Case Title: Wyoming Min. Ass'n v. State

Citation: 

Docket Number: 

State: wyoming

Court: Wyoming Supreme Court

Date: 1988-01-12T00:00:00Z

Document:
Wyoming Min. Ass'n v. State1988 WY 4748 P.2d 718Case Number: 87-128Decided: 01/12/1988Supreme Court of Wyoming

 THE WYOMING MINING 
ASSOCIATION, THUNDER BASIN COAL COMPANY, THE CARTER MINING COMPANY, A DIVISION 
OF EXXON COAL U.S.A., INC., AMAX, COAL COMPANY, A DIVISION OF AMAX, INC., NERCO 
COAL CORP., CORDERO MINING COMPANY, MOBIL COAL PRODUCING, INC., ROCKY MOUNTAIN 
ENERGY COMPANY, WESTERN FUELS ASSOCIATION, INC., 
PETITIONERS,

 

v.

THE STATE OF 
WYOMING, STATE BOARD OF EQUALIZATION AND ITS 
MEMBERS SHIRLEY WITTLER, CARROLL ORRISON AND TOM TROWBRIDGE IN THEIR OFFICIAL 
CAPACITIES; THE WYOMINGSTATE TAX COMMISSION, AND THE WYOMING 
DEPARTMENT OF REVENUE AND TAXATION, RESPONDENTS.

Petition for review from 
the State Board of Equalization.

Marilyn S. Kite 
(argued), and Patrick R. Day of Holland & Hart, Cheyenne, for Wyoming Min. Ass'n, Thunder Basin Coal 
Co., Carter Min. Co., Amax Coal Co., Nerco Coal Corp., Cordero Min. Co., Mobil 
Coal Producing, Inc., and Rocky Mountain Energy Co.

D.N. Sherard 
(argued), of Sherard, Sherard and Johnson, Wheatland, for Western Fuels Ass'n, 
Inc.

David D. Uchner 
of Lathrop & Uchner, Cheyenne, for amicus curiae Wyoming Rural Elec. 
Ass'n.

Alan B. Minier 
of Hirst & Applegate, Cheyenne, and William L. Slover, C. Michael Loftus, 
John H. LeSeur, Robert D. Rosenberg, Washington, D.C., for amicus curiae Western Coal Traffic 
League.

Joseph B. Meyer, 
Atty. Gen., and Michael L. Hubbard (argued), Sr. Asst. Atty. Gen., for defendants.

Kathleen A. Hunt 
of Smith, Stanfield & Scott, Laramie, for amicus curiae Wyoming Ass'n of 
Municipalities.

John V. Crow, 
Sublette County and Pros. Atty., and Van Graham, Deputy Sublette County and 
Pros. Atty., Pinedale, for amicus curiae 
Wyoming Ass'n of County Com'rs. 

Before THOMAS, CARDINE, URBIGKIT, and MACY, JJ., 
and HANSCUM, D.J.

CARDINE, 
Justice.

[¶1.]     Petitioners Western 
Fuels Association, Inc. and Wyoming Mining Association filed petitions for 
review and complaints for declaratory judgment in the Laramie County district 
court against the State of Wyoming, the State Board of Equalization, and others, 
challenging the action of the Board of Equalization extending the assessment of 
the special two percent coal severance tax for impact alleviation, § 39-6-303, 
W.S. 1977, through the 1987 calendar year. The actions were consolidated and 
certified to the Supreme Court upon motion of the parties.

[¶2.]     Petitioners submit the 
issue as: Whether the special two percent coal impact tax levied by § 39-6-303, 
W.S. 1977 expired on January 1, 1987.

