Summary of Proceedings

 

Joint Minerals, Business and Economic Development Interim Committee

 

Wyoming Territorial Park                                                                                July 11 and 12, 2002

Laramie, Wyoming

 

PRESENT:       Senator Bill Hawks, Cochair

                        Representative Clarene Law, Cochair

 

                        Senators Decaria, Mockler (7/11), Schiffer and Youngbauer

 

Representatives Anderson (7/11), Childers, Esquibel, Illoway, Lockhart and Meyer

 

                        Legislative Service Office:  Emily Birtell Gardyasz

                        Others: See Appendix A, Committee Sign-In Sheet.

 

ABSENT:         Representatives Eyre and Miller

 

AGENDA:        See Appendix B

 

*  *  *  *  *  *  *  *  *  *

 

Day 1.  Call to Order/Roll Call.  Cochair Law called the meeting to order at 9:00 a.m. and roll call was taken.  See Appendix C, Attendance.

 

Senator Hawks moved approval of the minutes for the May 11th and 12th meeting.  Rep. Illoway seconded.  Passed.  See Appendix D, Summary of Proceedings.

 

State Mining Council

 

The Committee heard testimony from Don Stauffenberg, State Mine Inspector, and Ron Hughes and Scott Graham, members of the State Mining Council on three draft bills.  Marion Loomis, Wyoming Mining Association testified in support of the drafts.  The Committee took the following action.

 

03LSO-0027.W3  Mining council revisions. (Appendix E)  Representative Childers moved the Committee to sponsor the bill.  Representative Illoway seconded.  Passed 12-0.  This will be a Senate file.  See Appendix F, Vote Form.

 

03LSO-0028.W1  Mining council-experience credit for mine foreman. (Appendix G)  Mr. Stauffenberg explained that the proposed one year experience credit for a mining engineering degree is similar to other states' experience requirements.  See Appendix H, Mine Foreman Certification Experience Requirements.  Mr. Hughes spoke in favor of changing the experience credit from two years to one year. Senator Hawks moved the Committee to sponsor the bill.  Representative Illoway seconded.  Passed 12-0.  This will be a Senate file.  See Appendix I, Vote Form.

 

03LSO-0030.W2  Mining council-decertification. (Appendix J)  The Committee discussed how decertification interplays with industry/company disciplinary actions against a certified mine foreman.  Mr. Loomis and Joe Jelaca, General Chemical, spoke in favor of the draft.  Senator Hawks moved the Committee to sponsor the bill.  Representative Meyer seconded.  Passed 10-2.  This will be a Senate file.  See Appendix K, Vote Form. 

 

Banking

 

The Committee heard testimony from Jeff Vogel, State Banking Commissioner regarding two draft bills.  The Committee took the following action. 

 

03LSO-0031.W2  Financial institutions and the Business Corporation Act.  (Appendix L)  Mr. Vogel testified in accord with his memorandum, dated July 2nd.  See Appendix M. Jim Mitchell, Assistant Attorney General, explained that direct authority on corporate matters, as opposed to current implied authority, is needed to guide banks and their attorneys.

 

Dave Johnson, Wyoming Bankers' Association, testified that member banks have not had enough time to review the draft. Wyoming banks want a working group formed to study the matter.  Mr. Johnson questioned whether the draft is needed.

 

The Committee discussed bank "safety and soundness" in relation to the Wyoming Business Corporation Act.  Mr. Vogel and Mr. Mitchell testified that safety and soundness would remain the overriding objective as provided for in the draft.

 

Mr. Johnson stated that the bankers could not reach a decision on this matter at their June meeting; but, suggested that by the next Committee meeting a consensus on this draft bill might be reached.

 

Chair Law laid the draft bill back, requesting that the draft be brought to the next Committee meeting in the fall.  Mr. Vogel agreed to provide more information regarding what specific statutory provisions would be applied to financial institutions under the draft.  The Committee requested that LSO staff work with Mr. Vogel to provide more information regarding title 13 and the Wyoming Business Corporation Act at the next meeting.

 

03LSO-0038.W2  Banking-revisions.  (Appendix N)  Mr. Vogel explained each of the statutory changes needed to "clean up" the banking statutes.  Dave Johnson, Wyoming Bankers' Association, spoke in support of the draft bill with one recommendation that "owner" be defined in the penalty provisions.

