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CSSB 26(FIN): "An Act 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                       CS FOR SENATE BILL NO. 26(FIN)                                                                    
01 "An Act relating to an appropriation limit; relating to the budget responsibilities of the                              
02 governor; relating to the Alaska permanent fund, the earnings of the Alaska permanent                                   
03 fund, and the earnings reserve account; relating to the mental health trust fund; relating                              
04 to deposits into the dividend fund; relating to the calculation and payment of permanent                                
05 fund dividends; and providing for an effective date."                                                                   
06 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:                                                                
07    * Section 1. The uncodified law of the State of Alaska is amended by adding a new section                          
08 to read:                                                                                                                
09       LEGISLATIVE INTENT. It is the intent of the legislature that the legislature                                      
10 reevaluate the use of earnings of the Alaska permanent fund, as prescribed under this Act, in                           
11 three years.                                                                                                            
12    * Sec. 2. AS 37.05.540(a) is amended to read:                                                                      
13            (a)  There is established as a separate fund in the state treasury the budget                                
01 reserve fund. The budget reserve fund consists of appropriations to the fund.                                           
02 [MONEY RECEIVED BY THE STATE THAT IS SUBJECT TO THE                                                                     
03 APPROPRIATION LIMIT UNDER (b) OF THIS SECTION AND THAT EXCEEDS                                                          
04       THAT LIMIT, MAY BE APPROPRIATED TO THE BUDGET RESERVE FUND.]                                                      
05    * Sec. 3. AS 37.05 is amended by adding a new section to read:                                                     
06 Sec. 37.05.545. Appropriation limit. (a) Unrestricted general fund                                                    
07 appropriations made for a fiscal year may not exceed $4,100,000,000 by more than the                                    
08 cumulative change in inflation since July 1, 2016, derived from federal indices. The                                    
09 determination of the change in inflation for purposes of this subsection shall be based                                 
10 on the Consumer Price Index for all urban consumers for Anchorage prepared by the                                       
11       United States Bureau of Labor Statistics.                                                                         
12 (b)  The appropriation limit in (a) of this section does not apply to an                                                
13       appropriation                                                                                                     
14                 (1)  to the Alaska permanent fund;                                                                      
15                 (2)  for payment of permanent fund dividends;                                                           
16                 (3)  required to pay debt obligations of the state; or                                                  
17                 (4)  for a capital project.                                                                             
18            (c)  In this section,                                                                                        
19                 (1)  "capital project" has the meaning given in AS 37.06.090;                                           
20                 (2)  "program receipts" has the meaning given in AS 37.05.146;                                          
21 (3)  "unrestricted general fund" does not include program receipts or                                                   
22       reappropriations.                                                                                                 
23    * Sec. 4. AS 37.07.020 is amended by adding a new subsection to read:                                              
24 (f)  In addition to the budget and bills submitted under (a) of this section and                                        
25 the fiscal plan submitted under (b) of this section, the governor shall submit a report                                 
26 with a calculation of appropriations in the budget prepared under (a) of this section as                                
27       applied to the appropriation limit under AS 37.05.545.                                                            
28    * Sec. 5. AS 37.13.010(a) is amended to read:                                                                      
29 (a)  Under art. IX, sec. 15, of the state constitution, there is established as a                                       
30       separate fund the Alaska permanent fund. The Alaska permanent fund consists of                                    
31 (1)  25 percent of all mineral lease rentals, royalties, royalty sale                                                   
01 proceeds, net profit shares under AS 38.05.180(f) and (g), and federal mineral revenue                                  
02 sharing payments received by the state from mineral leases [ISSUED ON OR                                                
03 BEFORE DECEMBER 1, 1979,] and 25 percent of all bonuses received by the state                                           
04       from mineral leases [ISSUED ON OR BEFORE FEBRUARY 15, 1980;                                                       
05 (2)  50 PERCENT OF ALL MINERAL LEASE RENTALS,                                                                           
06 ROYALTIES, ROYALTY SALE PROCEEDS, NET PROFIT SHARES UNDER                                                               
07 AS 38.05.180(f) AND (g), AND FEDERAL MINERAL REVENUE SHARING                                                            
08 PAYMENTS RECEIVED BY THE STATE FROM MINERAL LEASES ISSUED                                                               
09 AFTER DECEMBER 1, 1979, AND 50 PERCENT OF ALL BONUSES RECEIVED                                                          
10 BY THE STATE FROM MINERAL LEASES ISSUED AFTER FEBRUARY 15,                                                              
11       1980]; and                                                                                                        
12 (2) [(3)]  any other money appropriated to or otherwise allocated by                                                
13       law or former law to the Alaska permanent fund.                                                                   
14    * Sec. 6. AS 37.13.140 is amended to read:                                                                         
15 Sec. 37.13.140. Income. Net income of the fund includes income of the                                                 
16 earnings reserve account established under AS 37.13.145. The corporation shall                                      
17 determine the net [NET] income of the fund [SHALL BE COMPUTED                                                       
18 ANNUALLY AS OF THE LAST DAY OF THE FISCAL YEAR] in accordance with                                                      
19 generally accepted accounting principles, excluding any unrealized gains or losses.                                     
