Enrolled HB 213: Creating the education endowment fund and the dividend raffle fund; relating to the definition of "gambling"; relating to the investment, appropriation, and administration of the public school trust fund; authorizing donations from the permanent fund dividend for educational purposes and to enter the permanent fund dividend raffle; relating to transfers from the dividend raffle fund and the education endowment fund; relating to the duties of the Department of Revenue; and providing for an effective date.
00Enrolled HB 213 01 Creating the education endowment fund and the dividend raffle fund; relating to the definition 02 of "gambling"; relating to the investment, appropriation, and administration of the public 03 school trust fund; authorizing donations from the permanent fund dividend for educational 04 purposes and to enter the permanent fund dividend raffle; relating to transfers from the 05 dividend raffle fund and the education endowment fund; relating to the duties of the 06 Department of Revenue; and providing for an effective date. 07 _______________ 08 * Section 1. The uncodified law of the State of Alaska is amended by adding a new section 09 to read: 10 LEGISLATIVE INTENT. It is the intent of the legislature that the funds generated by 11 the permanent fund dividend raffle created in sec. 8 of this Act be used to supplement and not 12 to supplant state aid provided by the public school funding formula under AS 14.17.410.
01 * Sec. 2. AS 11.66.280(3) is amended to read: 02 (3) "gambling" means that a person stakes or risks something of value 03 upon the outcome of a contest of chance or a future contingent event not under the 04 person's control or influence, upon an agreement or understanding that that person or 05 someone else will receive something of value in the event of a certain outcome; 06 "gambling" does not include 07 (A) bona fide business transactions valid under the law of 08 contracts for the purchase or sale at a future date of securities or commodities 09 and agreements to compensate for loss caused by the happening of chance, 10 including contracts of indemnity or guaranty and life, health, or accident 11 insurance; 12 (B) playing an amusement device that 13 (i) confers only an immediate right of replay not 14 exchangeable for something of value other than the privilege of 15 immediate replay and does not contain a method or device by which the 16 privilege of immediate replay may be cancelled or revoked; 17 (ii) confers only tickets, credits, allowances, tokens, or 18 anything of value that can be redeemed for toys, candy, or electronic 19 novelties offered at the same facility where the amusement device is 20 located; or 21 (iii) allows a player to manipulate a claw machine or 22 similar device within an enclosure and enables a person to receive 23 merchandise directly from the machine; [OR] 24 (C) an activity authorized by the Department of Revenue under 25 AS 05.15; or 26 (D) the permanent fund dividend raffle authorized under 27 AS 43.23.064; 28 * Sec. 3. AS 37.10.071(d) is amended to read: 29 (d) In exercising investment, custodial, or depository powers or duties under 30 this section, the fiduciary or the fiduciary's designee is liable for a breach of a duty 31 that is assigned or delegated under this section, or under AS 14.40.255, 14.40.280(c),
01 14.40.400(b), AS 37.10.070, AS 37.14.160 [AS 37.14.110(c), 37.14.160], or 02 37.14.170. However, the fiduciary or the designee is not liable for a breach of a duty 03 that has been delegated to another person if the delegation is prudent under the 04 applicable standard of prudence set out in statute or if the duty is assigned by law to 05 another person, except to the extent that the fiduciary or designee 06 (1) knowingly participates in, or knowingly undertakes to conceal, an 07 act or omission of another person knowing that the act or omission is a breach of that 08 person's duties under this chapter; 09 (2) by failure to comply with this section in the administration of 10 specific responsibilities, enables another person to commit a breach of duty; or 11 (3) has knowledge of a breach of duty by another person, unless the 12 fiduciary or designee makes reasonable efforts under the circumstances to remedy the 13 breach. 14 * Sec. 4. AS 37.14.160 is amended to read: 15 Sec. 37.14.160. Duties of the commissioner of revenue. The commissioner of 16 revenue is the treasurer of the trust fund created in AS 37.14.110 and shall 17 (1) in carrying out investment duties under this section, exercise the 18 same powers and duties established for the Alaska Retirement Management Board in 19 AS 37.10.220; 20 (2) deposit the principal and income from investments into [IN 21 SEPARATE PRINCIPAL AND INCOME ACCOUNTS FOR] the fund; 22 (3) invest and maintain accounting records [THAT DISTINGUISH 23 BETWEEN THE PRINCIPAL AND INCOME OF THE FUND]; 24 (4) provide reports to the board established under AS 37.14.120 on the 25 condition and investment performance of the fund; 26 (5) determine, on July 1 of each year, the monthly average market 27 value of the fund for the five fiscal years preceding the previous fiscal year. 28 * Sec. 5. AS 37.14 is amended by adding a new section to read: 29 Sec. 37.14.165. Use of the public school trust fund. Each year, the legislature 30 may appropriate not more than five percent of the amount determined by the 31 commissioner of revenue under AS 37.14.160(5) for the following purposes:
