Coal valuation-industry factors.

WORKING DRAFT
2012
STATE OF
WYOMING
12LSO-0122.E1

HOUSE BILL
NO.
HB0038

Coal valuation-industry factors.

Sponsored by:
Joint Revenue Interim Committee

A BILL

for

AN ACT relating to
taxation of coal; providing industry factors for valuation of coal sold away from the mouth of the mine; requiring a report;
and providing for an effective date.

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

Section 1.
W.S. 39
‑
14
‑
103
(b)(vi), (vii)(intro) and by creating a new paragraph (xi)
is amended to read:

39
‑
14
‑
103.

Imposition.

(b)

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

(vi)

In the event the product as defined in paragraph (iii) of this subsection is not sold at the mouth
of the mine by bona fide arms
‑
length sale, or, except as otherwise provided, if the product of the mine is used without sale, the department shall determine the fair market value of coal in accordance with paragraph (vii), (viii), (ix)
,

or

(x)
or (xi)

of this subsection;

(vii)

For all coal production
occurring
prior to January 1, 2012 f
or 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:

(xi)

For all coal production on or after January 1, 2012 this paragraph replaces paragraph (vii) of this section. 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 p
roduction taxes, severance taxes
, black lung excise taxes and abandoned mine lands fees, by the industry factor of
seventy-nine percent (79%) for coal produced from mines located in Campbell, Converse, Johnson and Sheridan counties or eighty-one percent (81%) for coal produced in any other county in
this state
. 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.

Section 2.

Each year, the department of revenue shall

compare
the tax which would have been paid under W.S. 39
‑
14
‑
103
(b)(vii
)
prior to the changes made under this act
with the tax paid under W.S. 39
‑
14
‑
103(b)(xi) created by this act
. The department shall report its find
ings under this section to the joint revenue interim c
ommittee
not later than November 1, 2015
.

The report shall include the department's analysis of whether the industry factors specified under W.S. 39
‑
14
‑
103(b)(xi) continue to
accurately reflect
the
full fair market value of coal, any recommendations for revision of the industry factors and any recommendations concerning continuation of the industry factor method of valuation or other alternative valuation methods.

Section 3.

This act is effective immediately upon completion of all acts necessary for a bill to become law as provided by Article 4, Section 8 of the Wyoming Constitution.

(END)

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HB0038