wyoming legislative service office commit out form · wyoming legislative service office commit out...

WYOMING LEGISLATIVE SERVICE OFFICE

Commit out Form Altbough submi~sion of this form is 110t mandatory, (0 ensure your handout is included as parl of the official Committee record and is electronically distributed to all legislators, please take a few moments to complete this form and return it and a copy of the handoUT (including an electronic copy, if available) to cOlllmittee s1aff. Thank you for 1aking the lime to provide this information. The Wyoming Legislature welcomes your input into the legislative process.

SECTION 1: COMMITTEE AND TOPIC INFORMATION Committee name:

Joint Appropriations Committee

Meeting date:

Wednesday, January 13,2010

Please provide the agenda item, bill number, or subject the handout addresses:

UW (Agency 067) Budget Presentation

SECTION TVVO: DOCUMENT PROVrDER/AUTHOR INFORMATION Name of person who provided the handout to the committee:

Don Richards

Name of the document author (if different):

Name of the organization that you represent, if applicable:

University of Wyoming

Name of organization that the author of the handout represents (if different):

Please provide us with a telephone number or e-mail address where we can reach you if we have any questions about this handout:

(307) 766-4121

SECTION THREE: ELECTRONIC COPIES OF HANDOUT If you are not providing committee staff with a copy of the document in electronic form at the meeting, do you have a copy of the document in electronic form that you can provide to us?

XX Yes (see note below about how to send us an electronic copy of your handout)

o No

Please e-mail acopyofyourhandoula~anallachmentto;legdocs~_ state . \\.y . us . Please include tIle' committee name, meeting date. document author. document provider. and agenda item ill the body or the e-mail or include 3n elf'ctronic copy of this form along with your sllbmis~101l. If you lw\'c any questions about this form or pHwiding your bandout in an electronic format. please ca1J (307) 777-7i\f\ I.

Explanation and Background: FY 2011-2012 Budget Request

University of Wyoming, Agency 067; WICHE, Agency 069; EORC, Agency 070; and Medical Education, Agency 167

(Al1 pages reference the relevant budget request)

University of Wyoming (067)

I. (p. 18-19) Tuition and fee update

a. SUlnmary of tuition and fee increases .. ..... . .............................................. 1

b. Hathaway and facuIty endownlent . ........................................................ 5

II. (p.21) Wyoming Public Radio [$481,000 in GF, one-time funding]

a. Budget request summary ..................................................................... 7

b. Coverage lnaps ............................................................................... 9

III. (p. 23) School of Energy Resources (SER) [$17.4M in AML funds and $2M in carryover]

a. Budget request sulnmary ................................................................... 15

b. SER facility update, sinking fund discussion, and matching fund budget reduction and transit appropriation clarification .................................................... 17

IV. (p. 25) Carbon sequestration, Wyomjng Carbon Underground Storage Project (WYCUSP) [$45M in AML funds, one-time funding]

a. Budget request sulnlnary ................................................................. .19

V. Note: Clean Coal Research [$14M in AMLfundsJ

a. Summary of history, progress, and budget request. ................................... 23

VI. (p.26) WYOlning Reclamation and Restoration Center [$666k in AML funds]

a. Sumnlary of program ...................................................................... 27

VII. (p. 27) Nuclear Magnetic Resonance Spectrometer (NMR) [$985k in AML funds, one-time funding]

a. Sumnlary of budget request ............................................................ ... 29

VIII. (p. 28) University of Wyoming - General Electric Energy High Plains Gasification -Advanced Technology Center

a. Status update, IP insurance discussion, and AML swap .............................. .31

IX. (p. 32) Brucellosis Testing [$824,000 in OF]

a. Sumlnary of budget request ............................................................... 33

X. (p.34) Center for Distance Learning and Technology

a. Sun11nary of bud get request. .............................................................. 35

b. Note: Governor's Letter #3 - Video COJ1ferencing; Department of Administration and In/ormation, Agency 006, p. 145, discussion ... .... 0 .................................. 39

XL (po 38) NCAR

a. Carry forward .... o ••••••••••••••••••••••••••••••••••••••••••••••••• 0 •••••••••••••••••••••••• 45

XII. (p. 43 ofUW budget; p. 125 of Capital Construction budget) Fine Arts Building, Phase I and (p. 47 ofUW budget; p. 129 of Capital Construction budget) Downey Hall

a. Sun1n1ary and draft budget language for bonding ...................................... 49

XIII. (p. 24 of Capital Construction budget) Major Maintenance

a. Discussion of State Fiscal Stabilization Fund distribution ........................... 51

XIV. (p. 86 of Capital Construction budget) Casper College/UW Joint Facility and (p. 104 of Capital Construction budget) LCCCIUW Joint Facility

a. Discussion ................................................................................... 53

XV. Other

a. Retirelnent contribution ..... 0 ............................................................. 55

b. Athletic facilities loan, modification of interest rate .................................. 57

WICHE (069)

XVI. Background

a. Overview of students and impacts of budget reductions .............................. 59

EORC (070)

XVII. Background

a. Fact sheet .................................................................................... 61

Medical Education (167)

XVIII. (p. 19) Cheyenne Family Practice

a. Summary of budget request and actions taken ......................................... 69

XIX. (p. 29) WW AMI

a. Summary of budget request and statistics ............................................... 71

11

Other

XX. Other legislation external to the budget

a. Wyoming Investment in Nursing (WYIN) and Teacher Student Loan Repa)'lnent Program (TSLRP) ... . .... . ................................................................. 73

Appendices

Appendix A - Draft UW project amendlnents

Appendix B - Draft AML language for the FYl 0 authorizations

111

University of Wyoming 2011-2012 Budget Request

UW Tuition and Fee Discussion Reference pp. 18-19 ofUW's (Agency 067) Budget Request

Tuition Summary. (No Legislative Action Requested At This Time) On November 20,2009, the University of Wyoming Board of Trustees approved a two-year tuition increase across-the-board on all undergraduate, graduate, resident, and non-resident students. The Board approved two years of consecutive, five percent increases on tuition. In addition, three professional programs (Pharmacy, Business, and Law) will have additional tuition increases, or tuition differen6als, to support specific efforts within each of those professional programs.

• Federal stimulus funds from the American Recovery and Reinvestment Act that are expected to be provided to UW will be used to defray the cost of the tuition increase for all students in FY2011. While the tuition rate will increase, no UW student will pay, or be charged, a higher tuition rate in that year.

• The goals of the increase in tuition are two-fold: (i) to increase institutional efforts toward meeting membership in the Greater Western Library Alliance (GWLA), since the 2009 budget cuts adversely ilnpacted institutional efforts to expand quality library collections and (ii) to provide additional funds for instructional excellences - resources and tools that students need for an optimal educational experience such as microscopes, music instruments, and even student travel. (A five percent across-the-board increase in tuition generates approximately $1.5 million per year.)

• Even with these increases, from the resident undergraduate perspective, tuition charges will not have increased at UW for four consecutive school years. Further, UW undergraduate tuition rates will remain the lowest in the country among public, doctoral research universities.

• While the two year plan provides a path forward to strive to meet compelling educationdriven needs on campus, the increases will be insufficient to achieve the competitive educational goals UW strives to attain over time. As demonstrated in the table on page 18 of the UW budget request, in the next biennium (FY13-14) state appropriations will still likely be necessary to meet the goals of membership in the GWLA.

• In summary, the Governor and the State Legislature have been extraordinarily supportive to UW and 1tS operations in the past decade. Given the downturn in the state's fiscal condition, it is now necessary for UW to look elsewhere, including additional support from students, to fund critical progralns and initiatives and maintain instructional quality.

Mandatory Fee Summary. On January 22, 2010 the UW Board of Trustees is expected to consider increases to mandatory student fees on campus. Six mandatory fees paid by all Laramie campus full-time and part-time students will be discussed. Revenue from these fees support: (i) Student Union, (ii) Student Services, (iii) Student Health Service, (iv) Athletics, (v) Campus Recreation Programs, and (vi)

Pi

Transit. Transit and Athletics fees (like tuition) support programs that also receive support from state appropriations. The Board will be asked to approve a two-year program of fees coinciding with biennial budget requests and the above tuition discussions, though it is premature to anticipate the range of potential outc01nes from those deliberations.

• Like tuition increases, federal stimulus funds are expected to be provided to UW and will be used to defray the cost of any fee increase (other than for room and board or pass-through charges from external entities) for all students in FY2011.

• The UW Administration will not endorse any increase in fees that exceeds the total increase in tuition over the next two-year period. In other words, the UW Administration will not support a total fee increase in excess of ten percent over the next two fiscal years.

• By way of example, even these fee increases will likely leave unmet needs in future years. As illustrated by the Transit and Parking Services projected budget on the next page, there remain sizeable unmet needs in future years. UW will aggressively pursue federal grants, community support, expenditure control, and student financial participation in the operations of the transit system moving forward. That said, the potential gap in this area may warrant additional discussions, contingent upon the state's fiscal condition.

P2

Transit & Parking Services Projected Budget

Revenue Base (assuming Federal Grants stay at FYIO levels)

Revenue Adjustments

Mandatory Student Fee Increase

Permit Fee Increase

hpenditure Base

Expenditure Adjustments

Total Revenue

Bus Shelters from FY09 (One-time)

Bus Garage Construction (One-Time)

Bus Replacement (One-Time)

Additional Route (Recurring)

Total Expenditures

Net Income

6/30 Capital Reserve Cash Balance

FYll $2,592,000

$100,000

$2,692,000

$2,230,625

$2,230,625

$461,375

$1,036,375

FY12 $2,692,000

$30,000

$22,000

$2,744,000

$2,397.922

$4,500,000

$162,500

$7,060,422

-$4,316,422

$0

FY13 FY14

$2,744,000 $2,764,000

$20,000 $30,000

$22,000

$2,764.000 $2,816,000

$2,577,766 $2,971,098

$350,000 $150,000

$200,000

$3,127,766 $3,121,098

-$363,766 -$305,098

$0 $0

~""""""""""""'" ~,,""""''','''''~''~ Year Revenue Notes Expense Notes

FYll Capital - Bus Replacement 10 year plan Reimburse Rea I Estate Operations fOf bus shelter insta Ilanon in FY09

Bus garage construction, bus replacement according to plan

Options to fund shortfall:

1) WYDOT/FTA Grant Funding Increase

Innationary Adjustment, Operations 2) Increased Student Fees

FY12 Permit Fee Increase 3) Funding from State Legislature

Add additional Grand Ave. Corridor Route, bus replacement

according to plan


1) WYDOT/FTA Grand Funding Increase

2) Increased Student Fees

Inllationary Adjustment, Sus Replacement 3) Community support (City, community organizations)

FY13 Permit Fee Increase 4) Funding from State legislature

Bus replacement according to plan


1) WYDOT/fTA Grant Funding Increase

2) Increased Student Fees

Inflationary Adjustment, Operations 3) Community support (city, community organizations)

FY14 Permit Fee Increase 4) Funding from State Legislature

Assumptions Increased Expeditures - Based on a 7.5% increase in expeditures on annual basis (salaries, EPB's, fuel, etc)

Permit Fee Increase - Based on a 5% permit fee the 2nd year of each biennium

Bus Replacement· Based on 10 year plan of replacing UW TransPark buses as their service life expires (7-12 years), SO/50 match with

WYDOT

Bus Garage, FY12 - Estimated UW portion to build bus garage at South 15th Street Site, estimated cost $4,500,000

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Hathaway Scholarship Program and Excellence in Education Endowment No Reference to UW's (Agency 067) Budget Request

Hathaway Scholarship Program Update. • As reported by the Wyoming Department of Education students initiating their Hathaway

scholarship in the past three years are as follows: FY07 - 1,858; FY08 - 2,139; FY09-2,327; and FYI 0 - TBD.

• For UW, the table below shows the enrolling students within each of the three tiers of Hathaway scholarships:

T bl 1 C a e . I ti C t fH h S h I h· S d umu a ve oun so at away c oars lp tu ents, by Category.

Opportunity Performance Honors 2006 159 298 172 2007 242 506 633 2008 395 793 1002 2009 537 1057 ]297

• The Hathaway Endowment Fund cost basis at the end ofFY09 amounted to $455.6 million, with a market value of $431.1 million.

• The expenditures of the Hathaway Scholarship program are expected to increase each year, from roughly $14 n1illion in FYI 0 until there are a total of six cohorts fully populated. Expenditures after than point are expected to fluctuate based upon total number of graduating high school seniors, those electing to pursue higher education in Wyoming, and persistence and retention rates while in college. Eventually, the program is projected to have total expenditures approaching $20 million per year.

• Despite the downturn in investments experienced in calendar year 2008, sufficient funds appear to be available to fully support the anticipated number of scholarships throughout the CREG forecast period ending in 2014.

Excellence in Higher Education. • In the 2009 Supplemental Budget Bill (Section 342) the Legislature diverted $3,852,480 in

federal mineral royalties (FMRs) originally directed to the School Foundation Program (SFP) to bolster the Higher Education Endowment Reserve Account. This was done in an environment of severe investment losses and anticipated shortfalls in endowment earnings to support faculty salaries in the coming year.

• Due to both improved investment performance and a change in the approach to accounting for investment gains and losses by the State Treasurer, no funds were ultimately distributed from the Reserve Account during FY09.

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• Furthennore, UW has actively managed the expenditures derived from the Excellence in Higher Education Endowment during the past calendar year. FY09 concluded with several million dollars in the Reserve Account and more than a year's worth of expenditures available within UW's institutional reserves dedicated for the program.

• Nine of the 15 positions contemplated under the Excellence in Higher Education Endowment at UW have been filled. (One additional position has been filled, but is being funded from non-endowment funds at this time, the Spicer Chair.) Still another position, the master teacher in the Art Museum, is fined on a time-limited, further enhancing the management abilities of UW Administration.

• During the 2009 budget hearings~ UW made a commitment to forgo hiring any additional faculty under this program, until the expenditures and revenues stabilized.

• Several of the vacant positions are expected to be partially funded by substantial private contributions, e.g., the Kepler chair in law, the Toppan chair in accounting, and the Gardner and Fiske chair in physiology.

• The University has controlled expenditures in this program to the point where on-going salary and benefit costs (-$1.7 million) are less than the estimated annual earnings going [olWard, even assuming no capital gains, and just under one-third of the internal cash balance managed by UW. Further, the Reserve Account, managed by the State Treasurer has benefited greatly from the unused contributions by the legislature last year, and in fact, may reach the levels that would trigger a sweep of part of the account to help bolster the Higher Education Endowment corpus, as contemplated in statute. After adding in discretionary expenditures and anticipated one-time start-up costs for the existing positions, the financial picture for this program is dramatically better than last year.

• UW is required to submit an annual report to the Legis1ature regarding this program, including infonnation about the faculty members and the funds UW has expended and has on-hand. This report was submitted on October 1, 2009 and will continue to be used to advise the Legislature of the expenditures under the Excellence in Higher Education Endowment.

• Given this background, UW would request that it be relieved from its commitment to freeze all future hiring under this program, especiaUy for those faculty positions for which private funds are available or for which hiring would dramatically assist ongoing state initiatives, e.g., Atmosphere-Biosphere Interaction linking UW's area of distinction to the UW-NACR partnership. UW will commit to continue to monitor the investment environment closely in any additional hires under this program.

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2011-2012 Budget Request

Wyoming Public Radio Sites

Reference p.2l of UW (Agency 067) Budget Request

Lingle Tower. Budget request: $388,000 (one-time funding)

Population covered: 69,712

Cost of frequency: $32,000 (paid by UW) Yearly operational costs: ~$25,000 (paid by UW)

Frequency: 90.7 MHz

Power: 100 KW

Lingle Construction and Operation Budget.

