State investments in industrial development bonds.

WORKING DRAFT
2005
STATE OF WYOMING
05LSO-0646

HOUSE BILL
NO.
HB0339

State investments in industrial development bonds.

Sponsored by:
Representative(s) Harvey, Childers, Hammons, Jones, Luthi, Quarberg and Simpson and Senator(s) Coe, Geis and Northrup

A BILL

for

AN ACT relating to public funds; providing for loans to political subdivisions as specified; providing for repayment of loans; providing an appropriation; and providing for an effective date.

Be It Enacted by the Legislature of the State of Wyoming:

Section 1.
W.S. 9
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703 by creating a new subsection (f) and 16
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110 are amended to read:

9
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4
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703.

State loan and investment board; rules and regulations; reports on delinquent loans; procedures if default results in loss to a state permanent fund.

(f)

If the state loan and investment board determines that an investment of state permanent funds pursuant to W.S. 9
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4
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701(q) may result in a nonrecoverable loss either to the corpus of, or interest due to, any permanent fund of the state, the state loan and investment board may use any funds available in the loss reserve account created by W.S. 16
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110 to loan monies to the joint powers board, municipality or county issuing the bonds in order to allow the entity to redeem the state investment in the bonds in full prior to maturity. A loan under this subsection shall be made only after determination by the state loan and investment board that the conditions of this subsection including the following conditions are met:

(i)

Without the loan the issuing entity is likely to default on the bonds;

(ii)

Without the loan the facility financed by the bonds is likely to not be completed or to cease operations, resulting in a significant loss of employment;

(iii)

The issuing entity shall agree to repay the loan within the time period provided by the bonds. The state loan and investment board may establish a lower interest rate for the loan than provided for the bonds and may establish that the loan be repaid with or without interest. In establishing terms for the loan repayment the state loan and investment board may structure the loan to provide as much security as possible for the loan repayment recognizing the constitutional restrictions upon the issuing entity's incurment of debt and the need to continue operations of the facility;

(iv)

To the extent the issuing entity sells any of the issued bonds or forecloses upon the facility financed by the industrial development bonds or upon any other real, personal, tangible or intangible property providing security for the bonds, all proceeds shall be immediately payable to the state in repayment of the loan under this subsection.

16
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110.

Loss reserve account created; deposits; disposition of funds.

Revenues received by the state loan and investment board for deposit in the loss reserve account pursuant to W.S. 16
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109(a) shall be transmitted to the state treasurer for deposit to the credit of the loss reserve account within the earmarked revenue fund. Funds in the account shall be used for the purposes specified in W.S. 9
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703(e)
and (f)
and to pay the administrative and legal expenses of the board in making collections and foreclosing on loans made pursuant to W.S. 16
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109. If at the end of any fiscal year, the amount in the loss reserve account exceeds five percent (5%) of the total amount of permanent funds invested by the state in loans pursuant to W.S. 16
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109, the amount in excess of the five percent (5%) shall be transferred and credited to the general fund.

Section 2.
There is appropriated from the general fund three million five hundred thousand dollars ($3,500,000.00) to the loss reserve account created by W.S. 16
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110(e).

Section 3.

This act is effective immediately upon co
m
pletion of all acts necessary for a bill to become law as provided by Article 4, Section 8 of the Wyoming Constit
u
tion.

(END)

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HB0339