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HB 192: "An Act relating to procurement by the Alaska Permanent Fund Corporation; relating to an appropriation limit; relating to the budget responsibilities of the governor; relating to the Alaska permanent fund, 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 calculation and payment of permanent fund dividends; and providing for an effective date."

00                             HOUSE BILL NO. 192                                                                          
01 "An Act relating to procurement by the Alaska Permanent Fund Corporation; relating                                      
02 to an appropriation limit; relating to the budget responsibilities of the governor; relating                            
03 to the Alaska permanent fund, the earnings of the Alaska permanent fund, and the                                        
04 earnings reserve account; relating to the mental health trust fund; relating to deposits                                
05 into the dividend fund; relating to the calculation and payment of permanent fund                                       
06 dividends; and providing for an effective date."                                                                        
07 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:                                                                
08    * Section 1. The uncodified law of the State of Alaska is amended by adding a new section                          
09 to read:                                                                                                                
10       LEGISLATIVE INTENT. It is the intent of the legislature that the legislature                                      
11            (1)  reevaluate the use of earnings of the Alaska permanent fund, as prescribed                              
12 under this Act, in three years; and                                                                                     
13            (2)  reduce the state operating budget by $600,000,000 over the next four fiscal                             
01 years.                                                                                                                  
02    * Sec. 2. AS 36.30.015 is amended by adding a new subsection to read:                                              
03 (l)  The board of trustees of the Alaska Permanent Fund Corporation shall                                               
04 adopt regulations to govern the procurement of supplies, services, and professional                                     
05 services. The regulations must be similar to the procedures described in this chapter                                   
06 and in regulations adopted under this chapter. Notwithstanding any other provisions of                                  
07 this subsection, the Alaska Permanent Fund Corporation shall comply with the five                                       
08 percent preference under AS 36.30.321(a) and the requirement that contracts for legal                                   
09       services be approved by the attorney general under (d) of this section.                                           
10    * Sec. 3. AS 36.30.990(1) is amended to read:                                                                      
11                 (1)  "agency"                                                                                           
12 (A)  means a department, institution, board, commission,                                                                
13 division, authority, public corporation, the Alaska Pioneers' Home, the Alaska                                          
14 Veterans' Home, or other administrative unit of the executive branch of state                                           
15            government;                                                                                                  
16                      (B)  does not include                                                                              
17                           (i)  the University of Alaska;                                                                
18                           (ii)  the Alaska Railroad Corporation;                                                        
19                           (iii)  the Alaska Housing Finance Corporation;                                                
20 (iv)  a regional Native housing authority created under                                                                 
21 AS 18.55.996 or a regional electrical authority created under                                                           
22                 AS 18.57.020;                                                                                           
23 (v)  the Department of Transportation and Public                                                                        
24 Facilities, in regard to the repair, maintenance, and reconstruction of                                                 
25 vessels, docking facilities, and passenger and vehicle transfer facilities                                              
26                 of the Alaska marine highway system;                                                                    
27                           (vi)  the Alaska Aerospace Corporation;                                                       
28                           (vii)  the Alaska Retirement Management Board;                                                
29                           (viii)  the Alaska Seafood Marketing Institute;                                               
30 (ix)  the Alaska children's trust and the Alaska                                                                        
31                 Children's Trust Board;                                                                                 
01                           (x)  the Alaska Industrial Development and Export                                             
02                 Authority;                                                                                              
03                           (xi)  the Alaska Permanent Fund Corporation;                                              
04    * Sec. 4. AS 37.05.540(a) is amended to read:                                                                      
05 (a)  There is established as a separate fund in the state treasury the budget                                           
06 reserve fund. The budget reserve fund consists of appropriations to the fund.                                           
07 [MONEY RECEIVED BY THE STATE THAT IS SUBJECT TO THE                                                                     
08 APPROPRIATION LIMIT UNDER (b) OF THIS SECTION AND THAT EXCEEDS                                                          
09 THAT LIMIT, MAY BE APPROPRIATED TO THE BUDGET RESERVE FUND.]                                                            
10    * Sec. 5. AS 37.05 is amended by adding a new section to read:                                                     
