SB 146: "An Act relating to the investment, appropriation, and administration of the public school trust fund; and providing for an effective date."

00 SENATE BILL NO. 146 01 "An Act relating to the investment, appropriation, and administration of the public 02 school trust fund; and providing for an effective date." 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 37.14.130 is amended to read: 08 Sec. 37.14.130. Powers and duties of board. The board created in 09 AS 37.14.120 has the following powers and duties: 10 (1) to hold regular meetings and special meetings considered necessary; 11 and 12 (2) to have prepared an annual accounting of the [PRINCIPAL AND 13 INCOME OF THE] fund established in AS 37.14.110. 14 * Sec. 3. AS 37.14.160 is amended to read: 15 Sec. AS 37.14.160. Duties of the commissioner of revenue. The 16 commissioner of revenue is the treasurer of the trust fund created in AS 37.14.110 and 17 shall 18 (1) in carrying out investment duties under this section, exercise the 19 same powers and duties established for the Alaska Retirement Management Board in 20 AS 37.10.220; 21 (2) deposit the principal and income from investments into [IN 22 SEPARATE PRINCIPAL AND INCOME ACCOUNTS FOR] the fund; 23 (3) invest and maintain accounting records [THAT DISTINGUISH 24 BETWEEN THE PRINCIPAL AND INCOME] of the fund; 25 (4) provide reports to the board established under AS 37.14.120 on the 26 condition and investment performance of the fund; 27 (5) determine on July 1 of each year the monthly average market 28 value of the fund for the previous three fiscal years. 29 * Sec. 4. AS 37.14.165 is amended by adding a new section to read: 30 Sec. 37.14.165. Use of fund. Five percent of the amount determined by the 31 commissioner of revenue on July 1 of each year under AS 37.14.160(5) may be

01 appropriated for the fiscal year beginning the following July 1 for the following 02 purposes: 03 (1) funding support of the state public school program; and 04 (2) reimbursement of the costs of administration of the fund. 05 * Sec. 5. AS 37.14.170 is amended to read: 06 Sec. 37.14.170. Investments. The commissioner of revenue is the fiduciary of 07 the trust fund and shall invest the fund to provide increasing returns from capital 08 appreciation and net income over long-term periods to the fund's current 09 [INCOME] beneficiaries. The commissioner may invest the money in the fund on the 10 basis of probable total rate of return to promote the long-term generation of capital 11 appreciation and income. In managing the trust fund, the commissioner shall 12 (1) consider the status of the fund's capital and the income generated 13 on both a current and a probable future basis; 14 (2) determine the appropriate investment objectives; 15 (3) establish investment policies to achieve the objectives; and 16 (4) act only in regard to the financial interests of the fund's 17 beneficiaries. 18 * Sec. 6. AS 37.14.110(c) and 37.14.140 are repealed. 19 * Sec. 7. The uncodified law of the State of Alaska is amended by adding a new section to 20 read: 21 CONDITIONAL EFFECT. This Act take effect only if a court of competent 22 jurisdiction enters a final judgment on the merits that is no longer subject to appeal that 23 provides instruction to the state under AS 13.36.035 or other trust common law that 24 enactment and implementation of this Act do not violate trust duties of the state regarding the 25 grants of land for the benefit of public schools made in Section 6(k) of the Alaska Statehood 26 Act. 27 * Sec. 8. If this Act takes effect under sec. 7 of this Act, it takes effect the day after a final 28 judgment described in sec. 7 of this Act.