00 SENATE BILL NO. 199 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 and providing for an effective date." 04 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 05  * Section 1. The uncodified law of the State of Alaska is amended by adding a new section 06 to read: 07 LEGISLATIVE INTENT. It is the intent of the legislature to 08 (1) implement the recommendations of the 2021 Comprehensive Fiscal Plan 09 Working Group; and 10 (2) allow for adequate time to debate, analyze, and implement the revenue 11 measures and cost reductions required for the long-term financial stability of the state. 12  * Sec. 2. AS 37.13.140 is amended to read: 13 Sec. 37.13.140. Income. (a) [NET INCOME OF THE FUND INCLUDES 14 INCOME OF THE EARNINGS RESERVE ACCOUNT ESTABLISHED UNDER 01 AS 37.13.145.] Net income of the fund shall be computed annually as of the last day 02 of the fiscal year in accordance with generally accepted accounting principles, 03 excluding any unrealized gains or losses. [INCOME AVAILABLE FOR 04 DISTRIBUTION EQUALS 21 PERCENT OF THE NET INCOME OF THE FUND 05 FOR THE LAST FIVE FISCAL YEARS, INCLUDING THE FISCAL YEAR JUST 06 ENDED, BUT MAY NOT EXCEED NET INCOME OF THE FUND FOR THE 07 FISCAL YEAR JUST ENDED PLUS THE BALANCE IN THE EARNINGS 08 RESERVE ACCOUNT DESCRIBED IN AS 37.13.145.] 09 (b) The corporation shall determine the amount available for appropriation 10 each year. The amount available for appropriation is five percent of the average 11 market value of the fund for the first five of the preceding six fiscal years, including 12 the fiscal year just ended, computed annually for each fiscal year in accordance with 13 generally accepted accounting principles. In this subsection, "average market value of 14 the fund" includes the balance of the earnings reserve account established under 15 AS 37.13.145, but does not include that portion of the principal attributed to the 16 settlement of State v. Amerada Hess, et al., 1JU-77-847 Civ. (Superior Court, First 17 Judicial District). The amount available for appropriation may not exceed the  18 balance in the earnings reserve account described in AS 37.13.145. 19  * Sec. 3. AS 37.13.145(b) is amended to read: 20 (b) Each [AT THE END OF EACH] fiscal year, the legislature may  21 appropriate [CORPORATION SHALL TRANSFER] from the earnings reserve 22 account to the dividend fund established under AS 43.23.045, the amount necessary  23 to distribute the following amounts for permanent fund dividends to each eligible  24 individual for each of the following fiscal years:  25 (1) $1,100 in fiscal year 2023;  26 (2) $1,200 in fiscal year 2024;  27 (3) $1,300 in fiscal year 2025; and  28 (4) $1,300 in each fiscal year after fiscal year 2025, adjusted for  29 inflation calculated by  30 (A) computing the average of the monthly United States  31 Consumer Price Index for all urban consumers for each of the two  01 previous calendar years;  02 (B) computing the percentage change between the first and  03 second calendar year average; and  04 (C) applying that rate to the value of the dividend paid for  05 the fiscal year just ended [50 PERCENT OF THE INCOME AVAILABLE 06 FOR DISTRIBUTION UNDER AS 37.13.140]. 07  * Sec. 4. AS 37.13.145(b), as amended by sec. 3 of this Act, is amended to read:  08 (b) Each fiscal year, the legislature may appropriate from the earnings reserve 09 account to the 10 (1) dividend fund established under AS 43.23.045, 50 percent of the  11 amount available for appropriation under AS 37.13.140(b); and  12 (2) general fund, 50 percent of the amount available for  13 appropriation under AS 37.13.140(b) [THE AMOUNT NECESSARY TO 14 DISTRIBUTE THE FOLLOWING AMOUNTS FOR PERMANENT FUND 15 DIVIDENDS TO EACH ELIGIBLE INDIVIDUAL FOR EACH OF THE 16 FOLLOWING FISCAL YEARS: 17 (1) $1,100 IN FISCAL YEAR 2023; 18 (2) $1,200 IN FISCAL YEAR 2024; 19 (3) $1,300 IN FISCAL YEAR 2025; AND 20 (4) $1,300 IN EACH FISCAL YEAR AFTER FISCAL YEAR 2025, 21 ADJUSTED FOR INFLATION CALCULATED BY 22 (A) COMPUTING THE AVERAGE OF THE MONTHLY 23 UNITED STATES CONSUMER PRICE INDEX FOR ALL URBAN 24 CONSUMERS FOR EACH OF THE TWO PREVIOUS CALENDAR 25 YEARS; 26 (B) COMPUTING THE PERCENTAGE CHANGE 27 BETWEEN THE FIRST AND SECOND CALENDAR YEAR AVERAGE; 28 AND 29 (C) APPLYING THAT RATE TO THE VALUE OF THE 30 DIVIDEND PAID FOR THE FISCAL YEAR JUST ENDED]. 