00                            HOUSE BILL NO. 398                                                                          
01 "An Act relating to disposition of income of the Alaska permanent fund; and providing                                   
02 for an effective date."                                                                                                 
03 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:                                                                
04    * Section 1.  AS 37.13.145(b) is amended to read:                                                                  
05            (b)  After the transfers under (c) and (e) of this section, at [AT] the end of                           
06       each fiscal year, the corporation shall transfer from the earnings reserve account to the                         
07       dividend fund established under AS 43.23.045, 50 percent of the income available for                              
08       distribution under AS 37.13.140 minus any amount transferred under (e) of this                                
09       section, or the balance in the account, whichever is less.                                                    
10    * Sec. 2.  AS 37.13.145(c) is amended to read:                                                                     
11            (c)  At the end of each fiscal year [AFTER THE TRANSFER UNDER (b)                                        
12       OF THIS SECTION], the corporation shall transfer from the earnings reserve account                                
13       to the principal of the fund an amount sufficient to offset the effect of inflation on                            
14       principal of the fund during that fiscal year.  The corporation shall calculate the                               

01       amount to transfer to the principal under this subsection by                                                      
02                 (1)  computing the average of the monthly United States Consumer                                        
03       Price Index for all urban consumers for each of the two previous calendar years;                                  
04                 (2)  computing the percentage change between the first and second                                       
05       calendar year average; and                                                                                        
06                 (3)  applying that rate to the value of the principal of the fund on the                                
07       last day of the fiscal year just ended.                                                                           
08    * Sec. 3.  AS 37.13.145(d) is amended to read:                                                                     
09            (d)  Notwithstanding (b) and (e) of this section, income earned on money                                 
10       awarded in or received as a result of State v. Amerada Hess, et al., 1JU-77-847 Civ.                              
11       (Superior Court, First Judicial District), including settlement, summary judgment, or                             
12       adjustment to a royalty-in-kind contract that is tied to the outcome of this case, or                             
13       interest earned on the money, or on the earnings of the money shall be treated in the                             
14       same manner as other income of the Alaska permanent fund, except that it is not                                   
15       available for distribution to the dividend fund, and shall be annually deposited into the                         
16       principal of the Alaska permanent fund.                                                                           
17    * Sec. 4.  AS 37.13.145 is amended by adding a new subsection to read:                                             
18            (e)  If, on June 30 of any fiscal year, the balance in the budget reserve fund                               
19       (art. IX, sec. 17, Constitution of the State of Alaska) is less than $1,500,000,000, the                          
20       commissioner of revenue shall notify the corporation of the amount necessary to bring                             
21       the budget reserve fund balance up to $1,500,000,000.  After the transfer under (c) of                            
22       this section, the corporation shall transfer to the budget reserve fund from the earnings                         
23       reserve account the amount identified by the commissioner or the balance in the                                   
24       account, whichever is less.                                                                                       
25    * Sec. 5.  This Act takes effect June 29, 2002.