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January 27, 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.
Senator Schiffer moved the minutes from the January 11th meeting. Senator Jennings seconded the motion, and the minutes were adopted without change.
Chairman Luthi asked for additional information on the LIEAP
program concerning whether or not there is enough funding to continue the
program for the remainder of the ’05-06 biennium. The original estimate, including the Governor’s request,
provided enough funds through this winter, and that is still the current
estimate.
Jeff Dockter, Department of Family Services, responded to the Task Force’s prior inquiries about where the gaps are in the system by providing a handout entitled “Wyoming LIEAP Response to Task Force on Utility and Tax Relief” (Appendix 3). It outlines eligible households, federal poverty guidelines, etc., and includes an analysis of LIEAP participation rates.
Mr. Dockter went on to inform the Task Force that the most current pay run (done on Jan. 27, 2006) was $820,000, and is the largest he has seen since he became the LIEAP manager. To date, the LIEAP program has expended $3,000,000 on energy assistance benefits for the 2005-2006 winter. The LIEAP program has received around 11,000 applications this heating season so far, and about 2,500 additional applications are expected this month. Mr. Dockter stated there are not any pressing issues right now, but informed the Task Force that LIEAP has two more pay runs before March.
The Task Force inquired, looking at subparagraph (3) of the analysis handout provided by Mr. Dockter, as to how LIEAP gets information to eligible people who have not applied to the program, and whether or not senior centers get LIEAP handouts. Mr. Dockter responded that LIEAP flyers are mailed to senior citizens’ centers at the start of every heating season. In addition, LIEAP applications are mailed to all individuals and families that qualified for LIEAP assistance the previous heating season. This season the Public Service Commission conducted public forums in October in which LIEAP representatives participated. The Task Force suggested DFS may want to make sure someone is available to help fill out the LIEAP forms, as the complexity may be a deterrent to people utilizing the program.
Mr. Dockter stated the Department of Family Services (DFS) tries to make the applications as simple as possible. In section 6 of the handout Mr. Dockter provided, it is stated that DFS is trying to streamline the process, for example with Food Stamp clients, and to eliminate some of the paperwork. The Task Force then asked if people can be brought in from around the state, or if LIEAP representatives can go to senior centers, etc, to walk potential clients through the application process. Volunteers can also help fill out forms. Mr. Dockter indicated this is something DFS will definitely look at.
The Task Force also voiced concerns about the reduction of federal money for federal programs and if there are more hurricane seasons, like the one just passed, whether or not there will be enough LIEAP funding left.
Senator Jennings walked the Task Force through the changes made to the bill (Appendix 4) since the January 11, 2006 meeting where it was first introduced. Case law was added that describes moral obligation; the under-the-cap funding was eliminated; and the funding mechanism and descriptions of three accounts created - income, holding, and trust fund - were added, as was a maximum yearly benefit per household of $1,000. Senator Jennings then discussed the purposes of each account, and stressed the bill’s importance based on the questions asked of Mr. Dockter regarding federal funding issues and natural disasters such as were seen this past year.
Chairman Luthi added that, although the bill does not require it, Energy Share may play a major part and asked if there was anyone in the audience who could tell the Task Force where Energy Share stands regarding the number of applications that have been received. Leslie Blythe and Norm Long, both past presidents of Energy Share, responded to Chairman Luthi’s questions. Ms. Blythe began by providing background information on the Energy Share program and the purpose of the program. Ms. Blythe stated it is too early at this point to be sure how much money will be expended, but she did indicate that Energy Share is ahead of where it was last year in fund utilization. She further stated that Energy Share expects to raise around $100,000 this year, and that there is some indication that corporations may come forth with extra funding this year.
Senator Schiffer noted that this bill (Appendix 5) has not changed since his explanation at the January 11th meeting. He stated that staff had indicated some technical corrections were needed.
Chairman Luthi stated the language in the bill (Appendix 6) has not changed, and noted Fact Sheet, 06FS010R, “Reductions in Property and Sales/Use Taxes: A Comparative Distributional Analysis”, prepared by LSO Research, is available to Task Force members and the public.
Chairman Luthi stated the bill (Appendix 7) was drafted at the request of Representative Childers and asked LSO Staff to explain the bill.
