CHAPTER3

   ECONOMIC DEVELOPMENT LARGE PROJECT PROGRAM

 Section 1. Authority. These rules are promulgated in accordance with the Wyoming Administrative Procedure Act, W.S. 16-3-101 through 16-3-115 and the State Treasurer's rule-making authority in Section 2(j) of 2014 Wyoming Session Laws Ch. 46 (the "Act").

 Section 2. Purpose. These rules are intended to provide detailed procedures by which the applicants for large project loans or loan guarantees shall apply for such loans or loan guarantees.

 Section 3. Applicant. An applicant shall consist of a proposed or existing enterprise "which will employ people within the state, provide services in the state, use resources in the state or otherwise add economic value to goods, services or resources within the state" as mandated by the Act in Section 2(b ).

 Section 4. Materials Required for State Treasurer's Review

  (a) Project application. Applicants seeking a loan or loan guarantee under this program must submit a project application to the Governor, the State Treasurer and the Wyoming Business Council. This project application must contain the following comprehensive information:

   (i) Tab A - A detailed overview of the applicant's business entity, including identification of all principal management and owners;

   (ii) Tab B - A detailed description of the project to be financed, including all costs to be funded and a specific explanation of how the project satisfies the criteria set forth in Section 2(d) of the Act;

   (iii) Tab C- A business plan accurately describing the existing business and its history, future business endeavors, and all characteristics of the project to be funded through the loan or the financing secured by the loan guarantee. The business plan must address, but should not be limited to, the following components:

   (A) The total cost of the project, the amount of financing sought and what costs and expenses for the project will be covered by such financing;

   (B) The source of applicant's required private funds to be used in the completion of the project in an amount which is at least three (3) times the requested loan or loan guarantee amount;

   (C) Collateral offered to secure the loan or the loan guarantee and evidence that the collateral is the property of the applicant and is unencumbered with any other financing or an indication that any such financing will be paid off with proceeds from the loan or the financing obtained in connection with the loan guarantee;

   (D) Term offinancing;

   (E) Any other information reasonably necessary to inform the State's agencies and officials about the project to be financed, the nature of which may vary depending upon the type ofbusiness and facilities at issue;

     (iv) Tab D - A comprehensive chart and detailed description identifying all business entities related to the applicant, whether by contract or through a corporate affiliation;

     (v) Tab E- Financials for at least three (3) years, including tax returns;

     (vi) Tab F - A balance sheet and projected cash flow for the project for the anticipated term of the loan or loan guarantee evidencing ability to repay the loan or the financing guaranteed by the loan guarantee on or prior to maturity;

     (vii) Tab G - Existing short- and long-term financing for property associated with the project to be financed through the loan or loan guarantee;

     (viii) Tab H - A description and survey of the entire project which shall serve as collateral for the loan or loan guarantee and an estimate of value of the collateral, or, if the applicant desires to propose substitute security, then a description, survey and estimate of value of such substitute collateral;

     (ix) Tab I- All real and personal property rights offered as collateral to secure the proposed loan or loan guarantee;

     (x) Tab J - Records concerning environmental health of facilities and underlying real property associated with the project and completion of an environmental questionnaire provided by the Wyoming Business Council with regards to such property which will serve as collateral; if the environmental questionnaire indicates any environmental problems with the property, then further due diligence may be required, such as a Phase 1 and possibly Phase 2 environmental report;

     (xi) Tab K - Notice and identification of any threatened or pending litigation involving the anticipated project or property offered as collateral and/or the applicant (or such entity that will be the borrower) and any guarantor as provided in Section 7(j) below;

(xii) Tab L - Industry-specific information and documentation concerning the applicant's business activities within that industry, including without limitation, regulatory information related to the project to be undertaken; and

     (xiii) Tab M-Any relevant ongoing or new information that arises any time after applicant's initial submission of the above information which may influence or bear upon the review of the proposed loan or loan guarantee, including without limitation, new or altered financing arrangements, statutory, regulatory or rule changes which may impact applicant's project or operations or the proposal thereof, or changes in ownership.

