Case Title: WYODAK RESOURCES DEVELOPMENT CORPORATION v. WYOMING DEPARTMENT OF REVENUE

Citation: 

Docket Number: 

State: wyoming

Court: Wyoming Supreme Court

Date: 2002-12-17T00:00:00Z

Document:
WYODAK RESOURCES DEVELOPMENT CORPORATION v. WYOMING DEPARTMENT OF REVENUE2002 WY 18160 P.3d 129Case Number: 01-249Decided: 12/17/2002
OCTOBER TERM, A.D. 2002

                                                                                                
    

WYODAK 
RESOURCES DEVELOPMENT

CORPORATION,

Appellant(Petitioner),

 

v.

 

WYOMING 
DEPARTMENT OF REVENUE,

Appellee(Respondent).

 

W.R.A.P. 
12.09(b) Certification from the District Court of Laramie 
County

The 
Honorable Edward L. Grant, Judge

 

Representing 
Appellant:

Timothy L. Thomas of Morrill Thomas Nooney & Braun, 
LLP, Rapid City, South Dakota

 
 
             

Representing 
Appellee:

Hoke 
MacMillan, Attorney General; Rowena L. Heckert, Deputy Attorney General; Martin 
L. Hardsocg, Senior Assistant Attorney General; and Karl D. Anderson, Senior 
Assistant Attorney General    

 

Before HILL, C.J., and GOLDEN, LEHMAN,* KITE, and VOIGT, 
JJ.

 
 
        

*Chief Justice at time of oral argument

 
 
     

            
KITE, Justice.

 
 

[¶1]      Wyodak Resources 
Development Corporation (Wyodak) challenged the valuation of coal produced from 
its mine in Campbell County for the years 1992 through 1995, 1998, and 
1999.  Most of Wyodak's coal is sold 
under one long term contract with the joint owners of the nearby Wyodak power 
plant: Black Hills Corporation (Black Hills)Wyodak's parent companyand 
PacifiCorp.  Historically, Wyodak 
reported the value of the gross product sold to its parent company based upon 
the price it received under that contract.  
However, in 1997, Wyodak began claiming that, because the sale to Black 
Hills was not an arms length transaction, Wyo. Stat. Ann. § 39-14-103(b)(viii) 
(LexisNexis 2001)1 
provided spot market prices must be used to determine the fair market value of 
that coal.2  This 
approach yielded a lower value resulting in a lower tax obligation.  The Wyoming Department of Revenue (DOR) 
rejected Wyodak's position for years 1992 through 1995 on res judicata and other procedural 
grounds, and, for years 1998 and 1999, DOR determined the statutes did not allow 
use of spot market prices to determine the value of coal sold under this long 
term contract.  The State Board of 
Equalization (SBOE) upheld DOR's decision.  
We affirm in part on somewhat different grounds and reverse in 
part.

 
           

ISSUES

 

[¶2]      Wyodak presents these 
issues:

 
  
 

            
1.  Whether the board erred in holding that petitioner's claim 
for refund of severance taxes paid for the 1992 coal production year is barred 
by the doctrines of res judicata and 
claim preclusion.

            
2.  Whether the board erred in holding that petitioner waived 
its right to request refunds of severance taxes paid for coal production years 
1993, 1994 and 1995 by failing to appeal from the original notices of valuation 
within 30 days.

            
3.  Whether the board erred 
in holding that petitioner is barred by the doctrine of laches from challenging 
the valuation method used by the department in issuing notices of valuation for 
coal production years 1992, 1993, 1994 and 1995.

            
4.  Whether the board erred in upholding the department's 
position that the nonarms-length sales of coal between petitioner and its parent 
company, Black Hills Corporation, cannot be valued under Wyo. Stat. Ann. § 
39-2-209(e) or its identical successor statute.

            
5.  Whether the board erred in holding that the department 
properly valued the sales of coal from petitioner to the Wyodak power plant for 
the use of both Black Hills Corporation and PacifiCorp for coal production years 
1995, 1998 and 1999 as mine mouth sales under Wyo. Stat. Ann. § 39-2-209(b) and 
its identical successor statute.

            
6.  Whether the board erred in holding that the department may 
use an alternate valuation method under Wyo. Stat. Ann. § 39-2-202(d) for 
production years 1993, 1994, 1995, 1998 and 1999 when coal is specifically 
required to be valued under Wyo. Stat. Ann. § 39-2-209 and its identical 
successor statute.

            
7.  Whether the board erred in affirming or upholding the 
department's valuation of coal sold by petitioner in nonarms-length sales to 
Black Hills Corporation's plants other than the Wyodak power plant when the 
valuation was based upon the transfer price between related 
entities.

            
8.  Whether the board erred in holding that the sale 
transactions used by petitioner's coal valuation expert were not comparable 
contracts under Wyo. Stat. § 39-2-209(e).

 
         
          
     

Responsively, DOR frames the issues in the following 
manner:

 
 
       

            
1.  Could Wyodak, which had previously appealed and fully 
litigated its 1992 coal valuation, raise new valuation issues concerning its 
1992 production, or do the doctrines of res judicata, claim preclusion and 
waiver bar such new claims?

            
2.  Was Wyodak, after it knowingly and intentionally did not 
timely appeal the Department's notices of valuation as required by statute, 
permitted to challenge the Department's valuation methodology through refund 
requests?

            
3.  Under the facts of this case, was Wyodak permitted to value 
its non-arms-length coal sales to parent company Black Hills, using a spot 
market average price pursuant to Wyo. 
Stat. § 39-2-209(e), and its identical recodification, which required 
that comparable long-term or spot market sales of like quality, quantity, terms 
and conditions be used?

            
4.  Did the Department properly value Wyodak's coal sales to 
Pacificorp and parent company Black Hills for production years 1995, 1998 and 
1999, as mine mouth sales pursuant to Wyo. Stat. § 39-2-209(b) and its 
recodification, Wyo. Stat. § 
39-14-103(b)(v)?

            
5.  In the event that no 
methodology pursuant to Wyo. Stat. 
§ 39-2-209, or its recodification, Wyo. Stat. § 39-14-103, applies or 
renders a fair market valuation for taxation purposes, may the Department 
alternatively use recognized appraisal techniques pursuant to Wyo. Stat. § 39-2-202(d), recodified as Wyo. Stat. § 
39-14-102(c)?

            
6.  Assuming a recognized appraisal technique could be used 
pursuant to Wyo. Stat. § 39-2-202(d) and its recodification, could the Department value 
Wyodak's coal sales to parent Black Hills using Wyodak's arms-length sales to 
Pacificorp, under the same contract, as a comparable to determine the revenue 
number, and then perform a proportionate profits calculation to derive taxable 
value?