31  * Sec. 5. AS 37.13.145(c) is amended to read: 01 (c) After the appropriations [TRANSFER] under (b) and an appropriation 02 under (e) of this section, the legislature may appropriate [CORPORATION SHALL 03 TRANSFER] from the earnings reserve account to the principal of the fund an amount 04 sufficient to offset the effect of inflation on the principal of the fund during that fiscal 05 year. However, none of the amount transferred shall be applied to increase the value of 06 that portion of the principal attributed to the settlement of State v. Amerada Hess, et 07 al., 1JU-77-847 Civ. (Superior Court, First Judicial District) on July 1, 2004. The 08 corporation shall calculate the amount to transfer to the principal under this subsection 09 by 10 (1) computing the average of the monthly United States Consumer 11 Price Index for all urban consumers for each of the two previous calendar years; 12 (2) computing the percentage change between the first and second 13 calendar year average; and 14 (3) applying that rate to the value of the principal of the fund on the 15 last day of the fiscal year just ended, including that portion of the principal attributed 16 to the settlement of State v. Amerada Hess, et al., 1JU-77-847 Civ. (Superior Court, 17 First Judicial District). 18  * Sec. 6. AS 37.13.145(c), as amended by sec. 5 of this Act, is amended to read: 19 (c) After the appropriations under (b) [AND AN APPROPRIATION UNDER 20 (e)] of this section, the legislature may appropriate from the earnings reserve account 21 to the principal of the fund an amount sufficient to offset the effect of inflation on the 22 principal of the fund during that fiscal year. However, none of the amount transferred 23 shall be applied to increase the value of that portion of the principal attributed to the 24 settlement of State v. Amerada Hess, et al., 1JU-77-847 Civ. (Superior Court, First 25 Judicial District) on July 1, 2004. The corporation shall calculate the amount to 26 transfer to the principal under this subsection by 27 (1) computing the average of the monthly United States Consumer 28 Price Index for all urban consumers for each of the two previous calendar years; 29 (2) computing the percentage change between the first and second 30 calendar year average; and 31 (3) applying that rate to the value of the principal of the fund on the 01 last day of the fiscal year just ended, including that portion of the principal attributed 02 to the settlement of State v. Amerada Hess, et al., 1JU-77-847 Civ. (Superior Court, 03 First Judicial District). 04  * Sec. 7. AS 37.13.145(d) is amended to read: 05 (d) Notwithstanding (b) of this section, income earned on money awarded in 06 or received as a result of State v. Amerada Hess, et al., 1JU-77-847 Civ. (Superior 07 Court, First Judicial District), including settlement, summary judgment, or adjustment 08 to a royalty-in-kind contract that is tied to the outcome of this case, or interest earned 09 on the money, or on the earnings of the money shall be treated in the same manner as 10 other income of the Alaska permanent fund, except that it is not available for 11 appropriation [DISTRIBUTION] to the dividend fund under AS 37.13.140(b), for 12 an appropriation [TRANSFERS] to the principal under (c) of this section, or for an 13 appropriation under (e) of this section, and shall be annually deposited into the Alaska 14 capital income fund (AS 37.05.565). 15  * Sec. 8. AS 37.13.145(d), as amended by sec. 7 of this Act, is amended to read: 16 (d) Notwithstanding (b) of this section, income earned on money awarded in 17 or received as a result of State v. Amerada Hess, et al., 1JU-77-847 Civ. (Superior 18 Court, First Judicial District), including settlement, summary judgment, or adjustment 19 to a royalty-in-kind contract that is tied to the outcome of this case, or interest earned 20 on the money, or on the earnings of the money shall be treated in the same manner as 21 other income of the Alaska permanent fund, except that it is not available for 22 appropriation to the dividend fund under AS 37.13.140(b) or [, FOR AN 23 APPROPRIATION] to the principal under (c) of this section, [OR FOR AN 24 APPROPRIATION UNDER (e) OF THIS SECTION,] and shall be annually 25 deposited into the Alaska capital income fund (AS 37.05.565). 