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30th Legislature(2017-2018)

Bill Text 30th Legislature


00 Enrolled HB 213                                                                                                         
01 Creating the education endowment fund and the dividend raffle fund; relating to the definition                          
02 of "gambling"; relating to the investment, appropriation, and administration of the public                              
03 school trust fund; authorizing donations from the permanent fund dividend for educational                               
04 purposes and to enter the permanent fund dividend raffle; relating to transfers from the                                
05 dividend raffle fund and the education endowment fund; relating to the duties of the                                    
06 Department of Revenue; and providing for an effective date.                                                             
07                           _______________                                                                               
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 funds generated by                               
11 the permanent fund dividend raffle created in sec. 8 of this Act be used to supplement and not                          
12 to supplant state aid provided by the public school funding formula under AS 14.17.410.                                 
01    * Sec. 2. AS 11.66.280(3) is amended to read:                                                                        
02 (3)  "gambling" means that a person stakes or risks something of value                                                  
03 upon the outcome of a contest of chance or a future contingent event not under the                                      
04 person's control or influence, upon an agreement or understanding that that person or                                   
05 someone else will receive something of value in the event of a certain outcome;                                         
06       "gambling" does not include                                                                                       
07 (A)  bona fide business transactions valid under the law of                                                             
08 contracts for the purchase or sale at a future date of securities or commodities                                        
09 and agreements to compensate for loss caused by the happening of chance,                                                
10 including contracts of indemnity or guaranty and life, health, or accident                                              
11            insurance;                                                                                                   
12                      (B)  playing an amusement device that                                                              
13 (i)  confers only an immediate right of replay not                                                                      
14 exchangeable for something of value other than the privilege of                                                         
15 immediate replay and does not contain a method or device by which the                                                   
16                 privilege of immediate replay may be cancelled or revoked;                                              
17 (ii)  confers only tickets, credits, allowances, tokens, or                                                             
18 anything of value that can be redeemed for toys, candy, or electronic                                                   
19 novelties offered at the same facility where the amusement device is                                                    
20                 located; or                                                                                             
21 (iii)  allows a player to manipulate a claw machine or                                                                  
22 similar device within an enclosure and enables a person to receive                                                      
23                 merchandise directly from the machine; [OR]                                                             
24 (C)  an activity authorized by the Department of Revenue under                                                          
25            AS 05.15; or                                                                                               
26 (D)  the permanent fund dividend raffle authorized under                                                              
27            AS 43.23.064;                                                                                              
28    * Sec. 3. AS 37.10.071(d) is amended to read:                                                                        
29 (d)  In exercising investment, custodial, or depository powers or duties under                                          
30 this section, the fiduciary or the fiduciary's designee is liable for a breach of a duty                                
31 that is assigned or delegated under this section, or under AS 14.40.255, 14.40.280(c),                                  
01 14.40.400(b), AS 37.10.070, AS 37.14.160 [AS 37.14.110(c), 37.14.160], or                                             
02 37.14.170. However, the fiduciary or the designee is not liable for a breach of a duty                                  
03 that has been delegated to another person if the delegation is prudent under the                                        
04 applicable standard of prudence set out in statute or if the duty is assigned by law to                                 
05       another person, except to the extent that the fiduciary or designee                                               
06 (1)  knowingly participates in, or knowingly undertakes to conceal, an                                                  
07 act or omission of another person knowing that the act or omission is a breach of that                                  
08       person's duties under this chapter;                                                                               
09 (2)  by failure to comply with this section in the administration of                                                    
10       specific responsibilities, enables another person to commit a breach of duty; or                                  
11 (3)  has knowledge of a breach of duty by another person, unless the                                                    
12 fiduciary or designee makes reasonable efforts under the circumstances to remedy the                                    
13       breach.                                                                                                           
14    * Sec. 4. AS 37.14.160 is amended to read:                                                                           
15 Sec. 37.14.160. Duties of the commissioner of revenue. The commissioner of                                              
16       revenue is the treasurer of the trust fund created in AS 37.14.110 and shall                                      
17 (1)  in carrying out investment duties under this section, exercise the                                                 
18 same powers and duties established for the Alaska Retirement Management Board in                                        
19       AS 37.10.220;                                                                                                     
20 (2)  deposit the principal and income from investments into [IN                                                       
21       SEPARATE PRINCIPAL AND INCOME ACCOUNTS FOR] the fund;                                                             
22 (3)  invest and maintain accounting records [THAT DISTINGUISH                                                           
23       BETWEEN THE PRINCIPAL AND INCOME OF THE FUND];                                                                    
24 (4)  provide reports to the board established under AS 37.14.120 on the                                                 
25       condition and investment performance of the fund;                                                               
26 (5)  determine, on July 1 of each year, the monthly average market                                                    
27       value of the fund for the five fiscal years preceding the previous fiscal year.                                 