 
 
          
           
             
         

FACTS

 

[¶3]      Wyodak sells most 
of the coal it produces to the owners of the power plant located immediately 
adjacent to the mine.  PacifiCorp 
owns eighty percent of the plant, and Black HillsWyodak's parent companyowns 
twenty percent.  In 1987, Wyodak 
entered into a coal supply agreement with the two companies which provided for 
the sale to them of all coal required to fuel the plant for twenty-six years in 
proportion to their respective interest in the plant.  Pursuant to the applicable statutes and 
regulations, Wyodak filed annual reports of the value of the gross product it 
produced for use by DOR in determining the appropriate assessment for ad 
valorem tax and severance tax purposes.  Wyo. Stat. Ann. § 39-14-107 (LexisNexis 
2001).  Until 1997, Wyodak filed its 
gross product reports using the contract price it received for the coal from 
PacifiCorp and Black Hills.  From 
1992 through 1995, that price ranged from $9.57 per ton to $10.33 per ton.  Each 
year, DOR issued its Notice of Valuation (NOV), and Wyodak paid its taxes based 
upon those reported values.

 
       
            

[¶4]      DOR conducted an 
audit of certain Wyodak annual production reports including those filed for the 
1992 tax year.  Upon receipt of 
DOR's final determination and assessment, Wyodak filed an appeal with SBOE 
challenging DOR's treatment of the costs to relocate a state highway as direct 
mining costs.  SBOE affirmed DOR's 
final determination, Wyodak appealed that decision to this court, and we also 
affirmed DOR's actions.  Wyodak Resources Development Corp. v. State 
Board of Equalization, 9 P.3d 987 (Wyo. 2000).  During 
the appeal process, Wyodak did not raise any other issue concerning the 
propriety of its previously reported gross product values.

 
      
            
   

[¶5]      Beginning in 
1997, Wyodak changed its position regarding gross value.  First, it filed an amended gross product 
report and a request for refund for production year 1992. Ultimately, it filed 
amended reports and refund requests for 1993 through 1995, 1998, and 1999 
production, claiming a lower gross product value for each year based on its 
interpretation of § 39-14-103(b)(viii) that spot market prices must be utilized 
to determine the value of nonarms length sales.  In addition, it requested a refund of 
the taxes it contended were overpaid.  
DOR refused to process the amended production report and refund request 
for 1992 concluding they represented an effort to reopen that tax year which had 
been audited, appealed, and affirmed by SBOE and Wyodak had waived its right to 
appeal and change the valuation methodology with regard to that year.  DOR contended the doctrine of res judicata precluded such an effort.  
DOR likewise rejected the amended production reports and requests for 
refund filed for the years 1993 through 1995.  For these years, DOR concluded the 
statutory requirement that valuations be appealed within thirty days precluded 
later refund requests which raised issues that could have been raised in an 
appeal.  Wyo. Stat. Ann. § 
39-14-209(b)(iv) (LexisNexis 2001).

  

[¶6]      DOR also rejected 
the spot market values Wyodak reported for 1998 and 1999 and instead issued NOVs 
which utilized the contract price.  
DOR took the position that spot market prices were not comparable to 
Wyodak's contract and, therefore, § 39-14-103(b)(viii) did not apply.  Instead, DOR contended the sale was at 
the mouth of the mine and Wyo. Stat. Ann. § 39-14-103(b)(v) (LexisNexis 2001) 
applied or, in the alternative, it was entitled to utilize accepted appraisal 
techniques pursuant to Wyo. Stat. Ann. § 39-14-102(c) (LexisNexis 2001) which 
included use of comparable sales to value nonarms length sales and the 
PacifiCorp sale at the contract price was the most comparable.  Wyodak appealed the 1998 and 1999 NOVs 
as well as DOR's refusal to process 1992 through 1995 amended production reports 
and requests for refund.  SBOE 
consolidated all the appeals and held a three-day contested case hearing in 
January of 2001.

 
 
            
  

[¶7]      At the hearing, 
in addition to contending § 39-14-103(b)(viii) was the exclusive method for 
valuing its coal production, Wyodak claimed the facts did not support a finding 
the sale occurred at the mouth of the mine.  DOR contended a 1992 Coal Handling 
Facilities Agreement for the ownership and operation of certain coal handling 
and conveyance facilities which transported the coal from the north pit to the 
plant demonstrated the buyers took possession of, and responsibility for, the 
coal in the pit resulting in a sale at the mouth of the mine.  Although the agreement located the 
transfer of title to the coal at the secondary crusher outside of the pit, it 
also provided Black Hills and PacifiCorp jointly assumed financial 
responsibility for all the costs associated with conveyance of the coal from the 
pit to the power plant.  After 
execution of the Coal Handling Facilities Agreement, Wyodak and its parent 
companyBlack Hillsentered into another agreement which purported to convey 
Black Hills' interest in the coal conveyance facilities to Wyodak.  Although the parties never signed this 
later agreement, an exchange of funds occurred between the two affiliated 
companies.  On 
the basis of these facts, Wyodak argued the sale did not occur at the mouth of 
the mine and § 39-14-103(b)(v) could not apply.
     
                
   

[¶8]      SBOE issued its 
decision on August 8, 2001, affirming DOR's actions in all respects relevant to 
this appeal.3  Wyodak filed a petition for review of 
administrative action in the district court, and the district court certified 
the matter to this court pursuant to W.R.A.P. 12.09(b).

 
 
             
            
 

STANDARD OF 
REVIEW

 
 
 

[¶9]      This appeal 
raises fundamental issues regarding the appropriate construction of the ad valorem tax and 
severance tax statutes and is governed by Wyo. Stat. Ann. § 16-3-114(c) 
(LexisNexis 2001) of the Wyoming Administrative Procedure Act, which provides in 
part:

 
     
             
        

(c)  To 
the extent necessary to make a decision and when presented, the reviewing court 
shall decide all relevant questions of law, interpret constitutional and 
statutory provisions, and determine the meaning or applicability of the terms of 
an agency action.  In making the 
following determinations, the court shall review the whole record or those parts 
of it cited by a party and due account shall be taken of the rule of prejudicial 
error.  The reviewing court 
shall:

. . .

(ii)  Hold 
unlawful and set aside agency action, findings and conclusions found to 
be:

(A)  Arbitrary, 
capricious, an abuse of discretion or otherwise not in accordance with 
law;

                                    
. . .

(C) In excess of statutory jurisdiction, authority or 
limitations or lacking statutory right[.]

 
 
          
 

When 
an administrative agency case is certified to this court under W.R.A.P. 
12.09(b), we review the decision under the appellate standards applicable to a 
reviewing court of the first instance.  
Amax Coal Company v. Wyoming State 
Board of Equalization, 819 P.2d 825, 828 (Wyo. 1991).  The construction and interpretation of 
statutes are questions of law which we review de novo.  Powder River Coal Company v. Wyoming State 
Board of Equalization, 2002 WY 5, ¶6, 38 P.3d 423, ¶6 (Wyo. 2002); Osenbaugh v. State ex rel. Wyoming Workers' 
Safety and Compensation Division, 10 P.3d 544, 547 (Wyo. 2000).  We affirm an agency's conclusions of law 
when they are in accordance with the law.  
Powder River Coal Company, 
2002 WY 5, ¶6.  However, when the 
agency has failed to properly invoke and apply the correct rule of law, we 
correct the agency's error.  Id.