20 [INCOME AVAILABLE FOR DISTRIBUTION EQUALS 21 PERCENT OF THE                                                             
21 NET INCOME OF THE FUND FOR THE LAST FIVE FISCAL YEARS,                                                                  
22 INCLUDING THE FISCAL YEAR JUST ENDED, BUT MAY NOT EXCEED NET                                                            
23 INCOME OF THE FUND FOR THE FISCAL YEAR JUST ENDED PLUS THE                                                              
24 BALANCE IN THE EARNINGS RESERVE ACCOUNT DESCRIBED IN                                                                    
25       AS 37.13.145.]                                                                                                    
26    * Sec. 7. AS 37.13.140 is amended by adding new subsections to read:                                               
27 (b)  The corporation shall determine the amount available for distribution each                                         
28 year. The amount available for distribution equals five and one-quarter percent of the                                  
29 average market value of the fund for the first five of the preceding six fiscal years,                                  
30 including the fiscal year just ended, computed annually for each fiscal year in                                         
31 accordance with generally accepted accounting principles. In this subsection, "the                                      
01 average market value of the fund" includes the balance of the earnings reserve account                                  
02 established under AS 37.13.145, but does not include that portion of the principal                                      
03 attributed to the settlement of State v. Amerada Hess, et al., 1JU-77-847 Civ.                                          
04       (Superior Court, First Judicial District).                                                                        
05 (c)  In accordance with AS 37.13.146(a), 25 percent of the amount available                                             
06 for distribution under (b) of this section shall be reserved for dividends. The remainder                               
07 of the amount available for distribution under (b) of this section shall be reduced by                                  
08 the difference between the amount calculated under (1) of this subsection and the                                       
09 amount under (2) of this subsection if the amount calculated under (1) of this                                          
10       subsection exceeds the amount under (2) of this subsection:                                                       
11 (1)  the total amount of oil and gas production taxes under                                                             
12 AS 43.55.011 - 43.55.180, mineral lease rentals, royalties, royalty sale proceeds, net                                  
13 profit shares under AS 38.05.180(f) and (g), and federal mineral revenue sharing                                        
14 payments and bonuses received by the state from mineral leases that are deposited into                                  
15       the general fund in the current fiscal year;                                                                      
16                 (2)  the sum of $1,200,000,000.                                                                         
17    * Sec. 8. AS 37.13.140(b), added by sec. 7 of this Act, is amended to read:                                        
18 (b)  The corporation shall determine the amount available for distribution each                                         
19 year. The amount available for distribution equals five [AND ONE-QUARTER]                                               
20 percent of the average market value of the fund for the first five of the preceding six                                 
21 fiscal years, including the fiscal year just ended, computed annually for each fiscal                                   
22 year in accordance with generally accepted accounting principles. In this subsection,                                   
23 "the average market value of the fund" includes the balance of the earnings reserve                                     
24 account established under AS 37.13.145, but does not include that portion of the                                        
25 principal attributed to the settlement of State v. Amerada Hess, et al., 1JU-77-847 Civ.                                