[¶3.]     The parties stipulated 
to the facts, which are essentially as follows. During the mid-1970's, 
Wyoming's coal 
industry was growing rapidly. To help deal with the impact caused by this 
growth, the legislature enacted, in §§ 39-6-301 through 39-6-307, W.S. 1977, 
special mineral severance taxes levied against the privilege of mining coal. 
These statutes currently impose upon the privilege of extracting or producing 
coal in the state of Wyoming cumulative taxes of ten and one-half 
percent and are comprised of seven separate excise taxes. The revenues collected 
under each tax are directed into different funds. The seventh of these taxes is 
commonly referred to as the "coal impact tax." This special mineral severance 
tax, enacted by the legislature in 1975 as § 39-6-303, W.S. 1977, 
provides:

"(a) In addition to other 
taxes provided by law there is levied a severance tax upon the privilege of 
extracting or producing coal in the state of two percent (2%) of the value of 
the gross product extracted."

[¶4.]     A limit on the total 
amount of tax to be collected was established.

"(b) The tax levied in 
this section expires on January 1 following the year in which the cumulative 
taxes collected pursuant to this section total one hundred sixty million dollars 
($160,000,000.00)." Section 39-6-303, supra.

The cumulative 
amount collected by this tax grew steadily and, by the end of 1985, over 
$140,000,000 had been collected. Since the tax was generating more than 
$20,000,000 per year, personnel with several Wyoming coal companies determined 
early in 1986 that the cumulative taxes accruing and owing under the coal impact 
tax would probably surpass the $160,000,000 cumulative limit described in § 
39-6-303(b) during the calendar year of 1986, as measured by actual production 
occurring during that year. This likelihood was brought to the attention of 
members of the Wyoming Department of Revenue and Taxation (Department) during 
June and July of 1986. By late summer of 1986, it was apparent that the taxes 
which would cause the $160,000,000 cumulative limit to be reached would be those 
accruing and owing for the fourth calendar quarter of 1986, as measured by 
production which would occur during that quarter.

[¶5.]     Because coal impact 
taxes accruing and owing for the fourth calendar quarter of 1986 could, under § 
39-6-304, W.S. 1977, be actually paid during the first calendar quarter of 1987, 
the commissioner of public lands and farm loans requested advice from the 
attorney general's office concerning whether the expiration language of § 
39-6-303(b) required that taxes exceeding the $160,000,000 limit be actually 
received for the tax to expire or merely that the taxes accruing and owing for 
1986 would exceed the $160,000,000 limit.

[¶6.]     In response to this 
request, the attorney general's office issued a memorandum opinion interpreting 
§ 39-6-303(b) to provide that the tax would expire at such time as cumulative 
taxes totaling $160,000,000 were actually received by the State. Members 
of the Department advised individual Wyoming coal mining companies of the opinion 
and indicated that it would be adopted by the Department. 

[¶7.]     Thereafter, the coal 
producers contacted Representative Ron Micheli, who asked the attorney general's 
office whether or not the coal producers could pay some or all of the coal 
impact taxes owed for the final quarter of 1986 during that quarter. This had 
not occurred before; in the past, the coal producing companies had paid the tax 
on a quarterly basis on or before the due date a few months after a quarter 
ended. The attorney general's office responded by letter, dated September 2, 
1986, stating:

"You have asked the 
additional question whether coal producers liable for taxes could pay enough for 
this calendar year to bring the amount collected up to $160,000,000. A review of 
the statutes pertaining to tax collection does not reveal any prohibition on the 
payment of taxes on 1986 production, even though payment is not due until March, 
1987. It is obvious, however, that any payment might be subject to year end 
adjustment or reconciliation by the Revenue and Tax 
Department."

[¶8.]     The coal producers then 
requested that the Wyoming State Tax Commission (Commission) approve a request 
to pay the two percent tax owed under the statute for the final quarter of 1986 
during that quarter. The Commission approved this request by memorandum to the 
coal companies dated November 5, 1986, and forwarded forms to the coal companies 
to assist them in making the payments. The Commission also informed the coal 
producers that, for the first time, payments could be made by wire 
transfer.