 

The Committee discussed the regulation of automatic teller machines (ATMs) by the Banking Division.  Senator Mockler moved to amend page 2, line 21:  After "or a" insert "federally insured" and on line 22 restore the stricken language, strike "in" and insert "outside".  Representative Illoway seconded.  After discussion, Senator Mocker withdrew her motion to amend.

 

Senator Mockler moved to amend page 2, line 21:  After "or a financial institution" insert ",as defined by W.S. 13-1-501(a)(ii)".  Representative Esquibel seconded.  Failed.

 

Senator Hawks moved the Committee to sponsor the bill.   Representative Illoway seconded.  Passed 12-0.  This will be a House bill.  See Appendix O, Vote form.

 

Bd. of Prof. Engineers and Land Surveyors; Bd. of Geologists

 

During the last legislative session, there was opposition to the Senate confirmation of Mr. Joel Farber to the Board of Geologists. Mr. Farber, together with Mr. Lance Cook, had investigated a matter that came before the Board of Geologists involving a registered engineer. 

 

Mr. Lance Cook, on behalf of the Board of Geologists, explained the relationship between the Board of Geologists and the Board of Professional Engineers and Land Surveyors and the procedures followed when questions of jurisdiction arise, i.e. over the incidental practice in the field of engineering or geology. 

 

Mr. Cook explained the investigation he and Mr. Farber conducted to determine whether a registered engineer was qualified to perform geological work.  As part of the investigation, the engineer was contacted.  The engineer filed suit in the district court; the court held that the Board of Geologists could investigate. The Board determined that the person was qualified; the Board of Professional Engineers accepted this decision.  There was no jurisdictional dispute between the two boards.  

 

Mr. Cook assured the Committee that if given the same facts again, the boards could resolve the matter between themselves.  Also, he explained how the Attorney General's investigation manual will help the Board of Geologists avoid problems in the future.  Mr. Cook said that both boards would be involved in any investigations.

 

Wyoming Business Council

 

Wyoming Energy Commission.  Mr. Tucker Fagan, Chief Executive Officer of the Wyoming Business Council, introduced Mr. Patrick Pitet, Director of Minerals, Energy and Transportation for the  Council.  Mr. Pitet testified in accord with a handout provided to the Committee. See Appendix P, Notes on Wyoming Energy Commission. 

 

Mr. Pitet discussed the schedule for drafting an energy policy; the policy outline; the nine working groups formed by the Commission; and the Landowner Advisory Committee.  He informed the Committee of several contracts entered into by the Commission.  Mr. Pitet told the Committee that the Commission has agreed to participate in a Natural Gas Pipeline Assessment study proposed by Pace Global Energy Services (Pace).

 

The Committee discussed the price deferential for Wyoming natural gas.  Mr. Pitet explained that the Pace study is not limited to pipeline capacity problems; the purpose of the study is to look at the statewide situation and provide solutions.  Wyoming should not build more pipelines only to connect to a pipeline downstream already at capacity.  The study will be done by October.

 

The Committee also discussed the problems counties face due to energy development impacts. 

 

Mr. Pitet agreed to bring the Commission's priorities for proposed legislation to the next Committee meeting, instead of waiting until the energy policy is completed.  He also agreed to submit to LSO staff a detailed accounting of the money spent by the Wyoming Energy Commission, including salaries. 

 

OtherBusiness Council issues.  Mr. Fagan testified in accordance with Appendix Q, Business Council Notes.  His testimony included the following items.  Wyoming remains first in the nation for annual employment growth for the period May 2001 to May 2002.  The Business Council Loan Advisory Subcommittee will recommend to the Board in August that the Science Technology and Energy Authority (STEA) be used to provide "seed capital" for business start-ups.  Mr. Fagan reviewed the various activities of the Business Council.

 

Mr. Fagan requested a "clean-up" bill be drafted for W.S. 9-12-112, the Business Council Annual Report.  See Appendix Q, Business Council Notes at pages 3 and 4.  Chair Law directed LSO staff to work with Mr. Fagan to draft clean-up legislation.

 

Mr. Fagan testified that Wyoming lacks infrastructure and that long-term investment in this State is the key to growing our State's economy.  The Wyoming Technology Business Center would provide physical infrastructure to grow the rest of the State.  Improved highways and transportation means more commerce and growth for the State.

