Coal valuation.

WORKING DRAFT
2007
STATE OF
WYOMING
07LSO-0223

HOUSE BILL
NO.
HB0262

Coal valuation.

Sponsored by:
Representative(s) Esquibel, F.

A BILL

for

AN ACT relating to taxation and revenue; amending coal valuation provisions pertaining to various cost categories; creating a new definition; and providing for an effective date.

Be It Enacted by the Legislature of the State of
Wyoming
:

Section 1.

W.S. 39
‑
14
‑
101(a) by creating a new paragraph (xvi) and 39
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14
‑
103(b)(vii)(B) through (D) are amended to read:

39
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14
‑
101.

Definitions.

(a)

As used in this article:

(xvi)

"Depletion" means the reduction in the value of a mineral deposit identified as the percentage of the reserve removed in any given year multiplied by the historical acquisition costs. Historical acquisition costs include lease payments, bonus bids, cost depletion basis and any other methods used to ascribe value to the reserve at the time of acquisition.

39
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14
‑
103.

Imposition.

(b)

Basis of tax (valuation). The following shall apply:

(vii)

For coal sold away from the mouth of the mine pursuant to a bona fide arms-length sale, the department shall calculate the fair market value of coal by multiplying the sales value of extracted coal, less transportation to market provided by a third party to the extent included in sales value, all royalties, ad valorem production taxes, severance taxes, black lung excise taxes and abandoned mine 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 paragraph:

(B)

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,
depletion as defined under W.S. 39
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14
‑
101(a)(xvi), current reclamation expenses, equipment operating lease expense, coal sampling and testing prior to stripping, real and personal property tax within the mining operation but excluding production taxes, right-of-way easement payments, deferred overburden removal
and any other direct costs incurred prior to the mouth of the mine
,

that are specifically attributable
including engineering, maintenance facilities and environmental work performed as allocated by the department
to the mining operation;

(C)

Total direct costs include direct mining costs determined under subparagraph (B) of this paragraph 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
for
the mining, processing or transportation of coal up to the point of loading for shipment to market;

(D)

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 paragraph. 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.

Section 2.

This act is effective January 1, 2008.

(END)

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HB0262