CHEYENNE -- The Amendment 4 loan program, the product of a particularly lean period in Wyoming's bumpy economic history, is back on the Legislature's agenda.
Amendment 4 got its name because it was the fourth amendment on the ballot in the November 1986 general election.
It authorized the Legislature by a two-thirds vote to appropriate money, based on the state's tax base, into a revolving loan investment fund to promote the economic
development of the state.
The voters, hoping it would mean more jobs, embraced the amendment by a vote of 111,590 to 41,420.
It was the state’s first major attempt to broaden the tax base and to lessen the state's reliance on the mineral industry.
The amendment, which now is Article 16, Section 12 in the Wyoming Constitution, is being used to finance projects covered by Senate File 97.
The bill, which is moving through the Legislature, began life as a vehicle to get a $25 million Business Ready Community state loan for a Cody pharmaceutical company that is planning an expansion that could quadruple the number of employees to about 400 in future years.
Critics pointed out the bill was special interest legislation, clearly prohibited by the Wyoming Constitution.
The sponsors did a rewrite and the bill emerged with the Amendment 4 program as the financing vehicle.
The new bill opened the program to any local government unit or joint powers board.
It also set up a safeguards, or "sideboards" and legislators now call them, with a formal vetting process by state officials.
The bill is designed to handle the Cody loan but also large business projects coming to the state in the future.
The original Amendment 4 loan program was declared a failure after years of activity.
In 1992, a legislative management audit recommended the program be drastically changed or dumped altogether.
The report said most of the bad loans were made during the first year of the program under pressure for fast economic action, while loans made later were doing better. In the end the state wrote off as a loss more than 40 percent of its $18 million in loans.
In their eagerness to get the economy moving state officials had approved loans for shaky endeavors that had too little collateral or none at all.
The highly touted clean coal loan program also failed to deliver.
Some critics blamed the structure of the program which put elected officials at the forefront of the decision making.
Because they want to be liked, the electeds are unlikely to act like hard-eyed bankers when loaning money.
As a result of the disappointing results, the state officials put Amendment 4 aside and were wary for years of new economic development efforts.
Former Gov. Jim Geringer, elected in 1994, revived the movement.
The Wyoming Business Council, established in 1998, inherited administration of the remaining Amendment 4 loans.
The council has a corporate and private business approach to loans and grants.
It does all the preliminary screening and makes the initial recommendation to the governor and the other four elected officials who sit on the state Loan and Investment Board. Former Gov. Dave Freudenthal was a member of the Economic Development and Stabilization Board that handled the loan applications for both the Amendment 4 and clean coal programs.
During an interview several years ago, Freudenthal said the programs failed because it became mired in politics.
"What happened was instead of people showing up with their bankers and accountants, they showed up with their legislators and county commissioners," Freudenthal said.
Because of that history, Freudenthal said he was reluctant to see the state get into the equity business.
Senate File 97 appears to be a further step to get the state into the large project loan business.
With the expertise on the Business Council and the hard lessons of history, Wyoming officials are more sophisticated about the economic development loan business today.
The outcome should be better.
Contact Joan Barron at 307-632-1244 or email@example.com.