Committee Meeting Information

June 23 & 24, 2008

Teton County Administration Building

Jackson, Wyoming

 

Committee Members Present

Senator Cale Case, Co-Chairman

Representative Pete Illoway, Co-Chairman

Senator Ken Decaria

Senator Stan Cooper

Senator Grant Larson

Representative Kermit Brown

Representative Mary Gilmore

Representative Marty Martin

Representative Saundra Meyer

Representative Tim Stubson

Representative Dan Zwonitzer

 

committee Members Absent

Senator Charles Scott

Representative David Miller

Representative Lorraine Quarberg

 

Legislative Service Office Staff

Lynda Cook, Staff Attorney

Alex Kean, Research Associate

 

Others Present at Meeting

Representative Keith Gingery

Representative Pete Jorgensen

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

 

Joint Corporations Interim Committee Meeting Summary (June 23 & 24, 2008)

 

The Joint Corporations, Elections and Political Subdivisions Interim Committee met in Jackson to consider legislation revising the state corporations statutes, legislation providing for cluster developments in place of subdivisions, legislation to allow for unification of city and county governments, legislation to ensure accreditation of the insurance department, legislation amending the coroner's statutes and legislation providing for mobility across state lines for certified public accountants. 

 

Call To Order

Co-Chairman Cale Case called the meeting to order at 8:00 am.  The following sections summarize the Committee proceedings by topic.   Please see the Agenda for details. (Appendix 2).

 

approval of minutes

The committee approved the minutes of the April, 2008 meeting. 

 

Unification of city and county governments

 

Jan Friedlund, Teton County administrator, testified regarding consolidation of city and county government.  Bob McLaurin, Jackson Town Administrator also testified.

 

Ms. Friedlund provided a handout that discusses consolidation of governments.  (Appendix 3)  The handout discusses how consolidation needs to be based on providing a unified vision rather than just focusing on efficiency.  Ms. Friedlund stated that there are 107 unified governments in the country.    She testified that the motive of Teton County is to provide a unified vision – the ability to have a single planning commission for instance.

 

Senator Case noted that the clerk of district court is a constitutional office and therefore can’t be changed by statute.

 

Ms. Friedlund testified that in Teton County there is already a great deal of overlap in the functions of the city and town.  She noted that it is not a political issue but one of good governance.  She suggested that the consolidation of Albuquerque-Bernalio County is a good example of how the process can be implemented.

 

The committee discussed how the finances would be distributed.

 

Ms. Friedlund and Mr. McLaurin suggested a process whereby an election would authorize a charter commission that would take 2-3 years to address how the specifics of agencies, organization and finances would be distributed.  Then the final plan would be voted on again by the people.

 

Mr. McLaurin noted that in the Albuquerque example the second election did not pass. 

 

The legislative proposal would be broad and generic allowing the second election to work out the details of the consolidation.  It was noted that there were several bills in the past to address consolidation but none have ever passed.

 

There was discussion about what services the town and county could not already consolidate through joint powers boards.  Ms. Friedlund discussed a time when the county and city were both without planning directors.  At that time they felt they should not consolidate that office.  They felt the problem was in having a single planner serving two masters - both a city and county government.  She stated that the goal with this legislation is to have a single governing board for the director to be answerable to. 

 

Senator Larson noted that a consolidated government would help with the animosity that is created when there are people living in the county who own shops or property in the city but do not have the ability to vote on city issues. 

 

The committee noted that there are other counties in the state that may take advantage of consolidation.  The issue was raised as to whether property taxes would be affected because currently county residents generally pay less than city residents.  Mr. McLaurin stated that those details would be worked out in the charter commission and would be voted on in the details.  Senator Cooper noted that the legislature would have to deal with the budgetary process and the distribution of revenues.  Mr. McLaurin testified that he hoped the unified government would receive the same revenues as the two separate governments.  The committee recognized that there may be some change in the distribution statutes that would need to be made to accommodate this.  Senator Case suggested using a generic law.  There will be many instances in the tax code that would have to be specifically addressed.  One consideration is whether a unified government would have the authority and responsibility to impose certain local taxes in order to receive distributions.