Dave Gruver, LSO, provided an explanation of the bill, indicating a difficulty in the bill was trying to trace gas consumed in Wyoming from production to the retail user. This bill has a total cap of $2,000,000 any calendar year for the exemption, and the Department of Revenue must develop rules and regulations to implement it. LSO staff offered the caveat that once the money is deposited into the state coffers additional issues may be raised.
Chairman Luthi then discussed two aspects of the bill: a) collection, or lack of collection, of severance taxes; and b) determination of certifying the savings onto customers.
Craig Grenvik, Department of Revenue, addressed the ability to collect, or not collect, the tax. According to Mr. Grenvik, under the Department of Revenue’s computer system, it is easier to not collect the tax through a form of exemption.
Mary Byrnes, Public Service Commissioner (PSC), discussed the difficulty of tracing the benefit getting passed on to the consumer under the proposal. Administratively, it would be very cumbersome, and she stated that the PSC does not look at well-head rates. The Task Force inquired as to how tracing the benefit might be done. Ms. Byrnes stated she was not sure at this point.
The Task Force noted that the Department of Revenue is responsible for promulgating rules and regulations for the implementation of this bill, and inquired how the PSC would go about implementing the rules and regulations, and what kind of timeframe it would take. Mary Byrnes, PSC, stated it would be a lengthy amount of time, and would be a continuous process.
Senator Schiffer commented this would be a fairly complicated, very laborious process for the Department of Revenue to pull the information, but, based upon the testimony of Craig Grenvik, Department of Revenue, it can be done; however, in terms of certification and tracing the gas, it would be very difficult.
Chairman Luthi questioned whether or not this bill gives PSC the authority to set up a fund to deposit severance tax funds that would have been paid, and, therefore, allow the PSC to oversee its distribution. Ms. Byrnes stated she did not see the bill granting that authority to PSC, and does not believe PSC currently has that authority.
The requester of the bill, Senator Jennings, discussed the bill (Appendix 8), and asked Dave Gruver, LSO, to discuss areas of legal concern. Mr. Gruver discussed 4 areas of concern researched by LSO Staff: 1) special preferential tax treatment; 2) no corresponding use tax exemption which may be needed; 3) potential violation of the uniformity taxation requirement; and 4) residency requirement. Mr. Gruver indicated that the residency requirement of one year is likely acceptable. He also advised that a corresponding use tax exemption be included in the bill in light of the legal research on this issue.
The Task Force questioned whether or not this legislation would create a tax class of 65 year olds and whether or not that is acceptable. An example of having created a class based upon the age of 65, mandatory retirement, was discussed. Task Force members also stated the purpose of the bill is to create relief irrespective if needed or not, and not everyone over 65 may need relief.
Senator Jennings stated this bill is not needs-based, but rather provides a place to cut some taxes and, if a needs-based provision should be added, that would be acceptable to him. He further stated that when the bill was presented to AARP, there was no support for the bill because it was based on age alone.
Representative Cohee questioned whether or not taxes need to be cut, considering Wyoming has a lower personal tax load than any other state. Representative Cohee also questioned what the actual target population is, such as people with definite need.
Chairman Luthi clarified the Task Force was charged with looking at utility and tax relief, and it would be nice to share the surplus with citizens, and therefore, not all relief efforts will be tied to need. Chairman Luthi also suggested that this is a debate that will likely come up during session.
Senator Job also noted the need to look at tax relief with respect to long-term considerations down the road and how it will affect the tax structure. Chairman Luthi suggested sunset dates would be appropriate for tax bills due to the difficulty of justifying tax relief bills for more than two years.
In the bill requester’s (Representative Hammons) absence, Senator Job presented and explained the bill (Appendix 9). According to Senator Job, this bill is intended to take a longer view of energy and utility relief. The bill establishes a state component (tied to the federal plan) for LIEAP. One aspect discussed was submission of a waiver to raise the amount of funds used for weatherization from 15% to 25%, and how it can be spent. The Task Force discussed the bill provision of expanding eligibility to the greater of 185% of the federal poverty level or 60% of median state income. In addition, Senator Job relayed Representative Hammons’s suggestion (which is reflected in the draft) to select a lower benefit level to help more people. There was also discussion about the appropriation suggesting it may not be enough. LSO Research clarified DFS rules on weatherization, and stated that although the state can seek a waiver, its acceptance is not guaranteed.
The Task Force questioned who would qualify for the weatherization provision, and if it would only be those who own their homes. LSO Research stated a qualifying person could be an apartment dweller because it is the resident who qualifies for the benefit, not the dwelling (or owner of the dwelling).
