HCR 13 am: Relating to the Alaska permanent fund.

00 HOUSE CONCURRENT RESOLUTION NO. 13 am 01 Relating to the Alaska permanent fund. 02 BE IT RESOLVED BY THE LEGISLATURE OF THE STATE OF ALASKA: 03 WHEREAS, in November 1976, the people of the state voted to amend the 04 Constitution of the State of Alaska to create the Alaska permanent fund to save a portion of 05 the state's oil wealth for future generations; and 06 WHEREAS art. IX, sec. 15, Constitution of the State of Alaska, reads that "at least 07 twenty-five per cent of all mineral lease rentals, royalties, royalty sale proceeds, federal 08 mineral revenue sharing payments and bonuses received by the State shall be placed in a 09 permanent fund, the principal of which shall be used only for those income-producing 10 investments specifically designated by law as eligible for permanent fund investments. All 11 income from the permanent fund shall be deposited in the general fund unless otherwise 12 provided by law"; and 13 WHEREAS the permanent fund received its first oil royalty deposit of $734,000 on 14 February 28, 1977; and 15 WHEREAS, with wise fiscal stewardship, the permanent fund is currently worth over 16 $66,000,000,000; and

01 WHEREAS the Alaska permanent fund is a state legacy and is the only endowment in 02 the world to pay an annual dividend to every eligible state resident; and 03 WHEREAS the people of the state need a financially healthy permanent fund that will 04 continue to grow in perpetuity; and 05 WHEREAS the Alaska permanent fund is an integral part of the economic and social 06 fabric of the state and should continue to benefit all generations; and 07 WHEREAS the permanent fund dividend program was established in 1980, but 08 dividends were not paid out until 1982, after Zobel v. Williams was resolved by the United 09 States Supreme Court and new legislation, conforming to the decision, was enacted; and 10 WHEREAS, in the past two years, the earnings reserve account in the Alaska 11 permanent fund has, in addition to paying for the annual permanent fund dividend, become an 12 integral part of the state budget for public services, providing almost half of the state's 13 unrestricted general fund revenue in fiscal year 2020; and 14 WHEREAS, in 2018, the Thirtieth Alaska State Legislature passed Senate Bill 26, 15 which established a sustainable limit on the allowable annual draw from the earnings reserve 16 account, using a percent-of-market-value calculation commonly employed by most 17 foundations and endowments globally; and 18 WHEREAS recent analysis identifies a 15 percent risk over the next 10 years that the 19 earnings reserve account will fall short of meeting the sustainable annual draw for dividends 20 and public services; and 21 WHEREAS an overdraw of the earnings reserve account in the Alaska permanent 22 fund beyond the limit established by Senate Bill 26 would put the fund at material risk, 23 jeopardizing the annual draw, endangering the long-term economic well-being of the state, 24 and impairing the state's long-anticipated ability to rely on the earnings reserve account to 25 help meet the public service needs of the people of the state; and 26 WHEREAS international credit rating agencies have identified that the financial 27 health of the Alaska permanent fund is critically important to the state, providing operating 28 budget flexibility that would be lost if the fund were depleted; and 29 WHEREAS the greatest threat to the Alaska permanent fund and the permanent fund 30 dividend is the failure to enact a sustainable, balanced, long-term fiscal plan that includes an 31 effective spending cap; and

01 WHEREAS current and future generations of people of the state have a vested 02 interest in seeing the Alaska permanent fund continue its history of consistent financial 03 growth in line with the Alaska Permanent Fund Corporation's projected permanent fund value 04 of $84,571,000,000 by June 30, 2029; 05 BE IT RESOLVED that the Alaska State Legislature vows to defend the Alaska 06 permanent fund today and for generations to come; and be it 07 FURTHER RESOLVED that the Alaska State Legislature pledges to maintain a 08 permanent fund dividend for all future generations; and be it 09 FURTHER RESOLVED that the Alaska State Legislature pledges to safeguard the 10 substantial oil and investment wealth that has accumulated in the Alaska permanent fund over 11 the past two generations so that future generations can share in the fund's benefits.