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Trans-Alaska pipeline assessed at $10.2 billion

Posted: May 28, 2014 - 12:03am

FAIRBANKS — Oil companies that own the trans-Alaska pipeline will have 30 days to appeal a State Assessment Review Board decision to set the value of the pipeline system at $10.2 billion.

The decision last week set a figure sharply higher than the $5.7 billion set by the state assessor.

Oil companies contend the system should be valued at $2.7 billion and municipalities such as the Fairbanks North Star Borough argued for $13.76 billion.

The decision can affect oil companies’ property tax bills by tens of millions per year, the Fairbanks Daily News-Miner reported.

The board decision drew strong interest after Gov. Sean Parnell dismissed the former board chairman, Marty McGee, the longtime Anchorage property tax assessor, and replaced him with a member with a lengthy career in the oil industry. Critics said the change could skew decisions in favor of the industry and reverse increases based on a court case that concluded the industry had historically undervalued the pipeline.

The board, however, chaired by James Mosley, a former oilfield worker, chose a figure closest to the one recommended by municipalities.

“The Board finds that the Municipalities have met their burden of proving that the assessment was improper and not in accordance with the standards of (state law),” Mosley wrote.

The board rejected the state assessor’s decision to use a 2009 study on pipeline value.

“More recent estimates of cost, based on actual quotes from vendors and research in the market, are preferable to trending forward old studies,” Mosely said.

Oil companies have appealed board assessments for eight consecutive years.

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