00 SENATE BILL NO. 84 am 01 "An Act relating to fiscal management of endowment assets of the University of 02 Alaska; amending the definition of `university receipts' to include distribution from 03 university endowments and the total return from the University of Alaska's 04 endowment trust fund for land obtained under the Act of Congress of 05 January 21, 1929, as amended, and transferring responsibility for management and 06 investment of those assets; making technical amendments to provisions relating to 07 federal grants and appropriations from federal land grant college fund sources 08 that must be paid to the state; and affirming that the Board of Regents and 09 officers of the University of Alaska may not expend `university receipts' without 10 legislative appropriation." 11 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 12 * Section 1. AS 14.40.170(b) is amended to read: 13  (b) The Board of Regents may 14  (1) adopt reasonable rules, orders, and plans with reasonable penalties 01 for the good government of the university and for the regulation of the Board of 02 Regents; 03  (2) determine and regulate the course of instruction in the university 04 with the advice of the president; 05  (3) set student tuition and fees; 06  (4) receive [AND SPEND] university receipts and, subject to 07 legislative appropriation, expend university receipts in accordance with AS 37.07 08 (Executive Budget Act)." 09 * Sec. 2. AS 14.40.280 is amended to read: 10  Sec. 14.40.280. Endowments and donations. [ALL MONETARY GIFTS, 11 BEQUESTS, OR ENDOWMENTS THAT ARE MADE TO THE UNIVERSITY OF 12 ALASKA FOR THE PURPOSE OF THE SEPARATE TRUST FUND CREATED 13 UNDER AS 14.40.400 SHALL BE TRANSFERRED TO THE DEPARTMENT OF 14 REVENUE. THE DEPARTMENT OF REVENUE SHALL MANAGE THAT MONEY 15 IN ACCORDANCE WITH AS 14.40.400.] Title to and control or possession of land, 16 personal property, [AND ALL] money, and other property that [OTHER THAN 17 THAT TRANSFERRED TO THE DEPARTMENT OF REVENUE, WHICH] is 18 devised, bequeathed, or given to the university shall be taken by the university in its 19 corporate capacity acting by and through the Board of Regents [REGENTS] or an 20 authorized agent [,] and shall be entered in the perpetual inventory of the university 21 established in AS 14.40.330. 22 * Sec. 3. AS 14.40.280 is amended by adding new subsections to read: 23  (b) All monetary gifts, bequests, or endowments that are made to the 24 University of Alaska for the purpose of the separate endowment trust fund established 25 under AS 14.40.400 shall be deposited into that endowment trust fund. 26  (c) Except as provided by (b) of this section, the monetary gifts, bequests, or 27 endowments that are made to the University of Alaska shall be managed and invested 28 by the Board of Regents. In carrying out its management and investment 29 responsibilities under this subsection, the Board of Regents has the same power and 30 obligations to carry out duties with respect to the endowments of the University of 31 Alaska as are provided to and required of the Alaska State Pension Investment Board 01 under AS 14.25.180. 02 * Sec. 4. AS 14.40.290(a) is amended to read: 03  (a)  Federal grants and appropriations paid to the commissioner of revenue 04 under AS 14.40.380, 14.40.410, or 14.40.430, or from a source described in 05 AS 14.40.450, shall be transferred to the state treasury under AS 37.10.060 [THE 06 UNIVERSITY OF ALASKA SHALL HOLD ALL PROPERTY ACQUIRED BY IT]. 07 The Department of Administration, upon requisitions by the Board of Regents signed 08 by its president and secretary, shall pay to the treasurer of the Board of Regents all 09 federal land grant college funds coming into the possession of the Department of 10 Administration and subject to requisition by the Board of Regents and shall disburse 11 federal funds in aid of land grant colleges in accordance with the federal statute 12 providing for disbursement. 13 * Sec. 5. AS 14.40.360 is amended to read: 14  Sec. 14.40.360. Board of Regents authorized to select and to sell or lease 15 land granted by Act of Congress. The Board of Regents may select the land granted 16 to Alaska by the Act of Congress approved January 21, 1929, as amended, [AND] 17 may sell or lease the land, and shall deposit the net income as provided in 18 AS 14.40.400(a) [PROCEEDS IN THE STATE TREASURY] in conformity with that 19 Act. 20 * Sec. 6. AS 14.40.400(a) is amended to read: 21  (a) The Board of Regents [DEPARTMENT OF REVENUE] shall establish 22 a separate endowment trust fund in which shall be held in trust in perpetuity 23  (1) all net income derived from the sale or lease of the land granted 24 under the Act of Congress approved January 21, 1929, as amended; and 25   (2) [IN WHICH] all monetary gifts, bequests, or endowments made to 26 the University of Alaska for the purpose of the fund [, SHALL BE HELD IN TRUST]. 