CSSB 89(STA): "An Act relating to the members of the board and staff of the Alaska Permanent Fund Corporation."

00CS FOR SENATE BILL NO. 89(STA) 01 "An Act relating to the members of the board and staff of the Alaska 02 Permanent Fund Corporation." 03 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 04 * Section 1. AS 37.13.050(a) is amended to read: 05  (a) The Board of Trustees of the Alaska Permanent Fund Corporation consists 06 of seven [SIX] members appointed by the governor. One [TWO OF THE MEMBERS 07 MUST BE HEADS OF PRINCIPAL DEPARTMENTS OF STATE GOVERNMENT, 08 ONE OF WHOM] shall be the commissioner of revenue. Six [FOUR] members shall 09 be appointed by the governor from the public and may not hold any other state or 10 federal office, position, or employment, either elective or appointive, except as a 11 member of the armed forces of either the United States or of this state. 12 * Sec. 2. AS 37.13.050(b) is amended to read: 13  (b) The [FOUR] public members of the board must have recognized 14 competence and wide experience in finance, investments, or other business

01 management-related fields and at least two of the public members must have 02 recognized competence and wide experience in investment portfolio management. 03 * Sec. 3. AS 37.13.060 is amended to read: 04  Sec. 37.13.060. TERM OF OFFICE. The public members of the board shall 05 be appointed for terms of four years, and they may be reappointed. The terms of the 06 public members shall be staggered so that the terms of no more than two [ONE 07 TERM OF A] public members expire [MEMBER EXPIRES] each year. 08 * Sec. 4. AS 37.13.070(a) is amended to read: 09  (a) Within the limitations of AS 37.13.075, the [THE] governor may remove 10 a public member of the board from office for cause. A removal by the governor must 11 be in writing and must state the reason for the removal. A member who is removed 12 by the governor may not participate in board business and may not be counted for 13 purposes of establishing a quorum after the member receives written notice of removal 14 from the governor. In this subsection, "cause" means 15  (1) incompetency, which is the inability or the unintentional or 16 intentional failure to perform the duties of the trustee; or 17  (2) misfeasance or malfeasance in office, which includes the failure 18 of the trustee to exercise prudent judgment in the affairs of the corporation or 19 intentionally taking action for reasons other than the financial best interest of the 20 corporation. 21 * Sec. 5. AS 37.13 is amended by adding a new section to read: 22  Sec. 37.13.075. LIMITATIONS ON GOVERNOR. (a) The governor shall 23 base the decision to appoint or remove a board member solely on the financial best 24 interest of the fund. 25  (b) The governor may not influence or attempt to influence the board to make 26 an investment decision that violates prudent investment principles. 27  (c) Violation of this section constitutes a violation of AS 39.52. 28 * Sec. 6. AS 37.13.100 is amended to read: 29  Sec. 37.13.100. CORPORATION STAFF. The board may employ and 30 determine the salary of an executive director. The executive director may, with the 31 approval of the board, select and employ additional staff as necessary. The executive

01 director and other employees serve at the pleasure of the board. An employee of 02 the corporation, including the executive director, may not be a member of the board. 03 The executive director and the other employees of the board are in the exempt service 04 under AS 39.25. The board may not enter into an employment contract with an 05 employee that exceeds two years' duration. 06 * Sec. 7. AS 37.13.100 is amended by adding a new subsection to read: 07  (b) A board member shall act solely in the best interest of the fund when 08 making decisions regarding the executive director or employees of the corporation. 09 A person who violates this subsection breaches a fiduciary responsibility.