Bill Description

AN ACT relating to community development; creating the Wyoming housing revolving loan program; providing legislative findings; providing for loans for housing projects; specifying terms and conditions for loans; creating an account; providing for the appropriation of funds; requiring reports; requiring rulemaking; making conforming amendments; and providing for an effective date.

Notes

This bill is unconstitutional under the Wyoming Constitution and represents a clear expansion of government into an area that is not the proper role of the state. It turns Wyoming into a housing bank, using taxpayer dollars to finance construction, land purchases, and development costs for select local governments, housing authorities, and nonprofit organizations. Declaring this a “public purpose” in legislative findings does not make it so. The primary beneficiaries of this program are specific projects and organizations, not the public at large, and the Constitution does not allow the state to pick winners and losers in the housing market. If Wyoming is facing housing challenges, the solution is to remove government-created barriers like zoning restrictions, permitting delays, and regulatory costs, not to create a permanent, state-run lending program funded by reserve accounts meant to protect taxpayers during economic downturns.

Why This Bill Is Unconstitutional (Wyoming Constitution)

1. The State Is Not Allowed to Act as a Bank for Private or Quasi-Private Development

The Wyoming Constitution limits government to legitimate public purposes and does not grant the legislature authority to create ongoing lending programs for housing development. This bill turns the state into a financing institution for construction projects, land purchases, and predevelopment costs. That is an economic development scheme, not a core governmental function like roads, courts, or public safety.

Calling something “workforce housing” or “affordable housing” does not magically convert private development into a constitutional government duty.

2. “Public Purpose” Is Claimed, Not Proven

The bill’s declarations say the program is for a “valid public purpose of primary benefit to the state.” Legislatures can’t simply declare something constitutional. Under Wyoming constitutional principles, the court looks at who actually benefits.

Here, the direct and primary beneficiaries are:

• Specific developers,
• Housing authorities,
• Nonprofit organizations,
• And select local governments.

The public benefit is indirect and speculative. That’s not enough to justify large transfers of public money into targeted projects.

3. This Is Government Picking Winners and Losers

The bill authorizes loans to:

• Local governments,
• Housing authorities,
• Nonprofits,

But not private individuals or the broader market equally. This is classic government favoritism in economic development. The Constitution does not exist to let the state become a venture capitalist for politically favored “solutions.”

If housing is truly a market failure, the state should remove artificial constraints it created (zoning, permitting delays, density restrictions, development fees) instead of building a permanent subsidy machine.

4. Misuse of Stabilization and Strategic Reserve Funds

The bill raids either:

• The Strategic Investments and Projects Account, or
• The Legislative Stabilization Reserve Account (Wyoming’s “rainy day fund”).

Those funds exist to protect taxpayers during economic downturns and revenue shortfalls. Using them for housing loans is a misuse of their intended constitutional and fiscal purpose. This creates long-term risk to Wyoming’s financial stability for a program that has no constitutional mandate.

5. The Program Creates Permanent Government Expansion

This is not a one-time appropriation. It creates:

• A permanent revolving loan fund,
• Continuous appropriation,
• Rulemaking authority,
• Annual reporting,
• Ongoing administrative bureaucracy.

This entrenches state involvement in housing finance indefinitely, even though housing is not a core government function under the Wyoming Constitution.

Bottom Line:

The Wyoming Constitution limits what government is supposed to do.

Housing finance is not one of those core roles.

The bill uses constitutional-sounding language (“public purpose”) to justify something the Constitution does not authorize.

It socializes risk and privatizes benefit.

It spends reserve funds meant to protect Wyoming in bad times.

The real fix is regulatory reform, not state-run lending.