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December 11th and 12th
State Capitol Room 302
Cheyenne, Wyoming
Senator Robert Peck, Cochairman
Representative Rodney “Pete” Anderson, Cochairman
Senator Pat Aullman
Senator Stan Cooper
Senator Jayne Mockler
Representative Gerald Gay
Representative Mary Meyer Gilmore
Representative Steve Harshman
Representative John Hastert
Representative Mark Semlek
Representative Tom Walsh
Senator Bill Hawks
Representative Kurt Bucholz
Representative David Miller
Mark Quiner, Assistant Director
Don Richards, Senior Research Analyst
Joe Rodriguez, Staff Attorney
Dean Temte, Legislative Analyst
Please refer to
Appendix 1 to review the Committee Sign-in Sheet
for a list of other individuals who attended the meeting.
The Committee met in Cheyenne on the 11th and 12th day of December 2006. On the first day of the meeting the Committee voted to sponsor 07LSO-0123.W3, a bill on state assessed property and 07LSO-0147.W1, a bill revising the amount of the veteran’s property tax exemption. The Committee heard reports from the Department of Revenue regarding the effects of the sales and use tax exemption for coal gasification and liquefaction facilities and the effects of the sales and use tax exemption for manufacturing machinery. The Committee also received reports from the Department of Revenue on the food tax exemption and the property tax relief program and reports from the Department of Family Services on the low income energy assistance program and the from the Department of Health regarding the tax rebate program for the elderly and disabled.
On the second day of the Committee meeting, the Committee agreed to sponsor 07LSO-0151.W3, Fuel tax collection and 07LSO-0441.W2, Sales and use tax-telecommunications. The Committee also agreed to sponsor 07LSO-0150.C1, Fuel tax increase after adopting 07LSO-0177.L1, Vehicle registration fees and fuel tax increase, as substitute language.
Cochairman Anderson called the meeting to order at 8:30 a.m. (Refer to Appendix 2 to review the Committee meeting agenda.) Cochairman Anderson noted that Representatives-Elect Ken Esquibel, Mike Madden and Dave Zwonitzer – all newly elected and Revenue Committee-appointed legislators - were in attendance.
Senator Mockler provided an update of the activities of the State Assessed Property Task Force. Senator Mockler noted that the Task Force met in November and determined that among the major issues is assessing telecommunications so as not to give cable companies a competitive advantage. In addressing this issue, the Task Force looked at four options, and Senator Mockler reported that the Task Force is recommending 07LSO-0123.W3 to the Joint Revenue Interim Committee. (See Appendix 3.) Senator Mockler indicated that the proposed draft would require assessment of all telecommunications companies at 9.5 percent and is estimated to result in a cost of approximately $800,000 to the state.
Wade Hall, Ad Valorem Tax Division Administrator, Department of Revenue, addressed the Committee and noted that telecommunications services are currently being mixed by cable providers and are being assessed at 11.5 percent and 9.5 percent, depending upon the services they provide. Mr. Hall indicated that the Department could administer the revised assessment rate and state assessment to provide consistency. Mr. Hall did, however, suggest that the effective date of January 1, 2007 may cause some difficulty. Mr. Hall indicated the Department would prefer a January 1, 2008 effective date.
Liz Zerga, Altell Wireless, addressed the Committee and suggested Altell Wireless is supportive of the proposed draft of the Task Force. Ms. Zerga indicated that with the crossover of services and products the differing assessment rates prove difficult. She added that the telecommunications industry initially wanted to be taxed at the local level, although now believe a central assessment would also be fair. Finally, she noted that the burden placed on the infrastructure of a community by the telecommunications industry is not as great as that placed on the community by other industries.
Erin Taylor, Wyoming Taxpayers Association, addressed the Committee and indicated that the Wyoming Taxpayers Association supports the proposed draft. Ms. Taylor added that it might be beneficial to look at the assessment rates of other companies.
After receiving testimony, the Committee discussed the proposed draft. Representative Walsh moved the bill and the motion received a second. Senator Cooper moved to amend the effective date of the bill to January 1, 2008. The motion was seconded, and after a discussion of the amendment, it passed.
After further discussion, the motion for “do pass” carried. (See Appendix 4 for a record of the roll call vote.)
Representative Walsh presented 07LSO-0147.W1, Veteran's property tax exemption, to the Committee. (See Appendix 5 for a copy of the proposed draft.)
Director Ed Schmidt, Department of Revenue, addressed the Committee and indicated that he does not think complete records exist as to who has claimed the veterans' exemption previously, who has exhausted their current exemption, and who is eligible to come back into the program.
Wade Hall, Department of Revenue, addressed the Committee and presented an estimate of the fiscal impact of the proposed legislation. (See Appendix 6.) He noted that under the proposal, most veterans will not exhaust the exemption amount of $15,000. Mr. Hall explained his fiscal estimates to the Committee and noted that the state reimburses the counties for revenue lost, or forgone, as a result of veterans claiming the exemption.
