00 CS FOR SENATE BILL NO. 199(FIN) 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 income of the 14 earnings reserve account established under AS 37.13.145. Net income of the fund shall 01 be computed annually as of the last day of the fiscal year in accordance with generally 02 accepted accounting principles, excluding any unrealized gains or losses. [INCOME 03 AVAILABLE FOR DISTRIBUTION EQUALS 21 PERCENT OF THE NET 04 INCOME OF THE FUND FOR THE LAST FIVE FISCAL YEARS, INCLUDING 05 THE FISCAL YEAR JUST ENDED, BUT MAY NOT EXCEED NET INCOME OF 06 THE FUND FOR THE FISCAL YEAR JUST ENDED PLUS THE BALANCE IN 07 THE EARNINGS RESERVE ACCOUNT DESCRIBED IN AS 37.13.145.] 08 (b) The corporation shall determine the amount available for appropriation 09 each year. The amount available for appropriation is five percent of the average 10 market value of the fund for the first five of the preceding six fiscal years, including 11 the fiscal year just ended, computed annually for each fiscal year in accordance with 12 generally accepted accounting principles. The amount available for appropriation 13 may not exceed the balance in the earnings reserve account described in 14 AS 37.13.145. In this subsection, "average market value of the fund" includes the 15 balance of the earnings reserve account established under AS 37.13.145, but does not 16 include that portion of the principal attributed to the settlement of State v. Amerada 17 Hess, et al., 1JU-77-847 Civ. (Superior Court, First Judicial District). 18 * Sec. 3. AS 37.13.145(b) is amended to read: 19 (b) Each [AT THE END OF EACH] fiscal year, the legislature may 20 appropriate [CORPORATION SHALL TRANSFER] from the earnings reserve 21 account to the 22 (1) dividend fund established under AS 43.23.045, 50 percent of the 23 amount [INCOME] available for appropriation [DISTRIBUTION] under 24 AS 37.13.140(b); and 25 (2) general fund, 50 percent of the amount available for 26 appropriation under AS 37.13.140(b) [AS 37.13.140]. 27 * Sec. 4. AS 37.13.145(b), as amended by sec. 3 of this Act, is amended to read: 28 (b) Each fiscal year, the legislature may appropriate from the earnings reserve 29 account to the 30 (1) dividend fund established under AS 43.23.045, 25 [50] percent of 31 the amount available for appropriation under AS 37.13.140(b); and 01 (2) general fund, 75 [50] percent of the amount available for 02 appropriation under AS 37.13.140(b). 03 * Sec. 5. AS 37.13.145(b), as amended by secs. 3 and 4 of this Act, is amended to read: 04 (b) Each fiscal year, the legislature may appropriate from the earnings reserve 05 account to the 06 (1) dividend fund established under AS 43.23.045, 50 [25] percent of 07 the amount available for appropriation under AS 37.13.140(b); and 08 (2) general fund, 50 [75] percent of the amount available for 09 appropriation under AS 37.13.140(b). 10 * Sec. 6. AS 37.13.145(c) is amended to read: 11 (c) After the appropriation [TRANSFER] under (b) [AND AN 12 APPROPRIATION UNDER (e)] of this section, the legislature may appropriate 13 [CORPORATION SHALL TRANSFER] from the earnings reserve account to the 14 principal of the fund an amount sufficient to offset the effect of inflation on the 15 principal of the fund during that fiscal year. However, none of the amount transferred 16 shall be applied to increase the value of that portion of the principal attributed to the 17 settlement of State v. Amerada Hess, et al., 1JU-77-847 Civ. (Superior Court, First 18 Judicial District) on July 1, 2004. The corporation shall calculate the amount to 19 transfer to the principal under this subsection by 20 (1) computing the average of the monthly United States Consumer 21 Price Index for all urban consumers for each of the two previous calendar years; 22 (2) computing the percentage change between the first and second 23 calendar year average; and 24 (3) applying that rate to the value of the principal of the fund on the 25 last day of the fiscal year just ended, including that portion of the principal attributed 26 to the settlement of State v. Amerada Hess, et al., 1JU-77-847 Civ. (Superior Court, 27 First Judicial District). 