28    * Sec. 5. AS 37.14 is amended by adding a new section to read:                                                       
29 Sec. 37.14.165. Use of the public school trust fund. Each year, the legislature                                         
30 may appropriate not more than five percent of the amount determined by the                                              
31       commissioner of revenue under AS 37.14.160(5) for the following purposes:                                         
01                 (1)  funding support of the state public school program; and                                            
02                 (2)  reimbursement of the costs of administration of the fund.                                          
03    * Sec. 6. AS 37.14.170 is amended to read:                                                                           
04 Sec. 37.14.170. Investments. The commissioner of revenue is the fiduciary of                                            
05 the trust fund and shall invest the fund to provide increasing returns from capital                                   
06 appreciation and net income over long-term periods to the fund's current                                            
07 [INCOME] beneficiaries. The commissioner may invest the money in the fund on the                                        
08 basis of probable total rate of return to promote the long-term generation of capital                                 
09       appreciation and income. In managing the trust fund, the commissioner shall                                     
10 (1)  consider the status of the fund's capital and the income generated                                                 
11       on both a current and a probable future basis;                                                                    
12                 (2)  determine the appropriate investment objectives;                                                   
13                 (3)  establish investment policies to achieve the objectives; and                                       
14 (4)  act only in regard to the financial interests of the fund's                                                        
15       beneficiaries.                                                                                                    
16    * Sec. 7. AS 43.23.055 is amended to read:                                                                           
17            Sec. 43.23.055. Duties of the department. The department shall                                               
18                 (1)  annually pay permanent fund dividends from the dividend fund;                                      
19 (2)  subject to AS 43.23.011 and [PARAGRAPH] (8) of this section,                                                       
20 adopt regulations under AS 44.62 (Administrative Procedure Act) that establish                                          
21 procedures and time limits for claiming a permanent fund dividend; the department                                       
22 shall determine the number of eligible applicants by October 1 of the year for which                                    
23       the dividend is declared and pay the dividends by December 31 of that year;                                       
24 (3)  adopt regulations under AS 44.62 (Administrative Procedure Act)                                                    
25 that establish procedures and time limits for an individual upon emancipation or upon                                   
26 reaching majority to apply for permanent fund dividends not received during minority                                    
27 because the parent, guardian, or other authorized representative did not apply on                                       
28       behalf of the individual;                                                                                         
29 (4)  assist residents of the state, particularly in rural areas, who, because                                         
30 of language, disability, or inaccessibility to public transportation, need assistance to                              
31       establish eligibility and to apply for permanent fund dividends;                                                  
01 (5)  use a list of individuals ineligible for a dividend under                                                          
02 AS 43.23.005(d) provided annually by the Department of Corrections and the                                              
03 Department of Public Safety to determine the number and identity of those                                               
04       individuals;                                                                                                      
05 (6)  adopt regulations that are necessary to implement AS 43.23.005(d);                                                 
06 (7)  adopt regulations that establish procedures for the parent, guardian,                                              
07 or other authorized representative of a disabled individual to apply for prior year                                     
08 permanent fund dividends not received by the disabled individual because no                                             
09       application was submitted on behalf of the individual;                                                            
10 (8)  adopt regulations that establish procedures for an individual to                                                   
11 apply to have a dividend disbursement under AS 37.25.050(a)(2) reissued if it is not                                    
12 collected within two years after the date of its issuance; however, the department may                                  
13 not establish a time limit within which an application to have a disbursement reissued                                  
14       must be filed;                                                                                                    
15 (9)  provide any information, upon request, contained in permanent                                                      
16 fund dividend records to the child support services agency created in AS 25.27.010, or                                  
17 the child support enforcement agency of another state, for child support purposes                                       
18 authorized under law; if the information is contained in an electronic data base, the                                   
19       department shall provide the requesting agency with either                                                        
20                      (A)  access to the data base; or                                                                   
21 (B)  a copy of the information in the data base and a statement                                                         
22            certifying its contents;                                                                                     
23                 (10)  establish a fraud investigation unit for the purpose of assisting the                             
24 (A)  Department of Law in the prosecution of individuals who                                                            
25 apply for or obtain a permanent fund dividend in violation of a provision in                                            
26            AS 11, by detecting and investigating those crimes; and                                                      
27 (B)  commissioner to detect and investigate the claiming or                                                             
28 paying of permanent fund dividends that should not have been claimed by or                                              
29 paid to an individual and to impose the penalties and enforcement provisions                                            
30            under AS 43.23.035;                                                                                        
31 (11)  adopt regulations under AS 44.62 (Administrative Procedure                                                      
01 Act) so that contributions under AS 43.23.062 are given a priority over donations                                     
02 under AS 43.23.064 if the total amount of contributions and donations elected by                                      
03 an applicant exceeds the amount of the permanent fund dividend that the                                               
04       applicant is entitled to receive.                                                                               
05    * Sec. 8. AS 43.23 is amended by adding new sections to read:                                                        
06            Sec. 43.23.063. Education endowment fund. (a) The education endowment                                        
07       fund is established as a separate account in the general fund. The fund consists of                               
08       appropriations from                                                                                               
09                 (1)  donations to the fund under AS 43.23.064(b);                                                       
10                 (2)  transfers to the fund under AS 43.23.064(a);                                                       
11                 (3)  interest earned on the fund; and                                                                   
12                 (4)  any other money appropriated to the fund.                                                          
13 (b)  The commissioner is the fiduciary of the fund. In managing the fund, the                                           
14       commissioner shall                                                                                                
15                 (1)  have the same powers and duties as provided in AS 37.10.071; and                                   
16 (2)  invest the fund in a manner likely to achieve at least a four percent                                              
17       nominal return over a five-year period to meet the objectives of the fund.                                        
18            (c)  In managing the fund, the commissioner shall                                                            
19 (1)  consider the status of the fund's capital and the income generated                                                 
20       on both current and probable future bases;                                                                        
21                 (2)  determine the appropriate investment objectives;                                                   
22                 (3)  establish investment policies to achieve the objectives; and                                       
23                 (4)  act only in regard to the best financial interests of the fund.                                    