Construction Permit purchase

Engineering modifications and legal fees

Shelter (Thermobond 12'x30'x9' with generator installed)

Antenna (ERr SHPX-12AC with radomes/previously LP-8C)

200' ERI Tower and installa60n

Transmission line (150' 3 1/8" Andrew Helix)

Installation hardware (hangers, ground kits, etc)

Transmitter (Nautel NV20, previously NV 40)

Remote control (Audemat Relio)

Monitoring Receiver (Audemat GoldenEagle)

Network Switch (HP J4900C)

Diagnostic Console (Tripp-Lite B020-008)

Uninterruptible Power Supply (APC SURTA2000RMXL2U )

Equipment Rack (Middle Atlantic WRK-40SA-32) Power strip for above (Middle Atlantic PD-2415SC)

Satelli te receiver (International Datacasting SFX21 03)

Satellite dish and mount

Electrical installation

Site Prep

Total build costs

Electrical Land lease for tower

Telephone

Total recurring yearly costs (paid by UW from internal funds)

Original Budget

$32,000

$10,500

$50,060

$45,000

$35,000

$4,050

$5,000

$167,000

$4,359

$0

$0

$0

$0

$0

$0

$2,300

$6,000

$7,000 $20,000

$388,269

$18,396

$6,000 $720

$25,116

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Kaycee Expansion. Budget request: $93,000 (one-time funding)

Population covered: Modest rural population plus substantial traveling public on 1-25

Cost of frequency: NI A

Yearly operational costs: ~$4,000 (paid by UW: electric -$1,000; phone: -$1,000; lease:

-$2,000) Frequency: 88 .1 MHz

Power: 2 KW

Location: At a existing tower owned by Union Telephone

Purpose: Modify existing application, change channel, change to directional transmission Explanation: UW submitted an application before the Federal Communications Commission (FCC). However, another entity is expected to win the application with a different site and city that precludes UW's frequency at Kaycee. As a result, UW comlnissioned a study that would allow UW to modify its application by changing to a different frequency and use a directional antenna. This modification is only available during the application for proposals which could end at any time, at the discretion of the FCC. The directional antenna is critical to the success of this opportunity.

PB

-0 co

WYOMING PUBLIC MEDIA o servIce of the

~ UNIVER SITY OF WYOMING

Teton

KUWR 91.3

KUWA 91.3

Lincoln Ii Uinta

KUWZ 93.5

KUWR IOS.5

Park

A, Kum 90.9

~

KUWR 91.3

Sublette

KUWI90.S KIUW 88.5

!

A KUWP 90.1

KUWR 91.9

'J .~.

Fremont

KUW189.9

"

.::.

Sweetwa1ter

KSUW 91.3 Crook

Sheridan

KUWG 90.9

.!. 'J

. ..:..' KUWO 91.5

KBUW 90.5

Weston

KUWN 90.S

Johnson Campbell

KOW(9).3

KOUW91.1

NiobrQra

Natrona

Albany KUWR 89.9

KUWR 91.9

KUWl90.11 I J KuwY88.S

Platte Goshen

Carbon I I Laramie

IN ( K

CASPER

j\J ~\ t('()fl~1

F YBrll c)() t ;, , I

) 'J'i8 e L~'j~' rB r Proposed lingle, WY FAC# 177173 214C2

NOTE: This coverage representation shown here is approximate, within which lies the acltJal FCC contour coverage area.

LARAMIE

(~ ;J ( }) c) r 1 j\ I ~)~, ny

-0

• JLAND

( ~j () , ? .. , ,)() : t _ -j. \' J

UNGLE

-0

W

WYOMING PUBLIC MEDIA

T I , • and surrounding area, including approx. 70 miles if 1-90 and 80 miles of 1-25

WPR Kaycee New Service

Frequency: 88,,1 FM

Power: 2KW

Cost of Frequency: N/A

Cost of Construction: $93,000

Yearly Operational Cost: $4,014

electricity: $1,054 phone: $960 lease: $2,000

Located at a tower owned by Union Telephone

Modify existing application, change channel, change to

directional.

a service of the

~UNIVERS1TY OF WVOMING

,,--J-fyattville

Washakie

Hot Springs

'3s.~~

~"'.

Sheridan

Johnson

,Hl1; ........ -I\ " "aycee

""" ., -

Campbell

~ec/use

Converse

University of Wyoming 2011-2012 Budget Request School of Energy Resources

Reference p. 23 of UW (Agency 067) Budget Request

FY 2009/2010 Accomplishments. SER's vision is to ensure that Wyoming fulfills its promise to be a global leader in building a secure and sustainable energy future. SER partners with UW colleges to provide nationallycompetitive undergraduate and graduate instruction in energy-related disciplines, to advance Wyoming's energy-related science, technology and economics research, and to support scientific and engineering outreach through dissemination ofinfonnation to Wyoming's energy stakeholders, community colleges, and government agencies. The major accomplishments over the current (FY09-1 0) biennium include the following:

Academics • Faculty. Faculty were recruited for the remaining 2 positions allotted to SER. At

present, twelve faculty positions are authorized within SER. One position was filled (Reclamation and Restoration Ecology) and one offer is pending (Catalysis).

• Degrees. Energy Resource Science BS Degree program was designed, approved by the UW Board of Trustees, and offered starting with the fall semester of 2009. Simultaneously, the Board of Trustees approved an Energy Systems Sciences BS Degree offered through the College of Engineering and Applied Sciences.

• Graduate Students. Graduate Assistantship Program supported 70 graduate students over that time frame - 16 from the original awards and 54 new awards that are currently ongoing.

• Summer Programs for the State. The Energy SUIDlner Institute was offered each year. Forty-two high school sophon10res and eleven teachers have completed the two week programs.

Research • Matching Research. The Matching Grant Fund continues to meet the objective of

providing UW faculty with an advantage in capturing outside grants. Approximately $3.6 million have been committed to new proposals.

• Research Centers. Nine research centers are in various stages of operation. Four new centers - Carbon Management, Clean Coal Technology, Energy Economics and Public Policy, and Fundamentals of Fluid Flow - were organized during this biennium.

• Uranium Initiative. A Uraniulll program was initiated after the legislature appropriated $1.6 million for that purpose in the 2009 session. SER worked with stakeholders from industry, regulatory agencies, and research providers to organize a 2-day workshop of experts entitled ~'Uranium Extraction Workshop - Identifying the Challenges and Opportunities for Research" that was held September 22-23,2009 in Cheyenne. Results of that workshop led to the development of an RFP for research proposals that was issued in January 2010. Additionally, a public forum on the topic of Uranium recovery is under development to be held in April 2010

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Outreach • Leadership/Staffing. The position of Associate Director for Energy Outreach was

accepted by Mary Byrnes. • Conferences and symposia. SER sponsored and/or coordinated ten symposia,

conferences, workshops and 5 colloquium speakers during the period .. These have included transmission conferences, energy economic sUlnmit, symposia on global competition of energy, energy policy forums such as the Western States Energy and Environment Symposium as directed by the legislature, C02 and climate conferences, and programs on technology advancements.

• Legislative Outreach. SER has also assisted in organizing UW energy expertise to address legislative issues requested for interium study - particularly for the Wind Energy Taskforce.

Development Activities • Building. Levell planning for the Energy Resource Center was completed. $21 million

has been raised through gifts and state matching funds for construction of the building. Construction is anticipated to commence in late 20] 0

• Fundraising. Significant new gift commitments came from Arch Coal, Inc., Peabody Energy, and Ultra Petroleum.

Looking forward - Total FY 2011-2012 Budget Request. SER is requesting an operating budget of$19,477,580 for the FY201112012 Biennium. The budget is spread approximately evenly across the two years - $9,761,212 in PY2011 and $9,716,369 in FY2012. The budget will be distributed among salaries for SER personnel, stipends for graduate students and visiting scholar, three program areas, and administration. An outline of the budget, by category is provided on pages 22 and 23 of the 067 Budget.

In sum, the request for the 2011-2012 biennium is identical, in to, to the 2009-2010 biennium, with a request to carry forward $2 million fro In the prior biennium.

P16


SER Facility Update, Sinking Fund, Matching Funds Discussion, and TransPark Parking Lot Not Referenced in UW (Agency 067) Budget Request

SER Facility Update. (No Legislative Action Requested) Levell planning for the Energy Resource Center has been completed. This process defined the programmatic content for a truly outstanding building consistent with the mission of SER, and resulted in a recommendation for 30,000 assignable square feet. A Request for Qualifications (RFQ) was issued. Four design and engineering teams - all with Wyoming leadership - were shortlisted and interviewed. Fee negotiation is ongoing prior to an anticipated award of the contract by the BOT.

Twenty-one Inillion dollars has been raised through gifts and state matching funds for construction of the building. Additional funds are still being sought from the private sector to support a technology package that will add substantially to the functionality of the building. Approximately $2 million remains in state matching funds set aside for the building. Site preparation at the anticipated location for the building (Old Power Plant) is nearing completion. With proper approvals, a fall 2010 start of construction and a first quarter 2011 commissioning is targeted.

Sinking Fund Discussion. (Amendment #8, in Appendix A, proposed) Legislative language initiated in 2006 requires UW to establish a sinking fund for operation and maintenance of the Berry Center and Energy Resources Center. Construction funding for these two facilities is being provided through gifts and state matching funds. UW remains fully committed to addressing the costs of operations and maintenance for both of these facilities, without requesting additional state appropriation. However, it is simply not possible to raise private funds from donors to create a sinking fund, from which the interest is sufficient to address the costs of operations and maintenance. Consequently, UW is requesting to Inodify that legislative language to separately account for and fund these operations and maintenance from existing UW resources, rather than an up-front sinking fund. (The proposed language is provided in Amendment #8, on page vi, of Appendix A.)

Matching Fund Budget Reduction. (Amendment #7, in Appendix A, proposed) As a result of the June 2009 statewide 1 ° percent budget reductions, the Governor allowed UW to use $5 million in one-time budget reductions to immediately meet the required $18.3 million budget reductions required of UW to achieve the immediate ten percent cuts. This allowed UW to phase-in savings from reductions to salaries, support budgets, and the phase-down of certain units, as well as raise more funds, for example through commercial relationships, e.g., rents over the subsequent fiscal years. In order to implement this portion of the budget reduction, legislative action is required to decrease prior appropriations to UW for state matching funds, including matching funds for the School of Energy Resources facility and several other state-private facility matching projects. This amendment, if adopted, results in the return of $5 million to the state's General Fund. (The proposed language is provided in Amendment #7, on page v, of Appendix A.)

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Clarification to the Purchase of the South Lot for UW TransPark. (Amendment #7, in Appendix A, proposed) Within the same language as the $5 million matching fund budget reduction, proposed language would allow UW to expend a portion of the previously appropriated $].4 million for the purchase of the south parking lot for UW' s TransPark operations to raze existing structures on the property and render the lot suitable for parking. In short, it was originally anticipated that the lot owner would tear down the old buildings as part of the purchase. He has declined that route, but allowed UW to purchase the property for substantially less than the $1.4 million. UW is requesting authority to use the balance of the appropriation to raze the buildings, which are in poor condition and beyond costeffective repair, and pave the footprint for suitable parking.

P18

Carbon Storage


Carbon Sequestration - WY -CUSP Reference p. 25 in the UW (Agency 067) Budget Request

Demonstrating carbon storage at sub-commercial scale (5 to 10 million tons) in one or more Wyoming geologic fonnations is critical to the future of the state's energy economy. Wyoming supplies 10.6 quadrillion Btus of energy annually to the U.S., or 10% of the nation's energy. In 2008,700/0 of the energy supplied by Wyoming consisted of coal (467 million tons), which emits more C02 per unit of energy than oil or gas, and is used primarily for power generatlon. Furthennore, even though oil and gas consumption used for power generation may yield lower levels of C02, production of C02 emissions from any fossil fuel is unlikely to be exempt from the same economic and governmental constraints.

Federal regulatory efforts, federal legislation, and the world marketplace will seriously impact the health of Wyoming's fossil fuel industry. Regardless of one's views on global warming, the effect of governmental policy and the economic environment will impair the viability of Wyoming coal as an energy source. If Wyoming waits until all federal regulations and legislation are in place to begin to seriously pursue carbon storage, then the prospects for a successful outcome are greatly diminished.

The federal government has clearly recognized the value of commercial scale storage of carbon dioxide by funding seven regional demonstration partnerships across the country. These projects are in various stages of development, but it is clear that many of them will face serious barriers and will likely not become fully operational for a number of reasons. Those reasons include the difficulty in evaluating geologic structures suitable for storage, as well as the availability of carbon dioxide. Moreover, these federal1y funded projects, even if they eventually move forward, are much smaller than sub-commercial scale project envisioned in Wyoming.

Unlike other demonstration projects, Wyoming is prepared to proceed to comprehensively evaluate a promising site in the Rock Springs Uplift. Then, if the site is detennined to be suitable, AML funds would be used to leverage federal and private sector participation in a subcommercial scale carbon storage project. The WY -CUSP proposal has the benefit of discrete stages and measureable milestones whereby the suitability of a site for carbon sequestration can be detennined up-front, risks to proceeding to the next stage can be assessed, and non-state funds can be leveraged in a sequential manner in order to develop a more viable contribution to both industry and science.

If the sub-commercial demonstration project is successful, it will provide the data and techniques which the private sector can use to begin a carbon storage industry in the state. That will sustain coal's place in the nation's energy mix, as well as provide a new economic engine for Wyoming.

Enhanced oil recovery - C02 is currently used in large quantities for enhanced oil recoveryabout 6 million tons annually. Coal fired electric generation in Wyoming produces nearly 30

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Inillion tons ofe02 annually. That's far more than can be used in EOR. WY-CUSP will seek to sequester only a fraction of the total production of C02. At present, it is not the expectation of the WY -CUSP project to compete for C02 in the market against operators of enhanced oil recovery. Rather, the expectation is to secure unused C02 from existing "take or pay" contracts or secure C02 froIn a variety of potential other sources to avoid econon1ic competition with the EOR operations in Wyoming. More importantly, EOR can use only a fraction of the C02 necessary to make a significant reduction in emissions.

Project funding

2009 appropriation (AML - $8M) - The Governor and Legislature to date have used AML funds first to address abandoned mines issues across the state and then to fund initiatives to strengthen Wyoming's energy portfolio.

The 2009 Supplemental Budget Bill authorized $8 million in AML funds to leverage support from other sources to begin efforts to characterize geologic fonnations that are believed to have the greatest potential as C02 storage sites. SecUling support from non-state sources underscores the relevance and importance of the work that UW is attempting to accomplish.

Consistent with the narrative in the 2009 budget request, UW has in fact leveraged these AML funds to obtain support from both the federal government and the private sector. Moreover, UW has worked in concert with the Wyoming State Geological Survey and also leveraged research funds administered by the Clean Coal Task Force. The commitments are in place and field work began in Dec. 2009 to place a stratigraphic test well on state land in the Rock Springs Uplift.

The following chart indicates specifically where the $8 million from 2009 has been committed:

Project Total AML Other sources project Fund

portion Geologic Site Characterization In $16.9M $6.3M $5M US Dept of Energy Rock Springs Uplift - (drill well and $3M+ in-kind frOln private extensive testing) sector

UW in-kind support C02 Education and Training $1.9M $0.90M $1.0 M Dept of Energy Study Sequestration in depleted gas $ 1. OM $0.5M $O.5M from Clean Coal Task field in the PRB Force research funds Post doctoral researcher; seismic $0.25M $0.25M N/A processing and proj ect staff

Total $20.05 M $8.0 M

Note: Those sources in italics represent internal, state matching funds. The external matching sources leveraged total approximately $9M+.

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2010 Appropriation (AML-$45M) The 2010 appropriation will be used in two ways. First, approximately $10 million will be committed to the Rock Springs Uplift test well effort so that a C02 injection well, rather than a stratigraphic test weJ] can be drilled. Further, this $10 million represents a contingency amount that would not be fully expended unless the site is detennined to be suitable for C02 injection. A stratigraphic test well wi11 provide critical infonnation, but an injection well wi11 provide the capacity for far more sophisticated evaluation of the three distinct geologic zones to detennine their suitability for a demonstration project. It is infonnation that the private sector will need to detennine whether to invest further in this project. Nonetheless, the bulk of the funds will not be expended until the tests to detennine the feasibility of the geologic structures are complete and until there are commitments for non-state support.