27 * Sec. 7. AS 14.40.400(b) is amended to read: 28  (b) The Board of Regents [COMMISSIONER OF REVENUE] is the fiduciary 29 of the [TRUST] fund. The Board of Regents [AND] shall account for and invest the 30 fund. In carrying out its investment responsibilities under this subsection, the 31 Board of Regents has the same powers and duties with respect to the fund as are 01 provided to and required of the Alaska State Pension Investment Board under 02 AS 14.25.180 [AS SET OUT IN AS 37.14.110(c), 37.14.160, AND 37.14.170, 03 EXCEPT THAT THE COMMISSIONER SHALL REPORT THE CONDITION AND 04 INVESTMENT PERFORMANCE OF THE FUND TO THE BOARD OF REGENTS]. 05 * Sec. 8. AS 14.40.400(c) is amended to read: 06  (c) The total return [NET INCOME] from the [TRUST] fund shall be used 07 exclusively for the University of Alaska, as the successor under AS 14.40.030 of the 08 Agricultural College and School of Mines. 09 * Sec. 9. AS 14.40.400(d) is amended to read: 10  (d)  The [NO PART OF THE] proceeds arising from the sale or disposal of 11 land granted under the Act of Congress approved January 21, 1929, as amended, 12 [THIS GRANT] may not be used for the support of a sectarian or denominational 13 college or school. 14 * Sec. 10. AS 14.40.400 is amended by adding a new subsection to read: 15  (f) In this section, 16  (1) "fund" means the separate endowment trust fund established under 17 (a) of this section; 18  (2) "total return" means the total earning of the fund, including current 19 yield, gains, and capital appreciation, less all costs, expenses, losses, and capital 20 depreciation. 21 * Sec. 11. AS 14.40.491 is amended to read: 22  Sec. 14.40.491. Definition of university receipts. In AS 14.40.120 - 23 14.40.491, "university receipts" includes 24  (1) student fees, including tuition; 25  (2) receipts from university auxiliary services; 26  (3) recovery of indirect costs of university activities; 27  (4) receipts from sales and rentals of university property; 28  (5) federal receipts; 29  (6) gifts, grants, and contracts; [AND] 30  (7) receipts from sales, rentals, and the provision of services of 31 educational activities; and 01  (8) receipts attributable to amounts distributed from university 02 endowments established and managed under AS 14.40.280 and from the 03 endowment trust fund established and managed under AS 14.40.400. 04 * Sec. 12. AS 36.30.850(b)(15) is amended to read: 05  (15) a contract that is a delegation, in whole or in part, of investment 06 powers held by 07   (A) the commissioner of revenue under [AS 14.40.400,] 08 AS 14.42.200, 14.42.210, AS 18.56.095, AS 37.10.070, 37.10.071, or 09 AS 37.14; 10   (B) the Board of Regents of the University of Alaska under 11 AS 14.40.250 - 14.40.491; 12 * Sec. 13. AS 37.10.071(d) is amended to read: 13  (d) In exercising investment, custodial, or depository powers or duties under 14 this section, the fiduciary or the fiduciary's designee is liable for a breach of a duty 15 that is assigned or delegated under this section, or under AS 14.25.180, AS 14.40.255, 16 14.40.280(c), 14.40.400(b) [AS 14.40.400(b)], AS 37.10.070, AS 37.14.110(c), 17 37.14.160, 37.14.170, or AS 39.35.080. However, the fiduciary or the designee is not 18 liable for a breach of a duty that has been delegated to another person if the delegation 19 is prudent under the applicable standard of prudence set out in statute or if the duty 20 is assigned by law to another person, except to the extent that the fiduciary or designee 21  (1) knowingly participates in, or knowingly undertakes to conceal, an 22 act or omission of another person knowing that the act or omission is a breach of that 23 person's duties under this chapter; 24  (2) by failure to comply with this section in the administration of 25 specific responsibilities, enables another person to commit a breach of duty; or 26  (3) has knowledge of a breach of duty by another person, unless the 27 fiduciary or designee makes reasonable efforts under the circumstances to remedy the 28 breach. 29 * Sec. 14. AS 14.40.400(e) is repealed. 30 * Sec. 15. UNIVERSITY OF ALASKA ENDOWMENTS AND DONATIONS AND 31 UNIVERSITY OF ALASKA ENDOWMENT TRUST FUND: TRANSITION. (a) A contract, 01 right, liability, or obligation in effect on the effective date of this Act remains in effect 02 notwithstanding the amendments to AS 14.40.280 or 14.40.400 made in secs. 2, 3, 6 - 10, and 03 14 of this Act. 04 (b) Assets and liabilities of the University of Alaska endowment trust fund established 05 in AS 14.40.400(a) held by the Department of Revenue on the effective date of this Act shall 06 be transferred by the Department of Revenue to the University of Alaska to implement this 07 Act.