CSHB 1001(FIN): "An Act relating to income of the Alaska permanent fund and authorizing an advisory vote on a long-term financial plan for the state; and providing for an effective date."
00CS FOR HOUSE BILL NO. 1001(FIN) 01 "An Act relating to income of the Alaska permanent fund and authorizing an 02 advisory vote on a long-term financial plan for the state; and providing for an 03 effective date." 04 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 05 * Section 1. AS 37.13.140 is repealed and reenacted to read: 06 Sec. 37.13.140. Income. All income of the fund shall be deposited in the 07 Alaska Income Account established under AS 37.13.145. The balance of the Alaska 08 Income Account shall be determined according to generally accepted accounting 09 principles. Income of the fund includes income of the Alaska Income Account. 10 * Sec. 2. AS 37.13.145 is repealed and reenacted to read: 11 Sec. 37.13.145. Disposition of income. (a) The Alaska Income Account is 12 established as a separate account in the fund. Subject to (c) of this section, following 13 the end of each fiscal year, an amount shall be transferred from the account to the 14 general fund that is equal to 5.88 percent of the average of the quarter-end market
01 value of the last 20 fiscal year quarters before the fiscal year just ended of 02 (1) the fund, including the Alaska Income Account; and 03 (2) the budget reserve fund (art. IX, sec. 17, Constitution of the State 04 of Alaska). 05 (b) After the transfer under (a) of this section, the commissioner of revenue 06 shall transfer from the general fund to the dividend fund (AS 43.23.045) 50 percent 07 of the amount transferred to the general fund under (a) of this section. 08 (c) A transfer following the end of a fiscal year that is required under (a) of 09 this section shall be made during the next fiscal year and may consist of separate 10 installments transferred on different days; however, all installments must be transferred 11 during the same fiscal year. A transfer following the end of a fiscal year that is 12 required under (a) of this section may not exceed the entire balance that is in the 13 Alaska Income Account during the fiscal year in which the installments are transferred. 14 * Sec. 3. AS 37.13.300(c) is amended to read: 15 (c) Net income from the mental health trust fund may not be included in the 16 [COMPUTATION OF NET] income of the Alaska permanent fund [AVAILABLE 17 FOR DISTRIBUTION] under AS 37.13.140. 18 * Sec. 4. AS 37.14.031(c) is amended to read: 19 (c) The net income of the fund shall be determined by the Alaska Permanent 20 Fund Corporation as of the last day of the fiscal year in accordance with generally 21 accepted accounting principles, excluding any unrealized gains or losses [IN THE 22 SAME MANNER THE CORPORATION DETERMINES THE NET INCOME OF 23 THE ALASKA PERMANENT FUND UNDER AS 37.13.140]. 24 * Sec. 5. AS 37.17.020(b) is amended to read: 25 (b) The endowment shall be held and invested by the Alaska Permanent Fund 26 Corporation subject to AS 37.13.120; however, net income from the endowment shall 27 be distributed under AS 37.17.010 - 37.17.110 and 37.17.225. Net income from the 28 endowment may not be included in the [COMPUTATION OF NET] income of the 29 Alaska permanent fund [AVAILABLE FOR DISTRIBUTION] under AS 37.13.140. 30 * Sec. 6. AS 37.17.440(b) is amended to read: 31 (b) The principal and income of the endowment shall be held and invested by
01 the Alaska Permanent Fund Corporation subject to AS 37.13.120; however, net income 02 from the endowment and subsequent income earned on net income from the 03 endowment shall be held in a separate account until appropriated by the legislature. 04 Net income from the endowment may not be included in the [COMPUTATION OF 05 NET] income of the Alaska permanent fund [AVAILABLE FOR DISTRIBUTION] 06 under AS 37.13.140. 07 * Sec. 7. 2000 PERMANENT FUND DIVIDENDS. Notwithstanding AS 37.13.145(b) and 08 AS 43.23.025, the amount of each permanent fund dividend for 2000 is the amount of the 09 1999 dividend. 