Well drilling, testing and evaluation will occur through fall 2011. Then, if the evaluation detennines that the site is suitable for a demonstration project, deVelopment of the project would commence.

As was the case with the 2009 AML funding, UW also will pursue efforts to secure commitments from federal, international and private sector sources to leverage this appropriation. In fact, those efforts have already begun. Assulning that efforts to match the appropriation are successful, if the project is feasible, the total budget for development of the project may exceed $70 million.

WY -CUSP will provide for injection of C02 for several years, and then there will be extensive monitoring and verification to ensure the C02 remains captured for an additional period of years. Once WY -CUSP demonstrates the feasibility of injection and storage, the project could continue as a research platfonn, become a commercial operation, or be some combination of both. The infonnation gathered and techniques developed at this site can be applied to other prospective storage sites in Wyoming and elsewhere.

UW will of course take advantage of the educationa] opportunities that WY -CUSP will provide for our students. But those education benefits, while important, are secondary. The primary purpose ofWY-CUSP is to establish a sub-commercial-scale carbon storage demonstration project of national, and international, significance that will provide direct benefits to the breadth and longevity of Wyoming's energy economy.

The site evaluations that are already funded should be complete by 2011. Assuming the site is feasible, WY -CUSP will be fully developed over a period of years to include:

One or more additional C02 injection wells with associated compressor and ancillary equipment necessary to inject commercial quantities of C02 into receiving formations. (This aspect of the project offers a range of additional research opportunities on produced water that could benefit a number of Wyoming interests and industries.)

Pipelines as necessary to transport C02 to the injection welles).

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Smnmary

Water production wells to manage the subsurface fluid pressures resulting from injection.

Pipelines and other necessary infrastructure to treat and transport water, and facilities to evaluate how best to use that produced water.

Associated monitoring equipment for MVA (monitoring, verification, and accountability).

• The ability to sequester carbon is critical to the long term viability of Wyoming's energy industry.

• Wyoming win receive additional economic benefits if successful carbon sequestration at commercial scale can occur within the state.

• WY-CUSP is a necessary step on the path to a commercial scale demonstration project which will:

o Leverage non-state resources to support its development o Demonstrate technical feasibility of carbon storage through monitoring,

verification, and accountability (MVA) o Provide a platform for developing techniques that will increase the

economic viability of carbon storage o Provide opportunities to train a workforce with state-of-the-art skills

applicable to carbon storage o Create the potential for generating revenue from carbon storage

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2011-12 Budget Request Coal Task Force Matching Funds for Research

(External to UW (Agency 067) Budget Request

The Governor recommended an appropriation of an additional $14,000,000 in Abandoned Mine Land (AML) funds for Clean Co a] Technology Research Inatching grant program. This appropriation would continue, at an accelerated rate, advanced clean coal research and development with a required dollar for dollar match from non- State of Wyoming funds.

Background and History. In 2007 Laws, Ch. 186 (2007 House Bill 301) the Legislature created the Clean Coal Task Force (CCTF) consisting of the melnbers of the current University of Wyoming Energy Resources Council. This original legislation appropriated $2,500,000 to an account which could only be expended upon appropriation by the Legislature. The legislation also directed the Task Force to solicit proposals for research in clean coal technologies and required that the appropriation could not be disbursed unless there was a dollar for dollar match for the research from non-State of Wyoming funds.

In September 2007, the CCTF recommended funding of 4 proposals. The recommendation was endorsed by the Joint Minerals, Business, and Economic Development interim Committee, and money was appropriated by the Legislature to fund those projects.

To summarize activity since 2007, three separate appropriations of funds have been made to the CJean Coal Research Account: $2.5 in 2007, $3.8 in 2008, and $10,613,047 in 2009. Nine projects have been funded to date for the current fiscal year for a total of $4,494,60 1. The Clean Coal Research Account currently holds $6,425,680 to fund new research.

To summarize, three separate appropriations of funds have been made to the Clean Coal

Research Account:

Appropriation Amount

2007 Appropriation $2,500,000



Subtotal $16,913,047

2007 Commitments ($1,822,481 )

2008 Commitments ($2,672,120)

2009 Commitments ($5,992,766)

Remaining Balance $6,425,680

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An additional RFP was issued in October 2009 to solicit proposals in an effort to accomplish two

goals: to fill gaps in the technology profile represented by endorsed projects, and to put

remaining funds in the account to work in a timely manner. The solicited research areas include:

1) pre-combustionlpre-gasification coal technologies;

2) combustion and gasification design technologies;

3) post-combustion/post-gasification gas clean up;

4) advanced cycle technologies;

5) air separation technologies;

6) in-situ gasification technologies;

7) coal-to-liquids I coal to natural gas technologies; and

8) economic analysis studies examining the costlbenefit of combustion and gasification

of Wyoming coals at altitude.

Eight proposals were submitted whjch will be reviewed by the CCTP and presented to the Joint

Minerals, Business and Economic Development legislative comn1ittee in early 20] O.

Approved Research. On the fol1owing page, Table 1 summarizes the 2009 endorsed projects.

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Table 1. 2009 Clean Coal Technology Fund Endorsed Projects.

Proposal Title Submitted Funding Outside

By Requested Match Cryogenic Carbon Capture Sustainable $1,405,744 $1,405,750

I

Energy Solutions

Removal of Synlhesis Gas Pollutants & Liquid Ceramatec $ 950,000 $950,393 Fuel Synthesis ~ Part 2 WRI

Demonstration of Hydrogen Production from EERC $300,000 $600,000 Wyoming Coal

Development & Evaluation of Non-Carbon Western $350,000 $350,000 Sorbents Research

Institute

Extended Operational Runs on Emery Hybrid Emery Energy $1,340,650 $1,340,650 Gasifier to Accelerate Commercial Adoption Company

Supplemental Budget for "Capture & UW $106,382 $106,382 Mineralization of Carbon Dioxide from Coal Combuslion Flue Gas Emissions: Pilot Scale Studies"

C02 Sequeslration in Depleted Wyoming State $ 500,000 $500,000 Compartmentalized Gas Fields-the Key to Geological Deploying Clean Coal Technology in the Powder Survey River Basin, Wyoming

Hydrogen Separation for Clean Coal WRlfT om Barton $1,000,000 $1,000,000 Applications

-

Totals $5,992,766 $6,253,175

Outside Match Organization

BYU IL CCI

Office of Naval Research

National Center for Hydrogen Technology

NanoScale Amended Silicates, LLC

WRI Emery Energy Co.

UW

Wyoming Carbon Sequestration Fund

DOE Idaho Nat'l Lab WRI

Total Funds

$2,811,494

$1,900,393

$900,000

$700,000

$2,681,300

$212,764

$1,000,000

$2,000,000

$12,205,951

Technology Areas

Carbon Capture

Synthesis Gas Clean-up

Hydrogen Separalion

Carbon Capture

Combustion and gasification design

Carbon Capture

Carbon Sequestration

Hydrogen Separation

10 N c....


Wyoming Reclamation and Restoration Center Reference p. 26 ofUW (Agency 067) Budget Request

Mission. The Wyoming Reclamation and Restoration Center (WRRC) is an interdisciplinary program housed at the University of Wyoming. Its mission is to develop, collect, and disseminate impartial, scientifically-based information related to the reclamation, rehabilitation, and restoration of disturbed lands in high-altitude, arid regions of Wyoming and western US. Activities of the Center involve training of students about reclamation ecology, research into best practices in reclamation of disturbed lands, and extension and outreach for practitioners of reclamation ecology in the energy industry, state, and other interested agencies and businesses.

Background and update. In 2009-20] ° the Wyoming State Legislature provided $2,000,000 in AML funds to the WRRC. $1,500,000 was used to initiate an endowment with a target of raising up to $10,000,000 from outside, private sources. $500,000 was used to start bringing WRRC operations up to speed over 3 years. This funding was used to support the WRRC director, two graduate students, operations and travel, and extension activities and publications. The $500,000 was released to UW in late August. Since then, Dr. Pete Stahl has been acting as director and UW hired a V2 time administrative support person. Two graduate students are working on projects related to bond release and invasive species (weed) management on industry sites. An engagement liaison team that includes members from the state DEQ, BLM, industry, and consulting has been formed to use as a listening and advisory team. The WRRC has been deeply engaged in the development of plans for the proposed development of Continental DivideCrestone project, reclamation on the Pinedale Anticline. Further, an extension publication on reclamation is in press and several more are in the pipeline. The team has held its first workshop on basic reclamation in Rawlins (October, 2009) with great reviews. More sessions are proposed for early 2010 in Pinedale and Buffalo. Targeted workshops on clean air and invasive species management are in the planning stages for 2010. An additional $666,000 in AML funds are requested to fully implement the WRRC programs in extension, research, and teaching in anticipation of raising the endowment within 3 years.

Enhanced Funding. 1. Enhanced funding for reclamation ecology program: $666,000 (AML funding; figures

are biennialized) a. Personnel (Admin support person, director, research): $150,000 b. Extension professional ($60,000/year) $] 20,000 c. Extension activities/publications $ 36,000 d. Graduate students $160,000 e. Workshops and industry liaison activities $100,000 f. Laboratory analyses on soil, plants, and water: $] 00,000

In addition, faculty salaries are already covered in the University; and a high-level position in reclamation ecology was will join the faculty of the School of Energy Resources in April 2010.

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Benefits of Enhanced Funding. Additional funding for the Center will build on this core of existing expertise and activity, pennitting the center to expand its reach. The first infusion of AML funds brought outreach and engagelnent capacity, which will be augmented by the extension professional. Additional graduate student stipends will allow the program to continue to match projects being funded by industry and help support faculty working in reclamation. Analyses in the laboratory will support research and monitoring being conducted by WRRC personnel. It would also provide leverage for the continued pursuit of competitive external funding to support WRRC's activities, which address the increasing demands brought on by energy development, drought, and other impacts to Wyoming's fragile rangelands. Fully funding this center will (1) support the fundamental administration and coordination for center activities, (2) develop best management practices for publication and outreach, (3) train new and current practitioners of reclanlation ecology for energy industry as well as others concerned about restoring damaged lands, and (4) help sustain research to fill gaps in scientific knowledge about reclamation and restoration. Continued funding over the next two years will expand research about wildlife habitat, paying special attention to sage grouse habitat. Other activities to be expanded include in-depth studies about the properties of disturbed soil and how such perturbation might be minimized or mitigated in advance. Ongoing investigation of the economic choices and economic impacts of various policies will be conducted as well. These activities are essential to the energy industry, because the opportunity to extract coal, gas, and other subsurface resources from Federal and State lands is closely tied to the ability to reclaim, mitigate, manage endangered species habitat, and otherwise maintain Wyoming~s landscape.

Proposed Section 300 Revision. Amendment #9, on page vii, of Appendix A of the draft UW project budget amendment, a draft amendment is provided that would authorize UW to use the $1.5 million appropriated in the 2009 General Session to leverage gifts and increase the endowment as envisioned. The initial state appropriation has resulted in significant interest in financial partnerships, especially from industry. The proposed modification to the Legislature's narrative would allow two benefits: (i) it would allow private sources to be secured, as envisions and (ii) it would allow for the investment of these funds along with private contributions by the University of Wyoming Foundation in accordance with its investment policy, so a higher rate of return over time will result.

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NMR Uses.


Nuclear Magnetic Resonance Spectrometer Reference p. 27 ofUW (Agency 067) Budget Request

A research nuclear magnetic resonance (NMR) spectrometer is a powerful tool that will provide UW a competitive advantage in both research and education in several fields, including Chemistry, Chemical/Petroleum Engineering, Molecular Biology, and Pharmacy. In simple tenns, it enab1es the study of very large molecules, e.g. pollutants, composite materials, and biological materials, in sophisticated ways. Following are examples of uses of an NMR.

Fossil Fuels

A modern NMR can be used to chemically characterize all types of fossil fuels, to relate the chemical structure of asphalts to physical and rheological properties, to detennine the effects of different drying methods on coal structure, and to study the hydration kinetics of coal fly ash and spent oil shale. There are substantia] opportunities to continue work in these areas.

Solar Energy

Two strategies to improve semiconductor solar collectors appear especially promising: (l) NMR solid state analysis of existing thin film inorganic photovoltaic material in order to understand the influence of defects and the ordering or disordering of elements within the semiconductor layers in the cell on the overall solar collection efficiency. (2) The use of conventional solution state NMR to help design new solar cells based upon emerging technologies such as semiconducting polymers and small organic molecules.

Catalysis

Catalysis, research related to catalysts, is critical to develop rational approaches to selective hydrocarbon conversions to more useful products. One important example is the selective and efficient conversion of methane (natural gas) to easily transported methanol and other a1cohols. It is estimated that 40% of all natural gas is wasted (flared off) due to the lack of on-site conversion technology. NMR spectroscopy is essential for detennining the detailed molecular interactions of hydrocarbons (natural gas, oil, coal, etc.) and related materials with well-defined catalysts.

Other Alternative Fuels

An extremely important research effort in Energy Science involves metal catalyzed water splitting for the fonnation of hydrogen as a fuel. This involves the construction of organic (hydrocarbon) scaffolds that bind specific metals, which absorb energy from the sun. These complexes then "photocatalyze" the splitting of water into oxygen and hydrogen. The synthesis/construction of these organic scaffo1ds requires the use of NMR for characterization of

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the materials. The will provide indispensable infonnation for design of new generation materials with improved hydrogen generation ability.

Environmental impact

NMR can be used to characterize soil organic matter and humification processes in soils. This is of course important if one is studying the environmental impact of energy usage and extraction. Small changes in organic soil matter can playa critical role in the global carbon cycle and the efflux of CO2 into the atmosphere.

NMRatUW. Some nlajor scientific equipment is sufficiently expensive, e.g. approaching $1 million, and UW's instructional excellence budgets are sufficiently limited, that no one academic department or consortium of UW departments can pool their resources to purchase the equipment.

UW has aggressively pursued federal funding for other major equipment, e.g. electron microscope, and mass spectrometer, all in the range of several hundred thousand dollars. However, a source of revenue for a modem NMR spectrometer has not been identified.

A modem 600mhz NMR is increasingly expected to be a typical resource at research university. In fact, the absence of such an instrunlent was a factor in a faculty candidate's decision to tum down an offer of employment at UW.

This instrument will be used for a variety of energy related research and education efforts at UW. As such, UW proposed that AML fund be used to fund this acquisition at a cost of $985,000.

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University of Wyoming 20] 1-2012 Budget Request

UW-GE Energy High Plains Gasification - Advanced Technology Center Update Not Referenced in UW (Agency 067) Budget Request

Status Update. This summer, the Governance Board for the High Plains Gasification - Advanced Technology Center (HPG-ATC) and the Board of Trustees selected a proposed site in the Cheyenne LEADS Business Parkway from among 15 competitive proposals. Furthermore, TriHydro Corporation of Laramie, was selected as the permitting consultant and is under contract with UW. Front-end engineering and design work, procured by GE Energy, is also on budget and on schedule. Environmental permits are expected to be submitted in early 2010, with additional final design to commence later in 2010. The project remains on track for a commissioning period to begin in mid to late 2012.

Abandoned Mine Land (AML) Fund Swap. (Amendment #5, in Appendix A, proposed) In 2009, the Legislature adopted an amendment to all AML-funded projects associated with the University to allow for a substitution of university block grant funds for AML projects, except for the HPG-A TC project. This is necessary and appropriate in order to avoid matching AML funds with federal funds, avoid impractical federal limitations on the expenditure of funds, or in the case of the HPG-ATC, to avoid the creation of federal rights to gasification technology developed at the facility. The proposed amendment merely allows UW to operate under the same constraints with AML funds on the HPG-ATC project as all other AML-funded projects. (The proposed language is provided in Amendment #5, on page iv, of Appendix A.)

