) in the case of an industrial improvement or part of an industrial improvement that was constructed or installed after the plant commenced operation, the year in which the construction or installation of the industrial improvement or part of an industrial improvement was completed, and

(

b) in relation to an improvement or part of an improvement that is part of an electrical power generating facility, the number of years determined by subtracting from the year in which the new assessment roll is completed whichever of the following years applies:

(

i) in the case of an improvement or part of an improvement that was constructed or installed before the facility commenced operation, the year in which the facility commenced operation;

(ii) in the case of an improvement or part of an improvement that was constructed or installed after the facility commenced operation, the year in which the construction or installation of the improvement or part of an improvement was completed;

“dam” means a dam as defined in

section 20.1 of the Act to which that

section applies;

“effective age” , in relation to an industrial improvement or an electrical power generating facility improvement, means the number of years determined by

(

a) calculating the total cost of the improvement,

(

b) multiplying the chronological age of each part of the improvement by the cost of that part to give the weighted age of that part,

(

c) adding the weighted ages of all of the parts of the improvement, and

(

d) dividing the sum of the weighted ages by the total cost of the improvement and rounding the quotient up to the next whole year to yield the effective age of the improvement;

“electrical power generating facility” means a dam, a power plant or a substation;

“electrical power generating facility improvement” means an improvement that is part of an electrical power generating facility;

“industrial improvement” has the same meaning as in

section 20 of the Act;

“LNG improvement” means an industrial improvement that is part of a major LNG plant or is part of an industrial improvement that is part of a major LNG plant;

“major industrial plant” means a plant designed and built for a purpose described in paragraphs (

a) to (

q) of the definition of “industrial improvement” in

section 20 (1) of the Act;

“major LNG plant” means a major industrial plant that is designed

(

a) to process natural gas, and

(

b) to produce at least 4 million tonnes of liquefied natural gas per year,

and includes associated facilities used for the loading of liquefied natural gas onto sea going ships or barges and storage facilities that are ancillary to those loading facilities;

“power plant” means a power plant as defined in

section 20.1 of the Act to which that

section applies;

“substation” means a substation as defined in

section 20.1 of the Act to which that

section applies;

“wind power plant” means a power plant that uses a wind turbine to generate or supply electricity from the wind.

Major industrial plants other than major LNG plants

(1) In this section, “category” , in relation to a major industrial plant, means the category of the plant set out in column 1 of

Schedule 1 by reference to the primary purpose for which the plant was designed and built, being a purpose described in the definition of “industrial improvement” in

section 20 (1) of the Act.

(2) Subject to

section 9, this

section prescribes, for the purposes of

section 20 of the Act, the depreciation rate for an industrial improvement other than an LNG improvement.

(3) Subject to subsection (4), the depreciation rate is to be calculated as follows:

depreciation rate = percentage rate × age

where

age

the chronological age of the improvement or, if the parts of the improvement have different chronological ages, the effective age of the improvement;

percentage rate

the percentage rate set out in column 2 of

Schedule 1 opposite the category of the major industrial plant of which the improvement is a part.

(4) If the depreciation rate determined in accordance with subsection (3) is equal to or greater than 80%, the depreciation rate is 80%.

Major LNG plants that have not commenced operation

(1) This

section prescribes, for the purposes of

section 20 of the Act, the depreciation rate for an LNG improvement that is part of a major LNG plant that has not commenced operation.

(2) The depreciation rate is 40% for the year that the construction or installation of the LNG improvement commences and for each following year up to and including the year before the year that the major LNG plant commences operation.

Major LNG plants that have commenced operation

(1) Subject to

section 9, this

section prescribes, for the purposes of

section 20 of the Act, the depreciation rate for an LNG improvement that is part of a major LNG plant that has commenced operation.

(2) The depreciation rate for an LNG improvement whose construction or installation commenced before or in the year that the major LNG plant commenced operation is the rate set out in column 2 of Table 1 in

Schedule 2 opposite the year set out in column 1 of that table.

(3) The depreciation rate for an LNG improvement whose construction or installation commenced in a year after the year that the major LNG plant commenced operation is the rate set out in column 2 of Table 2 in

Schedule 2 opposite the year set out in column 1 of that table.