01 (1) funding support of the state public school program; and 02 (2) reimbursement of the costs of administration of the fund. 03 * Sec. 6. AS 37.14.170 is amended to read: 04 Sec. 37.14.170. Investments. The commissioner of revenue is the fiduciary of 05 the trust fund and shall invest the fund to provide increasing returns from capital 06 appreciation and net income over long-term periods to the fund's current 07 [INCOME] beneficiaries. The commissioner may invest the money in the fund on the 08 basis of probable total rate of return to promote the long-term generation of capital 09 appreciation and income. In managing the trust fund, the commissioner shall 10 (1) consider the status of the fund's capital and the income generated 11 on both a current and a probable future basis; 12 (2) determine the appropriate investment objectives; 13 (3) establish investment policies to achieve the objectives; and 14 (4) act only in regard to the financial interests of the fund's 15 beneficiaries. 16 * Sec. 7. AS 43.23.055 is amended to read: 17 Sec. 43.23.055. Duties of the department. The department shall 18 (1) annually pay permanent fund dividends from the dividend fund; 19 (2) subject to AS 43.23.011 and [PARAGRAPH] (8) of this section, 20 adopt regulations under AS 44.62 (Administrative Procedure Act) that establish 21 procedures and time limits for claiming a permanent fund dividend; the department 22 shall determine the number of eligible applicants by October 1 of the year for which 23 the dividend is declared and pay the dividends by December 31 of that year; 24 (3) adopt regulations under AS 44.62 (Administrative Procedure Act) 25 that establish procedures and time limits for an individual upon emancipation or upon 26 reaching majority to apply for permanent fund dividends not received during minority 27 because the parent, guardian, or other authorized representative did not apply on 28 behalf of the individual; 29 (4) assist residents of the state, particularly in rural areas, who, because 30 of language, disability, or inaccessibility to public transportation, need assistance to 31 establish eligibility and to apply for permanent fund dividends;
01 (5) use a list of individuals ineligible for a dividend under 02 AS 43.23.005(d) provided annually by the Department of Corrections and the 03 Department of Public Safety to determine the number and identity of those 04 individuals; 05 (6) adopt regulations that are necessary to implement AS 43.23.005(d); 06 (7) adopt regulations that establish procedures for the parent, guardian, 07 or other authorized representative of a disabled individual to apply for prior year 08 permanent fund dividends not received by the disabled individual because no 09 application was submitted on behalf of the individual; 10 (8) adopt regulations that establish procedures for an individual to 11 apply to have a dividend disbursement under AS 37.25.050(a)(2) reissued if it is not 12 collected within two years after the date of its issuance; however, the department may 13 not establish a time limit within which an application to have a disbursement reissued 14 must be filed; 15 (9) provide any information, upon request, contained in permanent 16 fund dividend records to the child support services agency created in AS 25.27.010, or 17 the child support enforcement agency of another state, for child support purposes 18 authorized under law; if the information is contained in an electronic data base, the 19 department shall provide the requesting agency with either 20 (A) access to the data base; or 21 (B) a copy of the information in the data base and a statement 22 certifying its contents; 23 (10) establish a fraud investigation unit for the purpose of assisting the 24 (A) Department of Law in the prosecution of individuals who 25 apply for or obtain a permanent fund dividend in violation of a provision in 26 AS 11, by detecting and investigating those crimes; and 27 (B) commissioner to detect and investigate the claiming or 28 paying of permanent fund dividends that should not have been claimed by or 29 paid to an individual and to impose the penalties and enforcement provisions 30 under AS 43.23.035; 31 (11) adopt regulations under AS 44.62 (Administrative Procedure
