JAC Agency Hearings 
JAC Index 01-15-18 pm1
Monday January 15, 2018
Agenda: PM
Governor’s Letters
Proposed Legislation

1/15/2018 1:20:38 PM
Governor’s Letters, Kari Jo Gray, Mary Kay Hill, 13 letters
Gray:  summary handout 001-180, UW budget correction, DOC – construction management, total additions to budget $31M, various agencies ready for additional information
Gray:  GL #1, Senior Center Funding, $200K
Burns: what has changed to request additional funds?
Gray: standard supplement to standard budget, is in profile
Hill: document that goes in the front of the book not in agency budget (001) but in Governor’s profile, consider operating budget plus a yea or nay on governor’s letters
Hill: GL #2, “We the People”, for middle and high school students, American Heritage, $100K GF, to State Parks and Cultural Resources
Burns: to expand the program throughout the state
Gray: GL #3, Title 25, involuntary commitments, costs exceed the WDH standard budget, not w/I control of WDH it is through the district courts, $6M GF requested plus carryover from FY 17/18 budget, no reversion from previous budget
Gray:  GL #4, Wyoming State Penitentiary, $5M GF to complete water mitigation and maintenance repairs, effective immediately
Burkhart: Amount of work been revised? Money coming from GF - penitentiary permanent land funds used? $13.5M to be used for build out of one wing; changes needed for other purposes
McOmie: director state construction department, budget adjusted slightly, everything w/I the initial budget request
Gray: other repairs needed at Torrington, better use of GF vs PPL, elaborated on repairs needed at Torrington; not an immediate need for the $13.5M, fence security used regular funds
Nicholas: using over a 4 or 5 year period
McOmie: $5.18 M using discussion, WJE recommendations, and breakdown provided in follow up information, more breakages in wet utility lines, snow fence outside the Pen fence, like the ones used along interstate, engineering study done for best use of fences, 
SHcwartz: How are PPL funds invested?
Kean: state agency pool for investing
Kean: GL #5, Abandoned Mine Lands – extension of prior authorization, keeping remaining funds of $948K, continue fund availability through June 2022
Gray:  Brian Jeffrey’s report on progress of pipeline corridor, environmental impact study being done
Kean: GL #6, Carryover of Prior Appropriations, Integrated Test Center asking to continue with funding through 2020

1/15/2018 1:54:52 PM
Hill: GL #7, Community College Capital Construction, clarified intent, concurs with CC president’s recommendation, 5 projects to receive funding, $20M from SIPA, instead use GF dollars, based on recent CREG report, major maintenance at WWCC, $571K additionally needed, total GF request $21M includes WWCC repairs
Nicholas: process for Legislature to fund Level 2 of CC projects
Hill: Priorities 1 and 3 are matching funds so facility costs $14M
Dockstader: increased involvement with major maintenance WWCC plus state construction involvement
Hill: nothing tried and true for this process, construction management, major maintenance biggest difference
Richards: level 2 funding, level 1 CC’s. level 2 precedent to be state funded, somewhere in between, not consistent, level 3 is 50/50, Legislature has never authorized contingency fund, can be requested
Burns: priority of construction projects
Nicholas: LCCC CC fine arts facility inadequate
Hill: priorities reflect what the CC President’s priority list had presented
Burns: emphasis on CC curriculum, state pays for half why get local support
Larsen: $3.54M contingency fund request
Walters:  typo in GL, correct in CapCon
Landen: projects disappear, how many more are out there?
Hill: CC’s can resubmit projects at any time, other funding sources for construction still come to JAC as square footage and maintenance needs to be increased
Rose: projects can request state funds or authorization, projects ok’s by commission it does not reprioritize, level 2 commits the state to some part of the process
Gray: GL #8, Cybersecurity, ETS, $2.2M GF dollars to strengthen cybersecurity, breakdown of needs/recommendations attached
Young: attacks per month, July 2017, about 225K attacks on states network per day, 6.7M/month  
Wilson: successfully fends off threats
Young: hired a new information security officer
Larsen: how much $ carryover
Young: all of it
Gray:  GL #9, Employee’s Group Insurance Carry-Over, based on calendar year vs fiscal year, $26M reversion in FY 16, no reversions on excess funds but swept into new account for us in FY 19/20 in case of potential 11% rate increase, borrowing authority reauthorization out of LSRA
Wilson: state investment pool tied in