DISCUSSION

 

A.        1992 
Production  Res 
Judicata

 

[¶10]   DOR argues Wyodak's failure to 
raise the issue of the application of § 39-14-103(b)(viii) in its appeal of the 
final assessment of the 1992 production triggered the doctrine of res judicata and precluded Wyodak from 
again challenging the valuation for that production year in the form of an 
amended production report and refund request.  In response, Wyodak contends no issue 
preclusion arose because this issue was not addressed in the audit.  Wyodak hints in its brief that perhaps 
it might have even been unable to raise the issue of the use of spot market 
prices instead of contract price in the valuation of its 1992 coal 
production.  It points to DOR's 
final audit determination letter which stated, "Exceptions to this assessment 
may be instituted pursuant to Rules, Chapter 2, Section 5, Wyoming State Board 
of Equalization, by filing a written notice of appeal with the Board."  Apparently, Wyodak contends DOR's use of the 
language "this assessment" somehow limited the scope of its right to appeal the 
final assessment to only those issues DOR addressed in the audit.  However, no such 
limit appears in the language of the final assessment letter, the statute, or 
the applicable rules.  
Wyodak was not prevented from raising this issue on appeal from the final 
assessment simply because the issue of whether the contract price or spot market 
prices should have been utilized for valuing the coal production was not the 
focus of the audit.  
In fact, the issues on appeal were limited only by Wyodak's choice.

 
            

[¶11]   The doctrine of res judicata 
applies to final determinations from administrative proceedings.  University of Wyoming 
v. Gressley, 978 P.2d 1146, 1153 (Wyo. 1999); Slavens v. Board of County Commissioners for Uinta 
County, 854 P.2d 683, 685 (Wyo. 
1993).  

 

Res judicata bars the relitigation of previously litigated 
claims or causes of action.  Four factors are examined to determine whether 
the doctrine of res judicata applies:  (1) identity in parties; (2) identity in 
subject matter; (3) the issues are the same and relate to the subject matter; 
and (4) the capacities of the persons are identical in reference to both the 
subject matter and the issues between them.  

 

Eklund v. PRI Environmental, Inc., 2001 WY 
55, ¶15, 25 P.3d 511, ¶15 (Wyo. 
2001) (citation omitted).  This doctrine furthers society's interest in 
having disputes conclusively resolved in a single action and minimizing the 
expense and difficulties of piecemeal litigation.  DLB v. DJB (Paternity of JRW), 814 P.2d 1256, 1264 (Wyo. 
1991). 

 

[¶12]   In addition to precluding issues 
previously raised and litigated from being the subject of later challenges, the 
doctrine precludes issues that could have been raised in the first action.  Cermak v. Great West 
Casualty Company, 2 P.3d 1047, 1054 (Wyo. 2000).  We have explicitly stated that claim 
preclusion has "the effect of foreclosing any litigation of matters that never 
have been litigated because of a determination that they should have been 
advanced in an earlier suit."  Id. at 1053.  A full and fair opportunity to litigate an 
issue is all that is required for the doctrine to apply.  Bender v. Uinta County 
Assessor, 14 P.3d 906, 910 (Wyo. 
2000); Wilkinson v. 
State ex rel. Wyoming Workers' Safety and Compensation Division, 991 P.2d 1228, 1234 (Wyo. 
1999).

 

[¶13]   Wyodak had the right to challenge the 
1992 valuation and assessment and exercised that right by appealing the final 
assessment through the administrative process and, ultimately, to this 
court.  Wyodak Resources 
Development Corp., 9 P.3d 987.  We 
affirmed Wyodak's 1992 valuation as determined by DOR and confirmed by SBOE and 
found they had correctly considered the claims raised by Wyodak "in determining 
the taxable value of the coal production from this mine."  Id. at 992.  After the 1992 
valuation and assessment were final, audited, appealed, and affirmed by SBOE and 
this court, the taxpayer now asks us to consider yet another, albeit different, 
objection it has to that assessment.  We conclude the doctrine of res judicata 
prevents 
that effort. To permit Wyodak to reopen the 1992 assessment and 
corresponding tax liability would undermine the finality critical to a sound tax 
system and subject the agency and the courts to endless litigation. This we 
cannot condone.  
The process provided this taxpayer with ample opportunity to challenge 
the agency's determination of the value of its coal production, and DOR was not 
required to allow the taxpayer to mount yet another challenge to that value.

            
 

B.        Refund 
Requests for Production Years 1993 through 1995

 

[¶14]   The 1993 through 1995 NOVs notified 
Wyodak of the thirty-day time limit to object and appeal final valuations to 
SBOE.  The 
appeal period to which DOR was referring is set out in Wyo. Stat. Ann. § 
39-14-109(b)(i) (LexisNexis 2001), which provides in pertinent part:

 

(i)  Following determination of the fair market 
value of property the department shall notify the taxpayer by mail of the 
assessed value.  
The person assessed may file written objections to the assessment with 
the board within thirty (30) days of the date of postmark and appear before the 
board at a time specified by the board.

 

Wyodak chose not to appeal those valuations and assessments 
despite DOR's acceptance of its reported gross product value which was the 
contract price of the coal sold to its parent company.  Instead, in 1998, 
Wyodak filed amended gross product reports for both ad valorem taxes 
and severance taxes for production years 1993 through 1995 claiming § 
39-14-103(b)(viii) required the gross product value be determined by spot market 
prices.4  It also requested a refund of taxes paid on 
the higher value originally reported pursuant to Wyo. Stat. Ann. § 39-14-109(c) 
(LexisNexis 2001).  
Again, DOR refused to accept Wyodak's amended production reports which 
claimed different values for ad valorem taxes and severance taxes contending they were 
"simply a device for appealing the original notices of valuation for the 
1993-1995 production periods after the appeal periods had lapsed."

 

[¶15]   To resolve whether that appeal deadline 
precluded Wyodak's requests for refund of either ad 
valorem taxes or severance taxes, we must examine the statutes governing 
those refunds and determine how they interrelate to the remedy provided by the 
appeal provision.  
The statutes provide different refund procedures for ad valorem taxes 
and severance taxes on coal production.  Section 39-14-109(c)(i) states in pertinent 
part:  "If any 
person pays any tax, or portion thereof, found to have been erroneous or 
illegal, the board of county commissioners shall direct the county treasurer to 
refund the erroneous or illegal payment to the taxpayer." Although not stated 
directly, because this provision pertains to counties and counties are 
responsible for collecting ad valorem taxes, we can assume this provision applies 
to ad valorem, 
and not severance, taxes.  No time limit is provided for refund requests 
for ad valorem 
taxes under this provision.5  However, the tax must have been found to be 
"erroneous or illegal" before a county is required to pay a refund. 