 

Andy Schwartz, chairman, Teton County Commission and Mark Barron, Mayor of Jackson testified in support of the proposal.  Mr. Barron agreed that the devil is in the details but he sees this as a great opportunity at least for Teton County because the city and county work so well together.   Mr. Barron discussed the many areas where the town and county already share responsibilities including fire departments, EMS, street cleaning, recycling and dispatch. 

 

Mr. Schwartz noted that the city and county use joint powers boards as efficiently as possible.  He stated that these work because of strong personal relationships.  He testified that the problem arises politically when there is competition for resources.  That kind of competition would be minimized with a single government with a single vision for the entire area.  He provided the example of the different priorities between the town and the county – the town priority is to maintain a commercial core whereas the county leans toward preservation of open space.  He discussed how county government is limited in its ability to enact ordinances.   

 

There was committee discussion about how to ensure that small rural county communities have a voice in a unified government.  Mr. Schwartz stated that would be looked at through how the unified government was divided into districts. 

 

There was discussion about how there has been resistance to allowing counties to have more authority.   There was also discussion about how to deal with multiple municipal governments within a county and how that would be addressed.   It was noted that the government would need to have the stability of a county government with the powers of a city government.  That would ensure that separate municipalities couldn’t be created within the county and defeat the purpose of the unification.

 

Representatives Gingery and Jorgenson testified.  Rep. Gingery described the process in Albuquerque.  The legislature first allows for a vote on whether a charter commission should be created.  Then the charter commission looks at where state law presented a roadblock to what they wanted to accomplish and made recommendation to the legislature to change those laws.  Finally, once the roadblocks are removed the plan is voted on.

 

Rep. Gingery discussed the various bills that were considered in the past.  He asked the committee to just focus on the unification aspect of the previous bills rather than a cafeteria plan for county governments.  He noted that unification is the proper term because the powers of both city and county would be unified rather than consolidated and pared down. 

 

There was discussion about how municipal officers have limited jurisdiction and sheriffs have statewide jurisdiction.  Rep. Gingery suggested that the unified government would need to have ordinance power and the resulting law enforcement agency would have to have the authority to enforce the ordinances throughout the total area.  Mr. Gingery noted that the current LSO staff drafted a good bill in 2005 as a draft to start with.

 

Rep. Brown suggested that a bill should lay out all the areas that the planning commission would have to address in order to create the government.  The planning commission would then have to come back to the legislature with areas of statute that would need to be amended to allow for the recommendations. 

 

Rep. Jorgenson testified in support of the concept.  He noted that statutory political boundaries are not necessarily the best way to govern.  He noted that the key to making this work is to create one governing board.   He discussed how cities and towns are funded through the appropriations committee.  He noted that the agenda should be changed to show that this discussion is about consolidation, not coordination. 

 

Joe Evans, County Commissioner's Association, testified that the association does not have a position on the topic.  He testified about the history of this topic, noting that there are very few counties where this might fit.  He cautioned the committee to ensure that it needs to be optional and there needs to be a vote of the people.  He noted that many people enjoy living in the county and there will likely be resistance to giving counties more authority.  He testified that while there might not be much savings in unification, there will be political changes.  He suggested that the small towns in a county will need to be considered and if they don’t want to join the new government they should not be forced to join.

 

Bob Lenz, Jackson Town Council, testified in support of the concept.  He testified that he believes people in the county should have the tool to unify with a town if they so desire.  At least in Teton County, people in the county do want to have a voice in the town, but they may not feel that way if the town increases a property tax.  He noted that it makes sense to have the legislature enact legislation to remove roadblocks but not to ratify the plan.  He stated that unification would solve the distribution of sales tax issue they are experiencing in Teton County where the town generates most of the sales tax, but the county receives more than half of the distribution.

 

The issue was raised about whether the final vote would have to be a majority of each entity or a majority of the total voters in the affected area.

