HB0301 - State investments-economic development.

 

2001

State of Wyoming

01LSO-0527.E1 ENGROSSED

 

 

 

HOUSE BILL NO.  HB0301

 

 

State investments-economic development.

 

Sponsored by:  Representative(s) Simpson, Baker, Hageman
and Lockhart and Senator(s) Meier

 

 

A BILL

 

for

 

 1  AN ACT relating to investment of state funds; increasing
 2  the amount and duration of time for the state treasurer to
 3  invest in small business loans under this section; allowing
 4  the state treasurer to purchase bonds for industrial
 5  development projects; modifying the conditions for the
 6  state treasurer to invest in industrial development bonds;
 7  amending the purpose for which such bonds may be utilized;
 8  and providing for an effective date.

 9 

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

11 

12         Section 1.  The legislature recognizes that one of the
13  critical needs for the development of Wyoming's vast energy
14  resources is the acquisition of rights-of-way for
15  transmission lines and pipelines. These transmission
16  corridors often span multiple counties and mechanisms need

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 1  to be in place to allow for orderly funding, acquisition
 2  and management of these important statewide assets. It is
 3  the intent of this act to provide for the funding,
 4  acquisition and management of such rights-of-way.

 5 

 6         Section 2.  W.S. 9-4-701(e)(intro), (q)(ii), (iii)(C),
 7  (D) and (vi), 15-1-702(a)(intro) and (i),
 8  16-1-104(c)(intro) and by creating a new paragraph (xii),
 9  16-1-107(a) by creating a new paragraph (vi) and
10  16-1-108(a) are amended to read:

11 

12         9-4-701.  Permissible investments; treasurer's rules
13  and regulations.

14 

15         (e)  The limitation on legislatively designated
16  investments under W.S. 9-4-712 applies to this investment.
17  To assist Wyoming's small businesses, the state treasurer
18  may invest or commit to invest and keep invested an amount
19  not to exceed thirty-five million dollars ($35,000,000.00)
20  fifty-five million dollars ($55,000,000.00) of any state
21  permanent funds available for investment, excluding
22  permanent funds allocated for joint powers loans, farm and
23  ranch loans, water development loans, or real estate
24  mortgages, through the purchase of portions of Small

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 1  Business Administration loans, Farmers Home Administration
 2  business and industry loans and Economic Development
 3  Administration loans. No new investments pursuant to this
 4  subsection shall be made after December 31, 2003 2006.
 5  Investment by the state treasurer shall be limited to the
 6  portion of the loan that is guaranteed by the Small
 7  Business Administration, Farmers Home Administration or
 8  Economic Development Administration. Any assignment of
 9  loans to the state treasurer under this subsection shall
10  provide that the Small Business Administration loan
11  participant, Farmers Home Administration loan participant
12  or Economic Development Administration loan participant
13  originating the loan and any assignee thereof shall service
14  the loan and make payments of principal and interest to the
15  state treasurer as provided by rule, and in the event of
16  default of the loan or the terms of the loan, be
17  responsible for the collection of the debt. For the first
18  five (5) years of the loan, the interest rates contained in
19  the loans shall be as established by the state treasurer
20  but not less than the yield of the five (5) year federal
21  treasury bond at the date of commitment. Following the
22  first five (5) years of the loan, the interest rate shall
23  be adjusted to the then current interest rate required in
24  the note and loan agreements. The state treasurer shall

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 1  promulgate rules and regulations governing the investment
 2  of state funds under this subsection including the
 3  following:

 4 

 5         (q)  The limitation on legislatively designated
 6  investments under W.S. 9-4-712 applies to this investment.
 7  To promote economic development and in addition to the
 8  authority under paragraph (a)(iii) of this section, the
 9  state treasurer is authorized to invest and keep invested
10  not to exceed thirty-five million dollars ($35,000,000.00)
11  one hundred million dollars ($100,000,000.00) of any state
12  permanent funds available for investment through the
13  purchase of industrial development bonds issued by
14  municipalities or counties under W.S. 15-1-701 through
15  15-1-710 subject to the terms and conditions specified
16  under this subsection. By December 31 of each calendar
17  year, the state treasurer and the Wyoming business council
18  shall each provide a report to the joint minerals, business
19  and economic development committee on the effectiveness of
20  the investment program authorized by this subsection. The
21  reports shall include the costs incurred by the state to
22  the permanent mineral trust fund, and the revenue received
23  by the Wyoming business council through fees and businesses
24  who utilized the program:

 

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 1 

 2              (ii)  No investment shall be made under this
 3  subsection unless:

 4 

 5                   (A)  The bonds are to finance the cost of
 6  acquisition of land or rights-of-way and the purchase,
 7  construction, and installation and operation of buildings,
 8  appurtenant personal property and equipment which will add
 9  economic value to goods, services or resources within or
10  outside this state. The buildings, appurtenant personal
11  property and equipment shall be used:

12 

13                         (I)  As part of the construction of a
14  facility or infrastructure for manufacturing, or processing
15  or generating power, transporting oil or gas, transmitting
16  electricity, providing telecommunications, or utility
17  services; or

18 

19                         (II)  For commercial or business
20  enterprises or their infrastructure; or

21 

22                         (III)  For reconstructing, remodeling,
23  modernizing or expanding an existing facility which will

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 1  add economic value to goods, services or resources within
 2  this state or infrastructure.