 

[¶16]   A second provision governs refund of 
severance taxes.  
Section 39-14-109(c)(ii) provides refund of taxes "imposed by this 
article" may be requested whenever a taxpayer has reason to believe those taxes 
were overpaid.  
"[T]his article" refers to Article 1,  "Coal," of Chapter 14, "Mine Product 
Taxes."  The 
only tax imposed by this article is severance tax on the value of the gross 
product for the privilege of severing or extracting coal in the state.  Wyo. Stat. Ann. § 
39-14-103(a) (LexisNexis 2001).  The statute specifies a severance tax refund 
request must be filed within five years after the end of the calendar year in 
which the claimed overpayment was made.  Section 39-14-109(c)(ii).  Wyodak's amended 
production reports suggested different gross product values for both ad valorem taxes 
and severance taxes.  
The refund requests filed with DOR were specifically for severance taxes 
which were paid directly to the state.  It is unclear whether those refund requests 
were also intended for ad valorem taxes collected by 
the county.  
However, if DOR had accepted the amended production reports, the new 
valuations would have been certified to the county, and § 39-14-109(c)(i) would 
have mandated the county refund the overpayment as an "erroneous" tax.  Consequently, the 
refund provisions for both taxes are implicated in this appeal.

 

[¶17]   DOR rejected Wyodak's amended 
production reports and refund requests without determining whether the taxes 
were erroneous or illegal or whether overpayments were made.  Instead, DOR 
concluded, when a taxpayer is aware of possible objections at the time it 
receives a final NOV, it must appeal that valuation within the thirty-day appeal 
period and cannot file amended production reports and refund requests at a later 
date.  DOR 
contends Wyodak was fully aware of the statute concerning the valuation of coal 
in nonarms length sales and could have made its argument at the time of the 
final NOVs.  
DOR argues, if amended production reports and refund requests can be 
filed after the thirty-day appeal period even when the taxpayer is aware of the 
possibility of a "mistake," the time limitation is rendered meaningless and 
valuations will have no finality.  In response, Wyodak claims the procedures for 
appeals of valuations and requests for refund represent separate and distinct 
remedies. 

 

[¶18]   In the conduct of statutory 
interpretation, we begin by inquiring into the ordinary and obvious meaning of 
the words employed by the legislature according to the manner in which those 
words are arranged.  
If more than one reasonable interpretation exists, we resort to general 
principles of statutory construction.  When the legislature has spoken in 
unambiguous terms, however, we are bound to the results so expressed.  State by and through 
Wyoming Department of Revenue v. Buggy Bath Unlimited, Inc., 2001 WY 27, ¶7, 18 P.3d 1182, ¶7 (Wyo. 
2001).

 

[¶19]   We have also observed:

 

It is the court's obligation to make sense out of a statute 
and give full force and effect to the legislative product; in construing 
statutes, intention of the law-making body must be ascertained from the language 
of the statute as nearly as possible.  A statute must not be given a meaning which 
would nullify its operation if it is susceptible of another 
interpretation.

 

Hasser v. Flint Engineering, 647 P.2d 66, 69-70 (Wyo. 1982).  Likewise, we will not construe a statute in a 
way that renders a portion of it meaningless.  Fosler v. Collins, 13 P.3d 686, 692 (Wyo. 
2000); US WEST 
Communications, Inc. v. Wyoming Public Service Commission, 989 P.2d 616, 619-20 (Wyo. 
1999).  With 
these precepts firmly in mind, we consider the proper meaning of the statutes in 
question in the context of the entire tax system as established by the 
constitution and the tax code as a whole.  

 

[¶20]   On several occasions, this court has 
agreed with the proposition as stated by Wyodak that appeals and refund requests 
are different remedies and both are available to taxpayers.  Amax Coal West, Inc. v. 
Wyoming State Board of Equalization, 896 P.2d 1329 (Wyo. 1995); 
Amoco Production 
Company v. Board of Commissioners of Carbon County, 876 P.2d 989 (Wyo. 1994); 
Atlantic Richfield 
Company v. Board 
of County Commissioners of County of Sweetwater, 569 P.2d 1267 (Wyo. 
1977).  In Amax Coal West, the 
court found, pursuant to earlier versions of the statute, that, since Amax had 
neither appealed the valuation for ad valorem taxes nor "applied for a refund of any 
excess taxes it had paid pursuant to Wyo. Stat. § 39-6-304(g) (1985) (repealed 1988)," it 
waived its right to later contest the tax.  896 P.2d  at 1332-33.  A strong inference 
can be drawn from the court's language that the right to apply for a refund of 
ad valorem taxes exists separately from the right to 
appeal the valuation within thirty days. Likewise, in Atlantic Richfield 
Company, we concluded the refund process for erroneous or illegal ad valorem taxes does not require the taxpayer to file 
an appeal within thirty days of the valuation determination.  In that case, the 
valuation was decreased as a result of a federal court ruling, issued after the 
taxpayer had filed its production report, which increased the required federal 
royalty. The facts in Amoco Production Company are more closely analogous to 
this case, and, therein, we held an appeal within thirty days of the valuation 
determination was not required before a taxpayer could file amended production 
reports and an ad valorem tax refund request.  In 1985, Amoco 
discovered mistakes in its production reports as a result of an internal audit 
and filed amended reports for production years 1980 through 1984.  876 P.2d  at 
991.6  This court held the refund statute for ad valorem taxes 
was available for "erroneous" as well as "illegal" taxes when the taxpayer 
discovered mistakes in the gross product reports after the thirty-day appeal 
period had expired.  
Further, we made it clear, if the state accepted the amended production 
reports and adjusted the valuations, the taxes paid on the original valuations 
were "erroneous."  
Id. at 
995.  We 
recognized "[m]any valid reasons exist for a taxpayer to amend its report 
subsequent to the thirty day period.  Examples of those grounds called to our 
attention included adjustment of interest owners' values and volumes."  Id. at 994.  Our opinion did not 
disclose the reasons for Amoco's mistake or whether it could have, with due 
diligence, discovered the mistake earlier.  Although certain dicta in the opinion 
speculated the legislature may have provided for refunds to afford relief to 
taxpayers who do not know of mistakes at the time of the filing, the holding 
provided no appeal within thirty days was required before amended production 
reports could be filed and a refund of ad valorem taxes could be requested.  Id.

 

[¶21]   No case has directly addressed whether 
amended production reports and refund requests can be filed after the thirty-day 
appeal period in cases where the taxpayer was, or arguably should have been, 
aware of the basis for the refund request at the time of the final 
valuation.  DOR 
contends the primary reason the Amoco Production Company court concluded ad valorem tax 
refund requests should be allowed after the thirty-day appeal period was to 
provide relief for the taxpayer who might not have been aware of the erroneous 
nature of a tax until sometime after the tax was paid.  Armed with this 
rationalization, DOR argues Wyodak was capable of urging its interpretation of § 
39-14-103(b)(viii) since the adoption of its substance in 1990.  No one disputes 
Wyodak was charged with knowledge of the statute at the time of its 
passage.  
Further, DOR witnesses testified Wyodak representatives contacted them on 
numerous occasions to discuss the possible applicability of the statute and were 
informed DOR did not agree the statute applied in Wyodak's situation.  The record 
discloses Wyodak chose not to argue the point for its own business and strategic 
reasons until 1997 when it began to file amended production reports and requests 
for refund.