 

Jim Whalen, Partnership for Wyoming’s Future, provided a study by the
Sonoran Institute regarding the growth impacts in the Teton region of Wyoming and Idaho.  (Appendix 4).  The Sonoran Institute has been involved in bringing growth issues forth on a community level.  He testified in support of the concept of encouraging cities and counties to communicate across the board on growth issues.

 

Sherry Dagle, Teton County Clerk, testified that she believes that the majority of county clerks are in support of a looking at unification but they have not discussed it as an issue in the recent past.   She suggested that Wyoming communities are evolving and the law needs to reflect that evolution.

 

The committee asked LSO to draft legislation that would allow for counties to have a vote to start a process to create a charter commission.  The bill should address make up of commission, what the commission would address and a timeline for implementation.  

 

The bill should address the following:

 

1.  Enabling legislation permitting the formation of a charter commission

2.  Formation of the commission

3.  Makeup of the commission

4.  Statutory changes generic to consolidated government i.e. consolidated government has combined powers now held by cities and by counties

5.  List of areas the commission must address; planned unit development analogy

6.  Authority for the involved entities to fund operation of the charter commission

7.  Transition provisions

8.  Time period for getting their work done

9.  Election to create the charter commission - Who votes on this?  Each entity or a consolidated vote?

10.  Charter commission meets and prepares a plan

11.  Plan as approved by the legislature goes to the voters for approval - Should it require a majority of each entity or a majority vote of the consolidated area?

 

Rep. Gingery requested a two-step process that allows the vote and gives the unified government the authority of both, and then the commission comes back with requests for changes to handle roadblocks.

 

There was discussion about when the statutory changes allowing for the unification would occur.  Rep. Jorgenson suggested that the committee consider the higher level issues before the local commissions waste time and money.  The committee noted that the bill will not have an appropriation.

 

Staff was directed to incorporate the tenets of the 2005 consolidation bill into the draft, setting out some of the authority that a unified government would have.    Chairman Case suggested that the members of the charter commissions be elected.  LSO is to work with Representatives Gingery and Jorgenson.

 

Subdivisions

 

09 LSO 0042.W1 – Subdivisions-cluster developments.

 

Jim Magagna, Stockgrowers Association, testified that the bill is coming along nicely.  He testified that he would like to see the preservation of open space to provide for preservation of lands even if the lands are not contiguous.  The committee discussed how the bill is designed to provide for an exception to normal subdivision, which entails subdividing a single parcel of property.

 

Jim Whalen, Sonoran Institute, testified regarding the bill.  He expressed concern that there might be situations where the cluster development might not actually protect wildlife and enhance rural character of the lands. 

 

Joe Evans, County Commissioner's Association, testified in support of the concept.  He introduced Jonathan Tiegert, Lincoln County senior planner.  Mr. Tiegert suggested that the bill should be clear that open space does not include roads.

 

Lori Urbigkit, Wyo. Association of Realtors, testified in support of the bill.  She argued that open space should not include lawns and yards.  She would like to see the fee on page 6-line 12 be changed to reflect costs.  She agreed that there has to be some protection for the landowners when the term of the open space expires.

 

There was discussion about how to protect the land from development after the term expires.  There was also discussion about whether the open space will be considered agricultural land for tax purposes.

 

The bill was moved and seconded.

 

The bill was amended (Appendix 5).

 

John Tiegert explained the difference between a density bonus and a parcel bonus.  He stated that the two are interchangeable in application.

 

There was discussion about whether it was wise to limit the application to the building of single family residential units.  Ms. Urbigkit offered to provide a common definition of “residential unit”. 

 

Kevin Connelly, Lincoln County commissioner, suggested that there should be a requirement that the open space designation be put on the plat.

 

The following language was approved:  "Open space as designated under this article shall be considered agricultural land for tax purposes if it meets the requirements of 39-13-103(b)(x).  Lots created under this article for residential purposes shall be considered residential property for purposes of ad valorem taxation."

