00 SENATE CS FOR CS FOR HOUSE BILL NO. 494(FIN) 01 "An Act changing the Alaska State Pension Investment Board to the Alaska 02 Pension Investment Authority and relating to the authority; and providing for an 03 effective date." 04 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 05 * Section 1. AS 37.10.071(f) is amended to read: 06  (f) In this section, "fiduciary of a state fund" or "fiduciary" means 07  (1) the commissioner of revenue for investments under AS 37.10.070; 08  (2) with respect to the Alaska Pension Investment Authority [STATE 09 PENSION INVESTMENT BOARD], for investments under AS 14.25.180, 10  (A) each trustee who serves on the authority; [BOARD OF 11 TRUSTEES; AND] 12  (B) each officer of the authority; 13  (C) any other person who exercises control or authority with 14 respect to management or disposition of assets for which the authority 01 [BOARD] is responsible or who gives investment advice to the authority 02 [BOARD]; or 03  (3) for investments not subject to AS 14.25.180 or AS 37.10.070, the 04 person or body provided by law to manage the investments [FOR INVESTMENTS 05 NOT SUBJECT TO AS 14.25.180 OR AS 37.10.070]. 06 * Sec. 2. AS 37.10.210(a) is repealed and reenacted to read: 07  (a) The Alaska Pension Investment Authority is established as a public 08 corporation and government instrumentality in the Department of Revenue. The 09 authority has a legal existence independent of and separate from the state. The 10 purpose of the authority is to have custody of and provide prudent and productive 11 management and investment of state pension funds and, if the authority secures the 12 agreement of the commissioner of the department or the fiduciary responsible for 13 another fund, of other state funds. 14 * Sec. 3. AS 37.10.210 is amended by adding a new subsection to read: 15  (j) The offices of the executive director and principal investment staff of the 16 authority shall be the authority's headquarters. The headquarters shall be located in 17 an Alaskan metropolitan area with a population in excess of 25,000, and it shall be 18 other than the metropolitan area that is the location of the headquarters of the Alaska 19 Permanent Fund Corporation. 20 * Sec. 4. AS 37.10.220(a) is amended to read: 21  (a) The trustees of the authority [BOARD] shall 22  (1) hold regular and special meetings at the call of the chair or of at 23 least four members; 24  (2) establish investment policies for the funds for which the authority 25 [IT] is responsible after reviewing recommendations from the investment advisory 26 council and the executive director [DEPARTMENT OF REVENUE]; 27  (3) submit long-range and quarterly investment reports to the 28 Legislative Budget and Audit Committee; 29  (4) report to the governor, the legislature, and employers participating 30 in the retirement systems by the first day of each regular legislative session concerning 31 the investment of funds for which the authority [BOARD] is responsible, including 01 financial and investment policies established by the authority [BOARD], and enclose 02 a summary of the most recent performance evaluations of the funds managed by the 03 authority [BOARD]; 04  (5) contract with external performance evaluators to review the 05 performance of each fund for which the authority [BOARD] is responsible and report 06 each year on the fund's condition to the authority [BOARD OF TRUSTEES] and to 07 the other appropriate boards; 08  (6) engage independent certified public accountants to perform an 09 annual audit of each of the funds for which the authority [BOARD] is responsible and 10 to report to the authority [BOARD] with the results of the audit; 11  (7) review the actuarial earnings assumption for each fund for which 12 the authority [BOARD] is responsible every two years and report its findings and 13 recommendations to the appropriate board or agency; 14  (8) after reviewing the recommendations from the executive director, 15 other staff members, [DEPARTMENT OF REVENUE] and the advisory council, 16 select and retain the external investment managers and custodians for the funds 17 managed by the authority [BOARD]; 18  (9) develop an annual operating budget plan and present it to the 19 Department of Revenue, the office of management and budget, and the legislature. 