![[Top]](/images/nav-top.gif)
![[Back]](/images/nav-back.gif)
![[Home]](/images/nav-home.gif)
January 11, 2006
State Capitol, Room 302
Cheyenne, Wyoming
Representative Randall Luthi, Chairman
Senator John Schiffer, Vice Chairman
Senator Kit Jennings
Senator Rae Lynn Job
Representative Roy Cohee
Representative Debbie Hammons
Representative Becket Hinckley
Dave Gruver, Assistant Director, LSO
Don Richards, Senior Research Analyst
Joy Hill, Associate Research Analyst
Please refer to Appendix
1 to review the Task Force Sign-in Sheet
for a list of other individuals who attended the meeting.
Chairman Luthi called the meeting to order at 5:30 p.m. The following sections summarize the Task Force proceedings by topic. Please refer to Appendix 2 to review the Task Force Meeting Agenda.
Representative Cohee moved the minutes from the December 13th meeting. Senator Schiffer seconded the motion, and the minutes were adopted without change.
Chairman Luthi provided a brief history of the purpose of the Task Force for the members and the audience and suggested that while the Task Force will entertain a discussion of several possible legislative drafts, it will not be taking votes on the proposals immediately. He added that the Task Force will be meeting one or two more times in the future to finalize their work.
Senator Jennings provided an overview of the legislation to Task Force members. (See Appendix 3 for a copy of the proposed legislation.) Senator Jennings indicated that declining federal revenues and caution regarding future federal budget actions caused him to look into a state mechanism to provide energy assistance over the long-term.
During Senator Jenning's discussion of the legislation, he explained the language on page two provides a justification for the proposed program. He explained the nature of the trust fund created in the draft and that it be a combination of state and private funds as a permanent corpus with the intent to operate the energy assistance program from the income of the corpus. Senator Jennings discussed the broad eligibility language in the bill and suggested his intent was to address temporary situations of hardship. Senator Jennings concluded his presentation with a discussion of the appropriation for the administration of the program.
Members of the Task Force inquired about the term “moral obligation” found in the language of the proposed legislation. In response, LSO staff discussed the case law upon which the language was based: State v. Carter, 30 Wyo. 223 (1923). He added that it is for the Legislature to decide what is a moral obligation.
The Task Force next discussed establishing an account upfront rather than using "under-the-cap" monies from severance taxes. Next, the Task Force discussed the potential of identifying private corporations willing to donate, eligibility requirements, and how a program provider would be selected.
Specifically, members of the Task Force questioned whether the language on page 7, lines 4 and 5, referred to individual efforts being exhausted or other assistance programs' funds being exhausted. The point was raised as to whether private programs such as the current Energy Share program would have to be exhausted.
The Task Force also discussed the timing of the proposed program and whether this is an immediate solution or a longer-term opportunity, particularly in light of the need to obtain administration and implementation services from a non-profit.
Paul Yaksic, Department of Family Services (DFS), noted that the income from the corpus would need to be $1 million per year to sustain the $50,000 in DFS administration alone. By comparison, he indicated that the LIEAP program is about a $6 million program and costs about $250,000 per year to administer. Mr. Yaksic suggested the Task Force consider language that would allow five percent, "or the minimum amount necessary for administration" to accommodate periods where insufficient earnings are generated.
Representative Wayne Reese supported the notion that the State has a moral obligation to assist with energy costs. However, he cautioned whether the proposal would work, especially in generating private donations, citing similar claims during the creation of the Business Council. If it is essentially going to be a public program, he asked why would we create another level of state government. Instead of the current proposal, Representative Reese suggested modifying the LIEAP eligibility requirements or taking payment in kind from gas companies to assist the needy.
In response, Senator Jennings noted energy companies have contributed to the Wildlife Trust Fund.
Senator Schiffer explained the proposed draft to the Task Force (Appendix 4). Senator Schiffer noted that homeowners with homes valued at less than the median value of the dwellings in the county in which the dwelling was located would be eligible for a tax credit of up to $2,000 in assessed value. An appropriation of $8 million is included in the legislation to hold political subdivisions and the school foundation program harmless. Senator Schiffer noted that while the fiscal note is an estimate, it does provide a good indication of the likely impact of the draft and illustrates that impact on a county by county basis. In closing, Senator Schiffer acknowledged that this proposal does not benefit everybody, but seems to offer one valid approach.
