An Act relating to deposits to the Alaska permanent fund from mineral lease rentals, royalties, royalty sale proceeds, net profit shares under AS 38.05.180(f) and (g), federal mineral revenue sharing payments received by the state from mineral leases, and bonuses received by the state from mineral leases, and limiting deposits from those sources to the 25 percent required under art. IX, sec. 15, Constitution of the State of Alaska; and providing for an effective date.

Posted: February 22, 2000
Contact: Representative Norman Rokeberg at (907) 465-4968

This legislation returns the percentage of all mineral lease royalties and bonuses deposited into the Permanent Fund to the constitutionally mandated 25 per cent.

SCS CSSS HB 96 (FIN) proposes changes to a statute?not the Constitution. The Constitution states that "at least twenty?five percent of all mineral lease rentals, royalties, royalty sale proceeds, federal mineral revenue sharing payments and bonuses received by the state shall be placed in a permanent fund." In 1980, the Legislature realized excess revenues existed (GF revenues for FY81 totaled $4.07 billion) and wisely decided to raise the amount of royalties and bonuses deposited into the Permanent Fund to 50 percent.

It is time for the State of Alaska to redirect these deposits to the General Fund. Passage of this bill would generate an extra $16.6 million in FY01, and an extra $19.4 million (average) per year over the next fourteen years.

AS the Prudhoe Bay and Kuparuk fields-which currently contribute to the General fund at a 75 percent rate- diminish, we need to replace them with the new, smaller satellite fields contributing at the same rate.

While we can and should make budget cuts, we would be foolish to ignore this source of General Fund revenue in solving our budget problem, as well as planning for future development of Alaska's resources. Prudent fiscal management requires this statutory change. CS SSHB 96(FIN) is a small step in the right direction.

I strongly urge you to support this much needed, fiscally-prudent legislation