  (b) Additional information. In addition to information in the project application, the State Treasurer may ask for additional information necessary for the State Treasurer's Office to conduct its due diligence and review of the project. Applicants shall respond to such requests in a timely manner with complete and current information. Any documents, materials or information provided to the State Treasurer's Office in connection with its review of the loan or loan guarantee may be shared by the State Treasurer's Office with any other State agency, including without limitation, the Governor's Office and the Wyoming Business Council. If the applicant provides any additional information or documents to the Governor's office and/or the Wyoming Business Council in connection with their review of the project outside the information contained in the project application described in Section 4(a) above, the applicant must also provide such additional information or documents to the State Treasurer.

   (c) Value of collateral. To satisfy the private commitment requirement of Section 2( d)(ii)(E) of the Act and to insure adequate collateral as required pursuant to Sections 2(e)(i), 2(e)(vi) and 2(e)(viii) of the Act, the State Treasurer may instruct the Wyoming Business Council to obtain appraisals and to otherwise assess the value of existing facilities, collateral, and other real or personal property. Any commitments or warranties given by the appraisers for such appraisals shall be assigned by the Wyoming Business Council to the State Treasurer.

   (d) Fee. The State Treasurer shall charge the applicant a loan origination fee or loan guarantee fee in the amount of one percent (1 %) of the total loan or guaranteed loan amount. This fee shall be used to pay for the costs of any experts hired by the State Treasurer and the Wyoming Business Council to aid in conducting the due diligence of the project, including, without limitation, appraisers, accountants, environmental engineers and attorneys. Any part of the origination or guarantee fee not used to pay such costs shall be deposited in the 2014 funding account as provided in Section 2(e)(ix) of the Act. If the cost of such experts exceeds the amount of the origination or guarantee fee, then the Wyoming Business Council shall pay any such excess costs. lfthe loan or

loan guarantee fails to close for any reason whatsoever, the applicant shall pay for, or reimburse the State for, all costs incurred by the State Treasurer and the Wyoming Business Council to review the project and the loan or loan guarantee and to conduct the due diligence necessary for such review, including, without limitation, the costs of such experts.

 Section 5. Program Review and Approval Process; Due Diligence; Closing

  (a) Steps of process. The steps necessary to obtain approval of a loan or loan guarantee under the large project program are generally as follows:

    (i) The applicant shall first submit the project to the Governor and any materials so required by the Governor for his or her review. See the Act, Section 2( c)(i).

    (ii) Simultaneously with submission of the project to the Governor, the applicant shall deliver the project application to the State Treasurer and the Wyoming Business Council.

    (iii) Upon the Governor's issuance of any preliminary recommendations for the size and parameters of the proposed loan or loan guarantee under Section 2(c)(i) of the Act, the State Treasurer shall review the application so that the State Treasurer may provide preliminary recommendations under Sections 2(c)(ii) and 2(e) of the Act.

     (iv) Upon the State Treasurer's issuance of any recommendations under Section 5(a)(iii) above, the Wyoming Business Council shall review the application under the process set forth in W.S. 9-12-601 through 9-12-603, which includes the formulation of a recommendation by a vote ofthe Wyoming Business Council Board.

     (v) The Wyoming Business Council shall forward its recommendation to the Wyoming State Loan and Investment Board for its final approval, or rejection, of the loan or loan guarantee. See the Act, Sections 2(c)(iv) and 2(d).

     (vi) Upon the completion of final approval of the Wyoming State Loan and Investment Board, the application as finally approved shall be submitted to the State Treasurer for final approval as to the structure of the loan or loan guarantee. The State Treasurer shall only give final approval to loans or loan guarantees that are structured so that the terms comply with Section 2(e) ofthe Act.