28 * Sec. 7. AS 37.13.145(d) is amended to read: 29 (d) Notwithstanding (b) of this section, income earned on money awarded in 30 or received as a result of State v. Amerada Hess, et al., 1JU-77-847 Civ. (Superior 31 Court, First Judicial District), including settlement, summary judgment, or adjustment 01 to a royalty-in-kind contract that is tied to the outcome of this case, or interest earned 02 on the money, or on the earnings of the money shall be treated in the same manner as 03 other income of the Alaska permanent fund, except that it may [IS] not be included in 04 the calculation of the amount available for appropriation under AS 37.13.140(b) 05 or [DISTRIBUTION TO THE DIVIDEND FUND, FOR TRANSFERS] to the 06 principal under (c) of this section [, OR FOR AN APPROPRIATION UNDER (e) OF 07 THIS SECTION,] and shall be annually deposited into the Alaska capital income fund 08 (AS 37.05.565). 09 * Sec. 8. AS 37.13.300(c) is amended to read: 10 (c) Net income from the mental health trust fund may not be included in the 11 computation of net income of the fund, the [OR] market value of the fund, or the 12 amount available for [DISTRIBUTION OR] appropriation under AS 37.13.140(b) 13 [AS 37.13.140]. 14 * Sec. 9. AS 43.23.025(a) is amended to read: 15 (a) By October 1 of each year, the commissioner shall determine the value of 16 each permanent fund dividend for that year by 17 (1) determining the total amount available for dividend payments, 18 which equals 19 (A) the amount appropriated [OF INCOME OF THE 20 ALASKA PERMANENT FUND TRANSFERRED] to the dividend fund 21 under AS 37.13.145(b) during the current year; 22 (B) plus the unexpended and unobligated balances of prior 23 fiscal year appropriations that lapse into the dividend fund under 24 AS 43.23.045(d); 25 (C) less the amount necessary to pay prior year dividends from 26 the dividend fund in the current year under AS 43.23.005(h), 43.23.021, and 27 43.23.055(3) and (7); 28 (D) less the amount necessary to pay dividends from the 29 dividend fund due to eligible applicants who, as determined by the department, 30 filed for a previous year's dividend by the filing deadline but who were not 31 included in a previous year's dividend computation; 01 (E) less appropriations from the dividend fund during the 02 current year, including amounts to pay costs of administering the dividend 03 program and the hold harmless provisions of AS 43.23.240; 04 (2) determining the number of individuals eligible to receive a 05 dividend payment for the current year and the number of estates and successors 06 eligible to receive a dividend payment for the current year under AS 43.23.005(h); and 07 (3) dividing the amount determined under (1) of this subsection by the 08 amount determined under (2) of this subsection. 09 * Sec. 10. AS 37.13.145(e) and 37.13.145(f) are repealed. 10 * Sec. 11. The uncodified law of the State of Alaska is amended by adding a new section to 11 read: 12 CONDITIONAL EFFECT; NOTIFICATION TO REVISOR OF STATUTES. (a) 13 Section 5 of this Act takes effect only if, by December 15, 2026, the commissioner of revenue 14 and the director of the legislative finance division jointly agree that revenue measures 15 anticipated to generate at least $800,000,000 of new annually recurring general fund revenue, 16 when compared to annual revenue generated from the statutes as they read on June 30, 2022, 17 have been passed by the Alaska State Legislature and enacted into law. 18 (b) The commissioner of revenue and the director of the legislative finance division 19 shall notify the revisor of statutes in a joint letter if, before December 15, 2026, revenue 20 measures anticipated to generate at least an estimated $800,000,000 of new annually recurring 21 general fund revenue, when compared to annual revenue generated from the statutes as they 22 read on June 30, 2022, have been passed by the Alaska State Legislature and enacted into law. 23 (c) In this section, "general fund revenue" does not include revenue from the 24 permanent fund. 25 * Sec. 12. Section 4 of this Act takes effect July 1, 2023. 26 * Sec. 13. If, under sec. 11 of this Act, sec. 5 of this Act takes effect, it takes effect July 1, 27 2027. 28 * Sec. 14. Except as provided in secs. 12 and 13 of this Act, this Act takes effect 29 immediately under AS 01.10.070(c).