SCS CSHB 213(FIN): "An Act relating to the investment, appropriation, and administration of the public school trust fund."

00 SENATE CS FOR CS FOR HOUSE BILL NO. 213(FIN) 01 "An Act relating to the investment, appropriation, and administration of the public 02 school trust fund." 03 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 04 * Section 1. AS 37.10.071(d) is amended to read: 05 (d) In exercising investment, custodial, or depository powers or duties under 06 this section, the fiduciary or the fiduciary's designee is liable for a breach of a duty 07 that is assigned or delegated under this section, or under AS 14.40.255, 14.40.280(c), 08 14.40.400(b), AS 37.10.070, AS 37.14.160 [AS 37.14.110(c), 37.14.160], or 09 37.14.170. However, the fiduciary or the designee is not liable for a breach of a duty 10 that has been delegated to another person if the delegation is prudent under the 11 applicable standard of prudence set out in statute or if the duty is assigned by law to 12 another person, except to the extent that the fiduciary or designee 13 (1) knowingly participates in, or knowingly undertakes to conceal, an 14 act or omission of another person knowing that the act or omission is a breach of that

01 person's duties under this chapter; 02 (2) by failure to comply with this section in the administration of 03 specific responsibilities, enables another person to commit a breach of duty; or 04 (3) has knowledge of a breach of duty by another person, unless the 05 fiduciary or designee makes reasonable efforts under the circumstances to remedy the 06 breach. 07 * Sec. 2. AS 37.14.160 is amended to read: 08 Sec. 37.14.160. Duties of the commissioner of revenue. The commissioner of 09 revenue is the treasurer of the trust fund created in AS 37.14.110 and shall 10 (1) in carrying out investment duties under this section, exercise the 11 same powers and duties established for the Alaska Retirement Management Board in 12 AS 37.10.220; 13 (2) deposit the principal and income from investments into [IN 14 SEPARATE PRINCIPAL AND INCOME ACCOUNTS FOR] the fund; 15 (3) invest and maintain accounting records [THAT DISTINGUISH 16 BETWEEN THE PRINCIPAL AND INCOME OF THE FUND]; 17 (4) provide reports to the board established under AS 37.14.120 on the 18 condition and investment performance of the fund; 19 (5) determine, on July 1 of each year, the monthly average market 20 value of the fund for the five fiscal years preceding the previous fiscal year. 21 * Sec. 3. AS 37.14 is amended by adding a new section to read: 22 Sec. 37.14.165. Use of the public school trust fund. Each year, the legislature 23 may appropriate not more than five percent of the amount determined by the 24 commissioner of revenue under AS 37.14.160(5) for the following purposes: 25 (1) funding support of the state public school program; and 26 (2) reimbursement of the costs of administration of the fund. 27 * Sec. 4. AS 37.14.170 is amended to read: 28 Sec. 37.14.170. Investments. The commissioner of revenue is the fiduciary of 29 the trust fund and shall invest the fund to provide increasing returns from capital 30 appreciation and net income over long-term periods to the fund's current 31 [INCOME] beneficiaries. The commissioner may invest the money in the fund on the

01 basis of probable total rate of return to promote the long-term generation of capital 02 appreciation and income. In managing the trust fund, the commissioner shall 03 (1) consider the status of the fund's capital and the income generated 04 on both a current and a probable future basis; 05 (2) determine the appropriate investment objectives; 06 (3) establish investment policies to achieve the objectives; and 07 (4) act only in regard to the financial interests of the fund's 08 beneficiaries. 09 * Sec. 5. AS 37.14.110(c) and 37.14.140 are repealed.