May Legislative Committee Report
Storming out of the gate, the Revenue Committee started the interim legislative schedule. Hold on tight – the calendar of events runs steady through November and then budget hearings begin… For now, here is your May legislative committee report.
Revenue: Carrying one of the largest interim agendas, the Revenue Committee wasted little time getting to work. Regulation and taxation of vapor products dominated the initial discussion. It is early, but anticipate the Committee to consider a variety of taxation models, including a mirror of tobacco tax statutes. In addition to monitoring the distribution of any tax imposition, the WCCA will monitor preemption discussions. So far, there is little appetite for that discussion within the Committee.
Immediately following the vapor product debate, the Committee accepted more than four hours of testimony on a variety of revenue bills. Among the topics listed, I offered opposition to past optional municipal tax legislative drafts, but indicated a willingness to discuss hold-harmless or benefit options. No further discussion on the topic occurred. In an anticlimactic moment, the Committee elected to drop from further consideration HB66 Lodging tax., HB67 Sales tax revisions., and HB233 Income tax. The Committee however agreed to consider HB220 National retail fairness act. (https://www.wyoleg.gov/Legislation/2019/HB0220), HB68 School funding revenue. (https://www.wyoleg.gov/Legislation/2019/HB0068), HB138 Sales tax payments. (https://www.wyoleg.gov/Legislation/2019/HB0138), and the optional municipal tax. There will also be consideration of raising the gas and diesel tax three cents, perhaps incrementally, and raising the ag land tax exemption from $500 to $10,000 (introduced by Wyoming Farm Bureau Federation).
Continuing the revenue raising conversation, Chairman Case introduced the concept of raising the property valuation factor. Article 15, Section 11 of the Wyoming Constitution requires a uniform means of assessment and establishes three classes of property: 1) gross production of minerals and mine products, 2) property used for industrial purposes, and 3) all other property, real and personal. The Constitution (Article 15) also limits the number of mills to be levied, whereas the valuation factor is left to be defined by the legislature (and is presumably easier to adjust). As reported in the 2019 Budget Fiscal Data Book (https://wyoleg.gov/budget/2019databook.pdf), a one percent change in the assessment on industrial property raises $20 million per year, while it raises $53 million per year for all other property. The Chairmen have requested that the Department of Revenue and LSO develop a white paper for review at a later meeting this year.
In other action, the Committee heard testimony from County Assessors related to oil and gas valuation, specifically concerns regarding new owners of equipment. Rather than requesting a bill, the Committee directed County Assessors and industry to collaborate on a solution to be presented at a later date.
Corporations, Elections and Political Subdivisions: Election code revisions, including voter registration requirements, the day of voting process, candidate filing periods, the write-in nomination process, death certificates during an election and voter identification requirements were considered. The Secretary of State and County Clerk’s Association both provided recommended revisions. Several bill drafts were authorized. The WCCA will monitor progress and report on any developments of note.
In relation to local issues, the Committee received testimony on municipal right-of-way fees, county permanent reserve accounts, surface water drainage systems, and local government participation in the state health care plan. Industry and the municipalities will attempt to develop a compromise on the right-of-way issue. Chairman Lindholm requested an approach that is cost-based, reasonable, non-discriminatory and includes a timeline. The WCCA will monitor the issue and ensure it remains a municipal only topic. On the issue of county permanent reserve accounts I outlined available options for counties to manage reserves. Based on testimony interest in the topic waned, but the Chairmen provided Rep. Clausen the option of drafting language for consideration by the Committee at a later date. Surface water drainage systems continues on under significant uncertainty. The Chairmen are going to consider requesting an Attorney General opinion to understand if municipalities already have the authority to assess service charges. Some on the Committee prefer to explicitly authorize the practice. Regardless, draft legislation will be introduced to the Committee. The topic of local government participation in the state health care plan gathered some attention when the Chairmen announced the Attorney General opinion, which provides that counties are “eligible to participate in the Employees’ Group Insurance plan.” While this is a positive development, it will be imperative for the WCCA to remain vigilant. There are some on the Committee and perhaps within industry who might seek to eliminate the possibility of local governments joining the state plan. For now however, the option is open.