 

[¶22]   Even accepting these facts as true, we 
fail to see how these circumstances prevented Wyodak from taking advantage of 
remedies the legislature provided to "any person" who filed within five years of 
the alleged overpayment or paid a tax determined to be erroneous. This 
conclusion is consistent with this court's statement in Amoco Production 
Company regarding the ad valorem tax refunds that "the legislature has 
determined . . . the taxpayer is entitled to a remedy--a remedy which 
will recover for the taxpayer those taxes which were not justly or equitably due 
from him and--at the same time--will avoid an unjust enrichment of the 
particular taxing entity.'"  876 P.2d  at 994 (quoting Atlantic Richfield Company, 569 P.2d at 
1273).

 

[¶23]   We are not inclined to judicially 
impose a due diligence standard upon taxpayers which would mandate they appeal 
every valuation in order to preserve a future argument concerning the legality 
of an assessment.  
To reach that conclusion, we would have to read language into the statute 
that is not there.  Voss v. Ralston, 550 P.2d 481, 485 (Wyo. 
1976).  Had the 
legislature intended such a limitation on the right to request a tax refund, it 
would have said so.  
Instead, the legislature chose to mandate a refund of ad valorem taxes 
whenever a tax is deemed erroneous or illegal and to impose a five-year statute 
of limitation on refund requests for overpayment of severance taxes.

 

 [¶24]  Our hesitancy to judicially impose a 
condition precedent to the right of a refund of either erroneous ad valorem taxes or the overpayment of severance taxes 
is enhanced when we review the legislative history of the applicable provisions 
and see how often the legislature has considered this issue and, ultimately, 
declined to impose a statute of limitation on requests for refund of ad valorem taxes, imposed a clear statute of limitation 
on application for refund of severance taxes, and made no mention whatsoever of 
the need to file an appeal of the valuation before such refund can be requested. 
With regard to ad valorem tax refunds, the two 
applicable statutory provisions have existed since before statehood: § 
39-14-109(c)(i), which directs the county to refund any erroneous tax without a 
statute of limitation; and Wyo. Stat. Ann. § 39-13-109(c)(i) (LexisNexis 2001), 
which provides an action may be filed in district court within one year after 
the assessment to enjoin an erroneous tax.  The substance of § 39-14-109(c)(i),7 enacted in 1876, was originally found in a 
chapter entitled "Territorial and County Revenue," and the substance of § 
39-13-109(c)(i),8 enacted in 1886, was originally located in the 
"Code of Civil Procedure."  No severance tax existed when these original 
versions were enacted, and both sections have since found their way into tax 
code statutes pertaining to ad valorem taxes.  The Atlantic Richfield Company 
court found these two sections were neither mutually exclusive nor 
conflicting and the first offered an administrative remedy with no statute of 
limitation and the second afforded a distinct judicial remedy with a one-year 
limitation.

 

[¶25]   Severance taxes were first adopted in 
1969.  1969 
Wyo. Sess. Laws ch. 193.  In that same year, the legislature enacted 
the substance of Wyo. Stat. Ann. § 39-6-304(g) (Michie 1985) (repealed 1988) and 
mandated any excess tax found to be erroneous, the 
result of an overpayment,9 or the result of an appeal be refunded so long 
as application for such refund was made within two years from payment.  Although this 
provision appears in the severance tax section, on its face, it applies to any tax.  In a case involving a severance tax refund 
request, we held this two-year statute of limitation was an absolute bar to 
later requests for refund irrespective of whether the taxpayer knew about the 
erroneous tax at the time of the assessment.  Amoco Production 
Company v. Wyoming State Board of Equalization, 797 P.2d 552, 555 (Wyo. 
1990).  We 
noted that the alleged difficulty taxpayers might have complying with such a 
time limit was a matter for the legislature.  Id.  Two other cases 
that followed, Enron Oil & Gas Company v. 
Freudenthal, 861 P.2d 1090, 1094-95 (Wyo. 1993), and CIG Exploration, Inc. 
v. State, Department of Revenue, 880 P.2d 601, 603 (Wyo. 1994), were decided consistently with Amoco Production Company, 797 P.2d 552, and 
concluded § 39-6-304(g) was a statute of repose intended to place the burden of 
timely filing on the taxpayer.  We find it significant the legislature 
repealed § 39-6-304(g) in 1988 and, at the same time, adopted the substance of 
§ 39-14-109(c)(ii) which extended the time for filing refund requests from 
two years to five years but applied that requirement to only severance 
taxes.  The 
legislature did not impose a specific time limit on refund requests for ad valorem taxes.10

 

[¶26]   Despite the numerous revisions and 
recodifications of the tax code since the first refund provision was adopted in 
1876 and this court's decisions indicating the separate and distinct nature of 
the appeal and refund remedies, the legislature has not chosen to impose an 
obligation of due diligence on the taxpayer as a condition precedent to the 
filing of a refund request.  Nor has the legislature imposed a statute of 
limitation on requests for refund of erroneous or illegal ad valorem taxes.  To impose such limitations on the remedies 
provided by the legislature to taxpayers in light of this legislative history 
would constitute an improper exercise of judicial power. "[T]he enactment of tax 
measures is exclusively within the providence of the legislature."  Wyoming State Tax Commission v. BHP Petroleum Company 
Inc., 856 P.2d 428, 439 (Wyo. 
1993); see also Wyo. Const. art. 3, § 35.  In the same vein, 
the following description is as apt today as it was in 1929:

 

"The courts can not venture upon the dangerous path of 
judicial legislation to supply omissions, or remedy defects in matters committed 
to a co-ordinate branch of the government.  It is far better to wait for necessary 
corrections by those authorized to make them, or, in fact, for them to remain 
unmade, however desirable they may be, than for judicial tribunals to transcend 
the just limits of their constitutional powers."

 

Midwest Hotel Co. v. State Board of 
Equalization, 39 Wyo. 461, 273 P. 696, 699 (1929) (quoting State ex inf. Crow v. West 
Side Street Railway Company, 47 S.W. 959, 961 (Mo. 1898)).