24            (d)  On July 1 of each year, the commissioner shall                                                          
25 (1)  determine the fund balance for the previously closed fiscal year,                                                  
26       including the earnings of the fund; and                                                                           
27 (2)  when the average market value for that fiscal year exceeds                                                         
28 $1,000,000,000, transfer 4.5 percent of the average fiscal-year-end market value of the                                 
29 balance of the fund for the last five fiscal years, including the fiscal year just ended,                               
30 and including any unrealized gains and losses, to the Department of Education and                                       
31 Early Development for distribution as supplemental grants to school districts                                           
01 according to the average daily membership for each district adjusted under                                              
02       AS 14.17.410(b)(1)(A) - (D), subject to appropriation.                                                            
03            (e)  Money appropriated to the fund does not lapse.                                                          
04 Sec. 43.23.064. Dividend raffle fund; dividend donations to the dividend                                                
05 raffle fund; drawing. (a) The dividend raffle fund is established as an account in the                                  
06 general fund. The commissioner shall manage the fund. Interest and other income                                         
07 received on money in the fund shall be separately accounted for and shall be                                            
08 appropriated to the fund. The fund consists of donations appropriated to the fund                                       
09 under (c) of this section. The commissioner shall use the dividend raffle fund, without                                 
10 further appropriation, to pay for prizes as set out in (d) of this section and may use up                               
11 to two percent of the balance of the fund but not more than $500,000 from the fund                                      
12 each fiscal year to pay the cost of administering the fund and for promotion and                                        
13 advertisement of the fund. When the balance of the dividend raffle fund exceeds                                         
14 $300,000,000 at the end of a fiscal year, the commissioner shall transfer the amount                                    
15 above $300,000,000 to the education endowment fund established in AS 43.23.063.                                         
16       Money donated to the fund does not lapse.                                                                         
17 (b)  Notwithstanding AS 43.23.069, the department shall provide on the Alaska                                           
18 permanent fund dividend application an option for an applicant who is 18 years of age                                   
19 or older to direct that all or a portion of the applicant's dividend payment be donated                                 
20 for educational purposes and to enter the permanent fund dividend raffle as provided                                    
21 in (c) of this section. A donation under this section may be $100 or more, in                                           
22 increments of $100, up to the total amount of the permanent fund dividend that the                                      
23       applicant is entitled to receive.                                                                                 
24 (c)  Of the donations received in a year under (b) of this section, the legislature                                     
25 shall appropriate 25 percent to the education endowment fund established in                                             
26 AS 43.23.063 and shall appropriate 25 percent to the dividend raffle fund. The                                          
27 legislature shall appropriate the remaining 50 percent of the donations received under                                  
28 (b) of this section to the Department of Education and Early Development for                                            
29 distribution as supplemental grants to school districts according to the average daily                                  
30       membership for each district adjusted under AS 14.17.410(b)(1)(A) - (D).                                          
31 (d)  At the beginning of each year, the commissioner shall conduct a public                                             
01       drawing to award prizes from the dividend raffle fund. Each $100 donation as                                      
02       provided in (b) of this section entitles a person to one entry into the raffle. The prizes                        
03       for the raffle shall be as follows:                                                                               
04                 (1)  the first name drawn receives an amount equal to eight percent of                                  
05       the balance of the dividend raffle fund;                                                                          
06                 (2)  the second name drawn receives an amount equal to four percent of                                  
07       the balance of the dividend raffle fund;                                                                          
08                 (3)  the third name drawn receives an amount equal to two percent of                                    
09       the balance of the dividend raffle fund; and                                                                      
10                 (4)  the fourth name drawn receives an amount equal to one percent of                                   
11       the balance of the dividend raffle fund.                                                                          
12            (e)  Nothing in this section creates a dedicated fund.                                                       
13    * Sec. 9. AS 37.14.110(c) and 37.14.140 are repealed.                                                                
14    * Sec. 10. Sections 1, 2, 7, and 8 of this Act take effect January 1, 2019.                                          
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