Intellectual Property Insurance Discussion. (Amendment #6, in Appendix A, proposed) GE Energy LLC understandably expected that UW would be liable, as a private finn would be, for unauthorized disclosure of GE Energy's intellectual property associated with the HPG-A TC project. UW typically procures insurance to cover potential liability when it enters into contracts, consistent with Wyoming's Governmental Claims Act. Commercial insurance for claims of this type is not readily available. The likelihood that UW would wrongfully disclose such information is remote, but the consequences of such disclosure could be very detrimental to GE Energy.

As such, UW, with the approval of the Board of Trustees and with consultation of the Attorney General, arranged for special insurance (called "fronting insurance") through United Educators (UE), UW's primary insurance carrier. Under Wyoming law, it is essential that this arrangement take the fonn of insurance, which is only related to unauthorized disclosure of intellectual property. The insurance policy is for $15 million and the deductible is $14.9 million. Like the state, UW invests operating funds as revenues flow in and expenditures occur. UW has agreed with the insurer to keep operating funds invested in short-tenn fixed income securities and committed to pay the deductible. This cOlnmitment will have no effect on UW operations, absent a claim, which is believed to be extremely remote.

If a claim were filed, it would be some time before the matter was resolved and any payment required. However, if there were a claim and UW had to pay the deductible, UW's operating budget would necessarily be affected. The reporting requirement proposed in Amendment #6 ensures the

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Governor, Attorney General, and the Joint Appropriations Committee are aware of the claim so that the discussions could occur regarding the fiscal consequences of the claim. (The proposed language is provided in Amendment #6, on pages iv and v, of Appendix A.)

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2011-12 Bienniuln Budget Request

Brucell osis Vacc1ne and Testing Research

Reference p. 32 of UW (Agency 067) Budget Request

With this biennium budget request of $824,000, the College of Agriculture and Natural Resources will continue to support brucellosis research. This funding includes $200,000 to fmiher the ConsortiU1l1 for the Advancement of Blucellosis Science (CABS) which was initiated in the 2009 supplenlental budget. CABS is pursuing a strategy for public and private funding (not htnited to WYOlning public funds) in the support of research leading to developlnent of iInproved vaccines and diagnostic tests for brucellosis in cattle, elk, and wild bison. It also includes $400,000 to support ongoing test and vaccine developnlent in the college and $224,000 to support the hiring of a Inicrobiologist to further the brucellosis vaccine and tes6ng research.

Background. Brucellosis is a disease of COnCelTI to wild animals, dOlnestic animals, and hUlllan health. It is estinlated that the federal govemnlent, state agencies, and the livestock industries have spent billions of dollars to eradicate brucellosis in the United States. A reservoir of one fonn of brucellosis persists in elk and wild bison in the Greater Yellowstone Area. The situation is aggravated by concentration of elk in winter elk feedgrounds.

Current vaccines are marginally effective at best. A critical tool for infection Dlanageolent will be developolent of more rapid and effective tests for the disease and the developluent of a vaccine that is effective in cattle, elk, and wild bison.

Development of such a vaccine is not likely to be economically feasible in the private sector. The market for this sort of vaccine, with its potential use in only three mountain states, would not justify the costs of research and developnlent that will be required.

In order to address this issue, a workshop, co-sponsored by the United States Animal Health Association, the Haub School and Ruckelshaus Institute of Environment and Natural Resources, and lllultiple state and federal agencies, was held in Laramie in 2006. That workshop invited dozens of scientists froln several nations and backgrounds to address the needs for developing an effective vaccine, effective delivery methods for a vaccine to wildlife, and lllore effective diagnostic tests. That team produced two reports, "The USAHA Laralnie Agenda" (www.UASAHA.org/pubs/2006Aug USAHA LaranlieAgenda.pdf) and a Technical Report, (www. U SAHA .org/pubs/2006A ug TechnicalReport GY A -Elk-Bison -Brucellosis. pdD.

The research effort to develop a vaccine and diagnostic tests could easily span 10 to 15 years. The scientists and stakeholders estimate that over the 10 to 15 year period, literally tens of 1nillio11s of dollars, fron) a variety of sources, will be required. But the first step, and a major recommendation of the 2006 workshop, was that a consortium of scientists and concerned stakeholders be fOlmed to initiate, oversee, and conduct research into the topics of vaccine and diagnostic test developlnent.

Consortium Proposal ($200,000). In 2009, $100,000 was appropriated to UW to initiate the consortium (the Consortiunl for the Advancenlent of Brucellosis Science (CABS). It is

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requested that the same level of funding be made available for each year of the FY 11-12 biennium to sustain the CABS consortium effort ($200,000 for the bienniuln). This initiative is following the recommendations of the USAHA Laramie Agenda to establish a consortium to oversee and coordinate research into the development of vaccines, vaccine strategies, and diagnostic testing for brucellosis in cattle, elk, and wild bison. This consortium is headquartered at the University of Wyoming, College of Agriculture and Natural Resources. Two teams have been fonned, one involving scientists nationwide who are interested in this topic and the other consists of stakeholders interested in seeing the vaccine and tests developed. The goal of the consortium is to facilitate, pursue and manage funding from a variety of sources, and oversee long-tenn research directed toward development of brucellosis vaccines and diagnostic tests. To date the teams have met and proposals for funding strategies have been developed. In addition, current research efforts have been (and are being) catalogued to assist the team in being sure all appropriate scientists and laboratories are involved.

Support Ongoing Brucellosis Research ($400,000). Funding of $400,000 will be used exclusively for brucellosis vaccine and test method development at the University of Wyoming for the next biennium. The research is intended to develop a rapid, easy to use, and more accurate, animal-side test for brucellosis in the first year and would support a challenge study investigating a different vaccine for brucellosis in the second year. A prototype animal-side test that would pennit quick identification rather than holding animals, particularly wildlife, pending the results of lab tests, has been targeted and is in development. This research support win help make the University of Wyoming cOlnpetitive for CABS funds when the consortium is able to attract outside support.

Hire a Bacterial Microbiologist ($224,000). Currently, the University of Wyoming has an imlnunologist and a bacterial microbiologist researching brucellosis vaccine and testing. The state has made a major investment in a Biosafety Level 3 addition to the Wyoming State Veterinary Laboratory to facilitate brucellosis investigations. It is important that UW build greater depth in bacterial microbiology to conduct the necessary brucellosis research and to be competitive for CABS funding once that is identified. This position would be dedicated primarily to research. Teaching responsibilities of the position would be principally re1ated to the research enterprise, e.g. graduate students who are preparing themselves to be tomorrow's researchers.

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Distance Education Reference p. 34 of UW (Agency 067) Budget Request

The Governor's Task Force on Distance Education, Video Conferencing, and IP-Based Communications Recognizing the difficulties inherent in the current distance learning programs and video conferencing systems and the need to make both more strategic resources, better serving Wyoming and residents now and for the future, in November 2008 Governor Freudenthal appointed a Task Force to examine and make recommendations on distance education, video conferencing, and IPbased con1munications for the State. The Task Force is comprised of representatives from the State's Office of the Chief InfoIDlation Officer, Department of Education, Governor's Office, University of Wyoming, and Wyoming community colleges.

With legislative funds appropriated in 2009 and wlth contributions from the budgets of the institutions represented on the Task Force, the Task Force hired consultants to (a) examine the current state of distance learning and video conferencing in Wyoming, (b) determine what users and other constituents desired for distance learning and video conferencing, and (c) make recommendations for how best to make effective use of distance learning programs and video conferencing to serve Wyoming residents.

Current Conditions • In Wyoming, distance learning opportunities are primarily delivered by a variety of

educational institutions: K-12 schools (including virtual schools), community colleges, and the University of Wyoming.

• An analysis of Wyoming distance learning programs conducted in 2009 concluded that "While Wyomingites have done an excellent job creating programs and introducing distance education technologies, we .find great disparities between the uses and understanding of best practices throughout the state. 1)

• The 2009 analysis also found that about 82 different academic programs are currently being delivered via distance learning methods in Wyoming. However, 63% of these distance learning programs serve fewer than one hundred learners.

• The largest distance learning programs are offered by Wyoming's post-secondary educational institutions (Wyoming community colleges and the University of Wyoming).

• While some coordination between distance learning providers and programs exists, that cooperation largely exists among institutions of higher education.

• There is no central source of infonnation about the variety of distance learning opportunities available, so Wyoming residents (e.g., learners, parents, and providers) may not understand the variety of distance learning opportunities that exist in the state.

Recommendations for Effective Utilization of Distance Learning and Video Conferencing in Wyoming Utilizing the work of its consultants, the Task Force developed two prilnary recommendations for Governor Freudenthal - one for distance education and another for video conferencing. While other recommendations made by the consultants will be addressed in the future as appropriate, this

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recOlnmendation for distance education is considered by the Task Force to be fundaIl1ental and the foundation for moving ahead:

• Distance Learning Center. The purpose of the Center for Excellence and Innovation in Distance Learning and Technology (Distance LeaIning Center) is to focus, integrate, and enhance distance learning opportunities. The Center will be responsible for providing leadership and support for distance leanling oppOliunities of all kinds and at all levels: K-12, higher education, professional developlnent, training, and lifelong learning. A visioning process for the Distance Learning Center was held 8-9 December in Riverton. Through this process, forty individuals representing K-12 schools, the Wyoming DepartInent of Education, all WyoTIling community colleges, the Comnlunity College COlulnission, WyoDling PBS, and the University of Wyoming helped define the work of the Center. For the Consensus Report of this visioning process, see http://docs.google.con1/viewer?a=v&pid=sites&srcid=ZGVrnYXVsdGRvbWFpbnx3eW92aWR Ib3xneDoxYjkyNGQwYTFmZWYyOGVj.

• Hosting the Center at UW offers the following benefits: The Center will use existing physical infrastructure at no additional cost to the State. The UW site provides the ability to cooperate and co11aborate, drawing expertise from substantial high-level university IT personnel. The Center will be located at the highest-volume distance education provider.

Benefits of the Distance Learning Center: • Act as an incubator to research, evaluate, and disseminate elnerging

distance learning methods and technologies; • Facilitate collaboration for sharing resources and other efforts; • Assess current status of distance education in the state, identify unlnet

needs, gaps, and overlaps in programs; • Build relationships with constituents and key stakeholders; • Be a c1earinghouse for training, best practices, and resources; • Provide leadership and advocacy for distance learning; • Pronlote technological equity and compatibility statewide; and • Research funding and coordinate grant activities and procurement of

resources

Budget breakout ($3 111il1ion for 2011-2012. To insure monlentunl, at least a portion, $1 mi1lion, would be beneficial ifit were made effective imn1ediate):

• ~$1.3 111illion per year for operation and administration of the Distance Learning Center including personnel, support costs, equipnlent, and software;

• $25,000 in FYI1 and $100,000 in FY 12 for course developn1ent for distance educators; • $130,000 in FY11 and $50,000 per year into the future for itnplementation of ePortal (a

single website location for an educational opportunities, fronl K-12, through cOlnmunity college, UW, workforce training, and professional development; and

• UW has conlnlitted to provide space for the Center within the existing UW-Laramie calnpus at no additional expense to the State.

For the conlplete review of distance education in WYOlning, see the Wainhouse Research Final Report sublnitted to the Governor's Task Force on Distance Education, Video Conferencing, and

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IP-Based COlnnlunications, 2 September 2009. The report can be found at http://docs.google.cOln/viewer?a=v&pid=sites&srcid=ZGVln YXV sdGR vb WFpbnx3eW92a WRlb3 xneDoxODE3MTZlnYjc50GYzZDcy

Reconlmendation for budget designation. For both the Distance Education and Video Teleconferencing budgets, to the extent J AC desires to support one or both of thenl, UW suggests that they are created as a new approPliation organization (AORG) under Agency 067 with two separate EORGs. For exanlple, AORG 9700, "Statewide Distance Education and Video Teleconferencing" with two EORGs 9701 "Distance Education" and 9702 ·'Video Teleconferencing". This would Inake the statev,ride purpose and expectations of these funds clear and distinct fro111 UW's larger enterprise.

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""'0 W co

Center for Excellence and Innovation in Distance Learning and Technology

The only way that Wyoming can provide the broadest array of high quality learning opportunities (at every level and of all kinds) to its small and dispersed population is to invest in the people, programs, and technologies that can produce and deliver effective distance learning. Much distance education is currently being offered throughout Wyoming, but the programs, providers, and technologies are isolated and general awareness of distance learning opportunities is limited. The Center for Excellence and Innovation in Distance Leaming and Technology (Distance Learning Center) has been conceived to provide leadership in distance learning for Wyoming, heighten awareness of distance learning opportunities, support the development and implementation of distance learning, promote the sharing of distance learning expertise and good practices, serve as a catalyst for distance learning innovation, and assess distance learning effectiveness through research.

The Center could function as a separate, independent entity and provide valuable service to distance learners and providers across Wyoming. However, to fully utilize the distance education human, academic, and technological resources currently existing in Wyoming - and better coordinate and integrate those resources and programs in order to benefit learners and providers - the Distance Learning Center should serve as a hub for statewide distance education efforts, not stand as an isolated and redundant resource.

-,:)

~ o

Distance Learning Organizati ons

State and National Programs and Experts


Video Conferencing Reference p. 145 of Dept. of A&l (Agency 006) Budget Request

The Governor's Task Force on Distance Education, Video Conferencing, and IP-Based Communications Recognizing the difficulties inherent in the current distance learning programs and video conferencing systems and the need to make both more strategic resources, better serving Wyoming and residents now and for the future, in November 2008 Governor Freudenthal appointed a Task Force to examine and make recommendations on distance education, video conferencing, and IP-based communications for the State. The Task Force is comprised of representatives from the State' s Office of the Chief Infonnation Officer, Department of Education, Governor's Office, University of Wyoming, and Wyoming community colleges.

Current Conditions • The State of Wyoming supports more than six large and separate video conference

systems along with several minor systems • Existing video systems have more than 350 end site locations in communities across the

state. Most all of these systems are funded at least partially with monies from the state General Fund, though some systems also rely on other revenue (e.g., student tuition or grants) to help support the systems and their operations.

• A 2009 review of video conferencing in Wyoming concluded that "A vast majority of statewide videoconferencing users see the value ofvideoconferencing and plan to increase use as a viable substitute for business travel as budgets dictate. Inter-agency videoconferencing is difficult due to the lack of unified connection standards and common scheduling calendars and methods. "

• There is no mechanism in the state that requires coordination among different video conference systems or the development of protocols or standards that would allow the different systems to operate virtually as one system. Comprehensive scheduling of the use of video conference presents enormous obstacles for effective use of these resources.

• Wyoming citizens have no single resource to which they can tum to find out about the availability of video conferencing resources and for support and training to use video conferencing resources effectively.

Recommendations for Effective Utilization of Distance Learning and Video Conferencing in Wyoming Utilizing the work of its consultants, the Task Force developed two primary recommendations for Governor Freudenthal - one for distance education and another for video conferencing. While other recommendations made by the consultants will be addressed in the future as appropriate, this recommendation for video conferencing is considered by the Task Force to be a fundamental foundation to move forward to have video conferencing be a strategic state asset:

• Video Conferencing Enterprise. The purpose of the Video Conferencing Enterprise is, through the Task Force, to integrate state video networks and systems in order to establish an effective state video conference capability that is technologically robust,

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expands video conferencing service capabilities, and Inininlizes dup1ication among state agencies and governlnent entities.

Benefits of the Video Conference Enterprise: • Represent the needs of the state~s video stakeholders; • Enable CWTent and future video systenlS, including desktop systenlS, to work effectively

as one virtual systen1; • Ensure timely upgrades of equiplnent for optimuln perfonnance; • Integrate and sinlplify scheduling of video conference sites; • Expand the nunlber of video conference sites to include locations for Inore public usage

(e.g., public libraries, comnlunity centers); • Provide the support necessary for effective use of video conferencing; • Develop and iInpleInent future IP-based cOlumunications technologies; • Work closely with the Distance Learning Center in establishing the state ' s video

conferencing infrastructure; and • Through video conferencing expansion and enhancements, reduce the inefficient use of

time, cost and danger of travel across Wyoming.