 

[¶27]   In addition to suggesting an 
interpretation of the statutes which would prohibit amended production reports 
and refund requests after the time limit for appeals, DOR argues we should reach 
the same result on the basis of the doctrine of laches.  SBOE agreed and 
affirmed DOR's refusal to consider the amended production reports and refund 
requests relying, in part, on laches.  That doctrine requires findings of (1) 
inexcusable delay and (2) injury, prejudice, or disadvantage to the party 
claiming laches.  
Thompson v. Board of County Commissioners of 
County of Sublette, 2001 WY 
108, ¶17, 34 P.3d 278, ¶17 (Wyo. 
2001).  Neither 
DOR nor SBOE made such findings and, we believe, could not do so under these 
facts.  
Certainly, the "delay" cannot be considered inexcusable when the taxpayer 
complies with the statute of limitation provided by the legislature.  Advanced Cardiovascular Systems, Inc. v. SciMed Life 
Systems, Inc., 988 F.2d 1157, 1161 (Fed. Cir. 1993) ("When a limitation on the period for 
bringing suit has been set by statute, laches will generally not be invoked to 
shorten the statutory period"); Morad v. Brown, 549 P.2d 312, 317 (Wyo. 
1976); Aronovitch v. Levy, 56 N.W.2d 570, 574 (Minn. 
1953).  
Likewise, no prejudice can be inferred when the legislative process is 
followed.

 

[¶28]   As we interpret statutes, we must read 
them in context and harmonize them in a sensible fashion.  Wyoming Community 
College Commission v. Casper Community College District, State of Wyoming, 
2001 WY 86, ¶22, 31 P.3d 1242, ¶22 (Wyo. 
2001).  When we 
do so in this situation, we can reach only one conclusion:  The right to 
request a refund of severance taxes existed for five years after the calendar 
year in which the overpayment of tax was made, and no limitation existed for a 
refund request for ad valorem taxes; however, a refund could be granted 
only when there was a determination such tax was erroneous or 
illegal.

 

[¶29]   We are not concluding Wyodak was 
entitled to the refund requested herein.  No such entitlement would arise unless and 
until DOR concluded the previous valuations were erroneous or an overpayment 
occurred.  Our 
holding is limited to whether Wyodak has a right to have its amended production 
reports considered at all.  DOR conceded Wyodak's severance tax refund 
requests for the years 1993 through 1995 were timely and properly filed.  The decision to 
refuse to accept and process the amended production reports was improper and 
beyond DOR's statutory authority.

 

"An administrative agency is limited in authority to powers 
legislatively delegated.  Administrative agencies are creatures of 
statute and their power is dependent upon statutes, so that they must find 
within the statute warrant for the exercise of any authority which they 
claim.'"  Amoco Production Co. v. 
State Bd. of Equalization, 12 P.3d 668, 673 (Wyo. 2000) (citations omitted).  "An agency is wholly without power to modify, 
dilute or change in any way the statutory provisions from which it derives its 
authority."  Platte Development Co. 
v. State, Environmental Quality Council, 966 P.2d 972, 975 (Wyo. 1998).  

 

Billings v. Wyoming Board of Outfitters and 
Guides, 2001 WY 
81, ¶24, 30 P.3d 557, ¶24 (Wyo. 
2001); see also 
Lineberger v. Wyoming State Board of Outfitters and Professional Guides, 2002 WY 55, ¶20, 44 P.3d 56, ¶20 (Wyo. 
2002).

 

C.        Valuation 
of Coal Sold by Wyodak to Its Parent Company

 

[¶30]   Now we turn to the fundamental issue in 
this case:  
What valuation method do the statutes provide for the coal Wyodak sold to 
its parent company?  
Historically, Wyodak reported its gross product value using the price per 
ton for which it sold its coal to its parent company and an arms length 
customerPacifiCorppursuant to a single, long term contract.  In 1990, the 
legislature enacted the substance of § 39-14-103(b)(viii), which 
provides:

 

            
(viii) For coal used without sale, or coal not sold pursuant to a bona 
fide arms-length agreement, the sales value for the purposes of paragraph (vii) 
of this subsection shall be the fair market value of coal which is comparable in 
the quality, quantity, terms and conditions under which the coal is being used 
or sold, both in the spot market and through long-term agreements negotiated 
within the previous twelve (12) months, multiplied by the respective number of 
tons used or sold for each reporting period[.]

 

[¶31]   Wyodak argues the sale to its parent 
companyBlack Hillsof twenty percent of the coal produced was not arms length 
and, therefore, this statute applied to that sale exclusive of other valuation 
methods provided in the statutes.  However, Wyodak ignores the fact that the 
remaining eighty percent of the coal was sold under the same contract and at the 
same price in an arms length transaction.  In adopting this statute, the legislature 
likely did not consider this unique situation in which both arms length and 
nonarms length sales occurred under the same contract, making application of the 
statute difficult at best. 

 

[¶32]   Wyodak's inability to identify another 
similar long term contract negotiated in the twelve months previous to the 
filing of the respective production reports presents an additional problem with 
applying this provision.  Unable to identify a similar long term 
contract, Wyodak argues spot market prices for coal sold in the Powder River 
Basin must be used to determine the fair market value of its coal sold to Black 
Hills.  DOR 
determined spot sales were not "comparable in the . . . terms and 
conditions under which the coal is being used or sold."  Instead, DOR 
contended other statutory provisions applied which required the higher contract 
price be used as the basis for the value of Wyodak's coal sales to its parent 
company. 

 

[¶33]   To properly interpret the various 
statutes applicable to coal valuation, we must first review their fundamental 
objective.  The 
Wyoming Constitution requires the gross product of mines be taxed in proportion 
to the value thereof and uniformly valued for tax purposes at full value as 
defined by the legislature.  Wyo. Const. art. 15, §§ 3, 11.  The legislature 
defined "value of the gross product" as the fair market value less deductions 
and exemptions, Wyo. Stat. Ann. § 39-14-101(a)(xv) (LexisNexis 2001), and "fair 
market value" as "the amount . . . a well informed buyer is 
justified in paying for a property and a well informed seller is justified in 
accepting, assuming neither party to the transaction is acting under undue 
compulsion."  
Wyo. Stat. Ann. § 39-11-101(a)(vi) (LexisNexis 2001).  With regard to the 
valuation of coal, the value of the gross product is the fair market value of 
the product at the mouth of the mine where produced, after the mining or 
production process is completed, and mining or production is deemed completed 
when the mineral product reaches the mouth of the mine.  Wyo. Stat. Ann. § 
39-14-103(b) (LexisNexis 2001).  The "mouth of the mine" for a surface mine, 
such as Wyodak's, is further defined as "the top of the ramp where the road or 
conveying system leaves the pit."  Wyo. Stat. Ann. § 39-14-101(a)(vi) 
(LexisNexis 2001).  
All these provisions read together provide the context within which the 
specific valuation methods contained in § 39-14-103(b) must be interpreted.  While the valuation 
statutes may not result in seamless coverage of all possible mining situations, 
we conclude the legislature intended for those statutes to be interpreted so 
that mineral production would be valued at its full fair market value.  Wyodak's contention 
that § 39-14-103(b)(viii) allowed coal sold to its parent company pursuant to a 
long term agreement to be valued on the basis of spot market prices is 
inconsistent with this conclusion. 

