The Alaska Permanent Fund is a constitutionally established permanent fund managed by a state-owned corporation, the Alaska Permanent Fund Corporation (APFC). The fund was established in Alaska in 1976 by Article 9, Section 15 of the Alaska State Constitution under Governor Jay Hammond. From February 1976 until April 1980, the Department of Revenue Treasury Division managed the state's Permanent Fund assets, until, in 1980, the Alaska State Legislature created the APFC.
Shortly after the oil from Alaska’s North Slope began flowing to market through the Trans-Alaska Pipeline System, the Permanent Fund was created by a amendment to the Alaska Constitution. It was designed to be an investment where at least 25% of the oil money would be put into a dedicated fund for future generations, who would no longer have oil as a resource. This does not mean the fund is solely funded by oil revenue. The Fund does not include either property taxes on oil company property nor income tax from oil corporations, so the minimum 25% deposit is closer to 11% if those sources were also considered. The Alaska Permanent Fund sets aside a certain share of oil revenues to continue benefiting current and all future generations of Alaskans. Many citizens also believed that the legislature too quickly and too inefficiently spent the $900 million bonus the state got in 1969 after leasing out the oil fields. This belief spurred a desire to put some oil revenues out of direct political control.
The Alaska Permanent Fund Corporation manages the assets of both the Permanent Fund and other state investments, but spending Fund income is up to the Legislature. The Corporation is to manage for maximum prudent return, and not—as some Alaskans at first wanted—as a development bank for in-state projects. The Fund grew from an initial investment of $734,000 in 1977 to approximately $42.1 billion as of August 31, 2012. Some growth was due to good management, some to inflationary re-investment, and some via legislative decisions to deposit extra income during boom years. Each year, the fund's realized earnings are split between inflation-proofing, operating expenses, and the annual Permanent Fund Dividend.
In June 2011, the Fund's chief investment officer announced he would leave the sovereign wealth fund and re-enter the private sector, joining consulting firm Wurts and Associates. His replacement will be Jay Willoughby, a businessman from the private sector.
Read more about Alaska Permanent Fund: Alaska Permanent Fund Corporation, Permanent Fund Dividend, Constitutional Budget Reserve (CBR)
Famous quotes containing the words permanent and/or fund:
“...that absolutely everything beloved and cherished of the bourgeoisie, the conservative, the cowardly, and the impotent—the State, family life, secular art and science—was consciously or unconsciously hostile to the religious idea, to the Church, whose innate tendency and permanent aim was the dissolution of all existing worldly orders, and the reconstitution of society after the model of the ideal, the communistic City of God.”
—Thomas Mann (1875–1955)
“I am advised that there is an unexpended balance of about $45,000 of the fund appropriated for the relief of the sufferers by flood upon the Mississippi River and its tributaries, and I recommend that authority be given to use this fund to meet the most urgent necessities of the poorer people in Oklahoma.”
—Benjamin Harrison (1833–1901)