11 Sec. 37.05.545. Appropriation limit. (a) Unrestricted general fund                                                    
12 appropriations made for a fiscal year may not exceed $4,100,000,000 by more than the                                    
13 cumulative change in inflation since July 1, 2016, derived from federal indices. The                                    
14 determination of the change in inflation for purposes of this subsection shall be based                                 
15 on the Consumer Price Index for all urban consumers for Anchorage prepared by the                                       
16       United States Bureau of Labor Statistics.                                                                         
17 (b)  The appropriation limit in (a) of this section does not apply to an                                                
18       appropriation                                                                                                     
19                 (1)  to the Alaska permanent fund;                                                                      
20                 (2)  for payment of permanent fund dividends;                                                           
21                 (3)  required to pay debt obligations of the state; or                                                  
22                 (4)  for a capital project.                                                                             
23            (c)  In this section,                                                                                        
24                 (1)  "capital project" has the meaning given in AS 37.06.090;                                           
25                 (2)  "program receipts" has the meaning given in AS 37.05.146;                                          
26 (3)  "unrestricted general fund" does not include program receipts or                                                   
27       reappropriations.                                                                                                 
28    * Sec. 6. AS 37.07.020 is amended by adding a new subsection to read:                                              
29 (f)  In addition to the budget and bills submitted under (a) of this section and                                        
30 the fiscal plan submitted under (b) of this section, the governor shall submit a report                                 
31 with a calculation of appropriations in the budget prepared under (a) of this section as                                
01       applied to the appropriation limit under AS 37.05.545.                                                            
02    * Sec. 7. AS 37.13.140 is amended to read:                                                                         
03 Sec. 37.13.140. Income. Net income of the fund includes income of the                                                 
04 earnings reserve account established under AS 37.13.145. The corporation shall                                      
05 determine the net [NET] income of the fund [SHALL BE COMPUTED                                                       
06 ANNUALLY AS OF THE LAST DAY OF THE FISCAL YEAR] in accordance with                                                      
07 generally accepted accounting principles, excluding any unrealized gains or losses.                                     
08 [INCOME AVAILABLE FOR DISTRIBUTION EQUALS 21 PERCENT OF THE                                                             
09 NET INCOME OF THE FUND FOR THE LAST FIVE FISCAL YEARS,                                                                  
10 INCLUDING THE FISCAL YEAR JUST ENDED, BUT MAY NOT EXCEED NET                                                            
11 INCOME OF THE FUND FOR THE FISCAL YEAR JUST ENDED PLUS THE                                                              
12 BALANCE IN THE EARNINGS RESERVE ACCOUNT DESCRIBED IN                                                                    
13       AS 37.13.145.]                                                                                                    
14    * Sec. 8. AS 37.13.140 is amended by adding new subsections to read:                                               
15 (b)  The corporation shall determine the amount available for distribution each                                         
16 year. The amount available for distribution equals five and one-quarter percent of the                                  
17 average market value of the fund for the first five of the preceding six fiscal years,                                  
18 including the fiscal year just ended, computed annually for each fiscal year in                                         
19 accordance with generally accepted accounting principles. In this subsection, "the                                      
20 average market value of the fund" includes the balance of the earnings reserve account                                  
21 established under AS 37.13.145, but does not include that portion of the principal                                      
22 attributed to the settlement of State v. Amerada Hess, et al., 1JU-77-847 Civ.                                          
23       (Superior Court, First Judicial District).                                                                        
24 (c)  In accordance with AS 37.13.146(a), 50 percent of the amount available                                             
25 for distribution under (b) of this section shall be reserved for dividends. The remainder                               
26 of the amount available for distribution under (b) of this section shall be reduced by                                  
27 the difference between the amount calculated under (1) of this subsection and the                                       
28 amount under (2) of this subsection if the amount calculated under (1) of this                                          
29       subsection exceeds the amount under (2) of this subsection:                                                       
30 (1)  the total amount of oil and gas production taxes under                                                             
31 AS 43.55.011 - 43.55.180, mineral lease rentals, royalties, royalty sale proceeds, net                                  
01       profit shares under AS 38.05.180(f) and (g), and federal mineral revenue sharing                                  
02       payments and bonuses received by the state from mineral leases that are deposited into                            
03       the general fund in the current fiscal year;                                                                      
04                 (2)  the sum of $1,200,000,000.                                                                         
05    * Sec. 9. AS 37.13.145(d) is amended to read:                                                                      
06 (d)  Income [NOTWITHSTANDING (b) OF THIS SECTION, INCOME]                                                           