Brenda Arnold, Laramie County Assessor, noted that she would like to see the exemption for real property applied only to the primary residence.
Representative Walsh moved “do pass” on 07LSO-0147.W1, and the motion received a second.
Representative Walsh moved to amend on page 4, line 13 after “that the exemption” insert “for real property”. The motion was seconded, and after discussion, the amendment passed.
Senator Mockler moved to amend the bill on page 3, line 21 by deleting "$2,000.00" and inserting "$3,000.00" and to make that amended figure consistent throughout the entire bill. The motion was seconded, and after discussion the amendment passed.
Senator Mockler moved to amend the bill by allowing the veterans who had previously used the exemption to be eligible for the new limits. The motion was seconded. The motion would add a non codified section to the end of the bill addressing the issue, similar to the following: "The provisions of this act, including the increased maximum amounts provided for the property tax exemption, shall apply to any veteran who has previously applied for and received a property tax exemption under W.S. 39-13-105. Any amount of property tax exemption previously received by any veteran prior to the effective date of this act shall be deducted from the maximum amount authorized by this act." After the discussion the motion passed.
After discussion on the bill the motion for “do pass” made by Representative Walsh carried. (See Appendix 7 for a record of the roll call vote.)
Dan Noble, Excise Tax Administrator, Department of Revenue, addressed the Committee and provided a report on the effects of the sales and use tax exemption for coal gasification and liquefaction facilities. (See Appendix 8.) In sum, Mr. Noble reported that there have been no impacts from this provision and suggested that the Department recommends that the Department of Employment be joined as a reporting party.
Marion Loomis of the Wyoming Mining Association addressed the Committee and noted that there is really no activity in the field right now in Wyoming, but there are some proposals on the drawing board. Mr. Loomis added that there are a number of states that are presenting tremendous incentives for the location of coal gasification and liquefaction plants.
Bob Tarantola, Rocky Mountain Power, addressed the Committee. He reported that Mid America is looking at the feasibility of building a plant in the Lake Desmet area and suggested that perhaps there will be some additions to the Jim Bridger power plant which may be an integrated gasification unit.
Dan Noble, Department of Revenue, addressed the Committee and presented a report on the effects of the sales and use tax exemption for manufacturing machinery. Mr. Noble indicated that the Department sent out a manufacturer’s survey and the data from the survey gives the Department an idea of the numbers of people employed in the area and the average wages. (See Appendix 9 for the results of the survey.)
Wade Hall, Department of Revenue, addressed the Committee regarding the property tax relief program. (See Appendix 10.) Mr. Hall indicated that there were 660 applications for property tax relief filed in tax year 2005; 566 of those applications were approved; and 94 were denied. The average rebate was $236.42. Mr. Hall suggested that the income test is the most restrictive eligibility criteria of the program.
Jeff Dockter, Department of Family Services, addressed the Committee regarding the low-income energy assistance program. (See Appendix 11.) The average benefit for fiscal year 2006 was $565, according to Mr. Dockter. Mr. Dockter concluded by indicating that one way to improve the program would be to increase the percentage of the federal poverty level needed to qualify for the program.
Bob Peck, Department of Health, addressed the Committee regarding the tax rebate program for the elderly and disabled. (See Appendix 12.) Mr. Peck noted that the Department estimates it will receive 3,800 applications in FY07 and that the Department will pay over $2.4 million in rebates. He also noted that due to the legislative revisions to the program during the 2006 Session, a greater percentage of applications will qualify for a rebate.
Dan Noble, Department of Revenue, addressed the Committee regarding the food tax exemption and noted that there is an inability to determine the actual fiscal impact on local governments. (See Appendix 13 for a copy of his report.) He noted that the Department is basing the reimbursements to the local governments on historical information, and the Department is continuing efforts to educate vendors. In conclusion, Mr. Noble indicated that the Department needs two additional FTEs if the exemption is to be continued.
Dean Temte, LSO, addressed the Committee to discuss recent state revenue estimates. (See Appendices 14, 15 and 16.) Mr. Temte noted that the projected increase over anticipated revenues as of the October CREG meeting is about $707.9 million. Mr. Temte noted that JAC action to date would add approximately three hundred million dollars back onto the table from the Governor's original budget recommendations. Mr. Temte also emphasized the impact the price of natural gas has on the state's fiscal profile. Specifically, he stated that page 7 in Appendix 14 shows the price of gas used in the October CREG projections - the price of $5.75 was used for calendar years 2006 through 2012.
Dan Noble, Excise Tax Administrator, Department of Revenue, addressed the Committee and presented the Committee with bill draft 07LSO-0441.W2, Sales and use tax - telecommunications. (See Appendix 17.) Mr. Noble explained the draft to the Committee, noting that it includes a number of definitional changes regarding telecommunications in regard to sales and use tax and also deals with the bundling of services. After discussion, the Committee decided to lay the bill over to the second day of the meeting.
Cochairman Anderson called the meeting to order at 8:30 a.m.