 

Air service.  Ken Griffin, Dean, UW College of Business, and UW Professors Larry Weatherford, Owen Phillips, and Brent Hathaway appeared before the Committee to testify on the report entitled "Airline Service in Wyoming" completed in February, 2002, and the upcoming air service study.  See Appendix R, Air Service Study, 2002.  See also Appendix S, The Economic Impact of Aviation in Wyoming 1996. 

 

Mr. Phillips, Professor of Economics, explained that Governor Geringer has authorized additional funding for a broader air study to determine how air service can be developed as infrastructure and a component of economic development in Wyoming. 

 

Mr. Phillips explained that since deregulation in 1978, Wyoming has been served by fewer spokes and larger hubs, namely Denver and Salt Lake.  This has resulted in higher air fares from Wyoming.  In fact, Wyoming's fares are quite high when compared to other states. This has resulted in fewer flights and smaller planes.  The equilibrium for the airline industry in Wyoming is high-priced fares and few passengers.  Further, the industry has reduced capacity, which once far exceeded the number of enplanements. Capacity is now approaching enplanements, diminishing the airline industry in this state.

 

In a survey of 1542 Wyoming respondents, 38% take at least one trip per year on a commercial plane and about 18% take more than one trip.  The survey also revealed that about 54% of all scheduled flights for those surveyed began and ended out of state.  The primary reason for going out of state was lower fares.  The number of people who drive to hubs for air service is quite high for Rock Springs, Cheyenne and Laramie.  See Appendix T, Survey Highlights.

 

Mr. Phillips explained that the upcoming study will consider the sensitivity of flyers and what will change their behavior.  If more people will fly, the airline industry will be stronger.  Senator Hawks pointed out the goal of the new study is to find solutions and recommendations to help improve air service.

 

 

Representative Lockhart shared with the Committee that Casper and Gillette will soon have air service via Big Sky Airlines to Billings, Montana.  With the help of a federal grant, the communities will purchase a Metroliner aircraft that will be leased to Big Sky. In turn, Gillette and Casper will have lower-priced fares.

 

Wyoming Technology Business Center. Rick Miller, UW Vice President, testified before the Committee in accord with handouts.  See Appendix U.  Mr. Miller presented a legislative history from the $250,000 appropriation for the phase II study to present.  Mr. Miller introduced Harry LaBonde, City Manager, Laramie and Tim Stamp, Laramie Economic Development Corporation. 

 

Mr. Miller explained that there are many "incubators" across the country, particularly at universities.  The incubator would help people with technological expertise to gain professional expertise needed to go into the marketplace.  Participants would be given 12-36 months of time in the incubator.  The building would be owned by the University of Wyoming and leased out to a private, not-for-profit organization, the Wyoming Technology Business Center (WTBC). Mr. Miller described the external and interior design of the building.  It is hoped that the incubator will attract UW graduates.  He shared the success story of one company, DeltaNu, that started in Laramie because the University is in Laramie.  See Appendix V, DeltaNu brochure. 

 

Mr. LaBonde spoke in favor of the Business Center, describing UW as an "intellectual asset" to the state.  Mr. Stamp said that the Business Center can provide a means to capture a return on the State's investment in UW students.

 

Mr. Miller testified that the Business Center will cost an estimated $8 million plus an additional amount to reflect 2003-2004 construction costs.  Additionally, the Business Center will require $400,000/biennium for operating expenses for 2-4 years.  Mr. Miller said he would need time to obtain federal funding for the Business Center.

 

The Committee discussed how to proceed with funding.  Senator Hawks moved that LSO staff draft a bill similar to the third reading amendment that passed in the Senate last session, including a time period in which matching funds can be raised.  Passed.

 

UW Public Policy Institute.

 

Mr. Rick Miller, UW Vice President, testified in accord with a handout entitled "Public Policy Research Institute".  See Appendix W.  Mr. Miller explained that the Governor and the Legislature, not the University of Wyoming, would decide the topics to be researched.  The research would be for the benefit of policymakers. He said that there are numerous topics to be researched that are outside of the work performed by the program evaluation division or the legal services division at LSO. 

 

After some discussion, the Committee decided to take up this matter the next morning.  The first day came to a close at approximately 4:30 p.m. 