20 * Sec. 5. AS 37.10.220(d) is amended to read: 21  (d) The chair of the trustees [BOARD] shall appoint the executive director 22 or a trustee to present the authority's [BOARD'S] position to legislative committees 23 when the committees are considering the authority's [BOARD'S] operating budget. 24 The authority [BOARD] is otherwise subject to AS 37.07 as provided in 25 AS 37.10.265. 26 * Sec. 6. AS 37.10.230 is amended to read: 27  Sec. 37.10.230. CONFLICTS OF INTEREST. (a) Trustees, the executive 28 director, and the investment officers of the authority are subject to the provisions 29 of AS 39.50. 30  (b) If a trustee or the executive director or an investment officer of the 31 authority acquires, owns, or controls an interest, direct or indirect, in an entity or 01 project in which assets under the control of the authority [BOARD] are invested, the 02 trustee or officer shall immediately disclose the interest to the authority [BOARD]. 03 The disclosure is a matter of public record and shall be included in the minutes of the 04 authority's [BOARD] meeting next following the disclosure. 05  (c) The authority [BOARD] shall adopt regulations to restrict trustees, 06 officers, and other employees from having a substantial interest in an entity or project 07 in which assets under the control of the authority [BOARD] are invested. 08 * Sec. 7. AS 37.10.230 is amended by adding new subsections to read: 09  (d) The executive director may designate additional officers and employees of 10 the authority who are subject to the provisions of AS 39.50 because of their 11 responsibility for participating in the management or investment of the funds for which 12 the authority is responsible. If an officer or employee of the authority designated 13 under this subsection acquires, owns, or controls an interest, direct or indirect, in an 14 entity or project in which assets under the control of the authority are invested, the 15 officer or employee shall immediately disclose the interest to the trustees as required 16 by (b) of this section. 17  (e) Failure to comply with the requirements of this section or regulations 18 adopted under this section is grounds for termination of employment. 19 * Sec. 8. AS 37.10.260 is repealed and reenacted to read: 20  Sec. 37.10.260. STAFF. The authority may employ and determine the salary 21 of an executive director. The executive director may, with the approval of the trustees, 22 select and employ additional staff as necessary. An employee of the authority, 23 including the executive director, may not be a trustee of the authority. The executive 24 director and other employees of the authority are in the exempt service under 25 AS 39.25.110. 26 * Sec. 9. AS 37.10 is amended by adding a new section to read: 27  Sec. 37.10.265. BUDGET OF THE AUTHORITY. Funds under the control 28 of the authority may be identified as the source of the operating budget of the authority 29 in the state's operating budget under AS 37.07 (Executive Budget Act). 30 * Sec. 10. AS 37.10.280 is amended to read: 31  Sec. 37.10.280. INSURANCE. The authority [BOARD] shall ensure that 01 trusteed assets and [ITS OWN] services of the trustees, officers, employees, and 02 agents of the authority are protected. At the direction of the trustees, the authority 03 [THE BOARD] may purchase insurance or provide for self-insurance retention in 04 amounts recommended by the executive director [COMMISSIONER OF REVENUE] 05 and approved by the trustees [BOARD] to cover the acts, including fiduciary acts, 06 errors, and omissions of trustees, officers, employees, [ITS BOARD MEMBERS] and 07 agents of the authority. Insurance must protect the authority [BOARD] and the state 08 from liability to others and from loss of trusteed assets due to the acts or omissions 09 of the trustees, officers, employees, and agents of the authority. 10 * Sec. 11. AS 37.10.290 is amended to read: 11  Sec. 37.10.290. EXEMPTION FROM TAXATION. Except as provided in 12 AS 29.45.030(a) for property acquired through foreclosure or deed in lieu of 13 foreclosure, the authority, funds managed by the authority, [BOARD] and all 14 properties at any time owned by the authority [IT], managed by it, or held by it in 15 trust, and the income from those activities or funds, are exempt from all taxes and 16 assessments in the state. All security instruments issued by the authority [BOARD] 17 and income from them are exempt from all taxes and assessments in the state, 18 including transfer taxes. 