CSSSSB 114(STA): "An Act relating to the Alaska Permanent Fund Corporation, the earnings of the Alaska permanent fund, and the earnings reserve account; relating to the mental health trust fund; relating to deposits into the dividend fund; relating to the duties of the commissioner of revenue; and providing for an effective date."
00 CS FOR SPONSOR SUBSTITUTE FOR SENATE BILL NO. 114(STA) 01 "An Act relating to the Alaska Permanent Fund Corporation, the earnings of the Alaska 02 permanent fund, and the earnings reserve account; relating to the mental health trust 03 fund; relating to deposits into the dividend fund; relating to the duties of the 04 commissioner of revenue; and providing for an effective date." 05 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 06 * Section 1. AS 37.13.010(a) is amended to read: 07 (a) Under art. IX, sec. 15, of the state constitution, there is established as a 08 separate fund the Alaska permanent fund. The Alaska permanent fund consists of 09 (1) 25 percent of all mineral lease rentals, royalties, royalty sale 10 proceeds, net profit shares under AS 38.05.180(f) and (g), and federal mineral revenue 11 sharing payments received by the state from mineral leases [ISSUED ON OR 12 BEFORE DECEMBER 1, 1979,] and 25 percent of all bonuses received by the state 13 from mineral leases [ISSUED ON OR BEFORE FEBRUARY 15, 1980; 14 (2) 50 PERCENT OF ALL MINERAL LEASE RENTALS,
01 ROYALTIES, ROYALTY SALE PROCEEDS, NET PROFIT SHARES UNDER 02 AS 38.05.180(f) AND (g), AND FEDERAL MINERAL REVENUE SHARING 03 PAYMENTS RECEIVED BY THE STATE FROM MINERAL LEASES ISSUED 04 AFTER DECEMBER 1, 1979, AND 50 PERCENT OF ALL BONUSES RECEIVED 05 BY THE STATE FROM MINERAL LEASES ISSUED AFTER FEBRUARY 15, 06 1980]; and 07 (2) [(3)] any other money appropriated to or otherwise allocated by 08 law or former law to the Alaska permanent fund. 09 * Sec. 2. AS 37.13.010(a), as amended by sec. 1 of this Act, is amended to read: 10 (a) Under art. IX, sec. 15, of the state constitution, there is established as a 11 separate fund the Alaska permanent fund. The Alaska permanent fund consists of 12 (1) 25 percent of all mineral lease rentals, royalties, royalty sale 13 proceeds, net profit shares under AS 38.05.180(f) and (g), and federal mineral revenue 14 sharing payments received by the state from mineral leases issued on or before 15 December 1, 1979, and 25 percent of all bonuses received by the state from mineral 16 leases issued on or before February 15, 1980; 17 (2) 50 percent of all mineral lease rentals, royalties, royalty sale 18 proceeds, net profit shares under AS 38.05.180(f) and (g), and federal mineral 19 revenue sharing payments received by the state from mineral leases issued after 20 December 1, 1979, and 50 percent of all bonuses received by the state from 21 mineral leases issued after February 15, 1980; and 22 (3) [(2)] any other money appropriated to or otherwise allocated by 23 law or former law to the Alaska permanent fund. 24 * Sec. 3. AS 37.13 is amended by adding a new section to read: 25 Sec. 37.13.015. Appropriations to the dividend fund. (a) Following the 26 calculation under AS 37.13.140(b), the legislature may appropriate to the dividend 27 fund established in AS 43.23.045 the following amounts from the following funds: 28 (1) from the earnings reserve account established in AS 37.13.145, 29 (A) 15 percent of 21 percent of the sum of the net income of 30 the fund determined under AS 37.13.140(a) for each of the last five fiscal years 31 including the fiscal year just ended; and