[¶9.]     Based on the 
Commission's November 5 memorandum, most of the Wyoming coal producers made payments, 
including partial payments, on the two percent coal impact tax in the final 
quarter of 1986 based on actual production during that quarter. These payments 
caused the cumulative total taxes collected prior to December 31, 1986 to exceed 
the $160,000,000 limit imposed by the statute; by December 29, 1986, the State 
had received and deposited a cumulative total of $164,017,573.23 paid under the 
coal impact tax. The Department accepted the final payments, and, in accordance 
with the provisions of § 39-6-305(d), W.S. 1977 (Cum.Supp. 1987), the state 
treasurer transferred all the payments received into a special "earmarked 
revenue fund" known as the "political subdivision capital assistance 
account."

[¶10.]  In a follow-up memorandum, dated January 
9, 1987, the Department, acknowledging that the tax had expired, 
stated:

"Thanks to the marvelous 
cooperation from the Wyoming Coal Industry, the Department of Revenue and 
Taxation has collected enough 2% Coal Impact Tax to break the $160,000,000 
maximum collection limit. Since these collections were legally collected before 
the end of December 1986, the Department of Revenue and Taxation can follow the 
instructions provided for by Wyoming Statute and reduce the Mineral Severance 
Tax rate for coal."

However, in a 
later memorandum to the coal producers, dated January 14, 1987, the Department 
indicated that it had been informed by the attorney general's office that its 
previous advice "might have been somewhat premature." And in a letter dated 
February 17, 1987, the attorney general advised the Board of Equalization 
(Board) "to collect quarterly impact tax coal payments through December 31, 1987 
* * *." Formal notification of the Commission's intention to continue to collect 
the tax through 1987 was sent in the form of a "final decision" of the Board to 
the coal producers on March 11, 1987. The memorandum specifically provided: "The 
2% Coal Impact Tax is due on your 1987 coal production and payable quarterly as 
provided by W.S. 39-6-304."

[¶11.]  In April 1987, the petitioners, as 
plaintiffs in two separate actions, filed petitions for review and complaints 
for declaratory judgment in the district court of LaramieCounty against the state of Wyoming, the Board and 
its members Shirley Wittler, Carroll Orrison and Tom Trowbridge in their 
official capacities, the Commission, and the Department as defendants. The 
petitions for review sought a judicial review and a reversal of the final 
administrative decision of the Board which purported to extend the two percent 
severance tax on coal through 1987. The complaints sought a declaratory judgment 
declaring that the tax expired on January 1, 1987. The defendants answered the 
petitions and complaints and asserted five affirmative 
defenses.

[¶12.]  Thereafter, the parties in both actions 
entered into a Stipulated Statement of Facts, a Stipulated Motion for 
Consolidation, and a Stipulated Motion for Certification to the Supreme Court. 
The district court ordered consolidation and certified the case to this court, 
in accordance with Rule 12.09, W.R.A.P. Because this court does not accept 
declaratory judgment actions by certification pursuant to Rule 12.09, W.R.A.P., 
this case will solely address the petition for review.

[¶13.]  Determination of this issue requires us 
to interpret statutes and constitutional provisions as they relate to the 
imposition of the coal impact tax, § 39-6-303, W.S. 1977, upon Wyoming coal 
producing companies and the roles that the State Board of Equalization and the 
Department of Revenue and Taxation play in that imposition. It is this court's 
obligation to make sense out of a statute and give full force and effect to the 
legislative product. Yeik v. Department of Revenue and Taxation, Wyo., 595 P.2d 965 
(1979).

[¶14.]  In interpreting statutes, we look first 
to the language of the statute, which "must be given [its] plain and ordinary 
meaning unless otherwise indicated." City of Evanston v. Robinson, Wyo., 702 P.2d 1283, n. 4 (1985). If the 
statutory language is clear and unambiguous, we will not look to statutory rules 
of construction, nor will we attribute another meaning to the statute. Estate of 
Reno, Wyo., 604 P.2d 550 
(1979).