10 * Sec. 8. TRANSITION. (a) The Alaska Income Account established in AS 37.13.145(a), 11 as repealed and reenacted in sec. 2 of this Act, is the successor to the earnings reserve 12 account, and the balance in the earnings reserve account on the effective date of this section 13 shall be retained in the Alaska Income Account until distributed in accordance with 14 AS 37.13.145, as repealed and reenacted in sec. 2 of this Act. 15 (b) Notwithstanding AS 37.13.145(a), as repealed and reenacted in sec. 2 of this Act, 16 the amount transferred from the Alaska Income Account to the general fund following the end 17 of 18 (1) fiscal year 2001 is equal to 5.88 percent of the average of the quarter-end 19 market value for the last 12 fiscal year quarters before the fiscal year just ended of 20 (A) the Alaska permanent fund (art. IX, sec. 15, Constitution of the 21 State of Alaska), including the Alaska Income Account; and 22 (B) the budget reserve fund (art. IX, sec. 17, Constitution of the State 23 of Alaska); 24 (2) fiscal year 2002 is equal to 5.88 percent of the average of the quarter-end 25 market value for the last 16 fiscal year quarters before the fiscal year just ended of 26 (A) the Alaska permanent fund (art. IX, sec. 15, Constitution of the 27 State of Alaska), including the Alaska Income Account; and 28 (B) the budget reserve fund (art. IX, sec. 17, Constitution of the State 29 of Alaska). 30 * Sec. 9. ADVISORY VOTE. At a special election to be held on September 14, 1999, in 31 substantial compliance with the election laws of the state including absentee voting, the
01 lieutenant governor shall place before the qualified voters of the state a question advisory to 02 the legislature and the governor. Notwithstanding AS 15.60.005 and other laws relating to 03 preparation of the ballot proposition, the question shall appear on the ballot in the following 04 form: 05 PREAMBLE 06 The people of Alaska created the permanent fund to save a portion of 07 Alaska's petroleum revenue for the future. After investing those 08 savings, the original intent and purpose was to then use the earnings 09 from those investments when Alaska's revenue from its petroleum 10 resources declined. Alaska's revenue from its petroleum resources has 11 now declined substantially and is forecast to continue to decline. Our 12 reliance on declining petroleum resources and volatile oil prices 13 constitutes an unstable and unsustainable state budget system. The 14 governor and legislature seek the public's input in adopting a stable and 15 sustainable long-term budget plan. 16 PLAN DESCRIPTION 17 (1)Spending Reductions: Continue state general fund budget reductions to 18 a combined total of at least $60,000,000 for fiscal years 2000 and 2001. 19 (2)Permanent Fund Protection: Guarantee the Alaska permanent fund 20 principal is untouched. The principal of the fund is inflation proofed 21 to protect its value for all Alaskans, including future generations. 22 (3)Permanent Fund Dividends: Does not change the amount of dividend 23 paid to qualified Alaska residents in 1999 and guarantees the same 24 amount in 2000. Beginning in 2001, the constitutional budget reserve 25 and the permanent fund earnings reserve will be combined to form the 26 Alaska Income Account. In determining the market value for the 27 calculation of the dividend, this new account will be joined with the 28 principal of the permanent fund. After accounting for inflation, the 29 dividend will be based on 50 percent of the annual earnings payment 30 of these combined accounts. 31 (4)Earnings Usage for Public Purposes: After payment of permanent fund
01 dividends and accounting for inflation, the remaining earnings will be 02 prioritized for usage for Alaska education, public safety, and 03 transportation purposes. 04 (5)Public Accountability: Expenditures from the Alaska Income Account 05 will be fully disclosed to the public in the annual permanent fund 06 dividend application. 07 (6)Income Tax: No income tax will be required as part of this plan. 08 (7)Balanced Budget Task Force: Establish a citizen's Balanced Budget 09 Task Force to explore and present options to further reduce and limit 10 state spending, as well as identify appropriate future revenue sources. 11 QUESTION 12 Should a portion of permanent fund investment earnings be used to help 13 balance the state budget after first paying annual dividends to residents 14 and inflation proofing? 15 Yes [ ] No [ ] 16 * Sec. 10. Sections 1 - 8 of this Act are repealed July 1, 2000. 17 * Sec. 11. Sections 1 - 6 and 8 of this Act take effect January 1, 2001. 18 * Sec. 12. Section 7 of this Act takes effect July 2, 2000. 19 * Sec. 13. Sections 9 and 10 of this Act take effect immediately under AS 01.10.070(c).