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Wyodak Resources Development Corp. v. State Board Of Equalization8/14/2000
e lands fees, by the ratio of direct mining costs to total direct costs. Nonexempt royalties, ad valorem production taxes, severance taxes, black lung excise taxes and abandoned mine lands fees shall then be added to determine fair market value. For purposes of this subsection:
(ii) Direct mining costs include mining labor including mine foremen and supervisory personnel whose primary responsibility is extraction of coal, supplies used for mining, mining equipment depreciation, fuel, power and other utilities used for mining, maintenance of mining equipment, coal transportation from the point of severance to the mouth of the mine, and any other direct costs incurred prior to the mouth of the mine that are specifically attributable to the mining operation;
(iii) Total direct costs include direct mining costs determined under paragraph (ii) of this subsection plus mineral processing labor including plant foremen and supervisory personnel whose primary responsibility is processing coal, supplies used for processing, processing plant and equipment depreciation, fuel, power and other utilities used for processing, maintenance of processing equipment, coal transportation from the mouth of the mine to the point of shipment, coal transportation to market to the extent included in the price and provided by the producer, and any other direct costs incurred that are specifically attributable to the mining, processing or transportation of coal up to the point of loading for shipment to market;
(iv) Indirect costs, royalties, ad valorem production taxes, severance taxes, black lung excise taxes and abandoned mine lands fees shall not be included in the computation of the ratio set forth in this subsection. Indirect costs include but are not limited to allocations of corporate overhead, data processing costs, accounting, legal and clerical costs, and other general and administrative costs which cannot be specifically attributed to an operational function without allocation[.]
This method attempted to value coal production at the "mouth of the mine" in order to establish the value of the coal that was solely attributable to the mining operations. Amax Coal Company v. Wyoming State Board of Equalization, 819 P.2d 825, 827 (Wyo. 1991).
Wyodak asserts that the road relocation costs were better classified as indirect costs which "cannot be specifically attributed to an operational function without allocation." We disagree. The agreement dictates that, before Wyodak could mine the coal under and around the right-of-way, it had to incur relocation and replacement expenses. They were necessary expenses of extracting the coal and were, therefore, specifically attributable to Wyodak's mining operation.
Wyodak also contends that the relocation costs should not be considered direct costs because they were extraordinary, amounting to "almost half of the total overburden removal costs for the entire 1990 production year." The term "extraordinary expenses" has not been defined, nor have extraordinary expenses been specifically exempted from the definition of direct costs. We are not convinced that Hillard v. Big Horn Coal Company, 549 P.2d 293, 298 (Wyo. 1976), supports Wyodak's argument that extraordinary expenses should be treated as indirect costs. As the Department of Revenue points out, although the opinion does acknowledge that coal producers do incur indirect costs not attributable to their mining, the case does not declare extraordinary costs as indirect costs in nature. We conclude that the fact that the relocation costs were substantial is inconsequential to whether they were properly classified as direct or indirect costs.
Wyodak complains that
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