1/15/2018 2:40:35 PM
Kean: realized Capital losses, 
Gray: set an interest rate, third party administrator payment, flat fee – follow up needed
Sommers: health insurance rates gone up, cuts made on rate holiday, too much money in fund could warrant penalty
Gray: analysis done, health care projections, large cash balance constitutes penalty, need conservative amount
Gray:  GL #10, Fire Borrowing Authority, $18M in account, requesting borrowing authority to fight fires, use LSRA for funds if needed up to $20M
Hill: GL #11, preschool enrollment growth increase in child count, $126K Gf dollars to WDH, numbers not available until after budget was submitted
Hastert: not addressed earlier
Hill: at odds with management audit committee, ECA down, previous years ECA
Kean: GL #12, Tobacco Settlement Funds, trend in investment earnings, historic settlement payments to state lower, adjustment needed, WDH exception #9, request funds come from special revenue (agency 558) not tobacco settlement, requesting $3M effective immediately
Kean: agency 558 is WDH own fund and available to us
Nicholas: why lower payments
Kean: less being paid into escrow account and less to be paid out, revenue for drug courts multiple sources
Hill: GL #13, University of Wyoming Section 1 Budget Request Correction
Richards: Madden proposal with upcoming bill
Hill: correction, error in calculations, $4.7M addition be added to standard budget for the block grant appropriation
Nicholas: GL on Science Initiative? $100M
Hill: in Agency 067 budget, Governor’s budget message, advantages of research

1/15/2018 3:09:32 PM
Break

1/15/2018 3:30:06 PM
Proposed Legislation
18LSO-377, State construction department – amendments, Tamara Rivale, creates an operations division, pg. 2 line 6, line 13, lines 17 – 23, struck language, line 14 sections repealed, pg. 5 acct effective immediately
Nicholas: under statute who are they required to report to and when
RIvale: to Governor’s office
McOmie: report to Governor as any agency, budget office works budget, allows flexibility in use of personnel, silo-ed into school and/or state side, can use folks for other projects
Laarsen: should make assignment to report to standing committee
McOmie: report to 2 committees already, budget centered on capital construction projects
Nicholas: JAC doesn’t see education side, value to reporting to JAC additionally, directed vs statute
McOmie: would be willing to brief when asked, providing more oversight to various facilities/projects
Burns: better explanation that “it frees things up” needed, operations, uniting everything
McOmie: no administrator asked for
Nicholas: repealed revisions, anything needed to be put back?
Rivale: policy reasons may drive bringing back some of the struck revisions, 
McOmie: have a state construction department into one division, no change in current staffing, still have division report to state agencies still in statute
Sommers: zero based budgeting
McOmie: removing provisions, zero based budgeting
Richards: 2 purposes behind bill, we ended up with 3 divisions, pg. 2 and 3 outlines base budget
Burns: we started with 2 then grew to 3 divisions
McOmie: funding drives where folks work and no flexibility in moving folks around, added efficiencies
Nicholas: new division creation a different classification for employees with appropriate pay increases
McOmie: don’t anticipate additional costs with this reorganization, no new employees
Public comment closed; Bill moved and seconded; Schwartz – amendments eliminate 3002 and 3003 in statutes work?
Rivale: more conforming language would be needed
Burns: divisions still exist; only fewer folks in divisions; 
McOmie: construction management, school facilities and operations division with new Legislation
McOmie: don’t want to tie divisions to where funding is coming from
Schwartz: what is benefit of defining structure in statute?
Burns: creates 3 divisions with 3 separate sources of funding