01 (B) two percent of the market value of the constitutional budget 02 reserve fund (art. IX, sec. 17, Constitution of the State of Alaska) calculated on 03 the last day of the fiscal year just ended; and 04 (2) from the general fund, 15 percent of the money deposited in the 05 general fund during the fiscal year just ended from all mineral lease rentals, royalties, 06 royalty sale proceeds, net profit shares under AS 38.05.180(f) and (g), federal mineral 07 revenue sharing payments, and bonuses received by the state from mineral leases. 08 (b) Nothing in this section creates a dedicated fund. 09 * Sec. 4. AS 37.13.140 is amended to read: 10 Sec. 37.13.140. Income. (a) Net income of the fund includes income of the 11 earnings reserve account established under AS 37.13.145. The corporation shall 12 determine the net [NET] income of the fund [SHALL BE COMPUTED 13 ANNUALLY AS OF THE LAST DAY OF THE FISCAL YEAR] in accordance with 14 generally accepted accounting principles, excluding unrealized gains or losses. 15 (b) The corporation shall determine the amount available for distribution 16 under this subsection, computed annually for each fiscal year, following the 17 conclusion of the fiscal year. The amount [, EXCLUDING ANY UNREALIZED 18 GAINS OR LOSSES. INCOME] available for distribution may not be less than zero 19 and equals four and one half [21] percent of the average market value [NET 20 INCOME] of the fund, including the earnings reserve account established in 21 AS 37.13.145, for the [LAST] five fiscal years immediately preceding [, 22 INCLUDING] the fiscal year just ended, reduced by an amount equal to 85 percent 23 of production taxes and mineral lease rentals, royalties, royalty sale proceeds, net 24 profit shares under AS 38.05.180(f) and (g), federal mineral revenue sharing 25 payments, and bonuses received by the state from mineral leases and deposited 26 into the general fund in the fiscal year just ended that exceeds $1,000,000,000 27 [BUT MAY NOT EXCEED NET INCOME OF THE FUND FOR THE FISCAL 28 YEAR JUST ENDED PLUS THE BALANCE IN THE EARNINGS RESERVE 29 ACCOUNT DESCRIBED IN AS 37.13.145]. 30 * Sec. 5. AS 37.13.140, as amended by sec. 4 of this Act, is amended to read: 31 Sec. 37.13.140. Income. [(a)] Net income of the fund includes income of the
01 earnings reserve account established under AS 37.13.145. Net [THE CORPORATION 02 SHALL DETERMINE THE NET] income of the fund shall be computed annually 03 as of the last day of the fiscal year in accordance with generally accepted accounting 04 principles, excluding any unrealized gains or losses. Income [, EXCLUDING 05 UNREALIZED GAINS OR LOSSES. 06 (b) THE CORPORATION SHALL DETERMINE THE AMOUNT 07 AVAILABLE FOR DISTRIBUTION UNDER THIS SUBSECTION, COMPUTED 08 ANNUALLY FOR EACH FISCAL YEAR, FOLLOWING THE CONCLUSION OF 09 THE FISCAL YEAR. THE AMOUNT] available for distribution [MAY NOT BE 10 LESS THAN ZERO AND] equals 21 [FOUR AND ONE HALF] percent of the net 11 income [AVERAGE MARKET VALUE] of the fund [, INCLUDING THE 12 EARNINGS RESERVE ACCOUNT ESTABLISHED IN AS 37.13.145,] for the last 13 five fiscal years, including [IMMEDIATELY PRECEDING] the fiscal year just 14 ended, but may not exceed net income of the fund for the fiscal year just ended 15 plus the balance in the earnings reserve account described in AS 37.13.145 16 [REDUCED BY THE PORTION OF PRODUCTION TAXES AND MINERAL 17 LEASE RENTALS, ROYALTIES, ROYALTY SALE PROCEEDS, NET PROFIT 18 SHARES UNDER AS 38.05.180(f) AND (g), FEDERAL MINERAL REVENUE 19 SHARING PAYMENTS, AND BONUSES RECEIVED BY THE STATE FROM 20 MINERAL LEASES AND DEPOSITED INTO THE GENERAL FUND IN THE 21 FISCAL YEAR JUST ENDED THAT EXCEEDS $1,000,000,000]. 