Dams

(1) In this section, “maximum depreciation rate” , in relation to an improvement that is part of a dam, means the rate set out in column 3 of

Schedule 3 opposite the description of the improvement in column 1 of that Schedule.

(2) Subject to sections 8 and 9, this

section prescribes, for the purposes of

section 20.1 of the Act, the depreciation rate for an improvement that is part of a dam.

(3) Subject to subsection (4), the depreciation rate is to be calculated as follows:

depreciation rate = percentage rate × age

where

age

the chronological age of the improvement or, if the parts of the improvement have different chronological ages, the effective age of the improvement;

percentage rate

the percentage rate set out in column 2 of

Schedule 3 opposite the description of the improvement set out in column 1 of that Schedule.

(4) If the depreciation rate determined in accordance with subsection (3) for an improvement is equal to or greater than the maximum depreciation rate for the improvement, the depreciation rate for the improvement is the maximum depreciation rate.

Power plants

(1) In this section, “maximum depreciation rate” , in relation to an improvement that is part of a power plant, means the rate set out in column 3 of

Schedule 4 opposite the description of the improvement in column 1 of that Schedule.

(2) Subject to sections 8 and 9, this

section prescribes, for the purposes of

section 20.1 of the Act, the depreciation rate for an improvement that is part of a power plant.

(3) Subject to subsection (4), the depreciation rate is to be calculated as follows:

depreciation rate = percentage rate × age

where

age

the chronological age of the improvement or, if the parts of the improvement have different chronological ages, the effective age of the improvement;

percentage rate

the percentage rate set out in column 2 of

Schedule 4 opposite the description of the improvement set out in column 1 of that Schedule.

(4) If the depreciation rate determined in accordance with subsection (3) for an improvement is equal to or greater than the maximum depreciation rate for the improvement, the depreciation rate for the improvement is the maximum depreciation rate.

Substations

(1) In this section:

“age” , in relation to an improvement, means the chronological age of the improvement or, if the parts of the improvement have different chronological ages, the effective age of the improvement;

“applicable table” , in relation to an improvement, means the table in

Schedule 5 whose title describes the improvement.

(2) Subject to sections 8 and 9, this

section prescribes, for the purposes of

section 20.1 of the Act, the depreciation rate for an improvement that is part of a substation.

(3) Subject to subsection (4), the depreciation rate is the rate set out in column 2 of the applicable table in

Schedule 5 opposite the age of the improvement set out in column 1 of that table.

(4) If the assessor determines, as of October 31 in any year, that an electrical transformer that is part of a substation, other than a substation that is part of an electrical power generating facility described in

section 8 (1), has a design capacity that is at least 100% greater than the peak megavolt amp load requirement of that transformer during the previous 12 months, the cost of that transformer must be reduced by 25% before application of the depreciation rate determined under subsection (3) for valuation of that transformer for the next assessment roll.

(5) Subsection (4) applies only if a transformer is installed to service a load requirement or anticipated load requirement, and, subsequent to the installation,

(

a) the load requirement diminishes, or

(

b) the anticipated load requirement does not occur.

Depreciation in relation to certain electrical power generating facilities

(1) The cost of improvements that are part of each of the following electrical power generating facilities must be reduced by 15% before the application of the depreciation rate determined under

section 5, 6 or 7 or subsection (2) of this section:

(

a) Lower Bonnington (Plant 1);

(

b) Upper Bonnington (Plant 2);

(

c) South Slocan (Plant 3);

(

d) Corra Linn (Plant 4).

(2) Subject to

section 9, the amount of depreciation to be applied to the following electrical power generating facility improvements must be determined by the assessor using generally accepted appraisal methods:

(

a) improvements that are part of a dam that has an actual electrical power generating capacity of 6 or less megawatts per hour;

(

b) improvements not specifically described in

Schedule 3, 4 or 5, as applicable.

