00 SENATE BILL NO. 27 01 "An Act relating to calculation of the amount to offset the effect of inflation on the 02 principal of the Alaska permanent fund, and to transfers of money from the earnings 03 reserve account; and providing for an effective date." 04 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 05 * Section 1. AS 37.13.145(c) is amended to read: 06 (c) On the last day of each fiscal year [AFTER THE TRANSFER UNDER 07 (b) OF THIS SECTION], the corporation shall calculate [TRANSFER FROM THE 08 EARNINGS RESERVE ACCOUNT TO THE PRINCIPAL OF THE FUND] an 09 amount sufficient to offset the effect of inflation on principal of the fund during that 10 fiscal year. The corporation shall calculate the amount [TO TRANSFER TO THE 11 PRINCIPAL UNDER THIS SUBSECTION] by applying the formula X - Y = Z 12 where 13 (1) X is determined by 14 (A) computing the average of the monthly United States 01 Consumer Price Index for all urban consumers for each of the two previous 02 calendar years; 03 (B) [(2)] computing the percentage change between the first 04 and second calendar year average; and 05 (C) [(3)] applying that rate to the value of the principal of the 06 fund on the last day of the fiscal year just ended; 07 (2) Y equals the total amount deposited in the fund under 08 AS 37.13.010 during the fiscal year just ending; and 09 (3) Z equals the amount to offset the effect of inflation. 10 * Sec. 2. AS 37.13.145(c) is amended to read: 11 (c) After the transfer under (b) of this section [ON THE LAST DAY OF 12 EACH FISCAL YEAR], the corporation shall transfer from the earnings reserve 13 account to the principal of the fund [CALCULATE] an amount sufficient to offset 14 the effect of inflation on principal of the fund during that fiscal year. The corporation 15 shall calculate the amount to transfer to the principal under this subsection by 16 [APPLYING THE FORMULA X - Y = Z WHERE] 17 (1) [A IS DETERMINED BY 18 (A)] computing the average of the monthly United States 19 Consumer Price Index for all urban consumers for each of the two previous 20 calendar years; 21 (2) [(B)] computing the percentage change between the first and 22 second calendar year average; and 23 (3) [(C)] applying that rate to the value of the principal of the fund on 24 the last day of the fiscal year just ended [; 25 (2) Y EQUALS THE TOTAL AMOUNT DEPOSITED IN THE 26 FUND UNDER AS 37.13.010 DURING THE FISCAL YEAR JUST ENDING; AND 27 (3) Z EQUALS THE AMOUNT TO OFFSET THE EFFECT OF 28 INFLATION]. 29 * Sec. 3. AS 37.13.145 is amended by adding new subsections to read: 30 (e) On the last day of each fiscal year, after the transfer under (b) of this 31 section, the corporation shall transfer from the earnings reserve account to the 01 principal of the fund the amount equal to Z, as calculated under (c) of this section, or 02 the balance in the account, whichever is less. 03 (f) On the last day of each fiscal year, after the transfer under (e) of this 04 section, any amount in the earnings reserve account that exceeds $250,000,000 shall 05 be transferred from the earnings reserve account to the budget reserve fund (art. IX, 06 sec. 17, Constitution of the State of Alaska). 07 * Sec. 4. AS 37.13.145(e) and 37.13.145(f) are repealed. 08 * Sec. 5. Sections 1 and 3 of this Act take effect June 30, 2005. 09 * Sec. 6. Sections 2 and 4 of this Act take effect on June 30 of the first fiscal year in which 10 the total of all amounts transferred to the constitutional budget reserve fund under 11 AS 37.13.145(f) during all years, including the fiscal year just ended, equals or exceeds the 12 total of all amounts appropriated from the constitutional budget reserve fund during all the 13 years, including the fiscal year just ended.