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STATE OF WYOMING Working Draft
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DRAFT ONLY
NOT APPROVED FOR
INTRODUCTION
HOUSE BILL NO.
Investment modernization-statutory funds.
Sponsored by: Representative(s) Obermueller
A BILL
for
1 AN ACT relating to public funds; establishing spending
2 policies for specified statutory funds; creating an income
3 account for the Wyoming cultural trust fund; providing for
4 the investment of specified statutory funds; providing for
5 deposits to the corpus accounts of specified statutory
6 funds; removing specified statutory funds from the Pool A
7 investment account; making conforming amendments; requiring
8 the transfer of funds; and providing for an effective date.
9
10 Be It Enacted by the Legislature of the State of Wyoming:
11
12 Section 1. W.S. 9-2-2303(a) by creating a new
13 paragraph (iv), 9-2-2304(b), 9-2-2306(a)(v), 9-2-2307(a),
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1 (b)(intro) and by creating new subsections (c) and (d) and
2 9-15-103(a), (b) and by creating a new subsection (s) are
3 amended to read:
4
5 9-2-2303. Definitions.
6
7 (a) As used in this article:
8
9 (iv) "Income account" means the Wyoming cultural
10 trust fund income account created by W.S. 9-2-2304(b).
11
12 9-2-2304. Wyoming cultural trust fund established;
13 income account established; corpus inviolate; investment by
14 state treasurer.
15
16 (a) The Wyoming cultural trust fund is created. The
17 Wyoming cultural trust fund shall consist of those funds
18 designated to the fund by law and all monies collected from
19 federal grants and other contributions, grants, gifts,
20 bequests and donations to the cultural trust fund.
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22 STAFF COMMENT
23 Subsection (a), above, is included for context. Unamended
24 statutory provisions will not be included in the formal
25 draft.
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2
3 (b) The monies deposited into the Wyoming cultural
4 resources trust fund established pursuant to this section
5 are inviolate and constitute a permanent or perpetual trust
6 fund. The monies shall be transmitted to the state
7 treasurer for credit to the trust fund. and shall be
8 invested by the state treasurer as authorized by law and in
9 a manner to obtain the highest net return possible
10 consistent with the preservation of the corpus. Any
11 earnings from investment of the corpus of the trust fund
12 shall be credited by the state treasurer into a separate
13 Wyoming cultural trust fund income account and distributed
14 in accordance with W.S. 9-2-2307. The state treasurer, or
15 his designee, who shall be registered under the Investment
16 Advisor's Act of 1940, as amended, if required to be
17 registered by the terms of that act, as amended, may invest
18 the unobligated, unencumbered balance of the trust fund and
19 the income account in equities, including stocks of
20 corporations. Investments under this subsection shall be
21 in accordance with W.S. 9-4-715(a) and (c) through (e) and
22 W.S. 9-4-716. In adopting investment policy statements for
23 the Wyoming cultural resources trust fund and income
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1 account, the state loan and investment board, in
2 consultation with the investment funds committee, shall
3 seek to preserve the balance of the trust fund and income
4 account in a manner that strives for the highest possible
5 risk-adjusted total net return consistent with an
6 appropriate level of safety and liquidity.
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8 STAFF COMMENT
9 Note that the provision above creates authority to invest
10 BOTH the trust fund and the income account in equities.
11 There is a question of whether the income account would
12 ever have sufficient funds to make it wise to invest it.
13 However, there is also an argument that permission can be
14 extended now, and that the Treasurer is not required to
15 invest the income account unless it would be appropriate.
16 This bill provides transfers to the income account to
17 better fund the account and to allow the account higher
18 yielding earnings strategies. Giving investment permission
19 now might allow the initiation of conservative investments
20 now, or in the future, if/when the income account is large
21 enough. Please provide direction on whether both the trust
22 fund and income account should be included.
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24
25 9-2-2306. Wyoming cultural trust fund board; duties
26 and responsibilities.
27
28 (a) The board shall:
29
30 (v) Review and monitor the expenditure of monies
31 from the trust fund income account to grantees; and
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1
2 9-2-2307. Disbursement of grants from trust fund
3 investment earnings.
4
5 (a) Subject to approval of applications from
6 nonprofit and governmental cultural, historical and arts
7 organizations, the board may award grants from the income
8 account to promote, preserve and enhance the unique
9 cultural heritage of Wyoming and its people.
10
11 (b) Subject to the expenditure limitation established
12 by this subsection, the board shall have the discretion in
13 determining the amount of money under each grant., except
14 that no grant shall be awarded until: The total amount of
15 grants awarded in any one (1) year shall not exceed the
16 spending policy amount specified in subsection (d) of this
17 section. Funds in the income account constituting special
18 appropriations, grants, transfers, bequests or donations
19 shall not be subject to the spending policy, shall not be
20 counted toward the spending policy and may be distributed
21 as grants by the board unless the special appropriation,
22 grant, transfer, bequest or donation specifies otherwise.
23
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1 (i) The corpus of the trust fund equals four
2 million dollars ($4,000,000.00) or July 1, 2000, whichever
3 occurs earlier; and
4
5 (ii) The interest earned from the corpus of the
6 fund and available for disbursement is sufficient to
7 adequately fund a project, taking into consideration all
8 other monies or in-kind contributions provided as a match
9 for the project by the grantee.