26  * Sec. 9. AS 37.13.145(f) is amended to read: 27 (f) An appropriation under (b) of this section may not exceed 50 percent  28 of the amount available for appropriation under AS 37.13.140(b). The combined 29 total of the appropriations [TRANSFER] under (b) [OF THIS SECTION] and [AN 30 APPROPRIATION UNDER] (e) of this section may not exceed the amount available 31 for appropriation under AS 37.13.140(b). 01  * Sec. 10. AS 37.13.300(c) is amended to read: 02 (c) Net income from the mental health trust fund may not be included in the 03 computation of the amount [NET INCOME OR MARKET VALUE] available for 04 [DISTRIBUTION OR] appropriation under AS 37.13.140(b) [AS 37.13.140]. 05  * Sec. 11. AS 43.23.025(a) is amended to read: 06 (a) By October 1 of each year, the commissioner shall determine the value of 07 each permanent fund dividend for that year by 08 (1) determining the total amount available for dividend payments, 09 which equals 10 (A) the amount appropriated [OF INCOME OF THE 11 ALASKA PERMANENT FUND TRANSFERRED] to the dividend fund 12 under AS 37.13.145(b) during the current year; 13 (B) plus the unexpended and unobligated balances of prior 14 fiscal year appropriations that lapse into the dividend fund under 15 AS 43.23.045(d); 16 (C) less the amount necessary to pay prior year dividends from 17 the dividend fund in the current year under AS 43.23.005(h), 43.23.021, and 18 43.23.055(3) and (7); 19 (D) less the amount necessary to pay dividends from the 20 dividend fund due to eligible applicants who, as determined by the department, 21 filed for a previous year's dividend by the filing deadline but who were not 22 included in a previous year's dividend computation; 23 (E) less appropriations from the dividend fund during the 24 current year, including amounts to pay costs of administering the dividend 25 program and the hold harmless provisions of AS 43.23.240; 26 (2) determining the number of individuals eligible to receive a 27 dividend payment for the current year and the number of estates and successors 28 eligible to receive a dividend payment for the current year under AS 43.23.005(h); and 29 (3) dividing the amount determined under (1) of this subsection by the 30 amount determined under (2) of this subsection. 31  * Sec. 12. AS 37.13.145(e) and 37.13.145(f) are repealed.  01  * Sec. 13. The uncodified law of the State of Alaska is amended by adding a new section to 02 read: 03 CONDITIONAL EFFECT; NOTIFICATION TO REVISOR OF STATUTES. (a) 04 Sections 4, 6, 8, and 12 of this Act take effect only if, by December 15, 2024, the 05 commissioner of revenue and the director of the legislative finance division jointly agree that 06 revenue measures anticipated to generate at least $700,000,000 of new annually recurring 07 general fund revenue, when compared to annual revenue generated from the statutes as they 08 read on June 30, 2022, have been passed by the Alaska State Legislature and enacted into law. 09 (b) The commissioner of revenue and the director of the legislative finance division 10 shall notify the revisor of statutes in a joint letter if, before December 15, 2024, revenue 11 measures anticipated to generate at least an estimated $700,000,000 of new annually recurring 12 general fund revenue, when compared to annual revenue generated from the statutes as they 13 read on June 30, 2022, have been passed by the Alaska State Legislature and enacted into law. 14 (c) In this section, "general fund revenue" does not include revenue from the 15 permanent fund. 16  * Sec. 14. If, under sec. 13 of this Act, secs. 4, 6, 8, and 12 of this Act take effect, they take 17 effect July 1, 2025. 18  * Sec. 15. Except as provided in sec. 14 of this Act, this Act takes effect immediately under 19 AS 01.10.070(c).