 

The committee approved requiring a statement be recorded on the plat indicating the open space.

 

The committee moved to table the bill until the next meeting when amendments have been incorporated.

 

09 LSO 0043.W1-Subdivisions-requirements.

 

Rep. Brown explained the bill.  The bill clarifies when a person can pre-sell lots and provides a requirement that subdivisions enact a homeowners association or similar entity that would be responsible for the maintenance and infrastructure.  When there is no provision for infrastructure and maintenance, the purchasers often come to the county commissioners asking for help.  This bill gives the county a tool for making those persons responsible for their own infrastructure development.

 

Lori Urbigkit, Wyo. Association of Realtors, testified in support of the bill.  She stated that bill does a good job of limiting what it is the county commissioners can require of the association agreements.

 

Jim Magagna, Wyoming Stockgrower's Association, testified in support of the bill, although he suggested that this exemption should always apply to the sale of 5 lots or less.

 

Joe Evans, County Commissioners Association, expressed concern about the change in the definition of “sell”.   He is concerned that allowing the presale of lots puts a great deal of pressure on the county commissioners to approve a subdivision if many of the lots are presold.  He also expressed concern that commissioners do not get involved in enforcing homeowners associations.  Finally, he expressed concern about requiring commissioners to set fees based on costs because that would change on a year by year basis.

 

Kent Connelly, Lincoln County commissioner, testified that county commissioners do have the authority to require an association but there is no consistent requirement among counties.  Although he noted the provision they use for that authority is not specific to homeowners associations.

 

Senator Larson noted that some financing requires evidence of a certain number of pre-sales to provide a loan.  Rep. Brown explained that this bill would facilitate this by allowing a subdivider to get those pre-sale commitments prior to the subdivision permit being issued.

 

The committee discussed whether the bill was what was necessary to solve the problems they want addressed.  Rep. Brown defended the bill by explaining that while homeowners associations can be created, it takes unanimous vote.  He stated that the only other option is to use majority vote to create a special improvement district which involves collection of taxes and substantial government involvement.

 

The bill was amended.  (Appendix 6).

 

The bill was tabled until the next meeting.

 

Coroners

 

09 LSO 0041.W1-Coroners-archeological burials.

 

Ed McAusland, Wyoming Coroner’s association, and Mark Miller, State Archeologist, testified in support of the bill.    Mr. McAusland testified that they are uncomfortable with the use of the term “inadvertently” on page 3-line 6.

 

Senator Case expressed that he believes it is morally wrong to defile a grave no matter how old it is.  He wants clarification that the coroner is the only person who can exhume, the exhumation shall only be in the public interest, and the coroner shall respect any religious beliefs apparent from the condition of the grave.

 

The bill was moved and seconded.

 

The committee approved insertion of the following language:  “(d)  Human remains shall be treated with respect and dignity with consideration of religious spiritual and ethnic evidence present at the burial.”

 

The bill was amended (Appendix 7) and tabled to the next meeting.

 

The meeting was adjourned for the evening.

 

Senator Case asked that the committee receive a copy of the committee's campaign finance bill from last legislative session with Senator Decaria’s proposed amendment. The committee will have a short discussion on the bill at the Sept 2 & 3 meeting. 

 

Model Corporations Act  (Appendix 8)

 

Walter Eggers, Holland and Hart, explained the process by which the working group has proceeded.  The working group has met six times.  Individual invitations were sent to every member of the business section of the Wyoming bar.  Approximately 6 or 7 attorneys have attended every meeting with additional participation from other attorneys on particular articles.  The group intends to present and advertise this work at the bar association meeting in Casper in September.  On the phone were Tom Long, Clint Langer and Bill Bagley.