22 * Sec. 6. AS 37.13.145(a) is amended to read: 23 (a) The earnings reserve account is established as a separate account in the 24 fund. Except for income deposited into the general fund under (e) of this section, 25 income [INCOME] from the fund shall be deposited by the corporation into the 26 account as soon as it is received. Money in the account shall be invested in 27 investments authorized under AS 37.13.120. 28 * Sec. 7. AS 37.13.145(a), as amended by sec. 6 of this Act, is amended to read: 29 (a) The earnings reserve account is established as a separate account in the 30 fund. Income [EXCEPT FOR INCOME DEPOSITED INTO THE GENERAL FUND 31 UNDER (e) OF THIS SECTION, INCOME] from the fund shall be deposited by the
01 corporation into the account as soon as it is received. Money in the account shall be 02 invested in investments authorized under AS 37.13.120. 03 * Sec. 8. AS 37.13.145(c) is amended to read: 04 (c) The [AFTER THE TRANSFER UNDER (b) OF THIS SECTION, THE] 05 corporation may [SHALL] transfer from the earnings reserve account to the principal 06 of the fund an amount [SUFFICIENT] to offset the effect of inflation on principal of 07 the fund during that fiscal year. However, none of the amount transferred shall be 08 applied to increase the value of that portion of the principal attributed to the settlement 09 of State v. Amerada Hess, et al., 1JU-77-847 Civ. (Superior Court, First Judicial 10 District) on July 1, 2004. On July 1, the [THE] corporation shall calculate the amount 11 to transfer to the principal under this subsection by multiplying the amount available 12 for distribution for the previous fiscal year under AS 37.13.140(b) by four and 13 subtracting the product of that calculation from the balance of the earnings 14 reserve account on June 30 of the previous fiscal year 15 [(1) COMPUTING THE AVERAGE OF THE MONTHLY UNITED 16 STATES CONSUMER PRICE INDEX FOR ALL URBAN CONSUMERS FOR 17 EACH OF THE TWO PREVIOUS CALENDAR YEARS; 18 (2) COMPUTING THE PERCENTAGE CHANGE BETWEEN THE 19 FIRST AND SECOND CALENDAR YEAR AVERAGE; AND 20 (3) APPLYING THAT RATE TO THE VALUE OF THE 21 PRINCIPAL OF THE FUND ON THE LAST DAY OF THE FISCAL YEAR JUST 22 ENDED, INCLUDING THAT PORTION OF THE PRINCIPAL ATTRIBUTED TO 23 THE SETTLEMENT OF STATE v. AMERADA HESS, ET AL., 1JU-77-847 CIV. 24 (SUPERIOR COURT, FIRST JUDICIAL DISTRICT)]. 25 * Sec. 9. AS 37.13.145(c), as amended by sec. 8 of this Act, is amended to read: 26 (c) after the transfer under (b) of this section, the [THE] corporation shall 27 [MAY] transfer from the earnings reserve account to the principal of the fund an 28 amount sufficient to offset the effect of inflation on principal of the fund during that 29 fiscal year. However, none of the amount transferred shall be applied to increase the 30 value of that portion of the principal attributed to the settlement of State v. Amerada 31 Hess, et al., 1JU-77-847 Civ. (Superior Court, First Judicial District) on July 1, 2004.