07 earned on money awarded in or received as a result of State v. Amerada Hess, et al.,                                    
08 1JU-77-847 Civ. (Superior Court, First Judicial District), including settlement,                                        
09 summary judgment, or adjustment to a royalty-in-kind contract that is tied to the                                       
10 outcome of this case, or interest earned on the money, or on the earnings of the money                                  
11 shall be treated in the same manner as other income of the Alaska permanent fund,                                       
12 except that it is not available for distribution [TO THE DIVIDEND FUND OR FOR                                           
13 TRANSFERS TO THE PRINCIPAL] under AS 37.13.140(b) and (c) [OF THIS                                                  
14 SECTION], and shall be annually deposited into the Alaska capital income fund                                           
15       (AS 37.05.565).                                                                                                   
16    * Sec. 10. AS 37.13.145 is amended by adding new subsections to read:                                              
17 (e)  Each year the legislature may appropriate from the earnings reserve                                                
18 account to the general fund an amount that does not exceed the amount available for                                     
19       distribution under AS 37.13.140(b) and (c).                                                                       
20 (f)  Each year the legislature may appropriate from the earnings reserve                                                
21 account to the principal of the fund an amount by which the balance of the earnings                                     
22 reserve account exceeds the amount available for distribution under AS 37.13.140(b)                                     
23       multiplied by four, less the amount appropriated under (e) of this section.                                       
24    * Sec. 11. AS 37.13 is amended by adding a new section to read:                                                    
25 Sec. 37.13.146. Appropriations to the dividend fund. (a) Each year, the                                               
26 legislature may appropriate 50 percent of the amount calculated under                                                   
27 AS 37.13.140(b) from the general fund to the dividend fund established in                                               
28       AS 43.23.045.                                                                                                     
29            (b)  Nothing in this section creates a dedicated fund.                                                       
30    * Sec. 12. AS 37.13.300(c) 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 available for distribution under AS 37.13.140(b)                                  
02       [AS 37.13.140].                                                                                                   
03    * Sec. 13. AS 43.23.025(a) is amended to read:                                                                     
04            (a)  By October 1 of each year, the commissioner shall determine the value of                                
05       each permanent fund dividend for that year by                                                                     
06                 (1)  determining the total amount available for dividend payments,                                      
07       which equals                                                                                                      
08                      (A)  the amount appropriated [OF INCOME OF THE                                                 
09            ALASKA PERMANENT FUND TRANSFERRED] to the dividend fund                                                      
10            under AS 37.13.146 [AS 37.13.145(b)] during the current year;                                            
11 (B)  plus the unexpended and unobligated balances of prior                                                              
12 fiscal year appropriations that lapse into the dividend fund under                                                      
13            AS 43.23.045(d);                                                                                             
14 (C)  less the amount necessary to pay prior year dividends from                                                         
15 the dividend fund in the current year under AS 43.23.005(h), 43.23.021, and                                             
16            43.23.055(3) and (7);                                                                                        
17 (D)  less the amount necessary to pay dividends from the                                                                
18 dividend fund due to eligible applicants who, as determined by the department,                                          
19 filed for a previous year's dividend by the filing deadline but who were not                                            
20            included in a previous year's dividend computation;                                                          
21 (E)  less appropriations from the dividend fund during the                                                              
22 current year, including amounts to pay costs of administering the dividend                                              
23            program and the hold harmless provisions of AS 43.23.075;                                                    
24 (2)  determining the number of individuals eligible to receive a                                                        
25 dividend payment for the current year and the number of estates and successors                                          
26 eligible to receive a dividend payment for the current year under AS 43.23.005(h); and                                  
27 (3)  dividing the amount determined under (1) of this subsection by the                                                 
28       amount determined under (2) of this subsection.                                                                   
29    * Sec. 14. AS 43.23.045(a) is amended to read:                                                                     
30 (a)  The dividend fund is established as a separate fund in the state treasury.                                         
31 The fund consists of money appropriated to it under AS 37.13.146. The dividend                                      
01       fund shall be administered by the commissioner and shall be invested by the                                       
02       commissioner in the same manner as provided in AS 37.10.070.                                                      
03    * Sec. 15. AS 43.23.055 is amended to read:                                                                        
04            Sec. 43.23.055. Duties of the department. The department shall                                             