 

Mr. Eggers presented the proposed changes to Articles 1 through 4.  Many of the changes to Articles 1 through 4 allow for electronic transmission of documents.  He noted that the working group did not recommend inclusion of a provision in the model act that would require a merit based review of filed documents by the secretary of state.  He also noted that the group recommended adopting all but one of the model act definitions.  He stated that updating the definitions section is key to making the case law useful to interpreting the state statutes.  There was discussion about the recommendation to not include the merit review by the secretary of state and whether that furthers the goal of cracking down on fraud.  Dr. Arp, Deputy Secretary of State, explained that the focus right now in cracking down is getting contact names to track down bad actors rather than reviewing every submission for defects.  Dr. Arp also explained how the Secretary of State is working with the state of Colorado to ascertain the cost of implementing an electronic filing program.

 

The committee moved to incorporate the working groups recommendations for Article 1.

 

The working did not make any recommendation for changes in Articles 2 and 3.  The committee moved to approve the working groups recommendation for those articles with the minor change of deleting “manually” from 17-16-202(d) and 17-16-205(b).

 

Mr. Eggers discussed the changes recommended for Article 4, Name.  The model act would provide extensive changes to this article.  The working recommended not adopting the model act, but making an addition to the statutory language that would allow a corporation to apply for a name that is already being used by a current corporation that the new corporation is intending to merge or consolidate with.   Dr. Arp testified  that the Secretary of State agrees with this language but they would like some definition of how long the temporary use could occur.   There was discussion about changes to 17-16-401(f)

 

The committee proposed to include language in (f) that would provide “To the extent the secretary of state determines the words or abbreviations to be deceptively similar”. 
The committee voted not to include this because it changes the standard, opens the state up for liability and limits the protections available to the public.  There was also discussion about the consensual use of similar names.

 

The working group suggested providing for administrative dissolution after the temporary time provided in the new 17-16-401(d)(iv).   The language approved states:  "Following the expiration of which the proposed user corporation’s existence will be administratively dissolved.”

 

The committee moved to incorporate the recommended changes of the working group to Article 4.

 

Article 5 was purposely not addressed by the working group.

 

Article 6 was presented by Clint Langer.  The big change is to allow for series of shares within a class.  The new language also provides for issuance of shares with shareholder protection that is being moved from article 11.  In W.S. 17-16-624 the new model language clearly states that corporations can develop shareholder rights plans that have different rights.  The statute provides for options with restriction.  There was discussion about how there is no such thing as treasury stock under the model act or Wyoming statutes.

 

The committee moved to incorporate the working group’s recommended changes to Article 6.

 

Dale Cottam, Holland & Hart, presented the proposed changes to Article 11.  He recognized Whitney Marquort, third year law student, for her assistance in the working group’s progress.   He noted that many of the changes in this article deal with how the article is applicable to various business entities.  Many of the changes are just wording changes to facilitate the broader applicability of the article.  The recommended changes provide for merger with consideration other than shares and even without consideration if approved by the merging shareholders.  The changes also provide more specificity about how the process of merger and share exchange occur.  Tom Long noted that the changes allow for a vote of less than a majority, i.e. majority of a quorum, for a merger or share exchange.

 

The committee moved to incorporate the working groups recommended changes to Article 11.

 

Dale Cottam presented Article 16 – Records and reports.  The changes are minor semantic changes and provision for electronic filing.  Other changes include language allowing for attorney’s fees and expenses.  There are two new provisions resolving whether directors have a right to inspection of records and exceptions to the notice requirements which are a codification of case law that has developed since the last revision.  The other new section provides a method for dealing with instances where shareholders cannot be reached.  This change would align the state statutes with federal proxy rules.  The final change is to state that the payment of tax is based on net assets.  Currently it is unclear whether assets are net or gross.

 

The committee moved to incorporate the working group’s recommended changes to Article 16.

 

Bill Bagley presented the working group’s changes to Article 15.  The requirement to list assets in Wyoming at the time of the application for certificate of authority is a moot point and is not necessary or appropriate until the filing of the first annual report.

 

The committee moved to incorporate the working group’s changes to Article 15.

 

Insurance Department Issues

 

09 LSO 0039.W1 – Insurance-financial reporting requirements.

 

Ken Vines, Insurance Commissioner, presented the bill.  The bill updates the audit law to conform with the national association of insurance commissioner’s model law.   The law requires an audited financial statement from each insurance company that is prepared by an independent accountant.