01 The [ON JULY 1, THE] corporation shall calculate the amount to transfer to the 02 principal under this subsection by 03 (1) computing the average of the monthly United States Consumer 04 Price Index for all urban consumers for each of the two previous calendar years; 05 (2) computing the percentage change between the first and second 06 calendar year average; and 07 (3) applying that rate to the value of the principal of the fund on 08 the last day of the fiscal year just ended, including that portion of the principal 09 attributed to the settlement of State v. Amerada Hess, et al., 1JU-77-847 Civ. 10 (Superior Court, First Judicial District) [MULTIPLYING THE AMOUNT 11 AVAILABLE FOR DISTRIBUTION FOR THE PREVIOUS FISCAL YEAR 12 UNDER AS 37.13.140(b) BY FOUR AND SUBTRACTING THE PRODUCT OF 13 THAT CALCULATION FROM THE BALANCE OF THE EARNINGS RESERVE 14 ACCOUNT ON JUNE 30 OF THE PREVIOUS FISCAL YEAR]. 15 * Sec. 10. AS 37.13.145(d) is amended to read: 16 (d) Notwithstanding (e) [(b)] of this section, income earned on money 17 awarded in or received as a result of State v. Amerada Hess, et al., 1JU-77-847 Civ. 18 (Superior Court, First Judicial District), including settlement, summary judgment, or 19 adjustment to a royalty-in-kind contract that is tied to the outcome of this case, or 20 interest earned on the money, or on the earnings of the money shall be treated in the 21 same manner as other income of the Alaska permanent fund, except that it is not 22 available for distribution to the dividend fund or for transfers to the general fund 23 [PRINCIPAL] under (e) [(c)] of this section, and shall be annually deposited into the 24 Alaska capital income fund (AS 37.05.565). 25 * Sec. 11. AS 37.13.145(d), as amended by sec. 10 of this Act, is amended to read: 26 (d) Notwithstanding (b) [(e)] of this section, income earned on money 27 awarded in or received as a result of State v. Amerada Hess, et al., 1JU-77-847 Civ. 28 (Superior Court, First Judicial District), including settlement, summary judgment, or 29 adjustment to a royalty-in-kind contract that is tied to the outcome of this case, or 30 interest earned on the money, or on the earnings of the money shall be treated in the 31 same manner as other income of the Alaska permanent fund, except that it is not
01 available for distribution to the dividend fund or for transfers to the principal 02 [GENERAL FUND] under (c) [(e)] of this section, and shall be annually deposited 03 into the Alaska capital income fund (AS 37.05.565). 04 * Sec. 12. AS 37.13.145 is amended by adding new subsections to read: 05 (e) Under art. IX, sec. 15, Constitution of the State of Alaska, subject to 06 legislative appropriation, the corporation shall deposit funds from the earnings reserve 07 account into the general fund until the amount available for distribution for that fiscal 08 year under AS 37.13.140(b) has been deposited into the general fund. On the last day 09 of a fiscal year, if the actual net income of the fund for that fiscal year is less than the 10 amount of income available for distribution under AS 37.13.140(b) for that fiscal year, 11 the corporation shall deposit into the general fund the amount from the earnings 12 reserve account necessary to satisfy the amount of income available for distribution 13 for that fiscal year or the balance of the earnings reserve account, whichever is less. 14 (f) Each year, on or before January 30, the commissioner of revenue may, 15 after consultation with the board, recommend an adjustment to the percentages of 16 money appropriated under AS 37.13.015, based on a review of the assets of the fund. 17 (g) Each year, on or before January 30, the commissioner of revenue shall 18 provide to the legislature a report evaluating the sufficiency of the assets in the 19 earnings reserve account and the amount the commissioner projects to be distributed 20 under AS 37.13.140(b). The commissioner shall deliver the report to the senate 21 secretary and the chief clerk of the house of representatives and notify the legislature 22 that the report is available. 23 (h) At the end of each fiscal year, the corporation shall transfer from the 24 earnings reserve account to the dividend fund established under AS 43.23.045, 50 25 percent of the income available for distribution under AS 37.13.140. 26 * Sec. 13. AS 37.13.300(c) is amended to read: 27 (c) Net income from the mental health trust fund may not be included in the 28 computation of the amount [NET INCOME] available for distribution under 29 AS 37.13.140(b) [AS 37.13.140]. 30 * Sec. 14. AS 37.13.300(c), as amended by sec. 13 of this Act, is amended to read: 31 (c) Net income from the mental health trust fund may not be included in the