 

Day 2.  Call to Order/Roll Call.  Cochair Hawks called the meeting to order at 8:00 a.m. and roll call was taken.  See Appendix C, Attendance.

 

Trona Valuation.

 

03LSO-0039.W1  Trona Valuation.  (Appendix X)  Randy Bolles, Mineral Tax Administrator and Craig Grenvik for the Department of Revenue appeared before the Committee.  Mr. Bolles testified that the Department has no disagreement with the trona industry over the draft bill to replace a complicated calculation with an industry factor stated as a percentage.  This will assist the Department from an administrative point of view.  The current calculation is very complex and difficult to understand. 

 

Mr. Bolles explained that over the past 12 years, the calculated factor has increased ("factor creep").  Under the calculation, the deeper the mine, the more tax is owed.

 

Marion Loomis, Wyoming Mining Association, Joe Jelaca, General Chemical and Dan Morrison, Solvay Minerals, Inc., testified before the Committee.  The trona companies provided a notebook describing the current calculation for the industry factor and the effect of changing to a set industry factor of 32.5%.  See Appendix Y.

 

Mr. Jelaca addressed the economic downturn that has occurred in the trona industry and the resulting effect on Sweetwater and Uinta Counties.  The trona industry competes in a global market.  Soda ash exports are key to industry growth.  Consumption in the U.S. is flat.

 

Mr. Morrison walked the Committee through the very complex calculation currently used to determine the value of trona.  See Appendix Y.  Mr. Bolles explained that different companies apply different depreciation methods; a set industry factor would level this out for the industry.  The Committee discussed the cost information that is submitted to the Department and the type of review performed by the Department. 

 

Mr. Morrison explained that the 32.5% factor is the average for the years 1990-2002.  Setting this factor would ensure that the tax burden follows the health of the trona industry.  Mr. Grenvik explained that if the price increases, the tax due would increase.

 

Mr. Terry Harding, FMC, explained that the individual trona companies want to be treated the same using an industry factor.  The companies mine trona from the same deposit, selling the same soda ash for the same price.

 

Mr. Loomis and Mr. Bolles testified that the 32.5% factor is not a cap, the tax will fluctuate based on the value of the product.  Mr. Bolles pointed out that there is a cap on uranium. 

 

Mr. Bolles explained the draft bill to the Committee. 

 

Sarah Gorin, Equality State Policy Center, testified that more data is needed, i.e., a chart showing trona production.  Mr. Jelaca responded that industry gives production numbers to the State Mine Inspector.

 

Senator Schiffer moved to amend page 2, lines 15 and 16, to delete 32.5% and insert 34.85%.  Senator Decaria seconded.  34.85% is the current rate for 2001-2002.  The amendment failed 4-6.  See Appendix Z, Vote form. 

 

Representative Illoway moved the Committee to sponsor the bill.  Senator Youngbauer seconded.  Passed 8-2.  This will be a House bill.  See Appendix AA, Vote form.

 

UW Public Policy Institute.

 

Mr. Rick Miller returned to the Committee and offered to have a representative from a public policy institute come and talk to the Committee.

 

Michael Walden-Newman, Wyoming Taxpayers' Association, urged the Committee to reevaluate how the Legislature uses its Management Audit Committee.  In his opinion, the Management Audit Committee is underused by the Legislature.

 

Representative Lockhart moved that a bill be drafted in support of the proposal for a public policy research institute and asked the Committee to vote "no" on the motion.  Representative Childers seconded.  After discussion, the motion failed 2-8.  See Appendix BB, Vote form.  The Committee will not discuss this matter any further during this interim, nor entertain any proposed legislation.

 

Mr. Miller responded that he may talk with Management Council.  He wants to have a more structured process in place for the legislature to have research done by UW.  He reassured the Committee that the policy makers, the Governor and the Legislature, would have control over a public policy institute.

 

The next meeting.  The next meeting will be held October 7th and 8th at the Oil and Gas Conservation Commission, Casper.  The meeting will commence at 9:00 a.m. on the first day and 8:00 a.m. on the second day.

 

Adjournment.  The meeting adjourned at approximately 10:00 a.m.

 

 

Respectfully submitted,

 

 

 

 

Senator Bill Hawks                                                               Representative Clarene Law

Cochair                                                                                Cochair

 

 

All appendices referenced are on file at the Legislative Service Office.

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