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
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
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
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
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,