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(a) the Depreciation of Dams, Power Plants and Substations Regulation, B.C. Reg. 395/99, is repealed;

(b) the Depreciation of Industrial Improvements Regulation, B.C. Reg. 379/88, is repealed;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
  1 Definitions
  2 Major industrial plants other than major LNG plants
  3 Major LNG plants that have not commenced operation
  4 Major LNG plants that have commenced operation
  5 Dams
  6 Power plants
  7 Substations
  8 Depreciation in relation to certain electrical power generating facilities
  9 Closure allowances
  10 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

2  (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

3  (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

4  (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

5  (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

6  (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

7  (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

8  (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

9  (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
(%)
1 (a) mining, extracting, beneficiating or milling of metallic or non-metallic ore 6.5
2 (b) mining, breaking, washing, grading or beneficiating of coal 4.0
3 (c) producing of aluminum 3.0
4 (d) smelting or refining of metal from ore or ore concentrate 3.0
5 (e) producing, manufacturing, processing or refining of petroleum or natural gas 3.0
6 (f) manufacturing of lumber or other sawmill and planing mill products 4.0
7 (g) manufacturing of wood veneer, plywood, particle board, wafer board, hardboard and similar products 4.0
8 (h) manufacturing of gypsum board 3.0
9 (i) manufacturing of pulp, paper or linerboard 3.0
10 (j) manufacturing of chemicals 4.0
11 (k) manufacturing of chemical fertilizer 3.0
12 (l) manufacturing of synthetic resins or the compounding of synthetic resins into moulding compounds 3.0
13 (m) manufacturing of cement 3.0
14 (n) manufacturing of insulation 3.0
15 (o) manufacturing of sheet glass or glass bottles 3.0
16 (p) building, refitting or repairing ships 5.0
17 (q) (i) loading of cargo onto sea going ships or barges, including associated cargo storage and loading facilities 5.0
18 (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
19 (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
(%)
1 Year that plant commenced operation and following 14 years 40
2 15th year after year that plant commenced operation 48
3 16th year after year that plant commenced operation 56
4 17th year after year that plant commenced operation 64
5 18th year after year that plant commenced operation 72
6 19th year after year that plant commenced operation and following years 80

Table 2

Item Column 1
Year
Column 2
Depreciation rate
(%)
1 Year that construction or installation of improvement commenced and following 14 years 40
2 15th year after year that construction or installation of improvement commenced 48
3 16th year after year that construction or installation of improvement commenced 56
4 17th year after year that construction or installation of improvement commenced 64
5 18th year after year that construction or installation of improvement commenced 72
6 19th year after year that construction or installation of improvement commenced and following years 80

Schedule 3

[Sections 5 and 8]

Depreciation Rates for Dam Improvements

Item Column 1
Improvement
Column 2
Percentage rate
(%)
Column 3
Maximum
depreciation rate
(%)
1 Dam – Structure
  (i) well maintained
  (ii) average maintenance
 
0.70
0.70
 
45
50
2 Head Gates 1.25 65
3 Surge Tank 1.25 65
4 Steel Penstock 2.00 65
5 Polyethylene (PE) Penstock 2.00 65
6 Wood Penstock 2.00 75
7 Tunnel
 (i) well maintained
 (ii) average maintenance
 
0.70
0.70
 
45
50
8 Concrete Tunnel Liner 2.00 65
9 Steel Tunnel Liner 1.50 65

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
(%)
1 Improvement that is part of a power plant other than a wind power plant 1.25 65
2 Improvement that is part of a wind power plant 2.25 65

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
(%)
1 1 0     18 21 18
2 2 and 3 1   19 22 20
3 4 2   20 23 21
4 5 and 6 3   21 24 23
5 7 4   22 25 25
6 8 and 9 5   23 26 27
7 10 6   24 27 28
8 11 7   25 28 30
9 12 8   26 29 32
10 13 9   27 30 34
11 14 10   28 31 and 32 38
12 15 11   29 33 and 34 45
13 16 12   30 35 and 36 48
14 17 13   31 37 and 38 53
15 18 14   32 39 and 40 59
16 19 16   33 greater than 40 65
17 20 17        

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
(%)
1 1 1   15 15 26
2 2 2   16 16 28
3 3 4   17 17 31
4 4 5   18 18 34
5 5 6   19 19 36
6 6 8   20 20 39
7 7 10   21 21 42
8 8 11   22 22 45
9 9 13   23 23 48
10 10 15   24 24 52
11 11 17   25 25 55
12 12 19   26 26 58
13 13 22   27 27 61
14 14 24   28 greater than 27 65

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
(%)
1 1 1   17 17 24
2 2 2   18 18 26
3 3 3   19 19 28
4 4 4   20 20 30
5 5 5   21 21 32
6 6 6   22 22 35
7 7 7   23 23 37
8 8 8   24 24 40
9 9 10   25 25 43
10 10 11   26 26 46
11 11 13   27 27 49
12 12 14   28 28 52
13 13 16   29 29 54
14 14 18   30 30 57
15 15 20   31 31 and 32 62
16 16 22   32 greater than 32 65

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 1 and 2 1   18 20 23
2 3 2   19 21 25
3 4 3   20 22 27
4 5 and 6 4   21 23 29
5 7 5   22 24 31
6 8 6   23 25 33
7 9 7   24 26 35
8 10 8   25 27 37
9 11 9   26 28 40
10 12 10   27 29 42
11 13 12   28 30 and 31 45
12 14 13   29 32 and 33 50
13 15 14   30 34 55
14 16 16   31 35 60
15 17 18   32 36 65
16 18 19   33 37 70
17 19 21   34 greater than 37 75

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
(%)
1 1 1   17 17 31
2 2 2   18 18 34
3 3 4   19 19 36
4 4 5   20 20 39
5 5 6   21 21 42
6 6 8   22 22 45
7 7 10   23 23 48
8 8 11   24 24 52
9 9 13   25 25 55
10 10 15   26 26 58
11 11 17   27 27 61
12 12 19   28 28 62
13 13 22   29 29 68
14 14 24   30 30 and 31 72
15 15 26   31 greater than 31 75
16 16 28        

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
(%)
1 1 0   19 29 18
2 2 to 5 1   20 30 20
3 6 to 8 2   21 31 and 32 22
4 9 and 10 3   22 33 and 34 25
5 11 and 12 4   23 35 and 36 28
6 13 and 14 5   24 37 and 38 32
7 15 6   25 39 and 40 35
8 16 and 17 7   26 41 and 42 39
9 18 8   27 43 and 44 43
10 19 and 20 9   28 45 and 46 48
11 21 10   29 47 and 48 53
12 22 11   30 49 and 50 56
13 23 12   31 51 and 52 60
14 24 13   32 53 and 54 65
15 25 14   33 55 and 56 68
16 26 15   34 57 and 58 72
17 27 16   35 greater than 58 75
18 28 17        

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
(%)
1 1 1   17 17 31
2 2 2   18 18 34
3 3 4   19 19 36
4 4 5   20 20 39
5 5 6   21 21 42
6 6 8   22 22 45
7 7 10   23 23 48
8 8 11   24 24 52
9 9 13   25 25 55
10 10 15   26 26 58
11 11 17   27 27 61
12 12 19   28 28 64
13 13 22   29 29 68
14 14 24   30 30 72
15 15 26   31 greater than 30 75
16 16 28        

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