00                             HOUSE BILL NO. 261                                                                          
01 "An Act relating to the investment, appropriation, and administration of the public                                     
02 school trust fund; and providing for an effective date."                                                                
03 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:                                                                
04    * Section 1. AS 37.10.071(d) is amended to read:                                                                 
05            (d)  In exercising investment, custodial, or depository powers or duties under                               
06       this section, the fiduciary or the fiduciary's designee is liable for a breach of a duty                          
07       that is assigned or delegated under this section, or under AS 14.40.255, 14.40.280(c),                            
08       14.40.400(b), AS 37.10.070, AS 37.14.160 [AS 37.14.110(c), 37.14.160], or                                     
09       37.14.170. However, the fiduciary or the designee is not liable for a breach of a duty                            
10       that has been delegated to another person if the delegation is prudent under the                                  
11       applicable standard of prudence set out in statute or if the duty is assigned by law to                           
12       another person, except to the extent that the fiduciary or designee                                               
13                 (1)  knowingly participates in, or knowingly undertakes to conceal, an                                  
14       act or omission of another person knowing that the act or omission is a breach of that                            
01       person's duties under this chapter;                                                                               
02                 (2)  by failure to comply with this section in the administration of                                    
03       specific responsibilities, enables another person to commit a breach of duty; or                                  
04                 (3)  has knowledge of a breach of duty by another person, unless the                                    
05       fiduciary or designee makes reasonable efforts under the circumstances to remedy the                              
06       breach.                                                                                                           
07    * Sec. 2. AS 37.14.130 is amended to read:                                                                         
08            Sec. 37.14.130. Powers and duties of board. The board created in                                           
09       AS 37.14.120 has the following powers and duties:                                                                 
10                 (1) to hold regular meetings and special meetings considered necessary;                                 
11       and                                                                                                               
12                 (2)  to have prepared an annual accounting of the [PRINCIPAL AND                                        
13       INCOME OF THE] fund established in AS 37.14.110.                                                                  
14    * Sec. 3. AS 37.14.160 is amended to read:                                                                         
15            Sec. AS 37.14.160. Duties of the commissioner of revenue. The                                              
16       commissioner of revenue is the treasurer of the trust fund created in AS 37.14.110 and                            
17       shall                                                                                                             
18                 (1)  in carrying out investment duties under this section, exercise the                                 
19       same powers and duties established for the Alaska Retirement Management Board in                                  
20       AS 37.10.220;                                                                                                     
21                 (2)  deposit the principal and income from investments into [IN                                     
22       SEPARATE PRINCIPAL AND INCOME ACCOUNTS FOR] the fund;                                                             
23                 (3)  invest and maintain accounting records [THAT DISTINGUISH                                           
24       BETWEEN THE PRINCIPAL AND INCOME] of the fund;                                                                    
25                 (4)  provide reports to the board established under AS 37.14.120 on the                                 
26       condition and investment performance of the fund;                                                             
27                 (5)  determine on July 1 of each year the monthly average market                                    
28       value of the fund for the previous three fiscal years.                                                        
29    * Sec. 4. AS 37.14.165 is amended by adding a new section to read:                                                 
30            Sec. 37.14.165. Use of fund. Five percent of the amount determined by the                                  
31       commissioner of revenue on July 1 of each year under AS 37.14.160(5) may be                                       
01       appropriated for the fiscal year beginning the following July 1 for the following                                 
02       purposes:                                                                                                         
03                 (1)  funding support of the state public school program; and                                            
04                 (2)  reimbursement of the costs of administration of the fund.                                          
05    * Sec. 5. AS 37.14.170 is amended to read:                                                                         
06            Sec. 37.14.170. Investments. The commissioner of revenue is the fiduciary of                               
07       the trust fund and shall invest the fund to provide increasing returns from capital                           
08       appreciation and net income over long-term periods to the fund's current                                  
09       [INCOME] beneficiaries. The commissioner may invest the money in the fund on the                                  
10       basis of probable total rate of return to promote the long-term generation of capital                         
11       appreciation and income. In managing the trust fund, the commissioner shall                                   
12                 (1)  consider the status of the fund's capital and the income generated                                 
13       on both a current and a probable future basis;                                                                    
14                 (2)  determine the appropriate investment objectives;                                                   
15                 (3)  establish investment policies to achieve the objectives; and                                       
16                 (4)  act only in regard to the financial interests of the fund's                                        
17       beneficiaries.                                                                                                    
18    * Sec. 6. AS 37.14.110(c) and 37.14.140 are repealed.                                                              
19    * Sec. 7. The uncodified law of the State of Alaska is amended by adding a new section to                          
20 read:                                                                                                                   
21       CONDITIONAL EFFECT. This Act take effect only if a court of competent                                             
22 jurisdiction enters a final judgment on the merits that is no longer subject to appeal that                             
23 provides instruction to the state under AS 13.36.035 or other trust common law that                                     
24 enactment and implementation of this Act do not violate trust duties of the state regarding the                         
25 grants of land for the benefit of public schools made in Section 6(k) of the Alaska Statehood                           
26 Act.                                                                                                                    
27    * Sec. 8. If this Act takes effect under sec. 7 of this Act, it takes effect the day after a final                 
28 judgment described in sec. 7 of this Act.