[¶15.]  The language to be interpreted here is 
that contained in § 39-6-304(a), W.S. 1977, relating to the time in which 
quarterly coal impact tax payments are due:

"(a) Except as provided 
in subsection (c) of this section, each taxpayer liable for a tax under W.S. 
39-6-302 or 39-6-303 shall remit quarterly tax payments to the department. The 
payment shall be determined by the taxpayer based on actual production during the 
quarter, values computed in accordance with subsection (b) of this section 
and the tax rates prescribed in this article. The quarterly tax payments are due 
and delinquent if not paid:

"(i) On or before May 15 for production 
during the first quarter of the current calendar year;

"(ii) On or before August 15 for production 
during the second quarter of the current calendar year;

"(iii) On or before November 15 for production 
during the third quarter of the current calendar year; and

"(iv) On or before March 1 for production 
during the fourth quarter of the preceding calendar year." (Emphasis 
added.)

[¶16.]  In the interpretation of a statute 
levying taxes, it is the established rule not to extend its provisions, by 
implication, beyond the clear import of the language used or to enlarge its 
operations so as to embrace matters not specifically stated therein. Kelsey v. 
Taft, 72 Wyo. 
210, 263 P.2d 135, 138 (1953). By the state constitution and by statute, the 
Department of Revenue and Taxation, through the Tax Commission and the Board of 
Equalization, is vested with the power and the duty to administer and supervise 
the tax laws of the state. Specifically, under § 39-1-303(a)(i) and (ix), W.S. 
1977, the Tax Commission is given the broad authority to manage the collection, 
payment, and receipt of all state revenues:

"(a) In addition to the 
other powers and duties imposed by law, the commission 
shall:

"(i) Coordinate 
collection of state taxes * * *;

* * * * * 
*

"(ix) Prescribe standard 
procedures for receiving, receipting, safeguarding and periodically reporting 
all state revenue receipts, whether current, delinquent, penalty, interest, 
refunds or otherwise, and the amounts, kinds and terms of items, either 
collected or still outstanding, to be summarized, studied and 
reported."

[¶17.]  Under § 39-1-304(a)(iv), W.S. 1977 (Cum. 
Supp. 1987), the Board of Equalization is expressly authorized to manage the 
internal affairs of the Board and construe tax statutes affecting the 
assessment, levy and collection of taxes. Section 39-1-304 provides in pertinent 
part:

"(a) The state board of 
equalization shall perform the duties specified in article 15, section 10 of the 
Wyoming 
constitution * * * and review their own assessments of property and tax 
determinations. In addition, the board shall:

"(i) Manage its internal 
affairs and prescribe rules of practice and procedure;

* * * * * 
*

"(iv) Decide all 
questions that may arise with reference to the construction of any statute 
affecting the assessment, levy and collection of taxes, in accordance with the 
advice and opinion of the attorney general, whose opinion and the rules, 
regulations, orders and instructions prescribed by the board are binding until 
reversed, annulled or modified by a court of competent 
jurisdiction."

Acting pursuant 
to these empowering statutes, on January 9, 1987, the Board construed §§ 
39-6-303 and 39-6-304 and announced that the coal impact tax had expired as of 
January 1, 1987, for the logical reason that the $160,000,000 limit set by the 
tax had been surpassed prior to the end of 1986.

[¶18.]  As the agency charged with the 
administration of the state severance tax provisions, the Board's interpretation 
of §§ 39-6-303 and 39-6-304, relating to how and when payments of the coal 
impact tax can be made and accepted, is entitled to great deference. WYMO Fuels, 
Inc. v. Edwards, Wyo., 723 P.2d 1230 (1986); 
Demos v. Board of CountyCommissioners of Natrona County, Wyo., 571 P.2d 980 
(1977).

[¶19.]  The State makes two arguments with 
respect to § 39-6-304 in support of its position that the coal impact tax did 
not expire on January 1, 1987. First, the State argues that the tax did not 
expire because the language of § 39-6-304 does not authorize or permit the 
partial payments of specific portions of the coal severance taxes. Second, the 
State argues that the legislature never intended nor contemplated the prepayment 
of a portion of the coal severance tax, and thus the coal impact tax could not 
expire under such circumstances. We disagree.