26       (Superior Court, First Judicial District).                                                                        
27    * Sec. 9. AS 37.13.145(d) is amended to read:                                                                      
28 (d)  Income [NOTWITHSTANDING (b) OF THIS SECTION, INCOME]                                                           
29 earned on money awarded in or received as a result of State v. Amerada Hess, et al.,                                    
30 1JU-77-847 Civ. (Superior Court, First Judicial District), including settlement,                                        
31 summary judgment, or adjustment to a royalty-in-kind contract that is tied to the                                       
01 outcome of this case, or interest earned on the money, or on the earnings of the money                                  
02 shall be treated in the same manner as other income of the Alaska permanent fund,                                       
03 except that it is not available for distribution [TO THE DIVIDEND FUND OR FOR                                           
04 TRANSFERS TO THE PRINCIPAL] under AS 37.13.140(b) and (c) [OF THIS                                                  
05 SECTION], and shall be annually deposited into the Alaska capital income fund                                           
06       (AS 37.05.565).                                                                                                   
07    * Sec. 10. AS 37.13.145 is amended by adding new subsections to read:                                              
08 (e)  Each year the legislature may appropriate from the earnings reserve                                                
09 account to the general fund an amount that does not exceed the amount available for                                     
10       distribution under AS 37.13.140(b) and (c).                                                                       
11 (f)  Each year the legislature may appropriate from the earnings reserve                                                
12 account to the principal of the fund an amount by which the balance of the earnings                                     
13 reserve account exceeds the amount available for distribution under AS 37.13.140(b)                                     
14       multiplied by four, less the amount appropriated under (e) of this section.                                       
15    * Sec. 11. AS 37.13 is amended by adding a new section to read:                                                    
16 Sec. 37.13.146. Appropriations to the dividend fund. (a) Each year, the                                               
17 legislature may appropriate 25 percent of the amount calculated under                                                   
18 AS 37.13.140(b) from the general fund to the dividend fund established in                                               
19       AS 43.23.045.                                                                                                     
20            (b)  Nothing in this section creates a dedicated fund.                                                       
21    * Sec. 12. AS 37.13.300(c) is amended to read:                                                                     
22 (c)  Net income from the mental health trust fund may not be included in the                                            
23 computation of [NET] income available for distribution under AS 37.13.140(b)                                        
24       [AS 37.13.140].                                                                                                   
25    * Sec. 13. AS 43.23.025(a) is amended to read:                                                                     
26 (a)  By October 1 of each year, the commissioner shall determine the value of                                           
27       each permanent fund dividend for that year by                                                                     
28 (1)  determining the total amount available for dividend payments,                                                      
29       which equals                                                                                                      
30 (A)  the amount appropriated [OF INCOME OF THE                                                                      
31 ALASKA PERMANENT FUND TRANSFERRED] to the dividend fund                                                                 
01            under AS 37.13.146 [AS 37.13.145(b)] during the current year;                                            
02                      (B)  plus the unexpended and unobligated balances of prior                                         
03            fiscal year appropriations that lapse into the dividend fund under                                           
04            AS 43.23.045(d);                                                                                             
05                      (C)  less the amount necessary to pay prior year dividends from                                    
06            the dividend fund in the current year under AS 43.23.005(h), 43.23.021, and                                  
07            43.23.055(3) and (7);                                                                                        
08                      (D)  less the amount necessary to pay dividends from the                                           
09            dividend fund due to eligible applicants who, as determined by the department,                               
10 filed for a previous year's dividend by the filing deadline but who were not                                            
11            included in a previous year's dividend computation;                                                          
12 (E)  less appropriations from the dividend fund during the                                                              
13 current year, including amounts to pay costs of administering the dividend                                              
14            program and the hold harmless provisions of AS 43.23.075;                                                    
15 (2)  determining the number of individuals eligible to receive a                                                        
16 dividend payment for the current year and the number of estates and successors                                          
17 eligible to receive a dividend payment for the current year under AS 43.23.005(h); and                                  
18 (3)  dividing the amount determined under (1) of this subsection by the                                                 
19       amount determined under (2) of this subsection.                                                                   
20    * Sec. 14. AS 43.23.025 is amended by adding a new subsection to read:                                             
21 (c)  Notwithstanding (a) of this section, the amount of each permanent fund                                             
22       dividend for fiscal years 2018, 2019, and 2020 shall be $1,000.                                                   
23    * Sec. 15. AS 43.23.045(a) is amended to read:                                                                     
24 (a)  The dividend fund is established as a separate fund in the state treasury.                                         
25 The fund consists of money appropriated to it under AS 37.13.146. The dividend                                      
