00 SENATE BILL NO. 227 01 "An Act relating to use of income of the Alaska permanent fund; relating to the amount 02 of the permanent fund dividend; relating to the duties of the commissioner of revenue; 03 providing for an effective date by repealing the effective date of sec. 8, ch. 16, SLA 2018; 04 and providing for an effective date." 05 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 06  * Section 1. The uncodified law of the State of Alaska is amended by adding a new section 07 to read: 08 LEGISLATIVE INTENT. It is the intent of the legislature to set the amount of the 09 2020 and 2021 permanent fund dividend at $1,600 for each eligible individual. 10  * Sec. 2. AS 37.13.140 is amended to read: 11 Sec. 37.13.140. Income. (a) [NET INCOME OF THE FUND INCLUDES 12 INCOME OF THE EARNINGS RESERVE ACCOUNT ESTABLISHED UNDER 13 AS 37.13.145.] Net income of the fund shall be computed annually as of the last day 14 of the fiscal year in accordance with generally accepted accounting principles, 01 excluding any unrealized gains or losses. [INCOME AVAILABLE FOR 02 DISTRIBUTION EQUALS 21 PERCENT OF THE NET INCOME OF THE FUND 03 FOR THE LAST FIVE FISCAL YEARS, INCLUDING THE FISCAL YEAR JUST 04 ENDED, BUT MAY NOT EXCEED NET INCOME OF THE FUND FOR THE 05 FISCAL YEAR JUST ENDED PLUS THE BALANCE IN THE EARNINGS 06 RESERVE ACCOUNT DESCRIBED IN AS 37.13.145.] 07 (b) The corporation shall determine the amount available for appropriation 08 each year. The amount available for appropriation is 5.25 percent of the average 09 market value of the fund for the first five of the preceding six fiscal years, including 10 the fiscal year just ended, computed annually for each fiscal year in accordance with 11 generally accepted accounting principles. In this subsection, "average market value of 12 the fund" includes the balance of the earnings reserve account established under 13 AS 37.13.145, but does not include that portion of the principal attributed to the 14 settlement of State v. Amerada Hess, et al., 1JU-77-847 Civ. (Superior Court, First 15 Judicial District). The amount available for appropriation may not exceed the  16 balance in the earnings reserve account described in AS 37.13.145.  17  * Sec. 3. AS 37.13.140(b), as amended by sec. 2 of this Act, is amended to read: 18 (b) The corporation shall determine the amount available for appropriation 19 each year. The amount available for appropriation is five [5.25] percent of the average 20 market value of the fund for the first five of the preceding six fiscal years, including 21 the fiscal year just ended, computed annually for each fiscal year in accordance with 22 generally accepted accounting principles. In this subsection, "average market value of 23 the fund" includes the balance of the earnings reserve account established under 24 AS 37.13.145, but does not include that portion of the principal attributed to the 25 settlement of State v. Amerada Hess, et al., 1JU-77-847 Civ. (Superior Court, First 26 Judicial District). The amount available for appropriation may not exceed the balance 27 in the earnings reserve account described in AS 37.13.145.  28  * Sec. 4. AS 37.13.145(b) is amended to read: 29 (b) Each [AT THE END OF EACH] fiscal year, the legislature may  30 appropriate [CORPORATION SHALL TRANSFER] from the earnings reserve 31 account to the 01 (1) dividend fund established under AS 43.23.045, 50 percent of the 02 amount [INCOME] available for appropriation [DISTRIBUTION] under 03 AS 37.13.140(b); and  04 (2) general fund, 50 percent of the amount available for  05 appropriation under AS 37.13.140(b) [AS 37.13.140]. 