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Wyodak Resources Development Corp. v. State Board Of Equalization8/14/2000
operations precluded the highway's immediate and permanent replacement, resulting in the accrual of the final replacement costs, does not change the logical conclusion that the costs were specifically attributable to the mining operations.
Wyodak contends that the costs associated with the second relocation occurred over a previously mined and reclaimed area and, therefore, could not have been incurred prior to the mouth of the mine. It also insists that these costs were incurred because of the Wyoming Transportation Commission's safety and convenience concerns. The Department of Revenue replies that this second relocation was in no way different from the first and that the costs associated therewith should be treated accordingly.
The relevant provision of the 1988 agreement stated:
2.2 Second Temporary Relocation. The State acknowledges that in order for the Company to maximize the removal of coal affected by State Highway 51 . . . it will be necessary to cause the State to relocate State Highway 51 to the Second Temporary Relocation in approximately 5 years after State Highway 51 is relocated to the First Temporary Relocation. The State does not at this time approve the relocation of State Highway 51 to the Second Temporary Relocation, but does agree to seriously consider giving such permission at a later time when required by the Company to continue its mining operations.
Although the Wyoming Transportation Commission denied Wyodak's proposed relocation site, it proposed an alternative route to the south, which Wyodak accepted. Wyodak would have incurred the expenses regardless of which route was utilized. This relocation was, by agreement, for the purpose of allowing Wyodak to maximize the removal of the coal, and it necessarily follows that the associated expenses were properly classified as direct costs.
CONCLUSION
The expenses at issue in this case were, by agreement, specifically attributable to the mining operation rather than general and administrative costs which could not be specifically attributed to an operational function without allocation. They were, therefore, properly classified as direct costs and correctly considered in determining the taxable value of the coal production from this mine.
Affirmed.
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