 

The committee discussed whether a CPA attestation was required for the company’s audited financial statements.  Senator Larson expressed concern that an internal audit is all that is required of companies with less than $100 million in premiums.  Mr. Vines stated that he would look at the threshold and report back to the committee.

 

Mike Mores, Farmer’s Insurance, and Joe Tornberg, AIG, testified in support of the bill and in support of the department maintaining their accreditation.

 

Ken Dugas, CPA, testified that federal law requires auditors to give an opinion on the company’s system of internal control for companies that are public companies.  The opinion is not required of the private companies under this statute.  He also suggested that the partner rotation requirement could be problematic.  Mr. Dugas expressed concern that the 5 years off could cause the rotating partner to lose some institutional knowledge.  He also questioned when the five year requirement goes into effect – is it five years after the date the statute goes into effect?

 

The committee amended the bill (Appendix 9) and tabled the bill until next meeting.

 

Certified Public Accountants

 

09 LSO 0046.W1-certified public accountants-revisions.

 

Mr. Marburg, CPA Board, and Rick Ryman, Wyoming Society of CPAs testified regarding the bill.  The bill is designed to allow for mobility for CPA’s across state lines.  It gives certain CPA’s the ability to gain practice privileges outside their home state without getting an additional license in the other state.  The language is largely taken from the uniform accountancy act.  He provided a handout that sets forth the substantive provisions of the bill.  (Appendix 10).

 

Mr. Ryman testified that the state is substantially equivalent under the national standards.  It is a based on statutory provisions regarding education, examination and experience.  The bill will sunset some provisions that would put Wyoming out of substantial equivalency in 2012.  The bill also attempts to provide more seamless reciprocity between these states with substantial equivalence.

 

As of today 26 states have adopted the mobility standards, 3 states are waiting governor signature and 5 states have draft legislation.

 

Mr. Ryman testified that this bill is commerce friendly and will allow CPA’s from other states to practice in Wyoming.  He compared the legislation to a driver’s license – a person with a Wyoming driver’s license can drive in Idaho, but in doing so they subject themselves to the laws of Idaho.

 

Mr. Marburg explained the bill.  He proposed amendments to respond to the staff notes in the draft bill. 

 

The bill was amended (Appendix 11) and tabled until the next meeting.

 

The next meeting was scheduled for September 2 & 3 in Saratoga.

 

Meeting Adjournment

There being no further business, Co-Chairman Pete Illoway adjourned the meeting at 5:20 pm.

 

Respectfully submitted,

 

 

 

Representative Pete Illoway, Co-Chairman                              Senator Cale Case, Co-Chairman

 

 

 

 

 

 

 

 

Appendix		Appendix Topic		Appendix Description		Appendix Provider
1		Committee Sign-In Sheet		Lists meeting attendees		Legislative Service Office
2		Committee Meeting Agenda		Provides an outline of the topics the Committee planned to address at meeting		Legislative Service Office
3		Unification		Written testimony		Jan Friedlund
4		Unification		Growth Impacts		Sonoran Institute
5		Subdivisions		09 LSO 0042.W1 – Subdivisions-cluster developments (as amended)		Legislative Service Office
6		Subdivisions		09 LSO 0043.W1 – Subdivisions-requirements (as amended)		Legislative Service Office
7		Coroners		09 LSO 0041.W1 – Coroners-archaeological burials (as amended)		Legislative Service Office
8		Corporations		Updated corporation statutes with recommendations (Articles 1-4, 6, 11, 13, 15 and 16)		Legislative Service Office
9		Insurance		09 LSO 0039.W2 – Insurance-financial reporting requirements (as amended)		Legislative Service Office
10		Certified Public Accountants		CPAs – Mobility in Wyoming		Wyo. Society of CPAs
11		Certified Public Accountants		09 LSO 0046.W1 – Certified public accountants-revisions (as amended)		Legislative Service Office