     (vii) Upon completion of all of the steps described in Sections 5(a)(i) through (vi) above, the application shall be submitted to the Governor for final approval based on his determinations set forth in Section 2(c)(v) of the Act.

(b) Information review. Nothing in these rules shall be interpreted to prevent the State Treasurer, the Governor, the Wyoming Business Council or the Wyoming State Loan and Investment Board from evaluating or reviewing information when that information is available.

  (c) Not subject to contested case procedures. Eligibility for a loan or a loan guarantee under this program shall not be construed as granting a property right, entitlement or expectation in any applicant. Consequently, decisions of State agencies or officials are not subject to contested case procedures and are not otherwise appealable agency decisions pursuant to the Wyoming Administrative Procedure Act.

  (d) Experts. The State Treasurer may hire experts as necessary to fully evaluate and negotiate the terms and conditions of the loan or loan guarantee as provided in Section 2(h) of the Act.

  (e) Material change or new information. After the Governor's final approval of the loan or loan guarantee, the State Treasurer may request from the applicant any materials or information the State Treasurer deems necessary to close the loan or loan guarantee. If, after the Governor's final approval of the loan or loan guarantee, new information is revealed that the State Treasurer reasonably determines should have been provided to the Governor, the State Treasurer, the Wyoming State Loan and Investment Board, or the Wyoming Business Council, or the State Treasurer determines that previously provided material information is no longer accurate or sufficient, the State Treasurer shall not allow the loan or loan guarantee to proceed to closing, and the applicant shall be required to reapply under Section 5(a) above if the applicant desires to proceed with the loan or loan guarantee.

  (f) Attorney General's Office. The Attorney General's Office must provide a written opinion certifying the legality of the transaction and all documents connected therewith, including without limitation, the Financing Agreement and the Mortgage or any other document which creates a security interest in the applicant's property in favor of the State Treasurer. See the Act, Section 2(f).

  (g) Closing. The applicant is required to close the loan or loan guarantee with the State Treasurer's Office within six (6) months of the final approval of the Governor pursuant to Section 5(a)(vii). The applicant may request an extension of the closing deadline in writing and must demonstrate good cause why the deadline should not apply and why a new deadline should be set. The State Treasurer, in his or her sole discretion, may agree to extend the closing deadline. In no event will the State Treasurer provide an extension which would allow the loan or loan guarantee to close more than one ( 1) year after the final approval of the Governor and the State Treasurer without resubmitting the request for the loan or the loan guarantee for the recommendation of the Wyoming    Business Council, the approval of the Wyoming State Loan and Investment Board and the final approval of the Governor and the State Treasurer.

 Section 6. Determination of Eligibility

  (a) Other requirements. In addition to compliance with these rules, projects shall not be eligible for financing unless they satisfy the criteria set forth in Sections 2(b) and 2( d) of the Act.

   (b) Eligible projects and expenses. Eligible projects must generally consist of an applicant's prospectively planned, well-defined business endeavor, and the project shall have a set beginning and completion date. A loan or loan guarantee hereunder shall not be used to fund past business or construction expenditures. Expenses eligible for reimbursement from loan proceeds following execution of applicable loan or loan guarantee documents shall relate back no earlier than the submission of the request for the loan or loan guarantee to the Governor pursuant to Section 5(a)(i) above. Financing under this program shall not primarily serve as a refinance mechanism or otherwise serve to substitute the loan or loan guarantee for an applicant's current lenders.

   (c) Examples of eligible projects. The following economic development projects, to the extent they satisfy the criteria set forth in Sections 2(b) and (d) of the Act and these rules, may be eligible for large project fund financing:

     (i) Manufacturing, fabrication or other industrial production facilities;

     (ii) Agricultural development or food processing;

     (iii) Development of, or improved utilization of, natural resources;

     (iv) Research and development projects that will add economic value to goods, services or resources within or outside the State;

     (v) Destination facilities, other than retail or food service businesses;

     (vi) Product distribution and/or warehousing facilities;

     (vii) Transportation or freight facilities;

     (viii) Scientific testing including, but not limited to, medical, clinical or engineering testing services;

     (ix) Utilities;

     (x) Facilities associated with the management of waste; and

(xi) Other activities that represent a new technology or type of economic enterprise.