[¶20.]  Nothing in the language of § 39-6-304 
forbids the partial payment of taxes. The acceptance of taxes in partial 
payments is not a substantial departure from the statute's requirements. While a 
taxpayer has no right to require or compel a treasurer to accept less than the 
entire tax owed, the treasurer may, in his discretion, accept partial payment of 
the tax and credit the same against the tax assessed. State ex rel.State 
Tax Commission of Utah v. Evans, 79 Utah 370, 6 P.2d 161, 84 
A.L.R. 766 (1931). See also 72 Am.Jur.2d State and Local Taxation § 845 (1974). 
Here, the taxpayers did not require or compel the treasurer to accept partial 
payments of the tax. Rather, the Commission approved a suggestion of some of the 
coal producers that they be allowed to pay the two percent tax before the date 
specified in § 39-6-304. The Commission indicated that if the tax surpassed the 
$160,000,000 limit prior to the end of 1986, through the voluntary participation 
of the producers in the prepayment drive, the tax would expire on January 1, 
1987. This discretionary act on the part of the Commission was clearly 
authorized by the statutes.

[¶21.]  That partial payment is permitted by the 
statute is supported by § 39-6-304(d), W.S. 1977, which provides for a year-end 
reconciliation of the taxes either owed by or owing to the 
taxpayers:

"(d) On or before May 15 
of each year beginning with the year 1982 based upon information received 
pursuant to W.S. 39-2-201, 39-2-202 and 39-6-304(a), the department shall 
determine the amount of the gross production returned for the preceding calendar 
year, shall compute the amount of tax liability and shall credit the amount paid 
under W.S. 39-6-304(a) and shall notify each taxpayer of the amount so 
determined and the balance or refund, if any, due."

[¶22.]  If partial payments of taxes were not 
anticipated, the legislature would not have included in § 39-6-304(d) provision 
for "the balance" due the Commission. Further, a year-end reconciliation, and 
thus § 39-6-304(d) itself, would be unnecessary if only the exact amount of tax 
due was permitted to be paid on any given due date. The legislature will not be 
presumed to do futile things. Yeik v. Department of Revenue and Taxation, supra, 
595 P.2d  at 969. Section 39-6-304(d) was designed to permit both partial 
payments and overpayments as clearly indicated by its 
language.

[¶23.]  Moreover, it is to the State's advantage 
to accept partial tax payments, for, once accepted and deposited, those early 
payments generate interest which otherwise would accrue to the taxpayer. In this 
case, the Board's decision to accept payments in November and December earned 
the State thousands of dollars in extra-interest income on the more than 
$4,000,000 collected under the prepayment plan, an advantage of the Evans rule 
permitting discretionary acceptance of partial tax 
payments.

[¶24.]  As to the State's argument that the 
statute does not authorize prepayment of the tax, the language of § 39-6-304 is 
to the contrary. It is unnecessary to go beyond the words of the statute to find 
its meaning. The statute specifically provides that payments of any of the coal 
severance taxes resulting from production in each quarter are due "on or before" a specific date occurring 
in the middle of the next calendar quarter. This phraseology clearly indicates 
that the dates contained in the statutes are the latest dates on which the taxes can be 
paid for any given quarter. Thus, coal impact tax payments could be made anytime 
before the due date once production figures could be ascertained, including 
during the quarter in which the right to mine is exercised. Council 81, American 
Federation of State, County and Municipal Employees, AFL-CIO v. State Department 
of Finance, Del., 293 A.2d 567 (1972) (statute requiring wage payments by the 
State "on or before" the fifteenth of each month only set the latest date on 
which the salaries could be paid, not the earliest date, and permitted the 
payment of salaries by the state during the period in which they were 
earned).

