Wyo. Code R. 060-0003-38
Loan and Investment Board
Chapter 38: Capital Construction Loans
Effective Date: 09/25/2023 to Current
Rule Type: Current Rules & Regulations
Reference Number: 060.0003.38.09252023
Capital Construction Loans
Section 1. Authority. This Chapter is adopted pursuant to Wyoming Statute (W.S.) 16-1-111.
Section 2. Definitions. In addition to the definitions in Chapter 1, as used in this Chapter:
(a) “Airport Board” means an airport board or joint powers board specifically involved in the construction, development, and improvement of airport facilities generating user fees.
(b) “Airport Project” means the construction, development, and improvement of airport facilities generating user fees, but shall not include fuel system or fuel tank removal or for asbestos removal.
(c) “Capital construction” means new construction, expansion, renovation, or replacement of an existing facility or facilities.
(d) “City” means any incorporated municipality having a population of four thousand (4,000) or more which has been declared a city or which has taken the necessary steps to be and has been proclaimed a city.
(e) “Commission” means the Wyoming Aeronautic Commission.
(f) “Division” means the Wyoming Department of Transportation Aeronautics Division.
(g) “Infrastructure project” means a capital construction project which may lawfully be undertaken within the powers of the political subdivision.
(h) “Irrigation District” means an irrigation district under W.S. 41-7-201.
(i) “Political subdivision” means Wyoming cities, towns, counties, special districts, school districts, and community college districts.
(j) “Special Districts” means special districts specifically involved in providing facilities or functions enumerated in W.S 16-1-104(c).
(k) “Street and road projects” means the construction, maintenance or improvement of a public street, road or alley within a city, town, or county.
(l) “Town” means any incorporated municipality, not a city.
(m) “Water Conservancy Districts” means a district created under the Water Conservancy Act, W.S. 41-3-701 through -779.
(a) Loans shall be made in such a manner and to such parties as shall, in the judgment of the Board, represent a prudent investment of state funds.
(b) The capital construction loan program is not intended to benefit investors or developers.
(a) Political subdivisions are eligible for loans for infrastructure projects. In order to qualify for a loan, the political subdivision must be able to demonstrate the following:
(i) A commitment to adequately maintain the project for the duration of the loan; and
(ii) All project costs will be funded at the time of receipt of the loan.
(b) Wyoming cities, towns, and counties are eligible for loans for street and road projects. In order to qualify for a loan, the city, town, or county must be able to demonstrate the following:
(i) A commitment to adequately maintain the project for the duration of the loan;
(ii) All project costs will be funded at the time of receipt of the loan;
(iii) All related infrastructure, including water and sewer is or will be in place at the time of receipt of the loan; and
(iv) No outstanding loans exist under this Chapter for a street and road project.
(c) Wyoming Irrigation Districts and Water Conservancy Districts are eligible for loans for replacement or major maintenance projects of storage, diversion, transmission, and distribution systems. In order to qualify for a loan, the district must be able to demonstrate the following:
(i) The entity was legally formed and approved prior to submitting an application;
(ii) The applicant has applied to all other eligible grant or loan programs and has fully applied any awards or loans from those programs to the project;
(iii) A commitment to adequately maintain the project for the duration of the loan; and
(iv) All project costs will be funded at the time of receipt of the loan.
(d) Airport Boards that have been legally formed and approved are eligible for loans for Airport Projects.
(e) Ownership of Project.
(i) For applicants qualifying under Subsections (a), (b) and (d) of this Section, the applicant must own the project in its entirety.
(ii) For applicants qualifying under Subsection (c) of this Section, the applicant must either own the project in its entirety or hold a valid lease for all parts of the project that:
(A) Permits the applicant to perform the proposed work; and
(B) Is for an indefinite term or a term covering the useful life of the project.
(f) Applicants must be compliant with all applicable reporting requirements of the Wyoming Department of Audit and Wyoming Department of Revenue prior to the application being considered by the Board.
Section 5. Eligible Purposes. Loans may be made for Airport Projects, Infrastructure Projects, and Street and Road Projects and may include costs associated with the following purposes:
(a) Purchase of land, buildings, and improvements associated with capital construction;
(b) Renovation or upgrade of existing infrastructure; and/or
(c) Planning and construction.
(a) Applications.
(i) Each applicant shall submit a written loan application to the Office on the form furnished by the Office. Applicants seeking a loan for an Airport Project shall also submit a copy of the application to the Division. At a minimum, the application shall include:
(A) A signed resolution stating the amount of the loan being requested, name of project and repayment source(s), and agreeing to maintain the project for the life of the loan;
(B) A detailed project summary which includes a breakdown of total project costs, a project timeline and proposed repayment source(s);
(C) Commitment letters from all funding sources, if applicable;
(D) Engineer’s Feasibility Statement;
(E) A formal maintenance plan documenting how the borrower will adequately maintain the project for the life of the loan;
(F) If the applicant is a special district, documentation of the formation of the special district and certification by the Board of County Commissioners that the special district currently exits; and
(G) If the applicant is a Joint Powers Board, a copy of the joint powers agreement approved by the Attorney General and a copy of the certification of organization filed with the Secretary of State.
(ii) Incomplete applications shall not be submitted to the Board for consideration.
(iii) Any false or misleading statements made by the applicant in an application shall be grounds for summary rejection of the application.
(iv) Timing.
(A) All loan applications must be received by the Office at least ninety (90) calendar days prior to any regularly scheduled meeting of the Board. Applicants must cure any defects in their application no later than forty-five (45) calendar days before any regularly scheduled meeting of the Board.
(B) Applications for Airport Projects loans must also be received by the Division at least fifteen (15) working days before a regular Commission meeting prior to the Board meeting to consider the Loan.
