(JUNEAU) - The Alaska State Senate approved House Bill 11 by a vote of 11 to nine on Monday, and by a reconsideration vote of 11 to nine on Wednesday. Sponsored by House Rules Chair Rep. Norman Rokeberg (R-Anchorage), HB 11 returns the percentage of all mineral lease, royalty, and sale revenues deposited into the Permanent Fund to the constitutionally mandated 25-percent. In 1980, the Legislature decided to deposit 50-percent of those revenues into the fund and has continued to do so; however, the Alaska State Constitution has always required only 25-percent.

"You don't continue to save money as you go broke," Rokeberg said. "We must close the fiscal gap and reduce the draw on the Constitutional Budget Reserve."

Prudhoe Bay contributes 25-percent of its oil revenues to the Permanent Fund; however, the Alpine and North Star oil fields contribute 50-percent of their revenues to the Permanent Fund. By changing the contribution rate of those fields to 25-percent and directing the remaining funds to the General Fund, Alpine and North Star contributions to the General Fund will replace the declining revenues from Prudhoe Bay. HB 11 will generate an estimated $42.9 million (average) per year over the next seven years, and $59.7 million in FY 2004 at an estimate $25.28 per barrel average. Meanwhile, the decision will not withdraw funds from the Permanent Fund. The Fund will continue to receive 25-percent of state resource revenues; therefore, it will continue to grow. The Senate amended HB 11 to return to the current 50-percent deposit rate by Alpine and North Star, if the Dividend loses more than 20 dollars. Rokeberg says that any significant impact to the Dividend is unlikely.

"This bill is not a raid on the Permanent Fund, we are not taking any money out of the Permanent Fund, and the Permanent Fund Dividend will see very little impact for the next ten years," Rokeberg said. "This bill minimizes taxes, decreases the draw on the Constitutional Budget Reserve, and is not a means to increase spending. We are cutting the budget."

HB 11 returns to the House for concurrence.

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