Legislature(2003 - 2004)

2004-06-22 Senate Journal

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2004-06-22                     Senate Journal                      Page 3835
SJR 102                                                                                           
SENATE JOINT RESOLUTION NO. 102 BY THE SENATE RULES                                                 
COMMITTEE BY REQUEST OF THE GOVERNOR,                                                               
          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.                                             

2004-06-22                     Senate Journal                      Page 3836
was read the first time and referred to the Finance Committee.                                      
The following fiscal information was published today:                                               
 Fiscal Note No. 1, zero, Department of Revenue                                                     
 Fiscal Note No. 2, Office of the Governor                                                          
Governor's transmittal letter dated June 21:                                                        
Dear President Therriault:                                                                          
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                                   
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.                                                                           

2004-06-22                     Senate Journal                      Page 3837
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