01 Act) so that contributions under AS 43.23.062 are given a priority over donations 02 under AS 43.23.064 if the total amount of contributions and donations elected by 03 an applicant exceeds the amount of the permanent fund dividend that the 04 applicant is entitled to receive. 05 * Sec. 8. AS 43.23 is amended by adding new sections to read: 06 Sec. 43.23.063. Education endowment fund. (a) The education endowment 07 fund is established as a separate account in the general fund. The fund consists of 08 appropriations from 09 (1) donations to the fund under AS 43.23.064(b); 10 (2) transfers to the fund under AS 43.23.064(a); 11 (3) interest earned on the fund; and 12 (4) any other money appropriated to the fund. 13 (b) The commissioner is the fiduciary of the fund. In managing the fund, the 14 commissioner shall 15 (1) have the same powers and duties as provided in AS 37.10.071; and 16 (2) invest the fund in a manner likely to achieve at least a four percent 17 nominal return over a five-year period to meet the objectives of the fund. 18 (c) In managing the fund, the commissioner shall 19 (1) consider the status of the fund's capital and the income generated 20 on both current and probable future bases; 21 (2) determine the appropriate investment objectives; 22 (3) establish investment policies to achieve the objectives; and 23 (4) act only in regard to the best financial interests of the fund. 24 (d) On July 1 of each year, the commissioner shall 25 (1) determine the fund balance for the previously closed fiscal year, 26 including the earnings of the fund; and 27 (2) when the average market value for that fiscal year exceeds 28 $1,000,000,000, transfer 4.5 percent of the average fiscal-year-end market value of the 29 balance of the fund for the last five fiscal years, including the fiscal year just ended, 30 and including any unrealized gains and losses, to the Department of Education and 31 Early Development for distribution as supplemental grants to school districts
01 according to the average daily membership for each district adjusted under 02 AS 14.17.410(b)(1)(A) - (D), subject to appropriation. 03 (e) Money appropriated to the fund does not lapse. 04 Sec. 43.23.064. Dividend raffle fund; dividend donations to the dividend 05 raffle fund; drawing. (a) The dividend raffle fund is established as an account in the 06 general fund. The commissioner shall manage the fund. Interest and other income 07 received on money in the fund shall be separately accounted for and shall be 08 appropriated to the fund. The fund consists of donations appropriated to the fund 09 under (c) of this section. The commissioner shall use the dividend raffle fund, without 10 further appropriation, to pay for prizes as set out in (d) of this section and may use up 11 to two percent of the balance of the fund but not more than $500,000 from the fund 12 each fiscal year to pay the cost of administering the fund and for promotion and 13 advertisement of the fund. When the balance of the dividend raffle fund exceeds 14 $300,000,000 at the end of a fiscal year, the commissioner shall transfer the amount 15 above $300,000,000 to the education endowment fund established in AS 43.23.063. 16 Money donated to the fund does not lapse. 17 (b) Notwithstanding AS 43.23.069, the department shall provide on the Alaska 18 permanent fund dividend application an option for an applicant who is 18 years of age 19 or older to direct that all or a portion of the applicant's dividend payment be donated 20 for educational purposes and to enter the permanent fund dividend raffle as provided 21 in (c) of this section. A donation under this section may be $100 or more, in 22 increments of $100, up to the total amount of the permanent fund dividend that the 23 applicant is entitled to receive. 24 (c) Of the donations received in a year under (b) of this section, the legislature 25 shall appropriate 25 percent to the education endowment fund established in 26 AS 43.23.063 and shall appropriate 25 percent to the dividend raffle fund. The 27 legislature shall appropriate the remaining 50 percent of the donations received under 28 (b) of this section to the Department of Education and Early Development for 29 distribution as supplemental grants to school districts according to the average daily 30 membership for each district adjusted under AS 14.17.410(b)(1)(A) - (D). 31 (d) At the beginning of each year, the commissioner shall conduct a public
01 drawing to award prizes from the dividend raffle fund. Each $100 donation as 02 provided in (b) of this section entitles a person to one entry into the raffle. The prizes 03 for the raffle shall be as follows: 04 (1) the first name drawn receives an amount equal to eight percent of 05 the balance of the dividend raffle fund; 06 (2) the second name drawn receives an amount equal to four percent of 07 the balance of the dividend raffle fund; 08 (3) the third name drawn receives an amount equal to two percent of 09 the balance of the dividend raffle fund; and 10 (4) the fourth name drawn receives an amount equal to one percent of 11 the balance of the dividend raffle fund. 12 (e) Nothing in this section creates a dedicated fund. 13 * Sec. 9. AS 37.14.110(c) and 37.14.140 are repealed. 14 * Sec. 10. Sections 1, 2, 7, and 8 of this Act take effect January 1, 2019.