  (d) Large project. All loans and loan guarantees issued under this large project program must meet the requirements of a large project as described in Section 2(d) of the Act. In addition, for a loan or loan guarantee to be eligible for the large project program, it must be a minimum of $5,000,000. If the character, scope or size of the project should change at any time after its approval by the Wyoming State Loan and Investment Board, the Governor and the State Treasurer pursuant to Section 2(c) of the Act, then the project must be resubmitted for approval under the process outlined in Section 2(c) of the Act for the project as so revised or modified.

  (e) Non-disclosed litigation or threats of litigation. A request for a loan or loan guarantee hereunder shall be ineligible if pending litigation or threats of litigation are not disclosed with the project application or timely disclosed thereafter.

  (f) Six month deadline. A submission shall become ineligible if the applicant is unable to close on all loan or loan guarantee documents with the State Treasurer within the six (6) month closing deadline set forth in Section 5(g) above, and if the applicant is unable to obtain a written extension from the State Treasurer. If the loan or loan guarantee fails to close, the applicant shall remain responsible for all costs incurred in the due diligence process including, without limitation, the costs of the Wyoming Business Council and any counsel, appraisers, engineers and accountants hired in connection with the State Treasurer's review of the proposed loan or loan guarantee.

 Section 7. Risk Analysis

  (a) Interest rate. The interest rate for any loan under this program shall be a minimum of one percent (I%). The interest rate shall be determined by considering applicable risk factors and the impact of the project.

  (b) Subordinate financing. The loan or loan guarantee documents shall require that the State maintain a first priority lien on all collateral, and no subordinate financing may be placed on any collateral securing the loan or loan guarantee without the written consent of the State Treasurer.

  (c) Insurance requirements. Insurance requirements shall vary based on the type of project which is the subject of the loan or loan guarantee but, at a minimum, general liability and property insurance shall be required in amounts and with terms that are acceptable to the State Treasurer naming the State as a lien holder. At the sole discretion of the State Treasurer, other types of insurance may be required based on the type of project being financed and/or the property which serves as collateral for the loan or loan guarantee, such as business interruption, flood, earthquake, etc.

  (d) Financial covenants. The State Treasurer may require that the loan or loan guarantee documents include financial covenants with which the applicant must comply for the term of the loan or loan guarantee. Such covenants may include standards relating to debt service coverage, debt limitations, net worth, leverage, interest coverage or any other financial metrics determined by the State Treasurer necessary to insure the strength and performance of the applicant.

  (e) Acceleration upon closure of facility or relocation outside the State. The loan documents may provide that, if the applicant should decide to close or downsize the facility or operation which is the subject of the project or relocate such facility or operation outside the State of Wyoming prior to maturity of the loan (or if the actions of the applicant indicate that applicant intends to so close, downsize or relocate the facility or operation) then, the outstanding balance of the loan shall be immediately due and payable including all interest accrued to the date of such payment and any and all fees and expenses due and owing. If the State has guaranteed financing pursuant to this large project program, the guarantee documents shall provide that the guarantee shall be null and void as of such decision to close, downsize or relocate the facility or operation (or as of the commencement of any actions indicating such a closure, downsize or relocation).

  (f) Commencement of project. The documents shall require that the applicant commence construction of the project within one (1) year after closing of the loan or loan guarantee. If the applicant fails to commence construction within such time period, then the outstanding balance of the loan shall be immediately due and payable including all interest accrued to the date of such payment and any and all fees and expenses due and owing. If the State has guaranteed financing pursuant to this large project program, the guarantee documents shall provide that the guarantee shall be null and void after one (1) year if construction of the project has not commenced.