Closure allowances

(1) If the assessor determines that a major industrial plant or an electrical power generating facility

(

a) is closed on or before October 31 in any year and the owner of the plant or facility or a senior executive officer of the corporation that owns the plant or facility confirms in writing that the closure is permanent, or

(

b) has been closed for a minimum of 3 consecutive years immediately preceding October 31 in any year and the owner of the plant or facility or a senior executive officer of the corporation that owns the plant or facility confirms in writing that the plant or facility is closed and the duration of that closure,

for the purpose of the assessment roll in the succeeding year, the depreciation applicable to the improvements that are part of the plant or facility is the amount sufficient to reduce the actual value of the improvements to 10% of the cost of the improvements.

(2) If the assessor determines that a separate industrial improvement or a separate electrical power generating facility improvement

(

a) is closed or shut down on or before October 31 in any year and the owner or manager of the major industrial plant or electrical power generating facility of which the improvement is a

part confirms in writing that the closure or shutdown is permanent, or

(

b) has been closed or shut down for a minimum of 3 consecutive years immediately preceding October 31 in any year and the owner or manager of the major industrial plant or electrical power generating facility of which the improvement is a

part confirms in writing that the improvement is closed or shut down and the duration of that closure or shutdown,

for the purpose of the assessment roll in the succeeding year, the depreciation applicable to the separate improvement is the amount sufficient to reduce the actual value of the improvement to 10% of the cost of that improvement.

(3) Subsection (2) applies only with respect to a complete industrial improvement or electrical power generating facility improvement and must not be applied to a part of an industrial improvement or a part of an electrical power generating facility improvement.

(4) A confirmation referred to in subsection (1) or (2), as applicable, must

(

a) be made to the assessor of the assessment area in which the major industrial plant or electrical power generating facility, as the case may be, is located,

(

b) be made by November 30 next following the October 31 referred to in subsection (1) (

a) or (

b) or (2) (

a) or (b), as applicable,

(

c) in the case of a confirmation under subsection (1) (

a) or (2) (a), specify the date of the permanent closure or shutdown, and

(

d) in the case of a confirmation under subsection (1) (

b) or (2) (b), specify the commencement date and duration of the closure or shutdown.

(5) Despite subsection (4), if

(

a) a major industrial plant or electrical power generating facility that has been previously closed is reopened, or

(

b) a separate industrial improvement or electrical power generating facility improvement that has been previously closed or shut down is reopened or reactivated,

this

section ceases to apply for the purposes of the assessment roll in the succeeding year.

Rounding down amounts

10 For the purposes of sections 20 (4) and 20.1 (3) of the Act, the assessment authority must round the actual value of an industrial improvement or an electrical power generating facility improvement that has been calculated by applying a rate of depreciation prescribed by this regulation

(

a) down to the nearest $100, if the actual value determined is greater than $101 and less than $99 999, and

(

b) down to the nearest $1 000, if the actual value determined is $100 000 or greater.

Schedule 1

[Section 2]

Depreciation Rates for Industrial Improvements

Item

Column 1

Category of Major Industrial Plant

Column 2

Percentage rate

(%)

(

a) mining, extracting, beneficiating or milling of metallic or non-metallic ore

6.5

(

b) mining, breaking, washing, grading or beneficiating of coal

4.0

(

c) producing of aluminum

3.0

(

d) smelting or refining of metal from ore or ore concentrate

3.0

(

e) producing, manufacturing, processing or refining of petroleum or natural gas

3.0

(

f) manufacturing of lumber or other sawmill and planing mill products

4.0

(

g) manufacturing of wood veneer, plywood, particle board, wafer board, hardboard and similar products

4.0

(

h) manufacturing of gypsum board

3.0

(

i) manufacturing of pulp, paper or linerboard

3.0

(

j) manufacturing of chemicals

4.0

(

k) manufacturing of chemical fertilizer

3.0

(

l) manufacturing of synthetic resins or the compounding of synthetic resins into moulding compounds

3.0

(

m) manufacturing of cement

3.0

(

n) manufacturing of insulation

3.0

(

o) manufacturing of sheet glass or glass bottles

3.0

(

p) building, refitting or repairing ships

5.0

(q) (

i) loading of cargo onto sea going ships or barges, including associated cargo storage and loading facilities

5.0

(q) (ii) the maritime structure of a grain terminal operation including piers, wharves, shipping galleries and loading gallery towers used to transport grain from a grain elevator to sea going ships or barges, but excluding grain elevators and associated structures