10
11 (c) As soon as possible after the end of each fiscal
12 year, the state treasurer shall transfer any unobligated,
13 unencumbered fund balance in the income account in excess
14 of XXX (XXX%) of the spending policy amount established in
15 subsection (d) of this section to the trust fund. The
16 transfer calculation required by this subsection shall not
17 include monies in the income account that are special
18 appropriations, grants, transfers, bequests or donations
19 unless the special appropriation, grant, transfer, bequest
20 or donation specifies otherwise.
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22 STAFF COMMENT
23 Consistent with your instruction and testimony from the STO
24 last interim, LSO's Budget/Fiscal team will work to
25 determine the tip percentage that will allow 7X the
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1 expected annual expenditures from the income account to
2 accumulate in the account before tips are made back to the
3 Trust Fund.
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5
6 (d) The amount of earnings in the income account
7 available for making grants under this section in any one
8 (1) fiscal year shall be an amount equal to five percent
9 (5%) of the five (5) year average market value of the trust
10 fund, calculated from the first day of the fiscal year,
11 subject to the following:
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13 STAFF COMMENT
14 The 5% spending policy inserted above is a place holder.
15 Our Budget/Fiscal personnel can help advise on an
16 appropriate number.
17
18 Also, since the Cultural Trust Fund was established in
19 1998, the 5 year average market value of the Trust Fund is
20 available. I will confirm with our Budget/Fiscal personnel
21 that using the prior 5 years will be appropriate and yield
22 a reasonable result.
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24
25 (i) The calculation required by this subsection
26 shall constitute the spending policy for the income
27 account;
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29 STAFF COMMENT
30 Note: The provision above creates a spending policy for
31 the "income account" rather than the trust fund. This is
32 because grants are made directly and only from the income
33 account.
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1
2 (ii) Nothing in this subsection shall be
3 construed to limit the expenditure of funds in the income
4 account that constitute appropriations, grants, transfers,
5 bequests or donations to the income account unless the
6 appropriation, grant, gift, transfer, bequest or donation
7 provides otherwise. The funds identified for expenditure
8 under this paragraph shall not be included in the spending
9 policy calculation required by this subsection;
10
11 (iii) Except as provided in subsection (c) of
12 this section, earnings in excess of the spending policy
13 amount established under this subsection and monies that
14 are subject to expenditure under paragraph (ii) of this
15 subjection shall be retained in the income account.
16
17 9-15-103. Wyoming wildlife and natural resource trust
18 account created; income account created; expenditures;
19 spending policy; purposes.
20
21 (a) A trust account is created to be known as the
22 Wyoming wildlife and natural resource trust account. The
23 trust account shall consist of those funds designated to
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1 the account by law and all monies received from federal
2 grants and other contributions, grants, gifts, transfers,
3 bequests and donations to the trust account. The trust
4 account is specifically empowered to accept grants, gifts,
5 transfers, bequests and donations including those which are
6 limited in their purposes by the grantor. Title to any
7 interest in any real property conveyed to the trust account
8 shall be held in the name of the state of Wyoming and shall
9 be administered by the board of land commissioners. Funds
10 deposited within the trust account are intended to be
11 inviolate and constitute a perpetual trust account. which
12 shall be invested by the state treasurer as authorized by
13 law and in a manner to obtain the highest net return
14 possible consistent with preservation of the account corpus
15 The state treasurer, or his designee, who shall be
16 registered under the Investment Advisor's Act of 1940, as
17 amended, if required to be registered by the terms of that
18 act, as amended, may invest the unobligated, unencumbered
19 balance of the trust account in equities, including stocks
20 of corporations. Investments under this subsection shall
21 be in accordance with W.S. 9-4-715(a) and (c) through (e)
22 and W.S. 9-4-716. In adopting investment policy statements
23 for the trust account, the state loan and investment board,
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1 in consultation with the investment funds committee, shall
2 seek to preserve the balance of the account in a manner
3 that strives for the highest possible risk-adjusted total
4 net return consistent with an appropriate level of safety
5 and liquidity.
6
7 (b) The state treasurer shall credit to a Wyoming
8 wildlife and natural resource trust income account the
9 earnings from investment of the trust account corpus. For
10 each fiscal year beginning July 1, 2024, the income account
11 shall be subject to the following:
12
13 (i) Except as otherwise provided by this
14 paragraph, earnings credited to the income account may be
15 expended by the board in accordance with this act in an
16 annual amount not to exceed the spending policy amount
17 specified in subsection (s) of this section. Funds in the
18 income account constituting an appropriation, grant,
19 transfer, bequest or donation shall not be subject to the
20 spending policy specified in subsection (s) of this
21 section, shall not be counted toward the spending policy
22 and may be distributed by the board unless the
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1 appropriation, grant, transfer, bequest or donation
2 specifies otherwise;
3
4 (ii) The legislature may, from time to time,
5 appropriate funds directly to the income account for
6 distribution in accordance with the terms of this act or as
7 otherwise directed in the appropriation. Such specially
8 appropriated funds shall be credited directly by the state
9 treasurer to the income account and are available to the
10 board for award of grants as otherwise permitted by this
11 act.;
12
13 (iii) As soon as possible after the end of each
14 fiscal year, the state treasurer shall transfer any
15 unobligated, unencumbered fund balance in the income
16 account in excess of XXX percent (XXX%) of the spending
17 policy amount established in subsection (s) of this section
18 to the trust account. The transfer required by this
19 paragraph shall not include any appropriation, gran