News from Representative Albert Sommers, HD#20
by Albert Sommers
December 1, 2014
Hello Sublette County, I attended a Joint Minerals, Business, and Economic Development Committee meeting on November 24th and 25th in Cheyenne. During those two days we finalized and approved several bills to be considered in the upcoming legislative session, which begins in January. In a previous legislative update, I gave you the details on most of those bills. We unanimously passed the following bills out of committee:
- One authorizing Wyoming to become a nuclear regulatory agreement state
- One allowing Wyoming to become a full member in the Interstate Mining Compact Commission
- One amending our solid waste remediation program
- One allowing monies from the corrective action account to be utilized for solid waste remediation after the leaking underground storage tanks program concludes
- A bill updating the mission of the Enhanced Oil Recovery Institute
- One lowering the interest rate for the Wyoming Business Councilís Challenge Loan Program
- One increasing and expanding the bonding authority for the Wyoming Infrastructure Authority
- One increasing oversight of Trust Companies created in Wyoming.
Two bills passed the committee without a unanimous vote. The first contentious bill created a program under the auspices of the Wyoming Business Council with oversight by the State Land and Investment Board (comprised of the governor, treasurer, auditor, secretary of state, and superintendent of public instruction for the state of Wyoming). The new program is titled the Wyoming Value Added Product Facility Program, and the purpose is to encourage the development of facilities in Wyoming that would take our raw products and turn them into an end product with substantially more value. Proposals bounced around the capital include a facility that turns natural gas into a high grade diesel product. Wyomingís role in this program would be to purchase up to 20% of the feedstock to be utilized in the plant, and then the state would receive the profit from that feedstock, minus some negotiated production costs. The money generated from the project would go back into a revolving fund, which could then be utilized for other similar projects. A goal of the legislature is to encourage the establishment of value added facilities in Wyoming. However, this bill was brought very late in the interim, which did not allow the committee to fully explore the concept. In the end, all but one member of the committee voted for the bill, and I did vote for the bill. Funding economic development is a two-edged sword, because government is stepping into the marketplace and aiding the private sector, which then influences market conditions. However, in a small state like Wyoming, in order to bring certain favorable industries to the state, we sometimes have to incentivize the process, which helps calm the nerves of jittery investors. If this natural gas to diesel facility comes to fruition, it will help Wyoming, and also provide another sales point for our countyís natural gas supply. If the plant does not come to fruition, we have a program in place to help the next value added facility start in Wyoming. These value added plants must be completely built and operational before Wyoming provides the feedstock, which ensures hundreds of jobs will be created.
The second contentious bill, which narrowly passed by a one vote margin, would create the Wyoming Chartered Family Trust Company Act. Chartered family trust companies are formed by very rich families, usually billionaires, to avoid regulation by the Federal Securities and Exchange Commission and to manage complicated estates. The SEC allows states to perform regulatory oversight of these family trust companies in lieu of federal oversight. These families prefer regulation by states, because it is usually done with a lighter hand than federal regulation, and it provides family members some assurance their trust is being managed properly. The trusts are created to theoretically last hundreds of years, and are primarily used to avoid federal estate taxes, at least that is my understanding. This bill was also brought late in the interim, and is very extensive in nature, dealing with a subject few people are well versed in. The only risk to the State of Wyoming from this Act appears to be in the event a family trust company was to involuntarily dissolve, which could leave the state on the hook to untangle the mess. The administrative costs of untangling public trust companies have cost other states millions of dollars, but experts donít believe this would happen with family trusts, as the exposure is greater with public trust companies. The bankerís association came out against the bill, because it did not believe the bill limited the members of a family trust to just family members, which would then put family trusts in competition with their public trust companies. I believe this bill should continue to be developed through another interim. This would give bankers and trust lawyers until 2016 to resolve some of their differences, and would give legislators more time to understand the issues. Further, I have not answered the philosophical question of whether Wyoming should be a vehicle for the very wealthy to avoid taxes that the normal citizen canít avoid. I voted against this bill in committee, but will see how it shapes up during the session.
On a personal note, I am slowly working through a concussion I received working cattle in late October, but I am improving. I appreciate all of the nice thoughts folks have sent my way. If you have any questions, please contact me at email@example.com.