06  * Sec. 5. AS 37.13.145(c) is amended to read: 07 (c) After the appropriations [TRANSFER] under (b) [AND AN 08 APPROPRIATION UNDER (e)] of this section, the legislature may appropriate 09 [CORPORATION SHALL TRANSFER] from the earnings reserve account to the 10 principal of the fund an amount sufficient to offset the effect of inflation on the 11 principal of the fund during that fiscal year. However, none of the amount transferred 12 shall be applied to increase the value of that portion of the principal attributed to the 13 settlement of State v. Amerada Hess, et al., 1JU-77-847 Civ. (Superior Court, First 14 Judicial District) on July 1, 2004. The corporation shall calculate the amount to 15 transfer to the principal under this subsection by 16 (1) computing the average of the monthly United States Consumer 17 Price Index for all urban consumers for each of the two previous calendar years; 18 (2) computing the percentage change between the first and second 19 calendar year average; and 20 (3) applying that rate to the value of the principal of the fund on the 21 last day of the fiscal year just ended, including that portion of the principal attributed 22 to the settlement of State v. Amerada Hess, et al., 1JU-77-847 Civ. (Superior Court, 23 First Judicial District). 24  * Sec. 6. AS 37.13.145(d) is amended to read: 25 (d) Notwithstanding (b) of this section, income earned on money awarded in 26 or received as a result of State v. Amerada Hess, et al., 1JU-77-847 Civ. (Superior 27 Court, First Judicial District), including settlement, summary judgment, or adjustment 28 to a royalty-in-kind contract that is tied to the outcome of this case, or interest earned 29 on the money, or on the earnings of the money shall be treated in the same manner as 30 other income of the Alaska permanent fund, except that it is not available for 31 appropriations [DISTRIBUTION] to the dividend fund under AS 37.13.140(b) or [, 01 FOR TRANSFERS] to the principal under (c) of this section [, OR FOR AN 02 APPROPRIATION UNDER (e) OF THIS SECTION,] and shall be annually 03 deposited into the Alaska capital income fund (AS 37.05.565). 04  * Sec. 7. AS 37.13.300(c) is amended to read: 05 (c) Net income from the mental health trust fund may not be included in the 06 computation of the amount [NET INCOME OR MARKET VALUE] available for 07 [DISTRIBUTION OR] appropriation under AS 37.13.140(b) [AS 37.13.140]. 08  * Sec. 8. AS 37.14.031(c) is amended to read: 09 (c) The net income of the fund shall be determined by the Alaska Permanent 10 Fund Corporation and shall be computed annually as of the last day of the fiscal  11 year in accordance with generally accepted accounting principles, excluding any  12 unrealized gains or losses [IN THE SAME MANNER THE CORPORATION 13 DETERMINES THE NET INCOME OF THE ALASKA PERMANENT FUND 14 UNDER AS 37.13.140]. 15  * Sec. 9. 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 by 18 (1) determining the total amount available for dividend payments, 19 which equals 20 (A) the amount appropriated [OF INCOME OF THE 21 ALASKA PERMANENT FUND TRANSFERRED] to the dividend fund 22 under AS 37.13.145(b) during the current year; 23 (B) plus the unexpended and unobligated balances of prior 24 fiscal year appropriations that lapse into the dividend fund under 25 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 (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 (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 43.23.240; 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. 10. AS 37.13.145(e) and 37.13.145(f) are repealed.  11  * Sec. 11. Section 2, ch. 16, SLA 2018, is repealed. 12  * Sec. 12. The uncodified law of the State of Alaska is amended by adding a new section to 13 read: 14 CONDITIONAL EFFECT. Sections 2 - 11 and 13 of this Act take effect only if the 15 lieutenant governor certifies that the initiative identified as "An Act relating to the oil and gas 16 production tax, tax payments, and tax credits," petition ID:19OGTX, is enacted under 17 AS 15.45.220. 18  * Sec. 13. Section 8, ch. 16, SLA 2018, is repealed. 19  * Sec. 14. If, under sec. 12 of this Act, secs. 2, 4 - 11, and 13 of this Act take effect, they 20 take effect on the day after the date the lieutenant governor certifies that the initiative 21 described in sec. 12 of this Act is enacted under AS 15.45.220. 22  * Sec. 15. If, under sec. 12 of this Act, sec. 3 of this Act takes effect, it takes effect 23 January 1, 2023.