19 * Sec. 12. AS 37.10.300 is amended to read: 20  Sec. 37.10.300. LIMITATIONS. The authority [BOARD] may not engage 21 in commercial banking activity or private trust activity. The authority [BOARD] may 22 not act as a depository or trustee for a private person, association, or corporation. The 23 authority [BOARD] may not act as a lender to a private person, association, or 24 corporation of money from any source except state funds under control of 25 [MANAGEMENT BY] the authority [BOARD]. 26 * Sec. 13. AS 37.10.390(1) is repealed and reenacted to read: 27  (1) "authority" means the Alaska Pension Investment Authority; 28 * Sec. 14. AS 39.25.110(11) is amended to read: 29  (11) the officers and employees of the following boards, commissions, 30 and authorities: 31  (A) Alaska Gas Pipeline Financing Authority; 01  (B) Alaska Permanent Fund Corporation; 02  (C) Alaska Industrial Development and Export Authority; 03  (D) Alaska Commercial Fisheries Entry Commission; 04  (E) Alaska Commission on Postsecondary Education; 05  (F) Alaska Aerospace Development Corporation; 06  (G) Alaska Pension Investment Authority; 07 * Sec. 15. AS 44.25.020 is amended to read: 08  Sec. 44.25.020. DUTIES OF DEPARTMENT. The Department of Revenue 09 shall 10  (1) enforce the tax laws of the state; 11  (2) collect, account for, have custody of, invest, and manage all state 12 funds and all revenues of the state except revenues incidental to a program of licensing 13 and regulation carried on by another state department and funds managed and invested 14 by the Alaska Pension Investment Authority [STATE PENSION INVESTMENT 15 BOARD]; 16  (3) register cattle brands; 17  (4) supply necessary clerical and administrative services for the 18 Alcoholic Beverage Control Board; 19  (5) invest and manage the balance of the power development fund in 20 accordance with AS 44.83.386; 21  (6) in accordance with the policies established by the [BOARD OF] 22 trustees of the Alaska Pension Investment Authority [STATE PENSION 23 INVESTMENT BOARD], collect and [,] account for [, HAVE CUSTODY OF, 24 INVEST, AND MANAGE] the state funds for which the authority [BOARD] is 25 responsible; 26  (7) administer the surety bond program for licensure as a fish processor 27 or primary fish buyer. 28 * Sec. 16. AS 44.25.028 is repealed. 29 * Sec. 17. IMPLEMENTING NAME CHANGE. To be consistent with the name change 30 made by this Act, wherever in the Alaska Statutes, and in regulations adopted under those 31 statutes, "Alaska State Pension Investment Board" or "board" are used, they shall be read as 01 referring to the "Alaska Pension Investment Authority" or "authority," as appropriate. Under 02 AS 01.05.031, the revisor of statutes shall implement this section in the statutes, and, under 03 AS 44.62.125(b)(6), the regulations attorney shall implement this section in the administrative 04 regulations. 05 * Sec. 18. TRANSITIONAL PROVISION CONCERNING BOARD MEMBERS. The 06 trustees of the Alaska State Pension Investment Board on June 30, 1994, shall become the 07 trustees of the Alaska Pension Investment Authority on July 1, 1994. 08 * Sec. 19. TRANSITIONAL PROVISIONS RELATING TO CREATION OF THE 09 AUTHORITY. All litigation, hearings, investigations, and other proceedings pending under 10 a law amended or repealed by this Act, or in connection with functions transferred by this Act, 11 continue in effect and may be continued and completed notwithstanding a transfer, 12 amendment, or repeal provided for in this Act. Orders and regulations issued or adopted 13 under authority of a law amended or repealed by this Act remain in effect for the term issued, 14 or until revoked, vacated, or otherwise modified under the provisions of this Act. All 15 contracts, rights, liabilities, and obligations created by or under a law amended or repealed by 16 this Act, and in effect on July 1, 1994, remain in effect notwithstanding this Act's taking 17 effect. Records, equipment, and other property of agencies of the state whose functions are 18 transferred under this Act shall be transferred commensurate with the provisions of this Act. 19 * Sec. 20. Section 3 of this Act takes effect July 1, 1995. 20 * Sec. 21. Except as provided in sec. 20 of this Act, this Act takes effect July 1, 1994.