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December 8, 2004
Room 302, Capitol Building
Cheyenne, Wyoming
Chair Grant Larson
Vice-chair Randall Luthi
Senator Henry “Hank” Coe
Senator Jayne Mockler
Representative Roy Cohee
Representative Fred Parady
Representative Ed Prosser
Representative Wayne Reese
Representative Jane Warren
Senator Bill Hawks
Senator April Brimmer Kunz
Senator Mike Massie
Dave Gruver
Please refer to
Appendix 1 to review the Committee Sign-in Sheet
for a list of other individuals who attended the meeting.
Chairman Larson called the meeting to order at 1:45 p.m. Minutes from the October meeting were approved.
The agenda for the meeting is attached as appendix 2.
Legislatively designated investments.
LSO staff explained 05 LSO 234.W1 (appendix 3). The bill would repeal the ability to invest in clean coal technology. The Legislature had previously prohibited additional investments in clean coal technology. Past investments have now been repaid. Thus the bill can be viewed as a clean-up of obsolete language. Senator Coe moved the draft bill be sponsored as a Committee bill. Representative Parady seconded. The motion passed 8-0. (Senators Hawks, Kunz and Massie and Representative Cohee were absent). Chairman Larson designated the bill to start in the Senate.
University securities law.
LSO staff briefly explained 05 LSO 219.W4 (appendix 4). The bill would modernize and liberalize the University Securities Law. Rick Miller, University of Wyoming, explained the bill in more detail, providing a written outline of the major aspects of the bill. (Appendix 5). Senator Larson questioned why the University would issue variable interest bonds when it had a fixed income. Beth Harden, UW, explained that the University would issue variable rate bonds in order to structure the bonds to reflect the life of the underlying asset and to reduce capital cost of the bonds. Representative Parady moved the draft bill be sponsored as a Committee bill. Representative Warren seconded. The motion passed 8-0. (Senators Hawks, Kunz and Massie and Representative Cohee were absent). Chairman Larson designated the bill to start in the House.
Prudent investor rule – state investments.
LSO staff explained 05 LSO 235.W3 (appendix 6). The bill would adopt the prudent investor rule for state investments. The Uniform Prudent Investor Act would be applicable to state investments under the draft, unlike under current law. It would also allow the state to invest in any investment approved by the state loan and investment board. The bill also addresses and modifies the qualifications and requirements for state investment advisors and investment managers. Treasurer Lummis explained the bill in more detail. She provided proposed amendments to the bill. (Appendix 7).
Representative Parady moved the draft bill be sponsored as a Committee bill. Representative Luthi seconded. Representative Parady moved the proposed amendments to the draft suggested by the Treasurer. That motion passed. The main motion passed 8-0. (Senators Hawks, Kunz and Massie and Representative Cohee were absent). Chairman Larson designated the bill to start in the House.
Prudent investor rule for hospitals.
LSO staff explained the draft bill would authorize special hospital district boards and county hospital boards to invest in additional investments under the prudent investor standard. (05 LSO 236.W3. appendix 8). Mr. Kidd and Mr. Perdue, Wyoming Hospital Association, addressed the Committee. Committee members questioned why the bill should not be applied to all special district investments and whether the hospital boards or other boards have sufficient financial investment background to authorize investments under the prudent investor standard. Mr. Kidd stated that the bill would more likely be used by larger hospitals who have larger reserves and investment advisers to provide investment advice. The Committee discussed the use of investment advisors by those boards. Vice-chairman Luthi moved the draft be sponsored as a Committee bill. Representative Parady seconded.
Representative Parady moved that there be a reporting requirement inserted in the bill. Senator Mockler seconded. The Committee discussed the reporting requirement and the motion was withdrawn. The Committee discussed requiring the use of investment advisors.
The motion passed 8-0. (Senators Hawks, Kunz and Massie and Representative Cohee were absent). Chairman Larson designated the bill to start in the Senate.
State Building Commission
LSO staff explained the three versions of bill drafts regarding the State Building Commission. LSO 231.W1 places the construction management section manager under the State Building Commission, rather than the department of administration and information. (Appendix 9) That person would act as secretary to the State Building Commission. The State Building Commission's recommendations regarding capital construction are required to be in the Governor's budget under the draft. LSO 232.W1 would repeal the State Building Commission and place its functions under the Governor's office. (Appendix 10) LSO 233.W2 would move the entire construction management section from the department of administration and information to the State Building Commission. (Appendix 11) The State Building Commission would take on all functions of the general services division which are handled by the construction management section. Staff explained that the concept did not lend itself completely to a clear demarcation of functions since many of those functions are intertwined.
State Superintendent Blankenship expressed support for 233.W2, then a preference for 231.W1 and finally 232.W1. Any of the three would be preferable to the current situation in his view.
Governor's Chief of Staff Boswell stated that the Governor's Office was opposed to either of the versions moving the positions under administration and information to the State Building Commission. The Governor had no position at this time on the repeal of the State Building Commission.
Rich Cathcart, section manager for construction management under the general services division of department of administration and information testified that his functions were much broader than construction management. He was in charge of major maintenance, repair and other replacement of facilities for state agencies. His section worked closely with sections of the department which were in charge of computer technology, minor repair and insurance of buildings. Mr. Cathcart explained that the State Building Commission's recommendations were this year, for the first time, being presented to the Appropriations Committee.
Representative Parady moved the Committee sponsor 233.W2 as a Committee bill. The motion was seconded by Representative Prosser. The Committee discussed the motion. The motion failed 2-7 with Representatives Parady and Prosser voting "aye". Chair Larson, Vice-chair Luthi, Senators Coe and Mockler and Representatives Cohee, Reese and Warren voted "no". (Senators Hawks, Kunz and Massie were absent).
Representative Parady moved the Committee sponsor 231.W1 as a Committee bill. The motion was seconded by Representative Luthi. The Committee discussed the motion. Representative Luthi moved to delete page 4-lines 1 through 3, thereby choosing the first alternative presented in the draft. The motion passed. The main motion passed as amended 6-3. Chair Larson, Vice-chair Luthi, Senator Coe and Representatives Cohee, Parady and Prosser voting "aye". Senator Mockler and Representatives Reese and Warren voted "no". (Senators Hawks, Kunz and Massie were absent). Chairman Larson designated the bill to start in the House.
There was no motion on draft 232.W1.
Treasurer Lummis addressed the most recent investment performance report provided earlier to the Committee.
There being no further business, Chairman Larson adjourned the meeting at 3:30 p.m.
Respectfully submitted,
Senator Grant Larson, Chairman