Task Force Meeting Information

November 17, 2005

Parkway Plaza, Gourmet Room

Casper, Wyoming

 

Task Force Members Present

Representative Randall Luthi, Chairman

Senator John Schiffer, Vice Chairman

Senator Kit Jennings

Senator Rae Lynn Job

Representative Roy Cohee

Representative Debbie Hammons

 

Task Force Members Absent

Representative Becket Hinckley

 

Legislative Service Office Staff

Dave Gruver, Assistant Director, LSO

Don Richards, Senior Research Analyst

 

Others Present at Meeting

Please refer to Appendix 1 to review the Task Force Sign-in Sheet
for a list of other individuals who attended the meeting.

Call To Order

Chairman Luthi called the meeting to order at 5:40 p.m.  The following sections summarize the Task Force proceedings by topic.  Please refer to Appendix 2 to review the Task Force Meeting Agenda.

 

Introductory Remarks

Representative Cohee nominated Senator Schiffer as Vice Chairman.  The motion was seconded, and it passed.

 

Chairman Luthi explained the creation of the Task Force by Management Council had occurred after discussion of a special session on utility rate relief.  He indicated that the Task Force will be considering both old and new ideas for utility and tax relief – what is possible, what might be possible, and what is not possible.  The Task Force directed LSO staff to release all background materials prepared for the Task Force to the public, including making copies available on the Legislature's website.  (Copies of all materials provided to the Task Force are included as Appendices 3 through 6.)

 

Review of Materials Supplied By LSO

Don Richards, LSO, provided a brief summary of 05IB016R, Tax Rebates in Wyoming and Other States:  Challenges and Options.  He discussed other state approaches to tax relief, identified current tax relief programs in Wyoming statute, and indicated that constitutional and administrative barriers may exist with certain programs.  He concluded his presentation by noting that 05IB016R provides a table of the fiscal impacts of many taxes currently collected.

 

Dave Gruver, LSO, provided a brief overview of a November 9^th (and November 14^th follow-up) memo summarizing a broad range of bills, in six different categories, that have recently been considered by the Legislature and may offer a template for a range of alternatives.  Next, Mr. Gruver highlighted a November 17^th memo on constitutional background discussing the provision of public funds to individuals and private entities.  The memo considers prior case law and Attorney General opinions but does not analyze any existing relief programs.  From a constitutional point of view, Mr. Gruver noted that not collecting the tax in the first place removes questions of constitutional provisions which may restrict other solutions. 

 

In response to Task Force questions, Mr. Gruver referred to a quote from the Court that essentially indicated it is hard to imagine a more broad prohibition to provide direct appropriation or donation of public funds to individual citizens, with the one exception of the necessary support of the poor.  He noted that some states may not have such prohibitions, or may not interpret their prohibitions similarly.  Mr. Gruver added that there is not a constitutional definition of who qualifies as "poor" and great deference has been given the Legislature, historically.  However, he noted a 1923 case regarding the widow of a undersheriff where the Court did not rely on the "support of the poor" exception when considering the appropriation to the widow.  In response to further questions, Mr. Gruver noted that the veterans exemption had been challenged three different times and upheld each time.  He noted that Court's statement, although in dicta, did indicate that retroactively exempting property would be inconsistent with the Constitution.

 

Public Testimony

George Axlund, Executive Director, WCDA, brought two new WCDA programs to the attention of the Task Force:  energy savers program and the workforce infrastructure program for housing.  (See Appendix 7 for a summary of the programs.)

 

Mr. Axlund indicated that the WCDA had approved $5 million for the energy savers program.  He indicated that the program has two categories:  deferred or amortized loans for families with less than 50 percent of the median household income and amortized loans for families with less than 80 percent of median income.  Mr. Axlund indicated that the loans would be streamlined and no credit or employment verification would be necessary. He stated that an amortized loan of four percent, for $7,500, for eight years would result in a payment of about $92 per month.  With an average loan amount of $5,000, 1,000 loans could be made with the initial $5 million.

 

Mr. Axlund indicated he was asking private lenders to assist in serving individuals above 80 percent of median income and noted that utility companies might provide incentives to customers willing to sign a one to three year agreement to stay with a provider in areas of the state where there is a choice between utility providers.  After the presentation of the WCDA program, he encouraged the Legislature to create a fund or revolving loan program so that the WCDA template might work as an on-going program.

 

Senator Schiffer asked that the supporting cost/benefit analysis be sent to him in terms of energy efficiency and repayment of the loan which would be used as a guideline for lenders.  He also recommended that training be provided around the state, not just in Casper.

 

Mr. Axlund reiterated that it was a statewide program, and committed to providing the cost/benefit analysis to Senator Schiffer and the rest of the Task Force membership.

 

Senator Jennings asked what would happen if the borrowers defaulted.  Mr. Axlund responded that WCDA has taken the risk of default into consideration and indicated that he knows there are going to be some losses.

 

Representative Robinson addressed the Task Force and suggested that it is better not to collect the tax up front rather than give it back after collection because of increased administrative costs and growth in government.  Representative Robinson suggested that exempting food from sales tax would reach the most citizens and noted that not everyone would benefit from a reduction in sales tax on utilities, particularly renters.  She noted that people receiving food stamps would not be impacted by the exemption on food. 

 

In response to other proposals she noted that a direct payment to citizens would be subject to income tax; loan programs may encourage debt; and the beneficiaries (state or local government) should be considered when reducing some taxes.  She also noted that some individuals do not use some grant or loan programs because of pride, privacy, or confidence in themselves.  Finally, Representative Robinson suggested the Task Force consider whether any incentive be permanent or have a sunset date. 

 

Tom Fuller, State Energy Program, Wyoming Business Council, recommended WCDA reconsider IECC 2003 code to insure the most long-run benefit to citizens.  He suggested the current proposal would not meet the international energy code because of trade-offs between energy efficiency of windows and a building's shell.  He noted that a holistic approach that considers all benefits should be pursued.

 

Directives From Task Force/Discussion of Next Meeting

Senator Jennings suggested the State could challenge people and industry to match funds appropriated by the State to be used for utility relief and he requested LSO staff to consider whether any constitutional concerns arise with such a matching program.

 

Representative Hammons asked LSO staff to prepare a summary of government energy assistance programs such as NOWCAP and LIEAP.

 

After Task Force discussion, Chairman Luthi indicated the next meeting of the Task Force would likely occur in the evening, in Cheyenne, during the week of December 12^th- 16^th, potentially on the 13^th or 15^th given the number of members in Cheyenne for other Committee business.

 

Senator Schiffer asked if legislators could be reimbursed for advertising a public meeting in a Task Force member's home area.  Mr. Gruver indicated he was unaware of precedent for such reimbursement, and Chairman Luthi indicated that such reimbursement may be an issue for Management Council consideration.

 

Meeting Adjournment

There being no further business, Chairman Luthi adjourned the meeting at 6:55 p.m.

 

Respectfully submitted,

 

 

 

Representative Luthi