01 computation of net income [THE AMOUNT] available for distribution under 02 AS 37.13.140 [AS 37.13.140(b)]. 03 * Sec. 15. AS 37.14.031(c) is amended to read: 04 (c) The net income of the fund shall be computed annually [DETERMINED] 05 by the Alaska Permanent Fund Corporation as of the last day of the fiscal year in 06 accordance with generally accepted accounting principles, excluding any 07 unrealized gains or losses [IN THE SAME MANNER THE CORPORATION 08 DETERMINES THE NET INCOME OF THE ALASKA PERMANENT FUND 09 UNDER AS 37.13.140]. 10 * Sec. 16. AS 37.14.031(c), as amended by sec. 15 of this Act, is amended to read: 11 (c) The net income of the fund shall be determined [COMPUTED 12 ANNUALLY] by the Alaska Permanent Fund Corporation in the same manner the 13 corporation determines the net income of the Alaska permanent fund under 14 AS 37.13.140 [AS OF THE LAST DAY OF THE FISCAL YEAR IN 15 ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES, 16 EXCLUDING ANY UNREALIZED GAINS OR LOSSES]. 17 * Sec. 17. AS 43.23.025(a) is amended to read: 18 (a) By October 1 of each year, the commissioner shall determine the value of 19 each permanent fund dividend for that year by 20 (1) determining the total amount available for dividend payments, 21 which equals 22 (A) the amount appropriated [OF INCOME OF THE 23 ALASKA PERMANENT FUND TRANSFERRED] to the dividend fund 24 under AS 37.13.015 [AS 37.13.145(b)] during the current year; 25 (B) plus the unexpended and unobligated balances of prior 26 fiscal year appropriations that lapse into the dividend fund under 27 AS 43.23.045(d); 28 (C) less the amount necessary to pay prior year dividends from 29 the dividend fund in the current year under AS 43.23.005(h), 43.23.021, and 30 43.23.055(3) and (7); 31 (D) less the amount necessary to pay dividends from the
01 dividend fund due to eligible applicants who, as determined by the department, 02 filed for a previous year's dividend by the filing deadline but who were not 03 included in a previous year's dividend computation; 04 (E) less appropriations from the dividend fund during the 05 current year, including amounts to pay costs of administering the dividend 06 program and the hold harmless provisions of AS 43.23.075; 07 (2) determining the number of individuals eligible to receive a 08 dividend payment for the current year and the number of estates and successors 09 eligible to receive a dividend payment for the current year under AS 43.23.005(h); and 10 (3) dividing the amount determined under (1) of this subsection by the 11 amount determined under (2) of this subsection. 12 * Sec. 18. AS 43.23.025(a), as amended by sec. 17 of this Act, is amended to read: 13 (a) By October 1 of each year, the commissioner shall determine the value of 14 each permanent fund dividend for that year by 15 (1) determining the total amount available for dividend payments, 16 which equals 17 (A) the amount of income of the Alaska permanent fund 18 transferred [APPROPRIATED] to the dividend fund under AS 37.13.145(h) 19 [AS 37.13.015] during the current year; 20 (B) plus the unexpended and unobligated balances of prior 21 fiscal year appropriations that lapse into the dividend fund under 22 AS 43.23.045(d); 23 (C) less the amount necessary to pay prior year dividends from 24 the dividend fund in the current year under AS 43.23.005(h), 43.23.021, and 25 43.23.055(3) and (7); 26 (D) less the amount necessary to pay dividends from the 27 dividend fund due to eligible applicants who, as determined by the department, 28 filed for a previous year's dividend by the filing deadline but who were not 29 included in a previous year's dividend computation; 30 (E) less appropriations from the dividend fund during the 31 current year, including amounts to pay costs of administering the dividend
