Alaska Senate Bill SB109

Alaska 2025-2026 Regular Session

• Introduced: 2/24/25
• Refer: 2/24/25

Caption

Permanent Fund Dividend; Pomv Split

Summary

SB 109 revises Alaska’s Permanent Fund payout structure by changing how the amount available for appropriation is calculated and how that amount is split between the state budget and the Permanent Fund Dividend (PFD). The bill replaces the existing income-based distribution framework with a percent-of-market-value approach: the Alaska Permanent Fund Corporation would calculate the amount available for appropriation as 5 percent of the average market value of the fund over the first five of the preceding six fiscal years, subject to the balance in the earnings reserve account. The legislature would then appropriate that amount from the earnings reserve account to the general fund, and 25 percent of that amount would be appropriated from the general fund to the dividend fund for PFD payments. The bill also preserves and clarifies the inflation-proofing mechanism for the fund’s principal, allowing the legislature to appropriate an amount from the earnings reserve account to offset inflation based on the Consumer Price Index. It continues to exclude certain settlement-related income associated with State v. Amerada Hess from the ordinary appropriation and dividend calculations, directing that income to the Alaska capital income fund instead. In addition, it makes a conforming change to ensure net income from the mental health trust fund is not included in the calculation of the amount available for appropriation under the new framework. If enacted, SB 109 would significantly alter Alaska Statutes governing the Permanent Fund, especially AS 37.13.140, AS 37.13.145, and the dividend calculation statute in AS 43.23.025. It would shift the state from a direct transfer model to a legislative appropriation model tied to a percent-of-market-value formula, while also reducing the dividend share to 25 percent of the amount available for appropriation. The bill takes effect immediately. The available context does not include committee testimony, recorded votes, or amendments beyond the bill text, so there is no documented public sentiment in the provided materials. Based on the bill’s structure, it appears to be a major fiscal policy proposal affecting both state revenue use and the size of annual dividends, which typically draws strong interest from budget and dividend stakeholders. The main point of potential contention is the dividend split: by setting only 25 percent of the available appropriation for the PFD, the bill would likely reduce dividend payments relative to formulas that allocate a larger share to residents. That change could be opposed by dividend advocates and supported by those prioritizing state budget stability and predictable withdrawals from the Permanent Fund. The bill also centralizes more discretion in the legislature through appropriations, which may be viewed as either a necessary budget tool or a reduction in the automatic nature of the current dividend system.

Impact

SB 109 would amend Alaska’s Permanent Fund statutes to establish a 5 percent percent-of-market-value appropriation formula, require legislative appropriations from the earnings reserve account, and direct 25 percent of the available appropriation to the dividend fund. It would also preserve inflation-proofing of fund principal, exclude certain Amerada Hess-related income from the appropriation/dividend calculation, and make a conforming change excluding mental health trust fund income from the appropriation base. The bill would materially affect the calculation and distribution of Permanent Fund earnings, the size of annual PFDs, and the state’s general fund revenue flow.

Sentiment

No committee transcript or vote record is provided, so there is no direct evidence of support or opposition in the supplied materials. The bill’s caption and structure indicate a significant policy change to the Permanent Fund Dividend and the POMV split, suggesting it is likely to be closely scrutinized by legislators, fiscal policymakers, and the public. In general, such proposals tend to generate mixed sentiment because they balance dividend payments against state budget needs.

Contention

The central contention is the proposed 25 percent allocation to the dividend fund, which would likely be seen by dividend proponents as too small and by budget hawks as a way to preserve more revenue for government operations and fund stability. Another likely point of debate is the increased reliance on legislative appropriations rather than automatic transfers, which shifts control over Permanent Fund earnings to the legislature. The exclusion of Amerada Hess-related income and the treatment of inflation-proofing are more technical issues, but they could also matter to stakeholders focused on protecting principal and preserving the fund’s long-term value.