Budget discussion (found in the Departlnellt of Administration and Illformation): • $262,000 for FYII in general funds to sustain operations of the Wyoming Video

Conferencing System (WVCS) (one-year funding); $485,000 in general funds (with $150,000 effective immediately) to provide funding for a Video Conferencing Coordinator and video conferencing support.

• $1 million for FYI2, pending the results of the progress report fronl the Task Force prior to the 2011 Legislative Session:

o The PlanNet consultants recoD).lllended over $4 nlillion in needed equipluent and network upgrades. This $11nillion placeholder will be prioritized to address a portion of the needed upgrades ..

For the complete review of video conferencing in Wyoming, see the PlanNet Final Report submitted to the Govell1or's Task Force on Distance Education, Video Conferencing, and IP-Based Communications, 31 July 2009. The report can be found at http://docs.google.comlviewer?a=v&pid=sites&srcid=ZGV m YXV sdGR vb WFpbnx3 e W92a WRlb3 xneDo zNTE4ZGEl NmUxNjhhMWly.

Recommendation for budget designation. For both the Distance Education and Video Teleconferencing budgets, to the extent lAC desires to support one or both of them, UW suggests that they are created as a new appropriation organization (AORG) under Agency 067 with two separate EORGs. For exanlple, AORG 9700, "Statewide Distance Education and Video Teleconferencing" with two EORGs 9701 "Distance Education" and 9702 "Video Teleconferencing". This would Dlake the statewide purpose and expectations of these funds clear and distinct froln UW's larger enterprise.

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DAVE FREUDENTHAL GOVERNOR

OF WYOMING

Office of the Governor

The Honorable Phil Nicholas The Honorable Rosie Berger Joint Appropriations Committee State Capitol, Room 204 Cheyenne, WY 82002

January 5, 2010

Subject: Appropriations for Video Conferencing System

Dear Senator Nicholas and Representative Berger:

STATE CAPITOL CHEYENNE, WY 82002

Pursuant to my testimony to you on December 7, 2009, and consistent with a recommendation from Mike McVay, I am formally recommending the transfer of the general fund appropriation, a total of $1,747,000, for the Video Conferencing System currently included in the Departn1ent of Administration and InfOImation budget (Agency 006) to the University of Wyoming (Agency 067).

The amount recommended to be transferred includes $262,000 to subsidize the operations of Video Conferencing System, $485,000 (of which $150,000 is requested effective immediately) to provide funding for a project director and continuing support for the Video Conferencing and Distance Education Task Force, and $1,000,000 to be available July 1,2011, pending the results of the progress report to be presented to me and the Legislature prior to the 2011 Legislative Session.

As I indicated, I believe it important that we begin. in earnest, the process of minimizing service duplication and improving service delivery both with respect to video conferencing and distance education. 1 also believe that the University of Wyoming is better positioned to accommodate success. I should add that this recommendation enjoys the support of the Department of Administration and Infonnation, the community colleges and the University of Wyoming.

DF:pjb

Best regards,

Dave Freudenthal Governor

c: Members of the Joint Appropriations Committee Dr. Jim McBride, Superintendent of Public Instruction

20 I 1-12 Governors Letter #J

TIY: 777·7860 PHONE: (307) 777-7434 FAX: (3D7) 632-3909

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Status Update.


NCAR-Wyoming Supercomputing Center (NWSC) Reference p. 38 ofUW~s (Agency 067) Budget Request

• The NCAR-Wyoming Supercomputing Center (NWSC) project encompasses the design and construction of a world-class center for scientific computing in the atmospheric and related geosciences. Consistent with its n1ission, the facility will be a leader in energy efficiency, incorporating the newest and lnost efficient designs and technologies. The center will also be used for data archival purposes.

• NSF is in the process of completing the required Environmental Assessment at NSF's expense, prior to construction of the NWSC.

• Construction of the facility -- including design, building construction, site infrastructure development, and commissioning -- is expected to take just more than three years, with a tentative ending date of August 2011. The design concepts for the facility were unveiled in August 2009, about six months after H+L Architecture of Denver was chosen as the design team for the project. Construction of the center will begin in spring 2010, pending the outcome of NSF reviews.

• The estimated construction cost for the NWSC is on the order of $60 million, including facility design and commissioning costs. The original financing plan anticipated the cost of construction would be met using an up-front cash contribution of $20 milhon from Wyoming and proceeds from the sale of private placement bonds to be issued by Laramie County and purchased by the State of Wyoming. $4.5 million of Business Ready Community Program funds would be contributed by the Wyoming Business Council for site infrastructure development.

• However, the financing structure is currently being revisited by NSF~ largely to Wyoming's benefit. UW and other partners will keep the Legislature apprised as these discussions resolve themselves prior to or during the 2010 Legislative Session.

Issue #1 - Carry forward of existing appropriation 100% General Fund. • The NCAR project contemplates $1 million annual commitment from UW once final

NSF approval is obtained. For the FY09-1 0 biennium, $2 million was appropriated for this anticipated obligation, but at most $1 million wil1 need to be expended for the current biennium. As a result, the $2 million appropriation for the FY11-12 biennium can be reduced to $1 million, as recommended by the Governor, if $1 million from the FY09-10 biennium is allowed to be carried forward.

• Language to accomplish the carry forward of $1 million from the FY09-1 0 biennium to FYl1 is incorporated in Amendment #1, page i, of Appendix A.

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Issue #2 - Advance costs to complete architectural and engineering designs. • Much like the Level III (final design and construction documents) of the State of

Wyoming's capital facility process, NSF will not grant final approval for construction funding for the NWSC until architectural and engineering (A&E) work and construction cost estimates are final.

• With final cost estin1ates in place, NSF final approval is now expected in the spring of 2010.

• However, silnilar to 2008, a source of funding was needed for the estimated $750,000 to complete the A&E effort.

• The state's NCAR legislation (in the 2007 Supplemental Budget Bill) appropriated $20 million to the Wyoming Business Council for the Center, but prohibits expenditure of those funds until final NSF approval and final project agreements are in place.

• Waiting for legislative action in February 2010 to release funds to finish the A&E effort would have delayed the project for several months. That delay may also create a risk of developments occurring pending state legislative action that might slow the project.

• Given that, and after advising the Governor of these developments, UW's Board of Trustees authorized UW to enter into an agreement with NCAR under which UW used $750,000 from its current state appropriation (block grant) to fund the final A&E work.

• Amendment #1, on page i, of Appendix A serves to restore UW's block grant funds that were expended in advance of legislative action to ensure NCAR's A&E finn could proceed to 100% final design consistent with the NSF timeline. This is identical to the action taken in 2009 to repay the University up-front funding to ensure A&E could proceed to 65 percent design. No new state appropriations are requested.

Issue #3 - Optical fiber connection. • The State Loan and Investment Board (SLIB) secured a fiber optic cable as the result of

a settlement agreement with a private finn several years ago. That cable has remained unused, or dark, during the period since state ownership.

• This fiber optic cable could be leased from the State to significantly benefit both NWSC and UW by providing redundant fiber optic connections. In order to use the loop, two short connections must be constructed in Laramie County, and there is believed to be sufficient funding available in the 2007 Business Ready Communities appropriation for NWSC ($4.5 million) to fund these two connections as well as the necessary infrastructure at the site.

• An additional, a longer connection is also required in Albany County, to insure reliable transmission for NWSC and UW.

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• Amendment #2, on page ii, of Appendix A serves to fund the construction of the single, Albany County connection from previously appropriated funding for the NCAR MOU if and only if NSF approval is not received prior to June 30, 2010 and the FYIO annual payment from UW to NSF is not required under the MOU. In that case, the amendment allows those previously appropriated funds to be used for this infrastructure expansion~ as an outcome of the NSF delays.

• If NSF approval and MOU execution is received prior to June 30, 2010, UW intends to pay for the necessary infrastructure connections out of its block grant, seeking funding in its 2011 supplenlental budget request.

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Capital Construction: Fine Arts Building and Downey Hall Reference p. 43 and 47 ofUW~s (Agency 067) Budget Request, repeated on pp. 125 and 129 of the

State Capi tal Construction Budget Request

Introduction. UW has two capital construction requests: (i) construction of Fine Arts Phase I facility for the visual arts and (ii) renovation of Downey Hall. However, UW is not seeking a legislative appropriation for either project. Authorization to issue revenue bonds and for the construction of both facilities is being requested of the Legis1ature.

Fine Arts Construction. UW is requesting an amount not to exceed $33 million in authorization to issue revenue bonds to be paid by federal mineral royalties (FMRs) statutorily dedicated to UW. The following two tables illustrate UW's current outstanding bonded indebtedness and the FYIl and FY12 revenue sources for bond payments.

Bond Issue Series 2001

Purpose Student Housing Food Service Wyoming Union

Outstanding Principal at 06/01/2010

Series 2004

Series 200S

Health Sciences Building Student Housing

Archeology & Anthropology Facility (AARF)

Series 2009 Refunding of 1999 Bond Issue for Student Housing Wyoming Union Bookstore

FYll and FY12 Revenue Sources for Bond Payments*

Housing & Food Service charges Student Union Bookstore FMR~s

FYIl $1.2SM

430K 107K

2.61M $4.4IM

Total

FY12 $1.25M

440K 106K

2.63M $4.43M

$6.0M

$9.3 M

$13.2 M

$7.1 M

$3S.6 M

* Includes $SOOK annually in maintenance reserve funds for an bond funded facilities Maintenance funds required in bond indenture until all bonds retired Funds are entirely expended annually for these facilities

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Bonds to pay for the construction of the Fine Arts Phase I facility will be funded with the statutory FMRs dedicated to UW. In the current environment for interest rates, it will be possible to leverage roughly $33 million in bonds through dedicating $3.3 million in annual revenues. Those FMR streams come from two sources for the UW's Fine Arts bonds:

1. UW 2003 series bonds, with $1,438,650 funded from UW FMR's will be retired in FY 2010, thus freeing up $1.4 million in UW FMR's, which can be used for other purposes.

2. Internal budget prioritization that will yield $1. 9 miJIion in FMR' s previously dedicated to UW facilities and plant operations.

Combined, these two sources will provide $3.3 million.

Downey Hall Renovation. UW is also requesting an amount not to exceed $6 million in authorization to issue revenue bonds to be paid for by student fees associated with residence halls. Applying the same 1: 1 ° rule of thumb in the current environment for interest rates, $600,000 in annual revenue stream could support approxin1ately $6 million for needed renovations. This $600,000 will be secured by re-directing historic fees on students residing in university owned residences for land line telephone operations and maintenance to the renovation costs of Downey Hall. As a result, students are not expected to experience any increase in fees.

The following draft footnote for the Fine Arts Phase I construction and Downey Hall renovation is provided for the loint Appropriations Committee's consideration:

1. Of this appropriation, the trustees of the University of Wyoming are authorized to issue bonds or other securities, in accordance with the provisions of the University Securities Law (W.S. 21-17-402 through 21-17-450) in a total principal amount not to exceed thirty-nine million dollars ($39,000,000.00) for the purpose of construction of the Fine Arts Phase I facility in an amount not to exceed thirty-three million dollars ($33,000,000.00) and renovation of Downey Hall, in an amount not to exceed six million do1lars ($6,000,000.00). Nothing contained in this footnote shall be construed as preventing the trustees from funding, refunding or reissuing any securities at any time as provided in the University Securities Law.

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Major Maintenance and Distribution of State Fiscal Stabilization Funds Reference p. 24 State's Capital Construction Budget Request

Background. (No Legislative Action Requested.) On December 1,2009, Governor Freudenthal submitted a revised application for federal stimulus State Fiscal Stabilization Funds (SFSF) to the federal Department of Education (USED). Under the federal stimulus legislation, American Recovery and Reinvestment Act of2009 (ARRA), Wyoming originally anticipated receiving State Fiscal Stabilization Funds (SFSF) amounting to approximately $67 million. The State's initial application for SFSF monies made in July 2009 anticipated significant shortfalls in K-] 2 education and requested the following distribution:

-$8 million for institutions of higher education (Wyoming community colleges and UW) and

-$59 million for K-12 education.

Based upon the October 2009 Consensus Revenue Estimating Group (CREG) projections, the anticipated shortfal1s in K-12 education during the relevant period no longer appear likely. As a result, all of the SFSF funds (-$67 million) are now requested to support ins6tutions of higher education, consistent with the most recent revenue projections.

If approved by the federal government, UW anticipates receiving $5.2 mil1ion in SFSF to mitigate the need for tuition and instructional fee increased charges to residents and non-residents in FY2011. More specifically, these stimulus funds will be used for library material acquisitions and for instructional excellence, both of which experienced budget reductions as part of the June 2009 statewide budget cuts.

Furthennore, due to constrained state finances, Governor Freudenthal recommended elimination of major maintenance payments to community colleges and UW, to be more than offset by available SFSF monies. UW's major maintenance for 20] I - I 2 would be reduced by $22.] million in general funds to be replaced by SFSF nl0nies. As of this writing, the exact amount of the shortfall that can be secured by Wyoming) up to $67 million, is still under discussion between the State of Wyoming and USED. The State's revised application has not yet been approved.

In short, UW still expects to receive stimulus funds that can be directed toward major maintenance, as articulated by the Governor, equal to the amount of the reduction in state general funds, if not $4 to $5 million more. (As of this writing, it appears unlikely that the full $33.2 million in SFSF monies for UW major maintenance will be approved.)

These federal funds also carry additional federal and state requirements such as: • a more constrained timeframe for lise (federal requirement); • substantial additional requirements to track and report on these federal funds, well

beyond the reporting requirements for state general funds (state and federal requirements );

• prohibition on the use of funds for athletic facilities, student housing, or a range of other purposes (expected state prohibition and federal prohibition;)

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• a range of additional contractual requirements on vendors paid by these fund (mostly federal requirements); and

• prohibition on charging increased rates of tuition and most fees (state and federal requiremen ts).

The federal requirements on the use of funds for renovation tracks closely with the state's definition of major maintenance projects, so the potential uses of the funds is silnilar, though not identical, to state funds, which have traditionally supported nlajor maintenance initiatives on UW -owned facilities.

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Capital Construc60n Budgets - Community College Joint Facilities Reference pp. 86 and 104 of the State Capital Construction Budget Request

Background Information (No Legislative Action Requested At This Time)

• Casper CollegelUW Joint Facility. The University of Wyoming Casper College was established over 32 years ago. The University, through the UW Outreach School, has developed a strong relationship of connections, cooperation, and integration with Casper College and sets itself apart as a model for such a University-Community College relationship.

On pages 84 through 86 of the State~s Capital Construction Budget, Casper College requests approval for the use of public funds for the Casper College Student Union/UWCC building. Both the Governor and the State Building Commission recon1mend approval. Further Casper College has secured public funds in the fonn of a local bond authorization to funds its portion of the construction of a Gateway Building and a joint facility with UW. At the appropriate time, the University intends to sell its current Outreach building located on North Poplar Street, just off of Interstate 25, and relocate all personnel and operations to the shared facility on the Casper College campus. Selling the Poplar property will assist in defraying just a small portion ofUW's share of the costs for a Joint Facility. Although final estimates are not yet developed, UW's share of the joint facility could be up to $16 million.

Though UW is not requesting any state authorization or appropriation during the 2010 Budget Session, we fully expect to request an authorization during the 2011 General Session. UW Administration is in the process of evaluating a number of financing options. In sum, UW will submit a proposal in the 2011 General Session to finance its share of the Joint Facility, but will not request any new state appropriation.

Since the Casper College construction project includes construction of a Gateway building prior to the construction of a Joint Facility, waiting until 2011 for authorization from the Legislature should not adversely impact the project, while at the same 6me afford UW sufficient time to evaluate a range offinancing options.

• Laramie County Community College (LCCC)!UW Joint Facility. The demand for baccalaureate and graduate degree education in Cheyenne from site bound, typically nontraditional aged students continue to escalate dramatically. UW and LCCC have long envisioned a joint education facility on LCCC's Cheyenne campus~ with a UW presence much like the one UW has with Casper College that has existed for decades.

