Legislature(2005 - 2006)
2005-02-28 Senate Journal
Full Journal pdf2005-02-28 Senate Journal Page 0414 SB 121 SENATE BILL NO. 121 BY THE SENATE RULES COMMITTEE BY REQUEST OF THE GOVERNOR, entitled: "An Act establishing the State of Alaska Capital Corporation; authorizing the issuance of bonds by the State of Alaska Capital Corporation to finance capital improvements in the state; and providing for an effective date." 2005-02-28 Senate Journal Page 0415 was read the first time and referred to the State Affairs and Finance Committees. The following fiscal information was published today: Fiscal Note No. 1, Department of Revenue Governor's transmittal letter dated February 25: Dear President Stevens: Under the authority of art. III, sec. 18, of the Alaska Constitution, I am transmitting a bill that would establish the Alaska capital income account as a separate account of the Alaska permanent fund, and would authorize the deposit into that account of the earnings on money received from State v. Amerada Hess, et al., 1JU-77-847 Civ. (Superior Court, First Judicial District). In 1992, the state's oil and gas royalty litigation (State v. Amerada Hess, et al., 1JU-77-847 Civ. (Superior Court, First Judicial District)) was headed to trial. Both state and federal judges had expressed concerns about the capacity of Alaskan judges and jurors to participate in the case on an impartial basis in light of the fact that the earnings on the portion of any recovery in the case would be deposited into the permanent fund and be used to pay the permanent fund dividends that all judges and jurors receive. AS 37.13.145(d) was enacted, which deposited into the principal of the permanent fund the earnings of all amounts received from settlement of this case. Thus, the concern about impartiality was resolved by disallowing the earnings from the settlement from being used in calculating the annual dividend amount. The Amerada Hess litigation is now completed, though the possibility of a re-opener subject to an arbitration remains. Approximately $425 million from this case, including earnings on settlement receipts and inflation-proofing, was deposited into the permanent fund. This bill proposes to end inflation proofing of the part of the permanent fund principal attributable to the Amerada Hess settlement and to authorize the deposit of the earnings from the settlement proceeds into a separate account of the Alaska permanent fund called the Alaska capital income account. The money in this separate 2005-02-28 Senate Journal Page 0416 account could then be appropriated by the legislature for any valid public purpose, including covering debt service on bonds to finance capital improvements in the state issued by the State of Alaska Capital Corporation under a companion bill I also am transmitting. I urge your prompt and favorable action on this measure. Sincerely yours, /s/ Frank H. Murkowski Governor