Legislature(2003 - 2004)

2004-06-22 House Journal

Full Journal pdf

2004-06-22                     House Journal                      Page 4445
HJR 102                                                                                           
HOUSE JOINT RESOLUTION NO. 102 by the House Rules                                                   
Committee by request of the Governor:                                                               

2004-06-22                     House Journal                      Page 4446
     Proposing amendments to the Constitution of the State of Alaska                                
     relating to and limiting appropriations from the Alaska permanent                              
     fund based on an averaged percent of the fund market value and                                 
     relating to permanent fund dividend payments.                                                  
was read the first time and referred to the Judiciary and Finance                                   
The following fiscal note(s) apply:                                                                 
1.  Zero, Dept. of Revenue                                                                          
2.  Fiscal, Office of the Governor                                                                  
The Governor's transmittal letter dated June 21, 2004, follows:                                     
"Dear Speaker Kott:                                                                                 
Under the authority of article III, section 18, of the Alaska                                       
Constitution, I am transmitting a resolution proposing amendments to                                
the Alaska Constitution relating to and limiting appropriations from                                
the Alaska Permanent Fund based on an averaged percent of the fund's                                
market value.  Passage of this resolution by the Legislature gives                                  
Alaskans a voice on the issue of a long-term fiscal plan.  Voters would                             
have the ability to approve the resolution and bring certainty to                                   
Alaska's fiscal future for themselves and future generations of                                     
The resolution outlines a long-term fiscal plan that 1) changes the                                 
structure of the Alaska Permanent Fund to an endowment model; 2)                                    
limits the annual payout from the Alaska Permanent Fund to five                                     
percent of the fund's value; 3) allocates the annual payout of 50                                   
percent to dividends, 45 percent to public education, including K-12                                
and the University, and five percent to communities.  Individual                                    
dividends would be guaranteed to be at least $1,000 or 50 percent of                                
the annual payout, whichever is higher.  I believe that these allocations                           
reflect the priorities of a majority of the public for the use of the                               
Alaska Permanent Fund.                                                                              
The resolution is based on provisions of CS House Joint Resolution                                  
26(FIN), which passed the House during the second session of this                                   

2004-06-22                     House Journal                      Page 4447
Legislature.  Under the provisions of this resolution, the Alaska                                   
Permanent Fund is converted to the Percent of Market Value or                                       
"POMV" endowment model.  An annual payout of five percent of the                                    
value of the fund is set.                                                                           
POMV is an accepted method for managing funds.  Anchorage,                                          
Fairbanks, the North Slope Borough, and Sitka residents have voted to                               
use the POMV model for their municipal trust accounts.  Private                                     
foundations like the Ford Foundation and about 83 percent of colleges                               
use some form of a POMV payout method.                                                              
These allocation provisions have a ten-year "sunset" to allow the                                   
Legislature and the voters an opportunity to revisit them to ensure that                            
the allocations continue to meet state needs.                                                       
I urge your prompt and favorable action on this legislation.                                        
                                 Sincerely yours,                                                   
                                 Frank H. Murkowski