UW and LCCC internally funded the equivalent of a Level I study to identify the specific programs that will be provided in the facility that will drive the detennination of the configuration of the facilities.

Similar to the CCIUW Joint Facility, both the State Building Commission and the Governor recommend approval for $26 million in Other Funds for a LCCC/UW Joint Facility. However, unlike the situation in Casper College, local bonding funds are not immediately

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available to more forward with construction of this facility. Further, a Level II study, at the cost of approximately $400,000 for this project, would be the next step in the process. Although UW is not currently requesting state appropriation for its share of a Level II study, UW Administration will work to identify internal resources to contribute to such an initiative.

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Retirement Contribution Discussion Not Referenced in UW (Agency 067) Budget Request

Background. (No Legislative Action Requested - FYI only) The Governor recommended setting aside $48.8 Inillion within the State Auditor's Office for potential payroll contribution rate adjustments, which could begin in FY2012, pending review by the Joint Appropriations Committee and the full Legislature. Within the $48.8 million, there is reportedly $3.5 million set-aside for potential increases in employer contributions for employees of the University of Wyoming and the state's community colleges.

Impact. The method and structure of such a bolstering of the Wyoming Retirement System (WRS) has two impacts on the University of Wyoming (and to some extent, other state entities). First, any lnandatory increase in the employer contribution raises issues for a number ofUW employees whose conlpensation is funded outside of the state~s block grant, or broadly speaking, UW~s Section II budget. Second, upon commencelnent of employment, university employees are given the irreversible decision to participate in the WRS, a defined-benefit plan, or TIAA-CREF, a private, non-profit defined-contribution plan, akin to a private sector 401 (k) plan. In sum, increases in employer contribution rates for both Section II employees and TIAA-CREF participants raises issues of equity. Table 1, below, illustrates the estimated magnitude of the cost of a 2.87 percent increase in the employer's contribution for various groups ofUW employees.

T bIlE . a e . stImate d t f287 cos S 0 . percen t retirement contrl ution or varIOUS uw 1 emp_ oyees.

UW Employee Category Annual Cost Section I employees participating in WRS $1,331,511 Section I employees participating in TIAA-CREF $2,535,610

SUBTOTAL Section I employees $3,867,121

Section II emp)oyees participating in WRS $370,637 Section II employees participating in TIAA-CREF $807,377

SUBTOTAL Section II employees $1,178,014

TOTAL $5,045,135

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Athletic FaciUties Loan, Modification of Interest Rate Not Referenced in UW (Agency 067) Budget Request

Explanation and Proposal. (Amendment #10, in Appendix A, proposed) In 2008, the Legislature authorized a bridge loan to UW frOln the corpus of the UW Pelmanent Land Fund to address cash flow issues resulting fi-Oll1 the payment timing of donor commiunents and payn1ents due to contractors. UW has not yet exercised the afforded access to bridge funding but anticipates doing so in late spring of201 O. Under this provision, any loan must be repaid no later than December 3], 2011, or approximately 20 n10nths after the bridge financing is accessed.

The original interest rate for such a loan was set at 5.35 percent in 2008, as an approximate reflection of the anticipated return of the UW Pennanent Land Fund. UW is requesting to reduce the annual percentage rate of a future loan from 5.35 percent to 4.5 percent to reflect the more current, anticipated investment return projected by the State Treasurer~s Office for this Fund. The lnodification is supported by the State Treasurer, and ultimately results in a short-term financing, for which the payment of interest and benefits are both experienced by UW. As a result, this action has no inlpact on the state's profile, or "go]denrod'~. (The proposed language is provided in Anlendment #10, on page viii, of Appendix A.)

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Western Interstate Commission for Higher Education 2011-2012 Budget Request

Overview of Students and Impacts of Budget Reductions Reference p. 9, WIeHE (Agency 069) Budget Request

WIeHE Professional Student Exchange Program (PSEP). Limitations on new students in the fields of medicine and dentistlY (eliminated) and osteopathic medicine (reduced to one) by the l¥lCHE commissioners as a result o/the June, 2009 budget cut.

Background. The purpose behind WIeHE PSEP is two-fold. Initially, it's for access for Wyoming students to attend progran1s in other states that aren't available at the University of Wyoming. Since state-supported schools give priority consideration to their own residents in the admissions process~ it can be difficult for non-residents to gain admission. WIeHE helps students gain review in state-supported schools. The second part is the possibility of some financial support. Students selected for support pay resident tuition at the institution selected and the State, through the WICHE budget, pays a standard, set support fee on their behalf. The support fee is designed to offset the difference between resident and non-resident tuition, plus an incentive payment for the school.

Wyolning has historically considered PSEP as an access program where the goal was to help as many Wyoming residents attend professional school as possible. While the assumption and hope was for the students to return home to practice, 1t has not been a requirement of the program.

Wyoming also has 2 contract programs; WWAMI for medical education, and WYDENT for dental education. These programs interact significantly with WIeHE PSEP. These programs are prinlarily complimentary rather than competitive.

Wyoming historically participated and supported students in 9 of the 10 PSEP areas: dentistry, allopathic medicine, occupational therapy, optometry, osteopathic medicine, physical therapy, physician assistant study, podiatric medicine, and veterinary Inedicine. We do not support in the 10th field, phannacy, because we have a pharmacy program.

In June of 2009, as P SEP' s budget cut, the Commissioners opted to discontinue the possibility of financial support in dentistry or allopathic medicine and to limit the number of students supported in osteopathic medicine to one.

PSg

Table of Current WICHE Students.

Field Year 1 Year 2 Year 3 Year 4 TOTAL Dentistry 0 4 3 3 10 Allopathic Medicine* 0 6 2 4 12 Occupational Therapy 1 2 3 Optometry 4 5 7 4 20 Osteopathic Medicine 1 1 3 1 6 Physical Therapy 3 9 9 21 Physician Assistant ] 2 3 Podiatry 0 0 0 1 1 Veterinary Medicine 8 9 9 7 33 TOTAL 18 38 33 20 109

Notes: * Allopathic Medicine does not include one student currently on leave to complete a PhD. That student is expected to return in 2011 and is eligible for 2.5 years of support. Dentistry, Medicine, Optonletry, Osteopathic Medicine, Podiatry, and Vet Medicine students are eligible for our years of support. Physical therapy students are eligible for three years of support, and Occupational Therapy and Physician Assistant students are eligible for two years of support.

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UNIVERSITY OF WYOMING

ENHAI\JCED OIL RECOVERY INSTil-UTE FACT SHEET

The Enhanced Oil Recovery Institute (EORI) resides in the School of Energy Resources and contributes to both the research and outreach components of that School.

The Enhanced Oil Recovery Institute (EORI) is financially supported by the Wyoming State Legislature and is mandated to promote enhanced oil recovery (EOR) to Wyoming producers.

Funding is provided to the Enhanced Oil Recovery Commission (EORe), appointed by the Governor, and is transferred to UW through a Memorandum of Understanding.

The EORC oversees the financial and procedural issues regarding the EORI.

The technical activities of the EORI are overseen by a Technical Advisory Board (TAB) that is selected by the EORI Director from scientists, engineers and economists in academia, government and industry, and currently includes three members of the National Academy.

EaRl budgets are developed on a biennial basis by the Director and approved by the EORC, the Governor, the Joint Appropriations Committee and the Legislature.

The EORI directly employs scientists and engineers (most often as research scientists) whose skill sets and activities contribute to the EaRl mandate.

The EORI supports regular faculty, post doctoral researchers, graduate students and research scientists whose skill sets and activities support the EORI mandate. Currently this type of support is being provided to individuals and programs in the departments of Economics and Finance, Chemical and Petroleum Engineering and Mathematics.

The EORI temporarily contracts with specialists or otherwise arranges for their services as required by ongoing or planned technical projects.

The outreach component of the Institute's mission is supported by its basic and applied research activities and includes collaborative stud ies arranged th rough confidentiality agreements, scoping studies using the EaRl database, and the formation of operator consortia (strategic alliances) on topics of mutual interest.

The dissemination of technical information is provided through professional meetings, workshops, seminars and public lectures arranged and/or sponsored by the EORI.

http://eori.uwyo.edu 1

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FACT SHEET (CONT/D)

Enhanced Oil Recovery Commission

PETER WOLD (Chai rman) BERN HINCKLEY

Wold Oil Properties, Inc Hinckley Consulting

LYNNE BOOMGAARDEN JIM NEIMAN

State Land and UW Board of Trustees Investments Administration

GAIL CHENOWETH RON SURDAM

Marathon Oil Company Wyoming State Geologist

GOVERNOR DAVE FREUDENTHAL CHUCK TOWNSEND

Staffed by: ROB HURLESS Wyoming State Senator Energy and TeleCommunica-tions Policy Advisor

Technical Advisory Board

DR. RANDALL SERIGHT DR. G. PAUL WILLHITE

New Mexico Institute of Kansas University Mining and Technology Research Center

L. STEPHEN MELZER DR. JAMES GRIFFIN

Melzer C02 Consulting Texas A&M University

DR. GARY POPE HANK TRUE

The University of Texas at True Oi" LLC Austin

CHARLIE CARLISLE KEN HENDRICKS

Chemical Tracers, Inc Anadarko Petroleum

DR. GEORGE H IRASAKI CHUCK PETERSON

Rice University Devon Energy Corp.

PETER HENNINGS CHRIS HEAVNER

ConocoPhillips Merit Energy

EORI Team - (45)

Research Scientists

Support Staff

POSt Doctoral Researcers

Faculry Associates

Graduate Students

Parr Time Employees

Consultants

13 3 2

7 14 3 3

http://eorLuwyo.edu

Energy

2

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RESEARCH

Projects Supported - (17) Economic Analysis

Reservojr Fluids

C02 Capture

Fracture Permeability

Fly Ash Effect on Sweep Efficiency

Low Salinity Waterflooding

Three Phase Fluids

Reservoir characterization

Rock Mineralogy From Geophysical Logs

Water Shut Off Techniques

Chemical Simulation of Well Bores

Naturally Fractured Reservoirs

Chemical EOR

Adjusted Brine Chemistry

Outcrop Reservoir Analogs

Database Development - EORI Database (Forney/Shier Donations)

Pipeline Development using GIS

Economic Scoping Studies Conducted - (6)

Peabody Energy

El Paso Western Pipelines & Utility Company

Refined Energy Holdings

Black Hills Exploration

Blue Source

Energy Expediters

http://eori.uwyo.ed U 3

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QU-rREACH

Consortium Topics

Reservoir conformance

Minnel usa fields

Gas displacemen t

Chemical EOR

Thermal EOR

Microbial EOR

Special technologies

Collaborative Studies - (11)

Elk Pe[rolewn

Safford Oil

Nerd Gas

5t. Mary's Land and Exploration

Underwood Oil and Gas

EXCO

Windsor Energy

Nadel and Gussman

TR Operating

Continental Resources

Nance Petroleum

Direct Organizational Contacts - (7) Interstate Oil and Gas Compact Commission (IOGCC)

Independant Petroleum Association of America (IPAA)

Independant Petroleum Association of Mountain States (IPAMS)

Oklahoma Independant Petroleum Association (OrPA)

Petroleum Association of Wyoming

Wyoming Oil & Gas Conservation Commission

Wyoming Pipeline Authority


P64

OUTREACH (CONT'D)

Meetings and Workshops - (17)

Name Date # Attended

Annual C02 Conferences 06-2007 160 05-2008 223 06-2009 229

EaR/lOR Conference 09-2008 90

Geologic Fractures Workshop 07-2007 20 02-2009 20

Minnelusa Consortium 11-2008 10 05-2009 12 09-2009 ]0

Polymer Gel Workshop 02-2005 50

TensJeep Reservoir Working 07-2005 30 Group

fjnding the Balance 10-2007 200

EaRl Wyoming Pipeline 05-2009 50 Authority

Chemical Workshop 10-2007 80

Hedburg Conference 07-2008 40

State of the Dominant Estate 11-2009 200 (U\" Law School)

Wyoming Pipelines the 10-2008 100 Territory Ahead (UW Law School)


P65

OUTREACH (CONT'D)

Confidentiality Agreements - (23)

Black Hills Exploration and Production, Inc

Blue Source

DKRW Advanced Fuels

Elk Petroleum Inc

Energy Expediters

ExxonMobile Gas & Power

Marketing Americas C02 and Helium Sales

Fabrication Technologies, Inc

Glori Oil Limited

Merjt energy Company

Mountain West Energy, LLC

Praxair, Inc

Stepan Company

Wyoming Cryogenics, Inc

True Oil, LLC

Denbury


El Paso Wester Pjpelines and Utility Company

Peabody Energy

DOW Chemical

Encore Acquisitions

W Travis Brown Jr. I Kenneth Luff, Inc

Capitan Energy Companies

JB Coal

Direct Company Interactions - (61)

Advanced Resources International

(ARI)

Alberta Research Council

Anadarko

Black Hills Exploration

Blue Source

Capitan Energy

Citation

ConocoPhillips Company

~/

Dakota Gas

Denbury

Devon

DKRW

Dow Chemical

Encana

ENCORE Acquisitions

Energy Expedi ters

EOG Resources

http://eorLuwyo.edu 6

P6S

OUTREACH (CONT/D)

ExxonMobil Gas & Power

Fab Tech

Gas Tech

GelTech

Gene R. George & Associates

Glori Oil

Holand and Hart

HTC PureEnergy

Kinder Morgan C02

Legado Resources

Marathon Oil

Merit Energy

Moncrief

Mosbacher Energy

Mustang Engineering

Nance Petroleum

Nadel and Gussman

Nerd Gas

Nicholas Consulting Group

Osborn Heirs

PacifiCorp

Peabody Energy

PetroLeum Technology Research

Centre - Regina

Praxair

Questar

Rancher Energy


REPSEA

Resolute Natural Resources

Safford Oil

SARGAS

Shell E&P

Stepan Company

St. Mary's Land and Exploration

Surtek

TIORCO

Trinity C02

TR Operating

True Oil

Underwood Oil and Gas

\XfaveFront in Houston

Wyoming Cryogenics Inc

Wyoming Gasification and Synfuels Company

XTO

http://eorj .uwyo.ed U 7

P67

Medical Education 2011-2012 Budget Request Cheyenne Family Practice

Reference p. 19 the Medical Education (Agency 0167) Budget Request

Background and History. • In July 2008, UW requested that the Cheyenne Family Residency Clinic's FY09-10 budget

authorization be increased by $4.79 million to support salary and benefits for 20 additional full-time and 6 part-time positions. Governor Freudenthal approved the B-11 request. Nineteen fu11-time and 3 part-time positions were filled. At the time of the B-11, increased clinic revenue generated from expanded services were expected to cover the costs of this expansion.

• In the summer 2009, it became apparent that although clinic revenue increased dramatically, it was insufficient to nleet the projected expenditures associated with the 2008 B-11 request. This reasons for the shortfall were twofold:

o A change to an electronic billing system, less than rigorous business practices, and associated billing delays; and

o Increased number of patients without insurance being treated as a result of the recent economic downturn.

• In order to fully understand the breadth and causes of the expected shortfall, UW retained an independent consultant, with specific expertise in medical residency operations, to review the business operations of the Cheyenne Family Practice Clinic and prohibited the hiring the remaining personnel authorized in the B-ll. That external review highlighted a number of opportunities to improve the business practices, including increased billing collections. As a result, of those actions, the projected $1.6 million annual shortfall was reduced to $800,000.

• On November 4, 2009, President Buchanan asked a small panel of state health and fiscal experts to conduct a further review of the Cheyenne Family Practice Clinic with three specific charges:

o Detennine whether the recommendation for action from the independent consultant should be implemented in whole or in part;

o Identify any other issues regarding residency business practices that should be evaluated; and

o As a result of the above, indicate whether UW and the State of Wyoming should consider modifications to the current residency program with regard to staffing levels or number of residents, consistent with the dual objectives of the program, i.e. a high quality residency to attract physicians to practice in Wyoming and healthcare delivery in southeastern Wyoming.