 3 

 4                   (B)  The Wyoming business council shall
 5  establish guidelines dependent upon the type of business
 6  concerned in each project considered and shall set the
 7  maximum amount of the investment to be made by the state of
 8  Wyoming in each project. In setting the maximum amount of
 9  investment the business council shall consider the number
10  of jobs created or preserved by the facility and the
11  economic impact to the state which may result from the
12  facility;

13 

14                   (B)(C)  The bonds bear interest at a
15  variable interest rate, indexed to the prime rate as
16  determined by the state treasurer pursuant to W.S.
17  39-14-108(c)(iv), adjusted annually, which is reasonably
18  commensurate with the risk, as recommended by the Wyoming
19  business council;, but the rate shall be not less than the
20  average earnings on the fixed asset portion of the
21  permanent mineral trust fund for the preceding twelve (12)
22  months; and

23 

 

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 1                   (C)(D)  At least twenty-five percent (25%)
 2  of the total cost of the project is provided by the owner
 3  of the facility. and not more than fifty percent (50%) of
 4  the total cost of the project shall come from public
 5  entities of the state of Wyoming unless the investment made
 6  by the state is in insurance on the bonds, up to eighty
 7  percent (80%) of the tax exempt project cost may be insured
 8  as an investment governed by the same rate of return so
 9  noted for direct bond investment under this subsection.

10 

11              (iii)  No investment shall be made under this
12  subsection unless the bonds provide:

13 

14                   (C)  The principal and interest are secured
15  by a pledge of revenues from the operation of the facility
16  or infrastructure and by a first mortgage on the facility
17  or other facilities or infrastructures with a loan-to-value
18  ratio not exceeding seventy-five percent (75%) of the
19  appraised value of the collateral; in lieu thereof, the
20  pledging of collateral of either United States treasury
21  zero coupon bonds with a face value exceeding the amount of
22  the investment to ensure inflation protection for the
23  state's permanent funds, or a guaranteed investment
24  contract by a company with substantial financial strength

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 1  as determined pursuant to subparagraph (D) of this
 2  paragraph, and the pledging of the highest available
 3  mortgage position on the facility, and by personal
 4  guarantees executed by the individual borrowers and such
 5  guarantees and pledges of the entity owning the facility or
 6  of the parent corporation of that entity, if any, as the
 7  owner or lender extends to lenders of the remaining debt
 8  financing. These guarantees and pledges shall be no less
 9  favorable to the state of Wyoming than those granted other
10  lenders of the same class. In no instance shall the owner
11  of the facility, through the creation of classes of
12  lenders, be placed in a superior position to the state for
13  repayment of an investment;

14 

15                   (D)  The principal and interest are may be
16  secured by additional security as required by the state
17  treasurer or governor, upon recommendation of the Wyoming
18  business council and with the approval as to form of the
19  attorney general.

20 

21              (vi)  No investment shall be made under this
22  subsection after June 30, 2003 2006.

23 

 

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 1         15-1-702.  Powers of municipalities and counties;
 2  limitations.

 3 

 4         (a)  In addition to all other powers each
 5  municipality, and county, and multi-county joint powers
 6  board has without any other authority the power to:

 7 

 8              (i)  Acquire one (1) or more projects located
 9  within the territorial limits of the municipality or within
10  the territorial limits of the county wherein the
11  municipality is situated, if acquired by a municipality, or
12  located within the county, if acquired by a county, or
13  located within multiple counties if acquired by a joint
14  powers board formed under W.S. 16-1-101 et seq.;

15 

16         16-1-104.  Joint powers, functions and facilities;
17  city-county airport board; eligible senior citizen centers.

18 

19         (c)  Specifically, without limiting but subject to the
20  provisions of subsection (a) of this section, two (2) or
21  more agencies may jointly plan, own, lease, assign, sell,
22  create, expand, finance and operate:

23 

 

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 1              (xii)  Rights-of-way for electric transmission
 2  systems, oil and natural gas pipelines, telecommunications
 3  and utilities.

 4 

 5         16-1-107.  Financing of joint projects.

 6 

 7         (a)  Any joint project consisting of property or
 8  improvements or an interest therein to be owned by
 9  participating agencies or a joint powers board undertaken
10  pursuant to this act may be financed:

11 

12         (vi)  By industrial development project bonds
13  issued pursuant to W.S. 15-1-701 et seq.

14 

15         16-1-108.  Obligations and responsibilities of
16  participating agencies.

17 

18         (a)  No participating agency nor any legal entity
19  created pursuant to this act shall construct, operate or
20  maintain any facility or improvement other than for service
21  to and use by the participating agencies and their resident
22  customers, except for undertakings pursuant to W.S.
23  16-1-104(c)(xii).

 

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 1 

 2         Section 3.  This act is effective immediately upon
 3  completion of all acts necessary for a bill to become law
 4  as provided by Article 4, Section 8 of the Wyoming
 5  Constitution.

 6 

 7                         (END)

 

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