(b) Consideration.
(i) The Office shall conduct a preliminary review of all applications received. If the Office identifies issues with the application which would result in a negative recommendation to the Board, the Office shall notify the applicant within 30 days of receiving the application of the issue and the applicant shall have the opportunity to correct the application or withdraw the application. Applicants must cure any defects in their application no later than forty-five (45) calendar days before any regularly scheduled meeting of the Board. The Office may summarily reject any applications with uncured defects or that are otherwise clearly ineligible.
(ii) All applications shall be reviewed by the Attorney General to certify the legality of the transaction and to determine if an election is required by law.
(iii) The following will be considered when reviewing applications:
(A) The project’s contribution to health, safety and welfare of the citizens in the political subdivision as demonstrated by:
(I) The extent the project will protect the citizens from exposure to hazards that may result in adverse consequences;
(II) Achieving compliance with state and federal mandates; or
(III) Any other relevant information demonstrating the project’s contribution to the health, safety and welfare of the citizens.
(B) The applicant’s need for the project and financial need of the applicant in relation to the project; and
(C) The applicant’s ability to repay the loan.
(iv) For applications for Airport Project loans, the Division shall evaluate the applications for airport related projects and the Administrator shall formulate a recommendation the Commission using the following criteria:
(A) Whether the proposed project is in compliance with the current Division accepted Airport Layout Plan and the overall development of the airport;
(B) Whether the applicant is meeting any and all current and past repayment obligations to the Commission; and
(C) The proposed project’s merit in relation to the overall state system planning and its usefulness in achieving state goals.
(v) For applications for Airport Project loans, the Commission shall:
(A) Consider each airport loan project application and allow for comments from the applicant and the Administrator of the Division; and
(B) Make a written recommendation to the Board whether to award a loan and documenting any concerns. If the recommendation is to award a loan, the Commission shall recommend the loan amount and comment on the appropriateness and nature of the type of security offered for the loan.
(a) Interest Rate. The interest rate for loans under this Chapter shall be pursuant to Chapter 14 of these rules.
(b) Origination Fee. The Office shall collect an origination fee in the amount of one-half of one percent (0.5%) of the approved loan amount.
(c) Length. The term for each loan shall be set by the Board with due regard given to repayment ability and the security offered, but in no event shall the term be less than five (5) years or exceed twenty-five (25) years.
(d) Repayment. Payments shall be made in accordance with the agreed upon terms within the executed loan documents.
(a) Every loan shall be evidenced by a promissory note or loan agreement for the principal sum of the loan.
(b) Loans shall be adequately secured to the Board’s satisfaction. Loans may be secured with:
(i) Pledge of the revenues from the project for which the loan was granted;
(ii) Pledge of other available revenues to the borrower;
(iii) A mortgage covering all or part of the project, or a pledge of the lease of the project;
(iv) An assignment of lease revenues; and/or (v) Any other security deemed adequate to secure repayment of the loan.
(c) If an appraisal is required, the applicant shall be responsible for ensuring one is completed prior to submitting a loan application. Office staff shall review and approve the methodology used for valuation and the overall market value prior to loan closing.
(d) The Board may require a first-position security interest in the revenue-generating facility and the user fees or assessments.
(a) Requests for disbursements shall be on a form provided by the Office and include supporting invoices establishing the eligibility of costs submitted for disbursement. Loan proceeds shall only be disbursed for eligible project costs as set forth in this Chapter and within established guidelines following review by the Office.
(b) The Office shall inspect and verify any reports and records required by the Board and submitted by the borrower before proceeds shall be released.
Section 10. Ineligible Project Costs. The following costs are not eligible for funding under this program:
(a) Costs for preparation or presentation of loan application;
(b) Costs incurred prior to loan award, except costs incurred for architectural and engineering design, surveying and environmental review, if required;
(c) Engineering fees, including design, inspection and contract administration costs, in excess of fifteen percent (15%) of project cost;
(d) Markups by engineers/architects of sub-contractor and other outside charges;
(e) Costs for transportation, meals, lodging and incidentals incurred offsite from the project or that exceed the current federal per diem reimbursement rate;
(f) Costs associated with the borrower’s own employees and equipment;
(g) Costs for real property in excess of current fair market value and/or costs for an amount of real property in excess of that needed for project purposes;
(h) Costs related to issuance of bonds;
(i) Costs for furnishings;
(j) Legal fees;
(k) Costs for sidewalks that are owned or maintained by a private property owner; and
(l) Costs for contingency or extra work allowance in excess of 10% of estimated construction costs.
(a) If a borrower anticipates that it will be unable to make a required loan payment, the Board may refinance the loan, provided that:
(i) The borrower’s inability to make payment is due to causes completely beyond its control and without the fault or negligence of the borrower;
(ii) The Board determines that refinancing is necessary for the better protection of the permanent mineral trust fund; and
(iii) The term of the refinanced loan does not exceed twenty-five (25) years from the date of refinancing.
(b) If a borrower becomes delinquent on its required loan payment, the Board may refinance the loan, provided that:
(i) The Board determines that refinancing is necessary for the better protection of the permanent mineral trust fund; and
(ii) The term of the refinanced loan does not exceed twenty-five (25) years from the date of refinancing.
(c) Interest rate. The interest rate for refinanced loans under this Chapter shall be pursuant to Chapter 14 of these rules.
(d) If the Board approves the refinancing of a loan, the borrower shall pay a refinancing fee prior to the execution of the loan amendment.
(a) On an annual basis, records of the borrower shall be, at a minimum, compiled by an independent accounting firm. The borrower shall provide the Office a Compilation, Review or Audited Financial Statement.
(b) The Board may, at its expense, conduct an independent audit of the borrower’s records and inspect the construction and operation of the project.