• Members of the team included Doug Vinzant, UW Vice President for Administration; Joe Steiner, Dean UW College of Health Sciences; Wendy Curran, Health Policy Advisor,

P69

Office of the Governor; Joyce Hefenieder, Deputy Director, Department of Administration and Information; and Reed Shafer, M.D., Cheyenne Medical Specialists.

• The exception budget request of$1.6 million for FY11-12, recognizes the public health benefits this Clinic provides, beyond the educational benefits. In the near-term, FYI 0 expenditures can be accommodated within existing resources of the Medical Education (Agency 167) budget. However, sustaining the existing, although expanded, operation through the next biennium will require additional subsidy.

o The exception budget requests contemplates an increase in clinic revenues and commits that any additional clinic fees generated beyond the presently anticipated $5.3 million will be used to offset any expansion in General Fund appropriations.

Residency Statistics. • Cheyenne Fami1y Practice Residency has graduated 161 doctors since the beginning of the

Residency program. Sixty-six (41 %) of them have continued or are currently practicing in

Wyoming. (Recognize this is simply an ancillary benefit. There is no residency workrequirement specifically associated with these programs.)

• Similarly, the Casper Family Practice Residency has graduated 204 doctors since the beginning of their program; 73 (36%) of them are currentJy practicing in Wyoming or did subsequently practice in Wyoming but have left.

P70

Medical Education 2011-2012 Budget Request

WWAMI Reference p. 29 the Medical Education (Agency 0167) Budget Request

Background Information and Statistics. Beginning in 1997 the first ten WYOlning students matriculated into the WWAMI (Washington, Wyoming Alaska, Montana, and Idaho) program. The first year of this medical education program is provided to Wyoming students at UW. The second year takes place in Seattle at the University of Washington School of Medicine, and students rotate through clinical training sites located across the five-state region during their third and fourth years. The University of Wyoming pays the full operating costs for instruction of these students, while the student pays an annual tuition fee to the University of Wyoming and agrees to return to Wyoming to practice medicine for a three-year period, or repay the funds expended by the State, with interest. Loan repayment does not begin until the physician has completed residency training, which can last from 3 to 8 years, or more. Since inception, 38 students have finished residency training and 24 (63%) have returned to Wyoming to practice medicine. Three of the 24 students have served their required repayment time in Wyoming. Prior to leaving Wyoming, these three students served in the communities of Lander, Casper, and Laramie. Table 1 illustrates the community breakdown for those students returning to Wyoming.

Table 1. Returning WW AMI Students, by Community of Medical Service.

Community Number of Students Buffalo 1 Casper 3 Cheyenne 1 Cody 2 Douglas 1 Evanston 1 Gillette 2 Jackson 1 Lander 4 Laramie 2

Powell 1 Sheridan 2 TOTAL 21

Potential Expansions. Currently, the budget proposal continues in the direction of populating all four years worth of instruction with 16 students per year. On the current pace, that will be accomplished by FY12. While UW currently has the capacity to expand to 20 students per year, a transition to 18 students per class (at approximately $65,000 per student, per year) would be appropriate. There are two potential limiting factors on class size, beyond ultimate available space: (i) adequate number of qualified applicants for this competitive education pursuit and (ii) available space at the University of Washington. Currently, only Wyoming residents are included in the pool of qualified candidates.

P71

If resident population becomes the limiting factor, UW graduates, including non-residents, may be a policy warranting discussion.

Future, Near-Term Graduates. In addition, there are currently 47 students serving in residencies and available to return to service in Wyoming (or pay back their loan with interest) in the coming years. The following table illustrates the number of students, by expected date of graduation from residency, and the focus of practice.

Table 2. Expected Residency Graduation Dates and Focus of Practice.

Year of Expected Graduation from

Residency 2010

2011

2012

2013

2014

TOTAL

Number of Graduates

10

17

]2

3

5

47

Focus of Practice Diagnostic Radiology/neuro-radiology (1) Emergency Medicine (2) Family Medicine (1) Internal Medicine/Rheumatology (1) Orthopaedic Surgery (1) Radiology (1) Surgery (3) Diagnostic Radiology (1 ) Emergency Medicine (1) Family Medicine (3) General Surgery (1) Internal Medicine (3) Internal MedicinelPediatrics (1) Nuclear Medicine (1) OB/GYN/General Surgery (1) Pediatrics (3) Psychiatry (1 ) Radiology/neuro-radiology (1) Anesthesiology (1) Dermatology (l) Emergency Medicine (1) Family Medicine (l) General Surgery (1) Internal Medicine/Endocrinology (1) OB/Gyn (2) Othopaedic Surgery (3) Urology (1) Anesthesiology (1) Neurology/Preventative Medicine (1) OB (1) Otolaryngology (1) Radiology - Diagnostic (1) Surgery (3)

P72


Update: Other Legislation External to the Budget Not Referenced in UW (Agency 067) Budget Request

Wyoming Investment in Nursing (WYIN). On December 7, 2009~ the Joint Labor, Health and Social Services Committee approved 10LSO-0117.W1, Wyoming investment in nursing extension. The WYIN program is administered by the Wyoming Community College Commission (WCCC) and has two cOlnponents: (1) support for certain nursing faculty salaries among the community colleges and (ii) a loan-for-service program for nursing students at both UW and the states community colleges.

Originally adopted in 2003, this program, 1ike the Teacher Student Loan Repayment Program (TSLRP) carries a sunset date of June 30, 2011. As a result of the sunset date, only one of the next two years of the biennium is included in the Governor's budget for this program (located on page 50 ofWCCC's budget (Agency 057)). However, as noted on the Governor's profile (attached), he has included the second year of funding for both programs in his fiscal profile. One year funding for WYIN is $2.6 million, of which roughly $300,000 benefits UW nursing students and the balance benefits faculty and students at the state's community colleges.

The Joint Labor Committee also inc1uded full funding ($2.6 million) for the second year in the bill approved in December which extends the sunset date for this program. UW will provide fun background on the success and operations ofUW's portion of the WYIN prograIn at the appropriate time for both the Senate and House Appropriations Committees, if advanced through the legislative process. At minimum, UW wanted to voice support for the program and continued funding, as contemplated in the fiscal profi1e of the Governor's budget.

Teacher Student Loan Repayment Program (TSLRP). On January 19,2010, the Joint Education Committee will consider 10LSO-0134.Cl, Teacher shortage loan repayment program. TSLRP is also adlninistered by the wcec, although its sole beneficiaries are UW students pursuing a degree or certification in targeted education disciplines with low supply relative to demand.

Similar to the WYIN program, the TSLRP program also has a June 30, 20] 1 sunset date, resulting in only one of the next two years offunding officially included in wecc's budget request (located on page 57 of wcec's budget (Agency 057). The cost for this program is roughly $400,000 per year, and is also contemplated in the Governor's fiscal profi1e (attached). However, since the Joint Education Committee has not met to consider this draft legislation, the outcome of what legislation will or will not be introduced is yet to be detelTIlined.

Again, UW will provide full background on the success and operations of the TSLRP at the appropriate time for both the Senate and House Appropriations Committees, if advanced through the legislative process. At minimum, UW wanted to voice support for the program and continued funding, as provided in the fiscal profile of the Governor's budget.

P73

-u -......I .po.

GENERAL FUND/BUDGET RESERVE ACCOUNT

Funds Available General Fund Carryover Budget Reserve Account Carryover General Fund Estimated Revenue (2011-2012) Budget Reserve Account Estimated Revenue (2011-2012)

Total Balance Available - Traditional Funds

Governor's Recommendations - Appropriations Appropriation - To Budget Reserve Account (5%) Appropriation - Operating Appropriation - Capital Construction Appropriation - Local Govt-Includes BRC & Comm. FaCIlities Appropriation ~ Medicaid Reserve Appropriation - Annual & Sick Leave Reserve Appropriation - Retirement System-Payroll Rate Adjustment Appropriation - AML School of Energy Resources Backup Appropriation - To Wildlife/Natural Resources Trust Appropriation - To Library Trust

Appropriation - To Cultural Trust Appropriation - Highways Appropriation - Wyo Investment in Nursing Program 2nd YR

Governor's Recommendations - Appropriations

Balance Avajlable - Traditional Funds

GOVERNOWSRECOMMENDAnON FISCAL PROFILE

2011-2012 BIENNIUM

96.355,000 1,866.100,000 1.036.300.000 2.998.755.000

(93.305,000)

(2.588,777.125) • (59 .576,905)

(124.056,560) (25000,000)

(1.000,000) (25,900.000) (17,500,000)

(5,000.000)

(3.000.000) (2.000.000)

(50,000,000) (2,637,820)

(2,997,753,410)

1,001 .590

SCHOOL FOUNDATION PROGRAM Funds Available

School Foundation Program Beginning Balance Revenue 11/12

Tolal Balance Available - School Foundation Program- 11/12

Governor's Recommendations - Appropria1ions - 11/12 Appropriation - Operating (~OS)

Appropriation· Operating (205) Extemal Cost Adjustment Appropriation - School Foundation Program/205 Appropriation - Court Ordered Placements/205 Appropriation - Specials/205 Appropriation· Education Reform/205 Appropriation - Student Performance Data Systems/20S Appropriation - Military National Guard Youth Program/007 Appropriation - School Fundmg Utigation/015 Appropriation - CCCfTeacher Loan Program/057 Appropriation - Trust Land Preservation + Enhancement/060 Appropriation - Other Ed Appropriations Appropriation - Retirement System-School Districts

Appropriation - Teacher Shortage Loan Repayment Program 2nd YR Governor's Recommendations - Appropriations - 11/12

Transfer Back To SFP To Prevent Deficit & Maintain $100 M Balance School Foundation Program Ending Balance

"AmounllnclucJes a lolal of 7B.953.871 GF for Judl~al & Leglslahve 6ranches ~ recommendation. SCHOOL CAPITAL CONSTRUCTION PROGRAM

LEGISLATIVE STABILIZATION RESERVE ACCOUNT

Funds Available Beginning Balance (07/01/08) Budget Bill Transfer In From BRA plus Excess over Required

Total Available - Legislative Stabilization Reserve Account

Governor's Recommendations Transfer To General Fund/BRA

Projected Balance - Legislative Stabilization Reserve Account Approprration Requested

Balance Available - Legislative S1abilizatlon Reserve Account

325.000,000 367.723,730 692,723,730

692 .723,730

692,723,730

Funds Available School Capital Construction Program Beginning Balance Revenue 2011/2012

Pre-empt WS.21-15-122 RevenuefTransfer To CSPLF 09/10 Ami Total Available - School Capital Construction Program - 11/12

Governor'S Recommendations Transfer Back To SFP To Prevent Deficit & Maintain $100 M Balance Appropriation - To Offset Negative Balance (placeholder if needed) Appropriation - FY 11/12 Mill Levy Supplement Appropnation - FY 11/12 Major Maintenance Appropnation - FY 11/12 Component Level Projects Appropriation - FY 11/12 Operations SFC Appropriation - FY 11/12 School Capital Construction*

Total - Governor's Recommendations - 11/12

Balance Available - School Capital Construction Program

"Includes 3.612.971 in conhngency_

100,000.000 1,435.938,492 1.535.938,492

(7.466,259)

(1.4S0.288.196) (23,057.126) (34,688,OOO) (31 ,705,007)

(2.137.135) (1.050,306) (4.905.490)

(400.000) (3,212,500) (9.924.000)

(22.900,000) (400.000)

(1.592,134.019)

156.195,527 100.000,000

201.856,434 102.937.548 208,996,365 513,790.347

(156,195,527)

(3.750.000) (82.000,000) (18.585,923)

(6,271.601) (165,675.598)

(432.478.649)

81 ,311,698

APPENDIX A

[UW Project Amendments] Section 300.

(a) NCAR Supercomputer:

(i) [Amendment #1 - 100% A&E design] 2007 Wyoming Session Laws, Chapter 136, Section 336(c)(i), as anlended by 2009 Wyoming Session Laws, Chapter 159, Section 343 is amended to read:

"Section 336.

(c) Subject to subsection (d) of this section, there is appropriated to the WYOlning business council to implement this section the amounts specified in this subsection beginning with the effective date of this act and ending June 30, 2008. Notwithstanding W.S. 9-4-207(a), any funds froln this appropriation that are unobligated and unencumbered on June 30, 2008, shall not lapse and shall remain available until June 30, ~ 2013 . The following amounts are appropriated:

(i) Twenty million dollars ($20,000,000.00) from the general fund. Of this appropriation, not to exceed three million five hundred thousand dollars ($3 ,500,000.00) four nlillion two hundred fifty thousand dollars ($4,250,000.00) is appropriated to the University of Wyoming but only to the extent that the university expends funds under its existing contract with NCAR for architectural and engineering services for the construction of the supercomputer center. Subsection (d) of this section does not apply to this appropriation;

(ii) One million dollars ($1,000,000.00) from the general fund to fund the memorandum of understanding throughin fiscal year ~2011 . The university shall include a request for one million dol1ars ($1,000,000.00) annually in its 2009-2010 biennial budget request to continue to fund the Inemorandum of understanding, which appropriation shall be separate from the university'S block grant.

(e) Notwithstanding W.S. 9-4-207(a), 9-2-1008 and 9-2-1012(e), any funds from the appropriations under this section, including any transferred funds, that are unobligated and unencumbered on June 30, 2008, shall not lapse and shall remain available until June 30, ~ 2013."

Comment: This amendment restores UW's funds that were expended in advance of legislative action to ensure that NCAR's A&E firm could proceed to 100% final design consistent with the National Science Foundation (NSF) tin1eline. In 2009, the Legislature took similar action to ensure A&E could proceed to 65% design. It also carries forward the 2007 appropriation of $1 million to fund the MOU in FY 2011.

(ii) [Amendlnent #2 - Optical fiber connection] Section 300. Section 067 of Section 2008 Wyoming Session Laws, Chapter 48, Section 2, as amended by 2009 Wyoming Session Laws, Chapter 159, Section 2 is amended to read:

APPROPRIATION FOR GENERAL FUND FEDERAL FUND OTHER FUNDS TOTAL APPROPRIATION

Section 067, University of Wyoming PROGRAM State Ai d 1.2 NCAR MOU.2 TOTALS

376,103,563 1 000,000

377,103,563

AUTHORIZED EMPLOYEES Full Time 0 Part Time 0 TOTAL 0

I. Of this general fund appropriation, two hundred fifty thousand dollars ($250,000.00) shall only be expended for operation of the Haub School of Enviromnent and Natural Resources.

376,) 03,563 I 000 000

377,103,563

2. IfNationaJ Science Foundation (NSF) approval for the NCAR-Wyoming Supercomputer Center (NWSq is not received by June 30, 2010, the unobligated and unexpended portion o[tl1 i$ appropriation shall not revert unti l June 30, 20 12, and this appropriation shall be llsed to fund construc tion of the fiber op tic connecti on located in Albany County, Wyoming for the NWSC opt ical fiber loop. If NSF approval for the NWSC is received by June 30, 20 I 0, the universitv shall expend not to exceed onc million dol lars ($\ ,000,000.00) from its appropriation tor State Aid for such construction and shall include in its supplemental budget request for the 201 1 general session the amount expended on construction for tha t fi ber optic connection.

Comment: This $1 million is required to be expended for the FY 2010 annual payment for NWSC (the NCAR-Wyoming Supercomputer Center) if NSF approves the project prior to June 30,2010. If NSF approval is not forthcoming by then, this amendment authorizes UW to use these funds to construct the necessary connection in the fiber optic loop that is located in Albany County to serve NWSC. The bulk of the fiber optic loop will be leased from the State Loan and Investment Board which secured the loop many years ago as the result of a settlelnent agreenlent with a private finn. Two short connections must be constructed in Laramie County, and there is believed to sufficient funding available in the 2007 Business Ready Communities appropriation for NWSC to fund these two connections as well as the necessary infrastructure. The longer connection in Albany County will complete the fiber optic loop which NCAR needs to ensure reliable data transmission. If NSF approval for approval is received prior to June 30, 2010, UW will pay for the connection out of its block grant, and include the amount expended in its supplemental budget request for 2011.

