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December
12, 2005
Capitol
Building
Cheyenne,
Wyoming
Senators Hank Coe, Grant Larson, Jayne Mockler and John
Schiffer;
Representatives Roy Cohee, Ross Diercks, Doug Osborn,
Bryan Pedersen and Wayne Reese.
Senators Bill Hawks and Kathryn Sessions;
Representative Randall Luthi.
Dave Gruver
Please refer to
Appendix 1 to review the Committee Sign-in Sheet for a list of other
individuals who attended the meeting.
All meeting materials and handouts provided to
the Committee by the Legislative Service Office (LSO), public officials,
lobbyists, and the public are referenced in the Meeting Materials Index,
attached to the minutes. These materials are on file at the LSO and
are part of the official record of the meeting.
Chairman Cohee called the meeting to order at 1:10
p.m. The minutes of
the June 17, meeting were approved.
College savings plan
State Treasurer Cynthia Lummis introduced the
issue of the college savings (529) program.
State legislation was initially enacted in 1999 to take advantage of a
federal tax code provision allowing an exemption from income taxation of
earnings on funds within a qualifying 529 plan. Sharon Garland, Deputy State Treasurer, Betsy Anderson, staff
attorney with the State Treasurer's Office and Andrea Feirstein of AKF
Consulting, consultant to the State Treasurer's Office on the 529 plan
addressed the Committee. Since the June Committee meeting, the
Treasurer's Office has been working to transition the plan to a new program
manager since the current program manager would like to terminate management of
the plan. The State Treasurer's Office
has been negotiating with Colorado to act as a program manager, but very
recently that state's program has taken the position it would not be a program
manager, but would be the issuer of securities under the program. Ms. Garland
provided a summary of the provisions of the program as they would exist under
the proposal with Colorado. (Appendix 3).
Representative Osborn questioned the benefit to
Wyoming citizens from operating a program in Wyoming. Ms. Garland stated that the proposal being presented is to delete
the program. She noted the bill would
allow the program to be started in Wyoming if the decision were made to restart
the program. The Committee discussed
the number of account holders (estimated to be about 600 by the Deputy Treasurer)
and the size of the trust in discussing the usefulness of the program to
Wyoming. The State Treasurer noted that
the landscape for the 529 program has changed dramatically in the past few
years, even states with large populations and programs have had trouble
attracting potential program managers. Representative
Pederson noted that participation might be low in Wyoming's plan due to poor
performance, he agreed that there likely will be consolidation of state
programs under a very few number of program managers.
The Committee discussed the current program and
the proposed legislation, 06 LSO 325.W3. (Appendix 4). Senator Mockler moved to sponsor the bill as
a Committee bill in the upcoming session.
Senator Schiffer seconded. Ms.
Anderson explained the bill that it would allow the State to terminate the
current plan, but would retain the ability to restart the plan or to continue
the plan should that be determined to be in the best interests of plan
participants. Ms. Anderson also
explained proposed amendments.
(Appendix 5). LSO staff
explained that the bill had been drafted with the understanding that Colorado
would simply become the new program manager, and the proposed amendments
attempt to address the change in the planned transfer, but there could well be
additional amendments needed which would have to be prepared for the session if
the Committee sponsored the bill at this meeting.
Senator Coe moved the proposed amendments. (Appendix 5) The motion was seconded and passed. LSO staff explained the bill contained highlighted provisions
that should be stricken if the Committee intended to remove itself from the
role called for in current law. Senator
Mockler moved to delete all references to the Committee throughout the law,
except for the definition and annual report requirement. The motion was seconded and passed. The main motion passed 9-0. The bill was designated to start in the
Senate.
Spending policy amounts
LSO staff explained that each year the Committee
is to recommend to the Legislature modifications to the spending policy amounts
for Permanent Wyoming Mineral Trust Fund and Common School Account
earnings. A draft report, following the
State Treasurer's recommendation not to modify the amounts was prepared for and
presented to the Committee. (Appendix
6). The Committee consensus was that
the report reflected the Committee's position.
State Trust Funds
Chairman Cohee explained the background of why
the proposed State trust fund bills were before the Committee. The Committee had been supplied previously
with a summary of an informal Attorney General's opinion regarding state trust
funds, the inviolate nature of certain funds, the general limitation on State
ownership of stocks and exceptions to that general limitation.
The Committee began consideration of draft bills
with 06 LSO 161.W1. (Appendix 7) LSO staff explained that the bill contained
alternatives, one to make clear that all funds in the Permanent Wyoming Mineral
Trust Fund were inviolate, the other providing that only the 1.5% severance tax
required by the Constitution was inviolate.
The Joint Appropriations Committee had voted to sponsor the first
alternative earlier this interim. Senator
Mockler, explained an additional alternative, which would allow the funds
beyond the 1.5% to be withdrawn in an emergency situation. Senator Larson moved that the Committee
should by letter to the Joint Appropriations Committee recommend support of the
alternative making all funds within the PWMTF inviolate. The motion was seconded and passed with Senator
Mockler voting "no."
The Committee next discussed 06 LSO 136.W1. (Appendix 8). Staff explained the bill would allow the statutory creation of
trust funds which would be inviolate under the proposed constitutional
provision. Once the cumulative total of
the trust funds under the constitutional provision reached 10% of the assessed
valuation of the state, no additional funds could be deposited. Representative Osborn moved the Committee
sponsor the bill, but suggested the Committee vote no. The motion failed on a 1-8 vote, with
Senator Coe voting "aye".
LSO staff explained the limitation on investing
state funds in stock under Article 16, Section 6 and the Attorney General's
view of which funds could be invested in stock. Senator Mockler moved 06 LSO 135.W1 (appendix 9) be sponsored as
a Committee bill. The motion was
seconded. LSO staff explained that the
bill would allow the investment of any state funds, under conditions specified
by the Legislature, to be invested in stock.
The motion passed 8-1 with Representative Osborn voting "no". The resolution was designated to start in
the House.
LSO staff explained the limitation on investing
worker's compensation funds in stock and that the Attorney General was of the
opinion that statute prohibited that action, while it was permissible under the
Constitution. Draft bill 06 LSO 46.C1 (appendix
10) would remove the statutory limitation.
Staff explained that the Labor Committee was sponsoring a different
version of the draft which would also allow worker's compensation funds to be
invested in equities, but under different conditions. Senator Schiffer moved the Committee sponsor the draft as a
Committee bill. The motion was seconded
and failed on a 4-5 vote with Senators Coe and Schiffer and Representatives
Cohee and Pedersen voting "aye"; Senators Larson and Mockler and
Representatives Diercks, Osborn and Reese voting "no".
LSO staff explained that 06 LSO 047.C1 (appendix
11) was drafted if the Legislature believed that Constitutionally the worker's
compensation funds could not be invested in stocks. The Committee discussed the need for the bill and the possibility
of confusing the public regarding a myriad of constitutional amendments. The bill died for lack of a motion.
Michael Walden-Newman, with the State Treasurer's
Office, provided information on State investments, including the differences
between equity and fixed investments and yield and total return. (Appendix 12). He also provided information regarding the allocation of
assets. (Appendix 13).
The Committee determined that no further
meetings would be necessary and adjourned.
Respectfully submitted,
Representative Roy
Cohee, Chairman