01 program and the hold harmless provisions of AS 43.23.075; 02 (2) determining the number of individuals eligible to receive a 03 dividend payment for the current year and the number of estates and successors 04 eligible to receive a dividend payment for the current year under AS 43.23.005(h); and 05 (3) dividing the amount determined under (1) of this subsection by the 06 amount determined under (2) of this subsection. 07 * Sec. 19. AS 43.23.025 is amended by adding a new subsection to read: 08 (c) If the value of each permanent fund dividend calculated under (a) of this 09 section results in a dividend for each eligible individual that is less than $1,000, then 10 the legislature may appropriate from the earnings reserve account established in 11 AS 37.13.145 an amount necessary to pay each eligible individual a permanent fund 12 dividend of $1,000. 13 * Sec. 20. AS 43.23.045(d) is amended to read: 14 (d) Unless specified otherwise in an appropriation act, the unexpended and 15 unobligated balance of an appropriation to implement this chapter lapses into the 16 dividend fund on June 30 of the fiscal year for which the appropriation was made and 17 may [SHALL] be used in determining the amount of and paying the subsequent year's 18 dividend as provided in AS 43.23.025(a)(1)(B). 19 * Sec. 21. AS 43.23.045(d), as amended by sec. 20 of this Act, is amended to read: 20 (d) Unless specified otherwise in an appropriation act, the unexpended and 21 unobligated balance of an appropriation to implement this chapter lapses into the 22 dividend fund on June 30 of the fiscal year for which the appropriation was made and 23 shall [MAY] be used in determining the amount of and paying the subsequent year's 24 dividend as provided in AS 43.23.025(a)(1)(B). 25 * Sec. 22. AS 37.13.145(b) is repealed. 26 * Sec. 23. AS 37.13.015, 37.13.145(e), 37.13.145(f), 37.13.145(g); and AS 43.23.025(c) are 27 repealed July 1, 2019. 28 * Sec. 24. The uncodified law of the State of Alaska is amended by adding a new section to 29 read: 30 TRANSITION. (a) Notwithstanding AS 43.23.025(a), as amended by sec. 17 of this 31 Act, AS 43.23.025(c), added by sec. 19 of this Act, and AS 43.23.045(d), as amended by sec.
01 20 of this Act, the commissioner of revenue shall determine the value of each permanent fund 02 dividend for the 2016 dividend year under AS 43.23.025 and 43.23.045(d), as those sections 03 read on the day before the effective date of secs. 17, 19, and 20 of this Act. 04 (b) The commissioner of revenue and the Alaska Permanent Fund Corporation may 05 adopt regulations, policies, and procedures necessary to implement this Act. The regulations, 06 policies, or procedures may not take effect before the effective date of the law implemented 07 by the regulation, policy, or procedure. 08 * Sec. 25. The uncodified law of the State of Alaska is amended by adding a new section to 09 read: 10 TRANSITION. (a) Notwithstanding AS 43.23.025(a), as amended by sec. 18 of this 11 Act, AS 43.23.045(d), as amended by sec. 21 of this Act, and the repeals of AS 37.13.015 and 12 AS 43.23.025(c) by sec. 23 of this Act, the commissioner of revenue shall determine the value 13 of the permanent fund dividend distributed in 2019 under AS 37.13.015, AS 43.23.025(a), 14 43.23.025(c), and 43.23.045(d), as those sections read on the day before the effective date of 15 secs. 18, 21, and 23 of this Act. 16 (b) The commissioner of revenue and the Alaska Permanent Fund Corporation may 17 adopt regulations, policies, and procedures necessary to implement AS 43.23.025(a), as 18 amended by sec. 18 of this Act, and AS 43.23.045(d), as amended by sec. 21 of this Act. The 19 regulations, policies, or procedures may not take effect before the effective date of the law 20 implemented by the regulation, policy, or procedure. 21 * Sec. 26. The uncodified law of the State of Alaska is amended by adding a new section to 22 read: 23 RETROACTIVITY. If secs. 1, 3, 4, 6, 8, 10, 12(e) - (g), 13, 15, 17, 19, 20, and 24 take 24 effect after July 1, 2016, secs. 1, 3, 4, 6, 8, 10, 12(e) - (g), 13, 15, 17, 19, 20, and 24 of this 25 Act are retroactive to July 1, 2016. 26 * Sec. 27. Sections 2, 5, 7, 9, 11, 12(h), 14, 16, 18, 21, and 23 of this Act take effect July 1, 27 2019. 28 * Sec. 28. Sections 24 and 26 of this Act take effect immediately under AS 01.10.070(c). 29 * Sec. 29. Except as provided in secs. 27 and 28 of this Act, this Act takes effect July 1, 30 2016.