11

(b) Energy Projects:

(i) [Amendnlent #3 - School of Energy Resources and HPG-ATC (GE project) carryforward of 2008 AML appropriation] 2008 Wyolning Session Laws, Chapter 48, Section 320(e)(i), as amended by 2009 Wyoming Session Laws, Chapter 159, Section 346 is amended to read:

Section 320. (e) Except for funds subject to subsection paragraphs(a)(v), (vi) and (vii) and subsection (c) of this section, funds appropriated under this section shall be for the period beginning with the effective date of this section and ending June 30, 2009. Notwithstanding W.S. 9-2-1008, 9-2-1012(e) and 9-4-207(a), any unexpended unobligated funds subject to:

(i) Paragraph (a)(v) for the school of energy resources shall not revert until June 30,--Wi-Q 2012;

(ii) Paragraph (a)(vi) for the high plains gasification facility and technology center shall not revert until June 30, ~ 2013;

Comment: This mnendment simply extends the date for reversion of the 2008 AML funding authorization for both the School of Energy Resources and the HPG-ATC fOE) project. Given the nature of the research commitments for SER and the design and construction timelines for the GE project, these prior appropriations will be expended over a ]onger time horizon.

(ii) [Amendment #4 - Clean coal research and carbon sequestration carryforward of 2009 AML appropriation] 2008 Wyoming Session Laws, Chapter 48, as amended by 2009 WY01ning Session Laws, Chapter 159, creating a new Section 339 (e) (i) and (iv) is amended to read:

'"Section 339. ( e) Except for funds subject to subsection ( c) of this section, funds appropriated under this section shall be for the period beginning with the effective date of this section and ending June 30, 2010. Notwithstanding W.S. 9-2-1008, 9-2-1012(e) and 9-4-207(a), any unexpended, unobligated funds subject to:

(i) Paragraph (c )(i) for the clean coal partnership project shall not revert until June 30, ~ 2014;

(iv) Paragraph (c)(iv) for C02 sequestration research and delnonstration shall not revert until June 30, ~ 2014;".

111

Comment: This amendment simply extends the date for reversion of the 2009 AML funding authorization for both the HPG-ATC (GE) project and sequestration demonstration project. Given the nature of the research cOlnmitments the design and construction timelines for the GE project and carbon sequestration denl0nstration project, these prior appropriations will be expended over a longer time horizon.

(iii) [Amendment #5 - HPG-ATC (GE project) authorization for AML fund swap] 2008 Wyolning Session Laws, Chapter 48, as amended by 2009 Wyoming Session Laws, Chapter 159, creating a new Section 339(d) and (e)(i) and (iv) is amended to read:

"Section 339. (d) The department of environmental quality, in consultation with the University of Wyoming and with the approval of the governor, may substitute other University of Wyoming purposes in its grant applications under subsection (c) of this section but only as necessary to replace university block grant funds expended as necessary to satisfy requirements prohibiting the use of abandoned mine land funds to match federal funds or where the use offederal abandoned mine land funds would be impractical for projects pursuant to paragraphs (c)Ji1 (ii), (iii), (iv), (v) and (vi) of this section.

Comment: This amendment provides the 2009 AML authorization for the HPG-A TC (GE) is subj ect to the AML "fund swap" provision. This will ensure that no AML funds are used for the project which might create federal rights to gasification technology developed at the facility.

(iv) [Amendment #6 - HPG-ATC (GE project) reporting of intellectual property claims] 2008 Wyoming Session Laws, Chapter 48, as amended by 2009 Wyoming Session Laws, Chapter 159, Section 339(c)(i) is amended to read:

"Section 339. ( c) The legislature authorizes the departlnent of environmental quality to sublnit grant applications to the federal office of surface mining for distribution of a portion of funds specified in subsection (a) of this section to the University of Wyoming for the period ending June 30, 2010 for the following projects:

(i) Thirty million dollars ($30,000,000.00) to the school of energy resources for the joint UW/GE clean coal partnership project. As a condition of this authorization, the University of Wyon1ing shall as soon as practicable repOli to the goven10r, attorney general, and joint appropriations con11nittee any clailn against the university or any of its employees or students for wrongful acts with regard to intellectual propeliy of another, which clailll is covered under insurance

IV

secured by the university regarding the joint UW /GE clean coal partnership project;".

Comment: This anlendment is part of the structure ofUW's business relationship with GE with regard to the HPG-ATC project. It requires the University to report to the governor. attorney generaL and joint appropriations committee any claims against the university under the intellectual property insurance secured by the university. Securing this insurance was essential to GE's participation in the project. Insurance o[this type is not cOlnmercialJy available, so a special insurance arrangement was structured with UW's insurer. The insurance policy is for $15 million and the deductible is $14.9 Inillion. Like the state, UW invests operating funds as revenues flow in and expenditures occur. UW has agreed with the insurer to keep operating funds invested in short term fixed income securities and conlmitted to pay the deductible. The likelihood of a claim is believed to be extremely remote. However, if there were a clainl and UW had to pay the deductible, UW's operating budget would necessarily be affected. This reporting requirement ensures the governor, attorney general, and the joint appropriations committee are aware of the claim so that discussions could occur regarding the fiscal consequences of the claim.

( c) Matching funds:

(i) [Anlendment #7 - FY 2010 budget reduction and South Shuttle lot modification] 2006 Wyoming Session Laws, Chapter 35, Section 3, Section 067 as runended by 2007 Wyoming Session Laws, Chapter 136, Section 3, Section 067 as amended by 2008 Wyoming Session Laws, Chapter 48, Section 319, as amended by 2009 WYOlning Session Laws, Chapter 159, Section 344 is amended to read:

Section 319. 3. (a) This general fund appropriation shall only be expended to provide the state match for the following projects in an amount not to exceed the amounts listed for each project:

Kendall House - IENR Engineering Labs Law School Moot Court School of Energy Resources Facility 1. International Center Other Lab and Facilities 2. Natural History Center

$1, 100,000 859,070 $2,000,000 $2,250,000 2,247,380 $20,000,000 18,468,550 $ I ,750,000 1,500,000 $6,250,000 3,275,000 $10,000,000

2. Of this appropriation, not to exceed one million four hundred thousand dollars ($1,400,000.00) may be expended by the university to purchase the south parking lot identified in the university's parking and transportation plan. Expenditures to purchase the south lot propel1y pursuant to this footnote shall not exceed the appraised value of the property. This footnote should not be construed to restrict the university from utilizing other available funds to augment amounts expended

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pursuant to this footnote. The university may expend funds available under this footnote to raze existing stluctures on the property and to render the resulting space suitable for parking.

Comment: This amendment implelnents the reductions to the UW FY 2010 budget required by the Governor's action to reduce all state agency budgets. There is a total of $5 million in reductions to these appropriations, but the reductions are in specific categories of matching funds so as to ensure UW can effectively pursue efforts with donors with regard to the remaining funds. This amendment authorizes use of the $l.4M approved in 2009 to purchase the South Shuttle lot to also be used to raze the buildings on that lot and to make the space that is made available after delnolition suitable for parking. It was origina11y believed that the lot owner would tear down the old buildings as part of the purchase. He declined to do so, and the University purchased to property for less than $900,000. UW requests authority to use the balance of the appropriation to raze the two commercial buildings on the lot and pave their footprint for parking. The two buildings are in poor condition and are not worth repairing.

(ii) [Amendment #8 - Sinking fund modification] 2006 Wyoming Session Laws, Chapter 35, Section 3, Section 067 as amended by 2007 WyOlning Session Laws, Chapter 136, Section 3, Section 067, footnote 3(b), as amended by 2008 Wyoming Session Laws Chapter 48, Section 319 is amended to read:

Section 319. "'3. (b) The university shall create a sinking fund for the purp 0 ses of op eration and ll1aintenance of facilities resulting fro111 new construction built as a result of this appropriation. Funding for this sinking fund shall be frolll university sources and shall be in an amount equal to fifteen percent (15~~) of the cost ofnevl construction resulting fronl this appropriation identify from university sources revenues sufficient to fund operations and maintenance of the School of Energy Resources facility and the Robed and Carol Berry Biodiversity Center, construction funding for both of which has been provided through private donations and state academic facilities nlatching funds. The university shall separately account for these revenues and expenditures and shall include in each biennial or supplelnental budget request a report indicating the sources and all10unts of revenues used and the expenditures for operations and Inaintenance for both these facilities during the preceding fiscal year."

Comment: This amendment deletes the requirement that UW establish a sinking fund for the Berry Center and the SER facility. Construction funding for these two facilities is being provided through gifts and state matching funds. Both projects are fully funded; and work on the Berry Center has begun. It is simply not possible to raise private funds from donors to create sinking funds. The intent of the Legislature was clearly to ensure that the state would not be obligated to pay the operation and maintenance costs for these facilities. To accomplish that, UW proposes to commit its own resources and separately account for them to accomplish the legislative intent in lieu of establishing a sinking fund.

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(iii) [Amendtnent #9 - Wyoming Reclamation ecology project - endowlnent appropriation to be used as matching funds] 2008 Wyoming Session Laws, Chapter 48, as amended by 2009 Wyoming Session Laws, Chapter 159, creating a new Section 339 (c)(vi) is anlended to read:

'"Section 339. (c) The legislature authorizes the department of environmental quality to submit grant applications to the federal office of surface mining for distribution of a portion of funds specified in subsection (a) of this section to the University of Wyoming for the period ending June 30, 2010 for the following projects:

(vi) One million five hundred thousand dollars ($1,500,000.00) to the college of agriculture to provide initial funding for a proposed twenty million dollar ($20,000,000.00) endowlnent to fund the reclamation ecology project. These funds shall be deposited into a separate endowment account from which only the income from account funds shall be expended. However, the university Inay use these funds to Inatch substantial endownlent gifts for an endowlllent for the rec1runation ecology project which gifts and nlatching funds shall be adnl inistered in accordance with W.S. 21 -16-901 through W.S. 21-16-904.

Comment: The 2009 appropriation authorized UW to create an endowment for the reclamation ecology project (formally caned the Wyoming Rec1runation and Restoration Center) . These AML funds were "swapped" with state funds in accordance with law since AML funds cannot be used for endowment purposes. UW can only invest the 2009 appropriation in short tenn fixed income securities. This amendment authorizes UW to use these as matching funds to leverage gifts to increase the endowment as envisioned. By using these as matching funds, a greater return will be generated. That's because gifts and matching funds by law can be invested by the University ofWYOlning Foundation in accordance with its investment policy, so a higher rate of return over time will result.

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(iv) [Amendment #10 - Athletics facilities bridge loan - reduction of interest rate to confonn with cutTent rates ofretum] 2008 Wyoming Session Laws, Chapter 48, Section 324(a) is runended to read:

[ATHLETICS BRIDGE LOAN]

Section 324.(a) The purpose of this section is to authorize the university to receive a bridge loan from the corpus of the University of Wyoming pennanent land fund account for the purpose of proceeding with construction of the remainder of the previous legislatively approved athletics facilities plan. The state treasurer shall invest funds in the University of Wyoming penn anent land fund account in a bIidge loan to the University of Wyoming which shall not exceed a total of four mil1ion three hundred thousand dollars ($4,300,000.00) or the amount of binding commitments from donors which have been secured but not yet paid, whichever is less. The loan made under this section shall be repaid not later than December 31, 2011, and the unpaid balance of the loan shall bear interest at five and thitiy five hundredths percent (5.3 5~~)four and fivetenths percent (4.5%) annually.

Comment: The 2008 Legislature authorized bridge loan to UW from the corpus of the UW permanent land fund to address the cash flow issues resulting from the timing of payment of donor commitments and payments due to contractors. UW anticipates drawing on this bridge loan beginning in May 2010. The new interest rate reflects the anticipated return projected by the State Treasurer's Office and the modification is supported by the State Treasurer.

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Appendix B: Draft AML section for 2010 funds

[AML FUNDING]

Section 300. (a) No application to the federal office of surface mining for grants from the state of Wyoming's share of abandoned mine land funds from the Surface Mining Control and Reclamation Act Amendments of 2006, Section 411 (h)(i), pursuant to 2007 H.R. 6111, shall be Inade except as expressly authorized by the legislature. Notwithstanding W.S. 35-11-1210, grant funds received for the projects authorized in this section may, but are not required to be, deposited into the state abandoned nline land funds reserve account pursuant to W.S. 35-11-1210. All funds received from the authorized grants are appropriated to the department of environmental quality in the amounts specified in this section to be expended for the purposes set forth in this section.

(b) The legislature authorizes the department of environmental quality to submit grant applications to the federal office of surface mining for distribution of a portion of funds specified in subsection (a) of this section for the period ending June 30, 2012 for the following projects:

(i) .. . (ii) .. . Etc.

(c) The legislature authorizes the department of environmental quality to submit grant applications to the federal office of surface mining for distribution of a portion of funds specified in subsection (a) of this section to the University of Wyoming for the period ending June 30, 20 I 2 for the following projects:

(i) Seventeen million four hundred thousand dollars ($17,400,000.00) for operation of the school of energy resources;

(ii) Forty-five million dollars ($45,000,000.00) to the school of energy resources for development of a sub-commercial scale C02 sequestration research and demonstration project. This appropriation is subject to the foHowing:

(A) The university's school of energy resources may expend funds under this appropriation so that the stratigraphic test well project funded in part by the 2009 appropriation for carbon storage is suitable for inj ection of carbon dioxide;

(B) No other funds under this appropriation may be expended until the school of energy resources, with the approval of the energy resources council, provides the following to the joint minerals, business and economic development interim committee and the joint appropriations committee and provides them thirty (30) days for review and comment:

(1) An evaluation of the feasibility of proceeding with the project based upon the data derived from the test well;

(II) A draft plan for the development and operation of the project. The draft plan shall include an explanation of how carbon dioxide for the project will be secured and of how liability issues with regard to injection and storage will be addressed;

(III) A draft budget for the developlnent and operation of the project over a period of time that is reasonable for the demonstration of monitoring, verification and accountability (MY A), including the extent to which commitInents for non-state resources to support development of the project have been secured. No appropriations subject to this subparagraph (B) shall be expended for the next phase of the project unless commitments of non-state resources in an amount equal to the state resources to support each of the next phases of the project have been secured;

(IV) A draft schedule for development.

(C) By November 1, 2011, the school of energy resources shall provide the infonnation required under subparagraph (B) of this paragraph to the joint appropriations cOlllmittee and joint minerals, business and economic development interim committee. By November 1, 2010, the school of energy resources shall submit a progress report regarding the project to the joint appropriations committee and joint minerals, business and economic development interim cOllllnittee.

(iii) Six hundred sixty-six thousand dollars ($666,000.00) to the college of agriculture for the Wyoming reclamation and restoration center;

(iv) Nine hundred eighty-five thousand dollars ($985,000.00) for a nuclear magnetic resonance (NMR) spectrometer;

(v) Fourteen million dollars ($14,000,000.00) to the school of energy resources for clean coal technology research as recommended by the clean coal research task force pursuant to W.S. 21-17-121.

(d) The department of envirorunental quality, in consultation with the University of Wyoming and with the approval of the governor, may substitute other University of Wyoming purposes in its grant applications under subsection (c) of this section but only as necessary to replace university block grant funds expended as necessary to satisfy requirements prohibiting the use of abandoned mine land funds to match federal funds or where the use of federal abandoned mine land funds would be impractical for projects pursuant to paragraphs (c)(i), (ii), (iii) and (v) of this section.

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( e) Except for funds subject to subsection ( c) of this section, funds appropriated under this section shall be for the period beginning with the effective date of this section and ending June 30,2012. Notwithstanding W.S. 9-2-1008, 9-2-1012(e) and 9-4-207(a), any unexpended, unobligated funds subject to:

(i) Paragraph (c)(ii) for C02 sequesh"ation research and demonstration shall not revert until June 30, 2014;

(ii) Paragraph (c )(ii) for clean coal technology research shall not revert unti1 June 30, 2014.

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