5.0

(q) (iii) grain elevators and associated structures

2.5

Schedule 2

[Section 4]

Depreciation Rates for Major LNG Improvements

Table 1

Item

Column 1

Year

Column 2

Depreciation rate

(%)

Year that plant commenced operation and following 14 years

15th year after year that plant commenced operation

16th year after year that plant commenced operation

17th year after year that plant commenced operation

18th year after year that plant commenced operation

19th year after year that plant commenced operation and following years

Table 2

Item

Column 1

Year

Column 2

Depreciation rate

(%)

Year that construction or installation of improvement commenced and following 14 years

15th year after year that construction or installation of improvement commenced

16th year after year that construction or installation of improvement commenced

17th year after year that construction or installation of improvement commenced

18th year after year that construction or installation of improvement commenced

19th year after year that construction or installation of improvement commenced and following years

Schedule 3

[Sections 5 and 8]

Depreciation Rates for Dam Improvements

Item

Column 1

Improvement

Column 2

Percentage rate

(%)

Column 3

Maximum

depreciation rate

(%)

Dam – Structure

(

i) well maintained

(ii) average maintenance

0.70

0.70

Head Gates

1.25

Surge Tank

1.25

Steel Penstock

2.00

Polyethylene (PE) Penstock

2.00

Wood Penstock

2.00

Tunnel

(

i) well maintained

(ii) average maintenance

0.70

0.70

Concrete Tunnel Liner

2.00

Steel Tunnel Liner

1.50

Schedule 4

[Sections 6 and 8]

Depreciation Rates for Power Plant Improvements

Item

Column 1

Improvement

Column 2

Percentage rate

(%)

Column 3

Maximum

depreciation rate

(%)

Improvement that is part of a power plant other than a wind power plant

1.25

Improvement that is part of a wind power plant

2.25

Schedule 5

[Sections 7 and 8]

Depreciation Rates for Substation Improvements

Table 1

Buildings – Steel Frame

Item

Column 1

Age of improvement

(years)

Column 2

Depreciation rate

(%)

Item

Column 1

Age of improvement

(years)

Column 2

Depreciation rate

(%)

2 and 3

5 and 6

8 and 9

31 and 32

33 and 34

35 and 36

37 and 38

39 and 40

greater than 40

Table 2

Buildings – Pre-Engineered

Item

Column 1

Age of improvement

(years)

Column 2

Depreciation rate

(%)

Item

Column 1

Age of improvement

(years)

Column 2

Depreciation rate

(%)

greater than 27

Table 3

Masonry – Load Bearing

Item

Column 1

Age of improvement

(years)

Column 2

Depreciation rate

(%)

Item

Column 1

Age of improvement

(years)

Column 2

Depreciation rate

(%)

31 and 32

greater than 32

Table 4

Transformers

Item

Column 1

Age of improvement

(years)

Column 2

Depreciation rate

(%)

Item

Column 1

Age of improvement

(years)

Column 2

Depreciation rate

(%)

1 and 2

5 and 6

30 and 31

32 and 33

greater than 37

Table 5

Breakers

Item

Column 1

Age of improvement

(years)

Column 2

Depreciation rate

(%)

Item

Column 1

Age of improvement

(years)

Column 2

Depreciation rate

(%)

30 and 31

greater than 31

Table 6

Grounding, Transformation Positions and Breaker Positions

Item

Column 1

Age of improvement

(years)

Column 2

Depreciation rate

(%)

Item

Column 1

Age of improvement

(years)

Column 2

Depreciation rate

(%)

2 to 5

6 to 8

31 and 32

9 and 10

33 and 34

11 and 12

35 and 36

13 and 14

37 and 38

39 and 40

16 and 17

41 and 42

43 and 44

19 and 20

45 and 46

47 and 48

49 and 50

51 and 52

53 and 54

55 and 56

57 and 58

greater than 58

Table 7

Light Metal Sheds

Item

Column 1

Age of improvement

(years)

Column 2

Depreciation rate

(%)

Item

Column 1

Age of improvement

(years)

Column 2

Depreciation rate

(%)

greater than 30

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