TAPS value settled at $8B for 5 years

  • By ELWOOD BREHMER
  • Monday, March 7, 2016 11:13am
  • News

The next court battle over the value of the Trans-Alaska Pipeline System won’t be for at least another five years.

Two settlements over the taxable value of TAPS between the State of Alaska, its owners and municipalities along the pipeline corridor were announced March 1. The agreements fix the value of the 800-mile pipeline, for property tax purposes, at $8 billion through 2020, according to a release from the North Slope Borough.

All pending litigation in Alaska courts regarding TAPS value will be dismissed as part of the deals as well.

North Slope Mayor Charlotte Brower thanked the Walker administration for the state’s help in reaching the linked deals.

“By fixing the value of the Trans-Alaska Pipeline System for the next five years, this agreement will provide a more stable and predictable budget environment and help ensure the financial security of the borough moving forward,” Brower said in a statement. “It also brings an end to the need for continuous litigation in which the borough and other municipalities have spent a decade and millions of dollars to obtain a fair valuation of TAPS.”

Under the deals for property tax years 2007 through 2015, the North Slope Borough will repay the state nearly $7.6 million and the City of Valdez will pay $7.3 million back to the State of Alaska for prior tax payments the state believes were in excess of the statutory cap on property tax revenues, according to a statement from the Department of Law.

The pipeline is primarily owned by subsidiaries of BP, ConocoPhillips and ExxonMobil. Unocal Pipeline Co. owns a 1.3 percent share of TAPS, according to Alyeska Pipeline Service Co., the pipeline operator.

In May 2014, the State Assessment Review Board valued TAPS at $10.2 billion. At the time, the owners estimated its value at $2.7 billion; the municipalities pegged the value at $13.7 billion; and the Department of Revenue suggested $5.7 billion as the taxable value for the year.

The proper value of the pipeline and subsequent property tax rates has been a source of legal contention for the Valdez and the North Slope and Fairbanks North Star boroughs for many years.

Coincidentally, the pipeline cost $8 billion to build in 1977 and was the world’s largest privately funded construction project at that time.

Elwood Brehmer can be reached at elwood.brehmer@alaskajournal.com.

More in News

Shawn Dick of Talkneetna carries a fresh catch out of the water while dipnetting on the Kenai Beach on July 10, 2020. (Peninsula Clarion file)
Kenai River dipnetting opens this month

The Kenai River personal use dipnet fishery opens July 10

The sun is seen shining above the Kenai River in Soldotna, Alaska, on July 14, 2020. (Photo by Erin Thompson/Peninsula Clario file)
When the temperature hits 70, Alaskans feel the heat — and start suffering health ills

Acclimatization, the angle of the sun at high latitudes and other factors make summer heat more intense in Alaska

A map shows active fires around the state of Alaska on Friday, July 1, 2022. (Screenshot from Alaska Wildland Fire Information Map)
Fire danger prompts restrictions on burning, fireworks

There were 160 fires in Alaska as of Thursday, and of those 17 were staffed with fire personnel

Jessica Cook, left, and Les Gara are photographed in The Peninsula Clarion’s offices Thursday in Kenai. (Ashlyn O’Hara/Peninsula Clarion)
Gara, Cook campaign on the Kenai Peninsula

The pair cited education funding, reproductive rights and election security as priorities

A map shows the Seward Highway MP 17-22.5 Rehabilitation Project area. The Seward Highway between Mileposts 17 and 22.5 — from about Primrose Campground to near Teddy’s Inn The Woods — will be closed from 8 p.m. and 5 a.m. on Mondays and Wednesday starting July 18, 2022. (Screenshot)
Roadwork in Moose Pass to shut parts of Seward Highway

The Seward Highway between Mileposts 17 and 22.5 will be closed from 8 p.m. and 5 a.m. on Mondays and Wednesday starting July 18

Former Homer High School athletic director poses on Friday, July 1, 2022, at the high school athletic field in Homer, Alaska. (Photo by Michael Armstrong/Homer News)
Work ethic, grit and teamwork

After two decades, Homer athletic director says goodbye to program he helped build

Assembly members participate during a meeting of the Kenai Peninsula Borough Assembly on Tuesday, June 21, 2022, in Soldotna, Alaska. (Ashlyn O’Hara/Peninsula Clarion)
Another renewable energy company seeks to set up peninsula solar farm

Utopian Power wants to build a two-megawatt solar farm on a 40-acre chunk of land owned by the borough

COVID-19. (Image courtesy CDC)
COVID hospitalizations up from last week

Hospitalization data is the most effective indicator of the prevalence of the virus

Most Read