00 HOUSE BILL NO. 224 01 "An Act relating to the governor's submission of a projection of anticipated revenue and 02 expenditures and proposal for enactment of an individual broad-based tax; relating to 03 income of the Alaska permanent fund; relating to the disposition of income of the Alaska 04 permanent fund; relating to the calculation of permanent fund dividends; relating to the 05 dividend fund; and providing for an effective date." 06 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 07  * Section 1. AS 37.07.020 is amended by adding new subsections to read: 08 (f) In addition to the submissions required under (a) and (b) of this section, the 09 governor shall review estimated and actual state revenue and estimated and actual 10 state expenditures for the current fiscal year and, by the 30th day of each regular 11 session, submit to the legislature a projection of the fiscal year end surplus or deficit. 12 If the projection for the current fiscal year is an anticipated deficit, the governor shall 13 also submit to the legislature a proposal to increase state revenue or reduce state 01 expenditures to achieve, by the end of the fiscal year, a balance of state revenue and 02 expenditures. 03 (g) If the amount available for distribution under AS 37.13.140 is insufficient 04 to satisfy any net deficit of unrestricted general funds in the proposed capital and 05 operating budgets submitted under this section, by the 15th day of the next regular 06 session, the governor shall submit to the legislature a proposal for enactment of an 07 individual broad-based tax to make up any deficit remaining after expending the 08 money available for distribution under AS 37.13.140. 09  * Sec. 2. AS 37.13.140 is amended to read: 10 Sec. 37.13.140. Income and distribution. Net income of the fund includes 11 income of the earnings reserve account established under AS 37.13.145. Net income 12 of the fund shall be computed annually as of the last day of the fiscal year in 13 accordance with generally accepted accounting principles, excluding any unrealized 14 gains or losses. Money [INCOME] available for distribution equals 4.5 [21] percent of 15 the average market value [NET INCOME] of the balance of the fund for the first  16 [LAST] five of the six fiscal years immediately preceding the current fiscal year,  17 including any unrealized gains or losses, but excluding that portion of the  18 principal of the fund attributed to the settlement of State v. Amerada Hess, et al.,  19 1JU-77-847 Civ. (Superior Court, First Judicial District) on July 1, 2004, as  20 determined at the end of the fiscal year in accordance with generally accepted  21 accounting principles. The distribution under this section [FISCAL YEARS, 22 INCLUDING THE FISCAL YEAR JUST ENDED, BUT] may not exceed net income 23 of the fund for the fiscal year just ended plus the balance in the earnings reserve 24 account described in AS 37.13.145. 25  * Sec. 3. AS 37.13.145(b) is amended to read: 26 (b) At the end of each fiscal year, after an appropriation under (e) of this  27 section, the corporation shall transfer from the earnings reserve account to the 28 dividend fund established under AS 43.23.045, the amount [50 PERCENT OF THE 29 INCOME] available for distribution under AS 37.13.140. 30  * Sec. 4. AS 37.13.145(d) is amended to read: 31 (d) Income [NOTWITHSTANDING (b) OF THIS SECTION, INCOME] 01 earned on money awarded in or received as a result of State v. Amerada Hess, et al., 02 1JU-77-847 Civ. (Superior Court, First Judicial District), including settlement, 03 summary judgment, or adjustment to a royalty-in-kind contract that is tied to the 04 outcome of this case, or interest earned on the money, or on the earnings of the money 05 shall be treated in the same manner as other income of the Alaska permanent fund, 06 except that it is not available for distribution under AS 37.13.140 [TO THE 07 DIVIDEND FUND OR FOR TRANSFERS TO THE PRINCIPAL UNDER (c) OF 08 THIS SECTION], and shall be annually deposited into the Alaska capital income fund 09 (AS 37.05.565). 