1/15/2018 3:57:40 PM
McOmie: salary comes from school side; 1st biennium, working across division lines
Richards: agency 027 budget can reflect change to clarify salary of director
Question being called, roll call vote taken; bill passes, House Bill
18LSO-0416, pari-mutuel events-distribution of fees, Brian Fuller, LSO staff attorney, resurrect of previous HB, pg. 2 lines 5 and 7 conforming amendments, lines 11 and 19 conforming amendments removes “and” pg. 2 line 21 permittee shall pay….etc. effective date July 1, 2018
Schwartz; historic horse racing $420M wagered live horse racing $5.366M wagered
Fuller: distribution historic horse racing ½% 42.1M, live horse racing ½% is $268K
Burns: differential
Fuller: Lines 13 – 19 clarifies percentage and where it goes
Nicholas: $800M deficit situation, looking for revenue sources, for the privilege of pari-mutuel betting should provide some sort of compensation to state
Landen: timing, success of program
Joyce: HB 25 reference, resurrect an industry, capital investment large, 7.5% on takeout, determined by customers, Wyoming Downs takeout, raising takeout drives customer away, tax rate 25% presently, raising percentage raises taxes to 32%, needs capital to grow, self-funding, young industry for state
Nicholas: pay out rate now 
Joyce:: 92.5% 
Nicholas: change to 92%, $2M or 91.5%
Joyce: takeout sensitive number, overall handle number potentially goes down
Wilson: clarify wagers, take outs, distributions
Joyce: walked through wagers, winning, losses, etc. across bettors
Nicholas: 92% return on bet
Wilson: gross receipt tax
1/15/2018 4:27:11 PM
Driskill: varied the takeout since starting? Compare statistically to casinos? Money pari-mutuel, track owners left out
Joyce: blended average, have varied takeout, comparison right in industry averages, zones of sweet spot 7 – 7 ¾; operator location straight lease, track operator bears 100% funding/expenses, etc., county owned facilities,  direct effect to take another chunk – disastrous as industry just turned profitable, support WY AG industry, tourism, leave money in the industry to grow program
Burkhart: Nevada comparison, 6% tax on gross amount 
Moore: director of WY pari-mutuel commission, clarify Rep Burkhart’s question, allow Vegas style gambling, 6% tax would be fine, no live racing, WY tax rate 1.9% of gross, historic racing
Nicholas: pay out in Kentucky
Moore: similar to WY, comingle into Oregon
Driskill:  interest in Kentucky or Oregon
Moore: no interest in either industry
Joyce: Nevada, 6% not on slots, on all forms of gambling
Public comment is closed
Bill moved and seconded
Driskill: strike out lines 6 -8, pg. 2, amendment # 1, keeps more money at the track and live racing, line 23 strike and live
Seconded; amendment passed
Driskill: pg. 2, line 1, on the first business day of every month, vs present language, seconded
Moore: every Wednesday, permittee pays pari-mutuel account,
Driskill: withdrew amendment
Larsen: omitting live racing get rid of simulcasting, yes it does omit 
Driskill: only live horse racing amendment; seconded, 
Joyce: didn’t exceed $1M on live HR, $5M on historic
Burns: line 22 add and in simulcast and out of state simulcast; live races simulcast to other locations
Joyce: yes they are out of state and intrastate
Rivale: may need to make conforming amendments to cover historic, live or simulcast
Moore: historic horse racing only, cities and counties getting only from historic horse racing
Amendment withdrawn by Driskill
Wilson: pg. 2; lines 4 – 11 questions, line 13, line 8 also,
Fuller: pg. 3 line 4 -9 provides for payments and exceptions
Question being called: Roll call vote – Richards, motion failed.

1/15/2018 5:03:14 PM
Adjourned