00SENATE BILL NO. 51                                                                                                      
01 "An Act relating to income of the permanent fund; and providing for an effective                                        
02 date."                                                                                                                  
03 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:                                                                
04    * Section 1.  AS 37.13.140 is amended to read:                                                                       
05  Sec. 37.13.140.  INCOME.  (a)  Real [NET] income of the fund includes                                               
06 income of the earnings reserve account established under AS 37.13.145.  Real [NET]                                    
07 income of the fund shall be computed annually as of the last day of the fiscal year and                                
08 shall be equal to net income calculated in accordance with generally accepted                                          
09 accounting principles, excluding                                                                                        
10   (1)  any unrealized gains or losses; and                                                                         
11   (2)  an amount determined by the corporation to be sufficient to                                                    
12 offset the effect of inflation on principal of the fund.                                                                
13  (b)  The amount calculated under (a)(2) of this section shall be treated as                                           
14 a return of capital to the principal of the fund and shall be transferred by the                                        

01 corporation to the principal of the fund at the end of the fiscal year.  The                                            
02 corporation shall calculate the amount to transfer to the principal under (a)(2) of                                     
03 this section by                                                                                                         
04   (1)  computing the average of the monthly United States Consumer                                                     
05 Price Index for each of the two previous calendar years;                                                                
06   (2)  computing the percentage change between the first and second                                                    
07 calendar year average; and                                                                                              
08   (3)  applying that rate to the average value of the principal of the                                                 
09 fund during the previous calendar year.                                                                                
10  (c)  Income available for distribution equals 21 percent of the real [NET]                                        
11 income of the fund for the last five fiscal years, including the fiscal year just ended,                                
12 but may not exceed net income of the fund for the fiscal year just ended plus the                                       
13 balance in the earnings reserve account described in AS 37.13.145.                                                      
14    * Sec. 2.  AS 37.13.145(c) is repealed.                                                                              
15    * Sec. 3.  TRANSITION.  Notwithstanding AS 37.13.140, as amended in sec. 1 of this Act,                              
16 for purposes of determining the income available for distribution, net income shall be used for                         
17 years before fiscal year 1995.                                                                                          
18    * Sec. 4.  This Act takes effect June 30, 1995.