10  * Sec. 5. AS 37.13.145 is amended by adding a new subsection to read: 11 (e) The legislature may appropriate money available for distribution under 12 AS 37.13.140 to satisfy any net deficit of unrestricted general funds in the proposed 13 capital and operating budgets submitted under AS 37.07.020 for the succeeding fiscal 14 year. 15  * Sec. 6. AS 43.23.025(a) is amended to read: 16 (a) By October 1 of each year, the commissioner shall determine the value of 17 each permanent fund dividend for that year, subject to (c) of this section, by 18 (1) determining the total amount available for dividend payments, 19 which equals 20 (A) the amount [OF INCOME OF THE ALASKA 21 PERMANENT FUND] transferred to the dividend fund under 22 AS 37.13.145(b) during the current year; 23 (B) [PLUS THE UNEXPENDED AND UNOBLIGATED 24 BALANCES OF PRIOR FISCAL YEAR APPROPRIATIONS THAT LAPSE 25 INTO THE DIVIDEND FUND UNDER AS 43.23.045(d); 26 (C)] less the amount necessary to pay prior year dividends from 27 the dividend fund in the current year under AS 43.23.005(h), 43.23.021, and 28 43.23.055(3) and (7); 29 (C) [(D)] less the amount necessary to pay dividends from the 30 dividend fund due to eligible applicants who, as determined by the department, 31 filed for a previous year's dividend by the filing deadline but who were not 01 included in a previous year's dividend computation; 02 (D) [(E)] less appropriations from the dividend fund during the 03 current year, including amounts to pay costs of administering the dividend 04 program and the hold harmless provisions of AS 43.23.075; 05 (2) determining the number of individuals eligible to receive a 06 dividend payment for the current year and the number of estates and successors 07 eligible to receive a dividend payment for the current year under AS 43.23.005(h); and 08 (3) dividing the amount determined under (1) of this subsection by the 09 amount determined under (2) of this subsection. 10  * Sec. 7. AS 43.23.025 is amended by adding a new subsection to read: 11 (c) Notwithstanding the amount calculated under (a) of this section, the 12 amount of each permanent fund dividend may not exceed $2,000, and, based on the 13 combined value of the constitutional budget reserve fund (art. IX, sec. 17, Constitution 14 of the State of Alaska) and the statutory budget reserve fund (AS 37.05.540), 15 excluding unrealized gains or losses, determined in accordance with generally 16 accepted accounting principles on December 31 of the calendar year immediately 17 preceding the current year, the amount of each permanent fund dividend shall be 18 further limited as follows: 19 (1) if the combined value is less than $2,500,000,000, then the amount 20 of each permanent fund dividend may not exceed $250; 21 (2) if the combined value is at least $2,500,000,000 but less than 22 $5,000,000,000, then the amount of each permanent fund dividend may not exceed 23 $500; 24 (3) if the combined value is at least $5,000,000,000 but less than 25 $7,500,000,000, then the amount of each permanent fund dividend may not exceed 26 $750; 27 (4) if the combined value is at least $7,500,000,000 but less than 28 $10,000,000,000, then the amount of each permanent fund dividend may not exceed 29 $1,000; 30 (5) if the combined value is at least $10,000,000,000 but less than 31 $12,500,000,000, then the amount of each permanent fund dividend may not exceed 01 $1,250; 02 (6) if the combined value is at least $12,500,000,000 but less than 03 $15,000,000,000, then the amount of each permanent fund dividend may not exceed 04 $1,500; 05 (7) if the combined value is $15,000,000,000 or more, then the amount 06 of each permanent fund dividend may not exceed $2,000. 07  * Sec. 8. AS 43.23.045(d) is amended to read: 08 (d) Unless specified otherwise in an appropriation act, if appropriations from  09 the budget reserve fund (art. IX, sec. 17, Constitution of the State of Alaska) have  10 not been repaid, the unexpended and unobligated balance of the dividend fund  11 shall be deposited into the budget reserve fund under art. IX, sec. 17(d),  12 Constitution of the State of Alaska, on June 30, before the transfer under  13 AS 37.13.145(b). If previous appropriations from the budget reserve fund (art.  14 IX, sec. 17, Constitution of the State of Alaska) have been repaid, the unexpended 15 and unobligated balance of [AN APPROPRIATION TO IMPLEMENT THIS 16 CHAPTER LAPSES INTO] the dividend fund shall be transferred to the statutory  17 budget reserve fund (AS 37.05.540) on June 30, before the transfer under  18 AS 37.13.145(b) [OF THE FISCAL YEAR FOR WHICH THE APPROPRIATION 19 WAS MADE AND SHALL BE USED IN DETERMINING THE AMOUNT OF 20 AND PAYING THE SUBSEQUENT YEAR'S DIVIDEND AS PROVIDED IN 21 AS 43.23.025(a)(1)(B)]. 22  * Sec. 9. AS 37.13.145(c) is repealed. 23  * Sec. 10. This Act takes effect January 1, 2017.