Sharon Gostovich and Jim O’Connor of the Department of Transportation walked the Committee through a draft bill, 07LSO-0151.W3, Fuel tax collection. (See Appendix 18.)
Roy Turner, Wyoming Petroleum Marketers Association, addressed the Committee in support of the draft legislation on fuel tax collection. He also raised a question about the definition of biodiesel products made from coal, but urged the Committee to carry the bill.
Senator Cooper moved “do pass” on 07LSO-0151.W3. The motion was seconded, and after discussion, the motion passed. (See Appendix 19 for a record of the roll call vote.)
Representative Anderson presented draft legislation requested by the Committee at its previous meeting which would increase the tax on fuel by five cents per gallon: 07LSO-0150.C1, Fuel tax increase. (See Appendix 20.) In addition, Dean Temte, LSO, provided the Committee with three handouts offering information relating to the fuel taxes in other states, and the average historical price of gasoline in Wyoming and surrounding states, and the spot fuel price in all states. (See Appendices 21, 22, and 23.)
Kevin Hibbard and Del McOmie of the Wyoming Department of Transportation addressed the Committee and gave an extensive presentation regarding the Department of Transportation budget. (See Appendix 31.) Mr. Hibbard discussed federal appropriations as well as other revenue sources, e.g., severance taxes, license fees, fuel taxes, etc. Responding to questions of the Committee, Mr. Hibbard noted that on a biennial basis, the Department is looking at a shortfall of $500 million and stated that one of the challenges faced by the Department is that their chief revenue streams are flat. Mr. McOmie also discussed a freight study that had been prepared on I-80. He stated that to maintain I-80 will cost between $6.4 billion and $8.8 billion dollars over the next 30 years.
Sheila Foertsch, Wyoming Trucking Association, addressed the Committee and indicated that her organization is not specifically opposed to the draft legislation increasing fuel taxes but that they have not taken a position at this time.
Tom Jones, National Federation of Independent Businesses, addressed the Committee and stated that his organization has not taken a position at this time.
Roy Turner, Wyoming Petroleum Marketers Association, addressed the Committee and noted that his organization has supported fuel tax increases in the past if the funds were not diverted to other users.
Jonathan Downing, Wyoming Contractors Association, addressed the Committee and indicated that his organization is supportive of the draft legislation.
Ken Hamilton, Wyoming Farm Bureau Federation, addressed the Committee and stated his organization has a long standing opposition to raising taxes. That being said, he indicated that they would marginally oppose the draft bill and are pleased that the agriculture exemption would remain intact.
Delbert Eitel, Eitel Trucking, addressed the Committee and indicated that he was in favor of the bill. Mr. Eitel would not term this as a fuel tax increase but more of a user fee.
Senator Peck moved "do pass" on 07LSO-0150.C1. The motion was seconded.
Senator Mockler moved to amend the bill by substituting 07LSO-0177.L1 (Appendix 24) in place of 07LSO-0150.C1. Senator Mockler then presented 07LSO-0177.L1 to the Committee and requested that LSO change the catch title of the bill to "Vehicle registration fee decrease." She indicated that her bill would raise fuel taxes but provide a similar reduction in motor vehicle registration fees.
Don Richards, LSO, provided the Committee with a draft fiscal impact analysis of Senator Mockler's proposal. (See Appendix 25.)
Sheila Foertsch, Wyoming Trucking Association, provided the Committee with additional information on national motor carrier fees. (See Appendix 26 and Appendix 27.)
After further discussion by the Committee the motion to amend carried. Subsequently, the motion of "do pass" on the bill carried. (See Appendix 28 for a record of the roll call vote.)
Dan Noble, Department Revenue, addressed the Committee regarding the telecommunications definitions proposed in 07LSO-0441.W2, Sales and use tax – telecommunications, presented during the previous day's meeting. (Appendix 17) Mr. Noble stated that definitions used in the bill are fairly specific, but they are used in the industry. The other major component of the bill is a bundling provision, according to Mr. Noble. He indicated that if the majority of the item is non taxable then the entire item will be non taxable. Likewise, if the majority of the item is taxable, it will be deemed taxable, according to Mr. Noble.
Mike Mosier, Wyoming Retail Merchants Association, addressed the Committee and expressed one concern that the new language in the bill could cast a wide net in the treatment of retailers.
Dave Picard, Verizon Wireless and AT&T, addressed the Committee and indicated that his clients agree with the intent of the bill and at this time would support the bill but may be bringing some amendments at a later date. He indicated that there had not been sufficient time to fully review the legislation and its potential consequences.
Representative Hastert moved "do pass" on the bill. The motion was seconded, and after discussions on the bill, the motion for "do pass" carried. (See Appendix 29 for a record of the roll call vote.)
There was no additional public comment
There being no further business Cochairman Anderson adjourned the meeting at 11:00 a.m.
Respectfully submitted,
Representative Rodney "Pete" Anderson, Cochairman