05                 (1)  annually pay permanent fund dividends from the dividend fund,                                  
06       without further appropriation;                                                                                
07 (2)  subject to AS 43.23.011 and paragraph (8) of this section, adopt                                                   
08 regulations under AS 44.62 (Administrative Procedure Act) that establish procedures                                     
09 and time limits for claiming a permanent fund dividend; the department shall                                            
10 determine the number of eligible applicants by October 1 of the year for which the                                      
11       dividend is declared and pay the dividends by December 31 of that year;                                           
12 (3)  adopt regulations under AS 44.62 (Administrative Procedure Act)                                                    
13 that establish procedures and time limits for an individual upon emancipation or upon                                   
14 reaching majority to apply for permanent fund dividends not received during minority                                    
15 because the parent, guardian, or other authorized representative did not apply on                                       
16       behalf of the individual;                                                                                         
17 (4)  assist residents of the state, particularly in rural areas, who because                                            
18 of language, disability, or inaccessibility to public transportation need assistance to                                 
19       establish eligibility and to apply for permanent fund dividends;                                                  
20 (5)  use a list of individuals ineligible for a dividend under                                                          
21 AS 43.23.005(d) provided annually by the Department of Corrections and the                                              
22 Department of Public Safety to determine the number and identity of those                                               
23       individuals;                                                                                                      
24 (6)  adopt regulations that are necessary to implement AS 43.23.005(d);                                                 
25 (7)  adopt regulations that establish procedures for the parent, guardian,                                              
26 or other authorized representative of a disabled individual to apply for prior year                                     
27 permanent fund dividends not received by the disabled individual because no                                             
28       application was submitted on behalf of the individual;                                                            
29 (8)  adopt regulations that establish procedures for an individual to                                                   
30 apply to have a dividend disbursement under AS 37.25.050(a)(2) reissued if it is not                                    
31 collected within two years after the date of its issuance; however, the department may                                  
01       not establish a time limit within which an application to have a disbursement reissued                            
02       must be filed;                                                                                                    
03 (9)  provide any information, upon request, contained in permanent                                                      
04 fund dividend records to the child support services agency created in AS 25.27.010, or                                  
05 the child support enforcement agency of another state, for child support purposes                                       
06 authorized under law; if the information is contained in an electronic data base, the                                   
07       department shall provide the requesting agency with either                                                        
08                      (A)  access to the data base; or                                                                   
09                      (B)  a copy of the information in the data base and a statement                                    
10            certifying its contents;                                                                                     
11                 (10)  establish a fraud investigation unit for the purpose of assisting the                             
12 (A)  Department of Law in the prosecution of individuals who                                                            
13 apply for or obtain a permanent fund dividend in violation of a provision in                                            
14            AS 11, by detecting and investigating those crimes; and                                                      
15 (B)  commissioner to detect and investigate the claiming or                                                             
16 paying of permanent fund dividends that should not have been claimed by or                                              
17 paid to an individual and to impose the penalties and enforcement provisions                                            
18            under AS 43.23.035.                                                                                        
19    * Sec. 16. AS 37.05.540(b), 37.05.540(c), 37.05.540(e); AS 37.13.145(b), and 37.13.145(c)                          
20 are repealed.                                                                                                           
21    * Sec. 17. The uncodified law of the State of Alaska is amended by adding a new section to                         
22 read:                                                                                                                   
23 TRANSITION: REGULATIONS. (a) The commissioner of revenue and the Alaska                                                 
24 Permanent Fund Corporation may adopt regulations, policies, and procedures necessary to                                 
25 implement this Act. The regulations, policies, or procedures may not take effect before the                             
26 effective date of the law implemented by the regulation, policy, or procedure.                                          
27 (b)  The commissioner of revenue and the Alaska Permanent Fund Corporation may                                          
28 adopt regulations, policies, and procedures necessary to implement this Act. The regulations,                           
29 policies, or procedures may not take effect before the effective date of the law implemented                            
30 by the regulation, policy, or procedure.                                                                                
31    * Sec. 18. Section 17 of this Act takes effect immediately under AS 01.10.070(c).                                  
01    * Sec. 19. Except as provided in sec. 18 of this Act, this Act takes effect July 1, 2017.