Rounding out two long days, the Committee considered wind farm developments. HB120 Energy production inventory exemption. (https://www.wyoleg.gov/Legislation/2019/HB0120) spurred conversation. This bill was opposed by the WCCA and vetoed by the Governor (https://www.wyoleg.gov/2019/Veto/HB0120.pdf). WCCA opposition centered around multiple issues: 1) unknown ad valorem tax lost – down $85 million between FY16 and 18, which impacts Wyoming’s counties, municipalities and school districts. 2) no definition of energy equipment. 3) the benefits of increase sales and use tax paid is unknown. 4) the tool will likely benefit a few select communities and not necessarily those where the projects are located. 5) it is unclear whether self-reporting or application will be the means to determine compliance. Chairman Landon requested a bill draft modeled after HB120, taking into account the Governor’s concerns. Sen. Nethercott requested that the bill be narrowly tailored (e.g., wind). Converse County Chairman Robert Short provided testimony regarding the wind generation tax, starting a conversation about the three year production exemption and per MWh imposition. No specific bill drafts were endorsed – elimination of exemptions and incremental increase to $3 per MWh failed introduction, but Sen. Case vows to bring it before the Revenue Committee.
Transportation, Highways and Military Affairs: The Transportation committee kicked off their first meeting of the 2019 Interim with an introduction and update from the new director of WYDOT, Luke Reiner. Director Reiner apprised the committee of the fiscal position of the department which at this time has an $135 million annual shortfall to maintain the current condition of Wyoming's roads. WYDOT's chief engineer Shelby Carlson then gave an overview of the State Transportation Improvement Program (STIP) and that process for 2019.
The committee discussed the need to replace the Revenue Information System. The current system's software is becoming obsolete and the hardware is at risk of suffering a catastrophic failure. This system houses many records including vehicle titles, licensing, and voter registration. Kelli Little testified that the WCCA will continue to monitor this project closely, and urged the committee and department to have a long-term funding plan in place before the replacement begins.
The committee next received an update on wildlife crossings which the WCCA is monitoring the work of WYDOT in this area to see if there is a possibility for partnership or combined efforts. Next the committee received a briefing on the Public Safety Communications Commission (PSCC) and WyoLink. Many fire and first responder departments testified that they will have to drop WyoLink if they have to pay user fees to use the system. Kelli testified that counties have spent millions of dollars standing up the system over the last decade and have already been paying these user fees with money that would otherwise be available to counties in the form of consensus grants. WYDOT has asked the committee to consider a Public Safety Communications Fee on phone lines as well as an appropriation from the legislature to cover the $5.5 million dollar annual operating cost.
Minerals, Business and Economic Development: In conjunction with the Corporations, Elections and Political Subdivisions Committee, the Minerals, Business and Economic Development Committee is examining utility production issues, focusing on coal-fired electric-generating facilities. The WCCA is monitoring the issue and will keep members apprised of relevant developments. Right now the work of the committees is more exploratory than legislation focused. Expect that to change as the summer moves along. In other conversation, the Committee discussed oversight of the NEPA process. The evaluation to date has been at the state level, but Campbell County Commissioner Mark Christensen provided testimony encouraging consideration of the role counties play in the process. The specific talking points he used are attached. No action was taken by the Committee.
Looking ahead, the following committee meetings might interest you:
- Judiciary, June 3rd and 4th in Gillette. The Family First Prevention Services Act, Guardian ad Litem and Parents Counsel Programs will take center stage. Each has the potential to impact counties – if done right, with limited or diminishing impact to counties. The Committee will also discuss Wyoming’s trespass laws and the Wyoming Public Records Act.
- Select Federal Natural Resource Management, June 25th in Douglas. Prairie dog management on the Thunder Basin National Grassland returns to the agenda. The U.S. Forest Service and Wyoming Department of Agriculture will provide reports.
- Travel, Recreation, Wildlife and Cultural Resources, June 27th and 28th in Gillette. Search and rescue funding, operation and coordination will be covered on day one, while gaming regulation dominates day two.
As a final note, the capitol square project is nearing completion. Although specifics around its opening have not been announced, expect a series of events around Statehood Day – July 10th.