 

[¶34]   When coal sales are not arms length 
transactions, such as the sales by Wyodak to Black Hills, the potential exists 
that the sales price may not reflect the fair market value.  Typically, one 
would presume the nonarms length sale price would tend to be lower and thereby 
more favorable to the preferred customer, such as a parent company, than the 
actual fair market value.  If such an artificially low price were 
utilized for purposes of taxation, the result would be a lower tax for operators 
selling to affiliated companies than that paid by other operators. That lack of 
uniformity would be unacceptable because "[t]he Wyoming Constitution mandates 
that all coal mines shall be taxed uniformly on the value of their gross 
product." Amax Coal 
West, Inc., 896 P.2d  at 1332.  It is not surprising then that the 
legislature deemed it important to provide a method for assuring coal sold in 
nonarms length sales is valued at its full fair market value as if the sale were 
arms length.  
We perceive this to be the purpose of § 39-14-103(b)(viii).  Using the fair 
market value of other arms length transactions to establish the value of the 
nonarms length sale in question assures the full market value is subject to 
tax.  However, 
the statute requires those other sales to be of coal "which is comparable in the 
quality, quantity, terms and conditions under which the coal is being used or 
sold" and allows both the spot market and long term agreements negotiated within 
the previous twelve months to be utilized.  Section 39-14-103(b)(viii).  For this valuation 
method to be employed, comparable coal sales must first be identified, and those 
sales must be similar in terms and conditions to the nonarms length sale before 
they can be utilized to establish the value. 

 

[¶35]   As fundamental "terms," the lengths of 
the contracts must be comparable before § 39-14-103(b)(viii) can apply.  It is well accepted 
that the price of coal sold under long term agreements is based upon different 
market considerations than the price of coal sold in the spot market.  In fact, Wyodak's 
expert witness testified to the difference between spot sales and long term 
agreements and concluded that, if long term agreements reflected current market 
conditions, it would be accidental.  Long term contracts provide security of 
supply at a stable price.  That price is dependent on the market 
conditions in existence at the time the contract is negotiated and the length of 
the contract term.  
Both the buyer and the seller assume certain market risks that are not 
present in the spot market which can respond immediately to changes in market 
conditions.  
Comparing spot market prices to long term prices is indisputably 
comparing apples to oranges, and we do not believe that is what the legislature 
intended.  
Instead, we believe it intended comparable spot sales be used to 
establish the value of nonarms length spot sales and comparable, long term 
agreements negotiated within the previous twelve months, if any can be 
identified, be used to establish the value of nonarms length, long term sales. 

 

[¶36]   In this case, Wyodak was unable to 
identify any similar long term contracts negotiated during the prior twelve 
months and, therefore, claimed spot market prices must be utilized.  Under its 
interpretation, we would have to ignore the statute's requirement that the terms 
be "comparable," which we cannot do.  Board of County Commissioners of Laramie County v. 
Dunnegan, 884 P.2d 35, 40 (Wyo. 1994); Enron Oil & Gas Company, 861 P.2d  at 1093.  

 

[¶37]   The record discloses other differences 
in "conditions under which the coal is being used or sold" between Wyodak's 
sales and spot sales.  
Coal sold by Wyodak was consumed by the adjacent plant and did not 
require the rail transportation needed for other spot sales from the Powder 
River Basin.  
That fact could affect the price a willing buyer would agree to pay a 
willing seller for the coal.11  In addition, the coal supply agreement 
between Wyodak and its parent company required that specific coal reserves be 
committed to the buyers for twenty-six years.  This fact could also affect the price upon 
which a willing buyer and a willing seller would agree.  

 

[¶38]   A final reason why applying this 
provision to Wyodak's circumstances was not likely what the legislature intended 
is the cost of mining the coal exceeded the spot market price upon which Wyodak 
relied.  It is 
difficult to conceive the legislature intended for a ton of coal sold under a 
nonarms length agreement to be taxed at a value less than the cost incurred to 
mine the same ton of coal.  Hillard v. Big Horn Coal Company, 549 P.2d 293, 302 (Wyo. 
1976).

 

[¶39]   Wyodak contends § 39-14-103(b)(viii) 
applied to its situation because no other statutory method did.  DOR responds that 
there were two other applicable statutory provisions§ 39-14-103(b)(v), which 
applied to coal sold at the mouth of the mine; and § 39-14-102(c), which allowed 
use of "recognized appraisal techniques" to value coal not sold at the mouth of 
the mine in an arms length sale and for which no other provision was 
applicable.

 

[¶40]   The mine mouth statute provides:  "In the event the 
product as defined in paragraph (iii) of this subsection is sold at the mouth of 
the mine without further movement or processing, the fair market value shall be 
the price established by bona fide arms-length sale less exempt royalties."  Section 
39-14-103(b)(v).  
DOR contends Wyodak's coal was sold to its parent company at the mouth of 
the mine and the bona fide arms length sale to PacifiCorp should have been 
utilized to determine the fair market value of Wyodak's production.  However, Wyodak 
contends this section did not apply because the coal was not sold at the mouth 
of the mine.  
The parties disagree over how the location of the point of sale should 
have been determined.  
DOR contends the point at which possession of, and responsibility for, 
the coal was transferred constituted the point of sale.  In response, Wyodak 
argues the point of sale was where title transferred.  The April 1, 1992, 
Coal Handling Facilities Agreement between Wyodak and its buyersPacifiCorp and 
Black Hillsprovided title transferred at the secondary crusher 1,670 feet from 
the mouth of the mine.  Wyodak argues this fact caused the "sale" to 
occur at that point and not at the mouth of the mine.  However, DOR points 
to the fact that the same agreement provided PacifiCorp (80%) and Black Hills 
(20%) owned and operated the coal handling facilities which transported the coal 
from the pit to the plant.  Since the buyers assumed possession of, and 
responsibility for, the coal in the pit, DOR concluded the coal was in fact 
"sold" at the mouth of the mine.  Wyodak references the later December 31, 
1993, Agreement for the Sale of Certain Coal Handling Facilities, which provided 
Wyodak would purchase Black Hill's interest in the conveyance facilities and be 
responsible for transporting the coal away from the mouth of the mine.  This nonarms length 
agreement was never signed, and the actual financial impact on the parties is 
unclear.  
Irrespective of these concerns, Wyodak contends it became responsible for 
delivering Black Hill's portion of the coal outside of the pit which prevented 
the sale of that coal from occurring at the mouth of the mine.  Without question, 
PacifiCorp continued to take possession of the coal in the pit and assumed all 
responsibility for the coal from that point.  The statute provides, "In the event the product 
. . . is sold at the mouth of the mine," bona fide sales can be 
utilized to determine value.  Section 39-14-103(b)(v) (emphasis 
added).  DOR 
argued, and SBOE agreed, that, because eighty percent of the "product" was sold 
at the mouth of the mine, coal sales to both PacifiCorp and Black Hills should 
be considered mine mouth sales.