26 fund shall be administered by the commissioner and shall be invested by the                                             
27       commissioner in the same manner as provided in AS 37.10.070.                                                      
28    * Sec. 16. AS 43.23.055 is amended to read:                                                                        
29            Sec. 43.23.055. Duties of the department. The department shall                                             
30 (1)  annually pay permanent fund dividends from the dividend fund,                                                  
31       without further appropriation;                                                                                
01 (2)  subject to AS 43.23.011 and paragraph (8) of this section, adopt                                                   
02 regulations under AS 44.62 (Administrative Procedure Act) that establish procedures                                     
03 and time limits for claiming a permanent fund dividend; the department shall                                            
04 determine the number of eligible applicants by October 1 of the year for which the                                      
05       dividend is declared and pay the dividends by December 31 of that year;                                           
06 (3)  adopt regulations under AS 44.62 (Administrative Procedure Act)                                                    
07 that establish procedures and time limits for an individual upon emancipation or upon                                   
08 reaching majority to apply for permanent fund dividends not received during minority                                    
09 because the parent, guardian, or other authorized representative did not apply on                                       
10       behalf of the individual;                                                                                         
11 (4)  assist residents of the state, particularly in rural areas, who because                                            
12 of language, disability, or inaccessibility to public transportation need assistance to                                 
13       establish eligibility and to apply for permanent fund dividends;                                                  
14 (5)  use a list of individuals ineligible for a dividend under                                                          
15 AS 43.23.005(d) provided annually by the Department of Corrections and the                                              
16 Department of Public Safety to determine the number and identity of those                                               
17       individuals;                                                                                                      
18 (6)  adopt regulations that are necessary to implement AS 43.23.005(d);                                                 
19 (7)  adopt regulations that establish procedures for the parent, guardian,                                              
20 or other authorized representative of a disabled individual to apply for prior year                                     
21 permanent fund dividends not received by the disabled individual because no                                             
22       application was submitted on behalf of the individual;                                                            
23 (8)  adopt regulations that establish procedures for an individual to                                                   
24 apply to have a dividend disbursement under AS 37.25.050(a)(2) reissued if it is not                                    
25 collected within two years after the date of its issuance; however, the department may                                  
26 not establish a time limit within which an application to have a disbursement reissued                                  
27       must be filed;                                                                                                    
28 (9)  provide any information, upon request, contained in permanent                                                      
29 fund dividend records to the child support services agency created in AS 25.27.010, or                                  
30 the child support enforcement agency of another state, for child support purposes                                       
31 authorized under law; if the information is contained in an electronic data base, the                                   
01       department shall provide the requesting agency with either                                                        
02                      (A)  access to the data base; or                                                                   
03                      (B)  a copy of the information in the data base and a statement                                    
04            certifying its contents;                                                                                     
05                 (10)  establish a fraud investigation unit for the purpose of assisting the                             
06                      (A)  Department of Law in the prosecution of individuals who                                       
07 apply for or obtain a permanent fund dividend in violation of a provision in                                            
08            AS 11, by detecting and investigating those crimes; and                                                      
09                      (B)  commissioner to detect and investigate the claiming or                                        
10 paying of permanent fund dividends that should not have been claimed by or                                              
11 paid to an individual and to impose the penalties and enforcement provisions                                            
12            under AS 43.23.035.                                                                                        
13    * Sec. 17. AS 37.05.540(b), 37.05.540(c), 37.05.540(e); AS 37.13.145(b), and 37.13.145(c)                          
14 are repealed.                                                                                                           
15    * Sec. 18. AS 43.23.025(c) is repealed June 30, 2021.                                                              
16    * Sec. 19. The uncodified law of the State of Alaska is amended by adding a new section to                         
17 read:                                                                                                                   
18 TRANSITION: REGULATIONS. The commissioner of revenue and the Alaska                                                     
19 Permanent Fund Corporation may adopt regulations, policies, and procedures necessary to                                 
20 implement this Act. The regulations, policies, or procedures may not take effect before the                             
21 effective date of the law implemented by the regulation, policy, or procedure.                                          
22    * Sec. 20. Section 19 of this Act takes effect immediately under AS 01.10.070(c).                                  
23    * Sec. 21. Section 8 of this Act takes effect July 1, 2020.                                                        
24    * Sec. 22. Except as provided in secs. 20 and 21 of this Act, this Act takes effect July 1,                        
25 2017.