Chairman Luthi noted that this program has been in statute for many years but has not been funded. Under the proposal the state would not collect the tax, but the State would backfill the portion not collected by the state.
In response to Task Force questions and statements, LSO staff clarified that staff was not aware that this program had been challenged in the Wyoming Supreme Court. Staff also pointed out that subsection (j) within W.S. 39-13-109(d)(i) goes to great lengths to suggest this program provides general tax relief, not specific property tax relief.
The Task Force then discussed if this program created a special class for property taxpayers and if everyone living in a house below the median is "poor." Senator Schiffer indicated that the $2,000 limit was based upon the veterans' tax exception and that there is nothing special about establishing the eligibility at the median home value – suggesting that a lower level could be established to target the poor.
Representative Cohee noted that there is some assumption inherent in the draft that persons who make less live in moderately priced housing.
Chairman Luthi explained the draft legislation would reduce the property tax rate for "all other property" (primarily residential, agriculture, and commercial) from 9.5 percent to 8.25 percent. (See Appendix 5 for a copy of the draft.) He suggested this approach maintains a broad view, and that if the State does not collect a tax, then any credits, exclusions, or reductions do not have to be based upon the Constitutional requirement of the necessary support of the poor.
Wade Hall, Department of Revenue, discussed the fiscal impact with the Committee and LSO provided a fiscal impact worksheet originally prepared by the Department of Revenue (Appendix 6). Mr. Hall noted that in the original fiscal analysis, no inflation had been considered. As a result, the appropriations included in the legislation to keep political subdivisions and the school foundation program whole would need to be increased. Mr. Hall added that recent growth in assessed values, due to both appreciation and new construction, had been in the neighborhood of ten percent in the recent past. Therefore, he assumed ten percent growth in assessed values for purposes of the fiscal handout. Mr. Hall also acknowledged that the Department of Revenue applied the statewide average mill levy for municipalities. Since the overall statewide mill levy is lower than the average mill levy within municipalities, the projected fiscal impact is probably a highest case scenario.
Chairman Luthi suggested that interested members may wish to consider sponsoring a private bill, as a back-up measure. He also asked members to bring forward other legislation, suggesting that the Task Force may wish to consider increasing the eligibility limits or benefits within the Low Income Energy Assistance Program (LIEAP).
The Task Force then asked Jeff Dockter, LIEAP Administrator, for a further explanation of the LIEAP program. Mr. Dockter explained the first criteria is income level. The State has used 185 percent of the federal poverty level, but the State can increase this guideline. With respect to the benefit amounts, Mr. Dockter indicated the State limits what the eligible household can receive – in other words what the poorest of the poor will receive. DFS can set the benefit level, consistent with available funds. This would require the State to submit a revised plan to the federal government, according to Mr. Dockter.
Mr. Dockter then explained that increasing the budget this year would create administrative challenges since the State has already denied applicants. Department of Family Services (DFS) would have to extend the application season at least until the middle of March if eligibility were expanded.
The Task Force concluded this discussion by considering if budget billing offered by utilities may actually reduce the amount that LIEAP clients can recoup.
Representative Hammons asked the Task Force if Mr. Dockter would be present at the next meeting and if the Task Force could get a better understanding of LIEAP and what could be changed to serve clients (or more clients) better. (Mr. Dockter indicated he would be available at the next meeting.)
Senator Job inquired whether the Task Force would actually sponsor bills, and, if so, questioned whether or not the Task Force has the authority to do so.
Chairman Luthi indicated that in the motion to create the Task Force, Management Council minutes state, "the Council authorize the Speaker of the House and the President of the Senate to appoint a task force to begin gathering ideas and legislative solutions to grant relief to Wyoming citizens. The solutions should include options to address the high cost of utilities, gasoline and property taxes among others. Any legislative solutions proposed by the task force could then be presented to the Legislature for the upcoming Budget Session." Further, under Legislative rules, Chairman Luthi noted there are limits on the number of bills, but the rule states that this limitation shall not apply to any other Committee designated by Management Council.
In response to Task Force questions, LSO staff stated that statutes do not speak to this issue (whether the Task Force can sponsor legislation) and rules can be read as supporting the ability of select committees to sponsor legislation but are not 100% clear cut either way. He added that generally Committees created by statute sponsor legislation.
There being no further business, Chairman Luthi adjourned the meeting at 7:10 p.m.
Respectfully submitted,
Representative Luthi