The Task Force questioned if there is a financial requirement for landlords. Mr. Dockter stated there is currently no requirement for a landlord to provide a financial contribution. The Task Force also discussed the feasibility of helping low-income families find a different place to live and whether or not that would be more efficient. Mr. Dockter indicated that it would, in some cases, but the program does not have that authority. It was also stated that in some areas, alternative housing is not easy to find. The Task Force further discussed if there is anything to prevent landlords from finding a reason to remove low-income renters and re-rent at higher a rate after weatherization has been done. Mr. Dockter stated there is a landlord rental agreement that addresses this issue in the state plan.
The Task Force also questioned whether or not the state will end up fixing a dwelling because a landlord does not take care of the property. Mr. Dockter responded that technically that is correct but stated that DFS asks the landlord to make a contribution. Mr. Dockter also indicated that DFS may refuse to work on a unit if it costs too much.
The Task Force discussed creating a state plan that complements the federal plan. Mr. Dockter stated that would be agreeable. There would be some question regarding who has oversight, but the federal guidelines could be used as a guide to tailor the plan. Chairman Luthi inquired if there are any pitfalls to be cautious about in creating a state program to avoid jeopardizing federal funding. Mr. Dockter addressed the inquiry by discussing concerns about tying the program to the state plan. Mr. Dockter explained that the difference in unit average maximum ($4,000 in the current plan vs. $2,744 in the proposed plan) is largely due to the long distances Wyoming crews have to travel to do weatherization, and discussed timing issues related to when reports are due and providing correct information to the Legislature. Senator Job suggested that the timing issue can probably be worked out; that rules and regulations are needed; and the difference between $4,000 and $2,744 is a legislative policy decision.
The bill requester, Senator Job, presented and discussed the bill (Appendix 10). A handout was provided containing information about the estimate of taxes paid by low-income Wyoming seniors. The sponsor stated this bill modifies current legislation, changing income limits based on inflation and the state’s self-sufficiency standard. The bill also elevates the floor on income limits, as well as expands the asset test and resource limits. Senator Job also added that the asset levels may be low at this point considering the current housing market. Senator Job mentioned some choices to consider should the Task Force desire to alter the bill: change rebate levels, income levels, or the asset test.
Pastor Jon Laughlin, Grace United Methodist Church, provided updates about the families who presented at a prior meeting. He discussed the need to initiate a press effort to calm people down about utility hikes and potential cut offs, and spread the truth about utility assistance. He also stressed the importance of informing people what is being done to address the issue of rising utility costs. He suggested home visits to help people understand what they can do, how they can get assistance, and what appliances, etc., they can use in their homes. He further stated that people do not know about the programs available and stressed the need for simplicity of filling out forms. In addition, he pointed out that the City of Cheyenne is proposing a 5th penny tax and not offering to kick in any money for energy assistance. He questioned whether or not the Legislature should address this with the Cheyenne City Council, and that perhaps the state, city and county should work together on this issue.
The Task Force discussed the efficiency of having a single form that would provide applicant information for programs across agencies. The Task Force also acknowledged that agencies tend to not communicate well with each other. Senator Schiffer suggested that perhaps the Task Force should prepared a budget amendment to encourage agencies to come together and create a universal form.
The Task Force discussed having a meeting after the session starts, but before discussion of the budget begins. Chairman Luthi noted the Task Force had been asked to become a source of information, identify the available programs, and to evaluate proposals that have come before it. He suggested bringing forth a suite of bills that cover the options presented, but to be cautious where there may be outstanding constitutional issues and administrative issues when considering modifications to existing programs. Chairman Luthi suggested a list of bills to be introduced in the suite: 06LSO-0243.L2, Emergency energy assistance trust fund; 06LSO-0317.L4, Homeowner’s tax credit – 2; 06LSO-0327.L3, Property tax assessment rate; 06LSO-0411.W1, Low income home energy assistance program; and 06LSO-0420.W3 Tax refund to elderly and disabled.
Senator Jennings moved the Task Force sponsor the identified bills. Senator Schiffer seconded the motion. A roll call was taken, with opportunity given to vote against any or all of the proposed bills. The roll call motion carried unanimously, with no objection to any individual bill.
There being no further business, Chairman Luthi adjourned the meeting at 7:15 p.m.
Respectfully submitted,
Randall Luthi, chairman