  (g) Other covenants. The State Treasurer may include terms in the documents for the loan or loan guarantee to protect the State's interest, such as (1) escrow accounts,

       (2)  cash sweeps, (3) pledge rights, (4) corporate approval rights, (5) acceleration rights for facility closure or downsizing, failure to meet job creation and tax base requirements and failure to continue to satisfy any requirements necessary to qualify for eligibility for the large project program and (6) other mechanisms the State Treasurer deems appropriate.

  (h) Private funds. Prior to closing a loan or loan guarantee, an applicant must certify to the State Treasurer that the applicant has committed private funds in an amount which is at least three (3) times the requested loan or loan guarantee and that such private funds are being spent on buildings, equipment and direct project infrastructure. The State Treasurer, at his or her discretion, may require additional information, documentation,escrow of funds, implementation of processes and procedures or any other reasonable materials or terms, to evidence this commitment of private funds.

  (i) Collateral. Based on the appraisals and information provided by the applicant for the collateral securing the loan or loan guarantee, the State Treasurer shall determine if such collateral is adequate based on the requirements of Sections 2(e)(i), 2(e)(vi), and 2(e)(viii) of the Act. The State Treasurer shall secure a first security interest in the entire project which is the subject of the financing and must approve any subsequent financing which is to exist at the time of closing or which applicant enters into after closing of the loan or loan guarantee. If the applicant shows good cause why the applicant cannot grant the State a first security interest in the entire project, then the applicant must propose substitute collateral which the State Treasurer deems to be sufficient to repay the loan or loan guarantee in the case of a default and in which the State Treasurer's interest is before the interest of any and all other lenders in such substitute collateral (if such other lenders have been previously approved by the State Treasurer as provided in Section 7(b) above).

  (j) Guarantees by affiliates. The State Treasurer may determine that upon examination and review of applicant's due diligence materials and the proposed collateral for the loan or loan guarantee, that additional collateral in the form of loan guarantees from affiliates of the applicant may be necessary to provide sufficient security to the State for repayment of the loan or loan guarantee.

 Section 8. Post-Closing

 (a) Subsequent requirements. The State Treasurer's Office shall continue to monitor the loan or loan guarantee after the closing. The documents shall contain periodic reporting and compliance requirements that applicant shall be required to satisfy.These reporting and compliance requirements may include, without limitation, (1) an as­ built survey, (2) notification of other debt, (3) annual financial statements, (4) copies of tax returns, (5) number and types of jobs created, (6) property valuation of project for property tax purposes, and (7) notice of any regulatory violations. In addition, applicant shall provide to the State Treasurer's Office, with a copy to the Wyoming Business Council, an annual progress report updating the status of the project being financed by the loan or loan guarantee.

 (b) Subsequent disbursements. Loan proceeds will be disbursed only after project expenses have been incurred. A disbursement request must be provided before closing for loan proceeds to be disbursed at closing, and loan proceeds will be disbursed only for expenses related to the project and incurred after the date applicant first submitted the project to the Governor for preliminary recommendations as provided in Section 5(a)(i) above. Any loan proceeds which are not disbursed on the day of closing will be held by the State Treasurer until applicant has submitted a disbursement request and proof of eligible expenses as shall be provided in the loan documents and as described in Section 6(b) above and approved by the State Treasurer's Office.

 Section 9. Confidentiality. Information and any other documentation submitted in support of a request for a loan or loan guarantee pursuant to the large project program, once submitted to a State agency or official, shall be governed by the Public Records Act, W.S. 16-4-201 through 205, as amended. Upon receiving a request to disclose a request for a loan or loan guarantee or supporting information, the State Treasurer's Office will, if it is the custodian, make a determination as to whether the information must be disclosed. The State Treasurer's Office, before it makes said determination or discloses an applicant's information, will inform the applicant. The applicant may be required to justify to the State Treasurer's Office why information submitted should be withheld under the Public Records Act or any other authority.

   3-10