 

[¶41]   We question whether Black Hill's 
nonarms length attempt to transfer financial responsibility for the coal 
conveyance facilities to its subsidiary should be considered  determinative of 
the value of the coal.  State v. Davis Oil Company, 728 P.2d 1107 (Wyo. 
1986).  
However, for two reasons, we do not perceive the significance of that 
issue to be as great as the parties apparently do.  First, the primary 
thrust of the statutory distinction between mine mouth sales and sales away from 
the mouth of the mine appears to be to insure transportation costs are not 
considered part of the value of the gross product and not to be to determine how 
to value nonarms length sales that may occur away from the mouth of the 
mine.  Section 
39-14-103(b).  
Neither Wyodak nor DOR argues that Wyodak's contract price included 
transportation charges.  Second, the legislature, in its wisdom, 
provided § 39-14-102(c) as a catch-all valuation method for situations which do 
not fit within the other specific valuation provisions. That section 
provides:

 

(c)  Except as otherwise provided, in the event 
the product as defined in W.S. 39-14-103(b)(iii) is not sold at the mouth of the 
mine by bona fide arms-length sale, or if the product of the mine is used 
without sale, the department shall determine the fair market value by 
application of recognized appraisal techniques.

 

Section 39-14-102(c).  Wyodak claims this section is limited by the 
phrase "[e]xcept as otherwise provided" and § 39-14-103(b)(viii) otherwise 
provides.  As 
noted above, we disagree that § 39-14-103(b)(viii) applies where no contracts 
are identified with comparable terms.  The application of "recognized appraisal 
techniques" includes the use of comparable sales or other bona fide arms length 
sales.  Amoco Production Company v. Wyoming State Board of 
Equalization, 899 P.2d 855, 858 (Wyo. 1995); Wyo. Stat. Ann. § 39-13-103(b)(ii) (LexisNexis 2001); 
Department of Revenue Rules ch. 6, §§ 4(n), 10.  Consequently, whether § 39-14-103(b)(v) or § 
39-14-102(c) applied, the statutes allowed the contract price paid by 
PacifiCorp, a comparable sale, to be utilized to determine value in this 
circumstance. 

 

[¶42]   This conclusion is unavoidable given 
the constitutional and statutory construct governing mineral taxation which 
mandates uniform taxation of the gross product at the full fair market 
value.  
Underlying all the issues in this dispute was the sale of the same coal 
to PacifiCorp under the same contract and circumstances, which no one disputes 
should be valued at the price paid pursuant to the long term coal supply 
agreement.  In 
this case, we are not faced with the possibility the nonarms length sale has 
resulted in a price below fair market value.  Instead, Wyodak's argument suggests the 
contract price was above the fair market value, and yet it was the same price 
PacifiCorp agreed to pay for the same coal in an unquestionably arms length 
agreement. 

 

[¶43]   We agree with DOR that the proper 
valuation of Wyodak's gross product was the price it actually received.  We affirm SBOE's 
order upholding DOR's decision to "use the arms-length PacifiCorp coal price as 
a comparable . . . to arrive at a fair market taxable value for 
Wyodak's non-arm's-length sales to Black Hills" and hold Wyodak's amended 
production reports and requests for refund for production years 1993 through 
1995 should have been rejected on their merits.

 

CONCLUSION

 

[¶44]   We affirm DOR and SBOE's conclusion 
that the doctrine of res judicata barred Wyodak's 
amended report and refund request for production year 1992.  However, for production years 1993 through 
1995, we reverse DOR's refusal to accept the amended reports and refund requests 
and SBOE's approval of that decision simply because Wyodak did not file appeals 
within thirty days after receipt of the notices of the final valuations for 
those years.  
We find no such condition precedent to refund requests in the 
statutes.  
Finally, we affirm DOR and SBOE's conclusions that § 39-14-103(b)(viii) 
did not apply in Wyodak's circumstance and § 39-14-102(c) allowed use of the 
sale to PacifiCorp as a comparable sale to establish the fair market value of 
coal sold to Wyodak's parent company.

 

[¶45]   Affirmed in part and reversed in 
part.

 

FOOTNOTES

 

1The legislature 
recodified Title 39 effective March 6, 1998, without making substantive 
changes.  1998 
Wyo. Sess. Laws ch. 5.  We will cite to the current, recodified 
statutes.  

2"Spot Market" or "spot sales" refers to coal sold under contracts of less than one year in 
duration. See Instructions to Complete Form 8101 MTD 
(Rev. Jan. 1999), Annual Gross Products Report for Coal, line 1b. 

3SBOE reversed DOR's 
decision to add on fees of $.31 per ton to Wyodak's value for 1993 through 1995 
production and remanded the matter for recalculation.  Wyodak did not 
appeal this aspect of SBOE's decision.

4Although the record is 
somewhat confusing, it appears both ad valorem taxes 
and severance taxes were placed at issue by Wyodak's amended reports and refund 
requests.  In 
SBOE 99-158, Wyodak appealed DOR's refusal to process its amended reports for 
1992 through 1995. Each amended report for those years provided "new" 
computations using the spot market price for both severance tax and "gross 
products tax."  
Gross products tax is the same as ad valorem 
tax as we noted in Wexpro Company v. Brimhall, 7 P.3d 42, 43 (Wyo. 2000). In SBOE 99-90, Wyodak appealed DOR's final audit letter 
"for severance and ad valorem taxes for production years 1993-1995."  In SBOE 99-70 (1998 
production) and SBOE 2000-99 (1999 production), Wyodak appealed the NOVs for the 
1998 and 1999 gross product reports which were utilized for both severance tax 
and ad valorem tax purposes.

5The statute does discuss 
the situation where an increase in value that is subject to approval by an 
agency of the federal or state government is ultimately disapproved and taxes 
are paid on the increased amount.  Under this statute, any person who paid taxes 
on that increased amount may apply for a refund within one year of the final 
determination of value, and the board of county commissioners must refund the 
amount of the excess tax paid.  Section 39-14-109(c)(i).  That situation is 
not applicable in this case.

6Similarly, Wyodak sought 
to file amendments in 1997 for its 1992 through 1995 production.

7Previously Wyo. Stat. § 
39-116 (1957) and Wyo. Stat. Ann. § 39-4-101(b) (Michie 1997) (repealed 
1998).

8 Previously Wyo. Stat. § 
39-157 (1957) and Wyo. Stat. Ann. § 39-3-203 (Michie 1997) (repealed 1998).

9"Overpayment" was added 
by amendment in 1980.  
1980 Wyo. Sess. Laws ch. 17, § 1.

10In 1991, the legislature imposed a time limit on audits by 
the state to five years back in time and provided an offsetting credit for any 
overpaid gross product or severance tax within the scope of the audit.  See Wyo. Stat. Ann. §§ 39-14-108(b)(vii), -109(d)(ii) 
(LexisNexis 2001).

11While Wyodak's expert 
testified the spot market prices he relied upon were adjusted to deduct the cost 
of transportation to the more distant buyers, he did not address questions 
raised concerning the possibility that a seller might be able to obtain a higher 
price if its buyer has little or no transportation cost.