HB 213: "An Act relating to the investment, appropriation, and administration of the public school trust fund."

00 HOUSE BILL NO. 213 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 37.14.110(c) is amended to read: 05 (c) The commissioner of revenue shall determine the net income of the fund in 06 accordance with investment accounting principles [AND IN A MANNER THAT 07 PRESERVES THE DISTINCTION BETWEEN PRINCIPAL AND INCOME AND 08 THAT EXCLUDES CAPITAL GAINS OR LOSSES REALIZED ON PRINCIPAL]. 09 The principal of the fund [AND THE CAPITAL GAINS OR LOSSES REALIZED 10 ON PRINCIPAL] shall be perpetually retained in the fund for investment purposes. 11 * Sec. 2. AS 37.14.160 is amended to read: 12 Sec. 37.14.160. Duties of the commissioner of revenue. The commissioner of 13 revenue is the treasurer of the trust fund created in AS 37.14.110 and shall 14 (1) in carrying out investment duties under this section, exercise the

01 same powers and duties established for the Alaska Retirement Management Board in 02 AS 37.10.220; 03 (2) deposit the principal and income from investments in separate 04 principal and income accounts for the fund; 05 (3) invest and maintain accounting records that distinguish between the 06 principal and income of the fund; 07 (4) provide reports to the board established under AS 37.14.120 on the 08 condition and investment performance of the fund; 09 (5) determine, on July 1 of each year, the monthly average market 10 value of the fund for the previous 10 fiscal years. 11 * Sec. 3. AS 37.14 is amended by adding a new section to read: 12 Sec. 37.14.165. Use of the public school trust fund. Each year, the legislature 13 may appropriate 4.75 percent of the amount determined by the commissioner of 14 revenue under AS 37.14.160(5) for the following purposes: 15 (1) funding support of the state public school program; and 16 (2) reimbursement of the costs of administration of the fund. 17 * Sec. 4. AS 37.14.170 is amended to read: 18 Sec. 37.14.170. Investments. The commissioner of revenue is the fiduciary of 19 the trust fund and shall invest the fund to provide increasing returns from capital 20 appreciation and net income over long-term periods to the fund's current 21 [INCOME] beneficiaries. The commissioner may invest the money in the fund on the 22 basis of probable total rate of return to promote the long-term generation of capital 23 appreciation and income. In managing the trust fund, the commissioner shall 24 (1) consider the status of the fund's capital and the income generated 25 on both a current and a probable future basis; 26 (2) determine the appropriate investment objectives; 27 (3) establish investment policies to achieve the objectives; and 28 (4) act only in regard to the financial interests of the fund's 29 beneficiaries. 30 * Sec. 5. AS 37.14.140 is repealed.