HOUSE BILL NO.      

State treasurer investments.

Sponsored by:  Joint Agriculture, Public Lands and Water Resources Interim Committee

A BILL

for

AN ACT relating to investment of state funds; increasing the amount which the state treasurer may invest in loans to assist small businesses; requiring a specified percentage of the investment to be in agricultural related loans; changing the amount of monies available for legislatively designated investments; and providing for an effective date.

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

     Section 1.  W.S. 9-4-701(e) and 7-4-712(a) are amended to read:

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

(e)  The limitation on legislatively designated investments under W.S. 9-4-712 applies does not apply to this investment.  To assist Wyoming's small businesses, the state treasurer may invest or commit to invest and keep invested an amount not to exceed fifty-five million dollars ($55,000,000.00) seventy-five or one hundred million dollars ($75,000,000.00 or $100,000,000.00) of any state permanent funds available for investment, excluding permanent funds allocated for joint powers loans, farm and ranch loans, water development loans, or real estate mortgages, through the purchase of portions of Small Business Administration loans guarantees, Farmers Home Administration business and industry loans and Economic Development Administration loans USDA - Farm Service Agency loan guarantees and USDA Rural Development loan guarantees.  Of the amounts invested pursuant to this subsection, not less than ???? per cent (???%) shall be invested in loans made to agricultural producers.  "Agriculture producers" shall be defined by the state loan and investment board.  No new investments pursuant to this subsection shall be made after December 31, 2006.  Investment by the state treasurer shall be limited to the portion of the loan that is guaranteed by the Small Business Administration, Farmers Home Administration or Economic Development Administration USDA - Farm Service Agency or USDA Rural Development.  Any assignment of loans to the state treasurer under this subsection shall provide that the Small Business Administration loan participant, Farmers Home Administration USDA - Farm Service Agency loan participant or Economic Development Administration USDA Rural Development loan participant originating the loan and any assignee thereof shall service the loan and make payments of principal and interest to the state treasurer as provided by rule, and in the event of default of the loan or the terms of the loan, be responsible for the collection of the debt.  For the first five (5) years of the loan, the interest rates contained in the loans shall be as established by the state treasurer but not less than the yield of the five (5) year federal treasury bond at the date of commitment.  Following the first five (5) years of the loan, the interest rate shall be adjusted to the then current interest rate required in the note and loan agreements.  The state treasurer shall promulgate rules and regulations governing the investment of state funds under this subsection including the following:

***  STAFF COMMENTS  ***

The general consensus was that this was a good investment for the state because of the correlation with the federal treasury bond interest rate and, therefore, should be taken out of the limitation on legislatively designated investments under W.S. 9-4-712.

     9-4-712.  Limitation on legislatively designated investments.

     (a)  There is established a limitation on legislatively designated investments as provided in this section.  Total investments of permanent funds of the state in the items listed in subsection (b) of this section shall not exceed five hundred million dollars ($500,000,000.00) four hundred million dollars ($400,000,000.00).  Prior to the convening of each general session of the legislature, the state treasurer shall, after consultation with the state loan and investment board, recommend to the select committee on capital financing and investments whether any adjustment should be made in the limitation established by this section.

     Section 2.  W.S. 9-4-712(b)(i)(C) is repealed.

     Section 3.  This act is effective July 1, 2002.

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