[¶25.]  Payment on or before the middle of the succeeding 
quarter is exactly what occurred here, as indicated by paragraph 12 in the 
stipulated statement of facts:

"[M]ost Wyoming coal producers 
made payments, including partial payments, on the Coal Impact Tax based primarily on actual production during the 
final quarter of 1986. With the approval of the Department of Revenue and 
Taxation, many of these payments were, for the first time, wire transferred to 
the Department. Payments made during the 
fourth quarter of 1986, based on actual production information, caused the 
cumulative taxes received by the State under W.S. § 39-6-303 to exceed 
$160,000,000 by December 31, 1986." (Emphasis added.)

The stipulated 
statement of facts further indicates:

"13. By December 29, 1986, the State of 
Wyoming had 
received and deposited a cumulative total of $164,017,573.23 collected under the 
Coal Impact Tax. This total, along with the amounts and dates of payments 
made during the final quarter of 1986, are shown on the chart attached as 
Exhibit `E' prepared by the Wyoming Department of Revenue and Taxation in early 
January, 1987.

"14. That the Department of Revenue accepted the 
payments described in paragraph 12 and, in accordance with the provisions of 
Section 39-6-305(d), the State Treasurer 
transferred all the payments received into the `earmarked revenue fund' which is 
known and cited as the `Political Subdivision Capital Assistance Account'." 
(Emphasis added.)

[¶26.]  Considering paragraphs 12, 13, and 14 of 
the stipulation of facts, quoted above, and applying the plain and ordinary 
meaning of the foregoing statutory language, it is clear that the two percent 
coal impact severance taxes were correctly paid, collected, accepted by the 
Department of Revenue, and credited to the earmarked fund, prior to January 1, 
1987. Because the cumulative amount collected under the tax exceeded 
$160,000,000, the only reasonable conclusion we can reach is that the two 
percent coal impact tax expired effective January 1, 1987, under the express 
statutory language of § 39-6-303(b).

[¶27.]  The State, however, further asserts that 
the "special policies and practices approved by the appellees [respondents] for 
the remittance of coal severance taxes for the fourth quarter of 1986 were null 
and void without the promulgation of rules under the Wyoming Administrative 
Procedure Act." We disagree.

[¶28.]  If the language of a statute which an 
agency is empowered to administer and enforce leaves no room for substantial 
debate over its meaning, an administrative rule reiterating the inevitable 
statutory consequence is unnecessary. Equitable Life Mortgage and Realty 
Investors v. New 
Jersey Division of Taxation, 151 N.J. Super. 232, 376 A.2d 966 (1977). A clear statutory direction is enforceable by an agency in 
accordance with its plain meaning without promulgation of a rule. Thomson v. 
Wyoming In-Stream Flow Committee, Wyo., 651 P.2d 778 
(1982).

[¶29.]  Administrative pronouncements such as 
interpretive rules and general statements of policy do not require the same 
public participation in their formulation as do substantive rules. This is so 
because interpretive rules and general statements of policy do not establish 
binding norms which are finally determinative of anyone's rights. At most, they 
merely repeat or emphasize an obligation already existing in a statute. American 
Hospital Association v. Bowen, 640 F. Supp. 453 (D.D.C. 1986), reversed on other 
grounds, 834 F.2d 1037 (D.C. Cir. 1987). Even if the special procedures adopted 
by the commission here were considered either an "interpretative rule" or a 
"general statement of policy" as defined under the Wyoming Administrative 
Procedure Act, §§ 16-3-101 through 16-3-115, W.S. 1977, they would not change 
the statutory provision allowing payment before the middle of the succeeding 
quarter.

[¶30.]  We hold that under § 39-1-304(a)(iv), 
W.S. 1977 (Cum.Supp. 1987), the Board of Equalization was specifically 
authorized to construe the coal impact tax statute to allow payment of tax upon 
coal mined during the quarter when payment was made and to determine that the 
tax ended under the statute when taxes totaling $160,000,000 had been received. 
The tax having ended January 1, 1987, all coal impact taxes paid pursuant to § 
39-6-303 by petitioners after that date should be returned to 
petitioners.

[¶31.]  The Board's later final decision to 
extend the two percent severance tax on coal through 1987 is 
reversed.