Alaska Permanent Fund Application Time

Between January and March, Alaskans fill out the forms so that come October, the State sends us our Alaska Permanent Fund Dividends (PFD's).   This fund was set up when the State was embarking on our giant oil bonanza.  Gov. Jay Hammond was perhaps the key backer of this idea of establishing a fund by setting aside a percentage of income from our oil revenues.  Here's what the Alaska Permanent Fund Corporation website says:

WHAT IS THE ALASKA PERMANENT FUND?

A dedicated fund owned by the State of Alaska

In 1976, as the Alaska pipeline construction neared completion, Alaska voters approved a constitutional amendment to establish a dedicated fund: the Alaska Permanent Fund.

Created by a constitutional amendment

"At least 25 percent of all mineral lease rentals, royalties, royalty sales proceeds, federal mineral revenue-sharing payments and bonuses received by the state be placed in a permanent fund, the principal of which may only be used for income-producing investments."

Comprised of income-producing investments

The Fund is invested in a diversified portfolio of public and private asset classes. All investments, whether in Alaska or around the world, must be expected to produce income with an acceptable level of risk. The Fund is not invested in projects that are primarily focused on economic or social development.

Used for both savings and spending

The Legislature may spend realized Fund investment earnings. Realized earnings consist of stock dividends, bond interest, real estate rent and the income made or lost by the sale of any of these investment assets. Unrealized earnings - those resulting from the change in market value of assets that are held - cannot be spent. Most of the spending from the Fund has been for dividends to qualified Alaska residents. The Permanent Fund Dividend Division (a separate entity from the APFC) operates the PFD program, which the Legislature established in 1980.

Managed by a state-owned corporation

In 1980, the Legislature established the Alaska Permanent Fund Corporation to manage Fund investments.

The idea was that the oil in the ground belonged to all Alaskans now and in the future and so the revenue generated by the fund shouldn't simply be used by the generation of Alaskans alive when the resouce was 'cashed in.'  A significant portion should be put into a fund that would continue to grow, like an endowment, for future generations.  So, at some point in the future when oil revenues dried up, the fund would be large enough that the income from investments would be able to pay for a significant part of the State's annual budget.

It was also decided that Alaskans should get dividends.  Some people, I suspect, just wanted to get their hands on some money.  Some politicians figured getting money out of the hands of the government and into the hands of the people was just good politics.  And others thought that if the people got a dividend, they would have a stake in the size of the State royalties for the oil, and would have a vested interest in making sure the State didn't get too cozy with the oil companies.  So the Alaska Permanent Fund dividend was born.

It did get held up for a couple of years because the formula for figuring out how much of a dividend each person got was challenged in court (successfully).  Originally it was based on how long someone lived in the state, but the US Supreme Court said that was unconstitutional.  

Now, 33 years after the fund was established, we have about $34 billion dollars in the fund (down from a high of $40 billion before the market crash) and Alaskans - every man, woman, and child who is a resident and files an application - gets a dividend from this fund.  The October 2009 checks were $1305 per recipient.

So, Sunday, my wife and I got onto the computer and went to the Permanent Fund Dividend Site and filled out the online application.   At the end of the process we got the following:

2010 Adult PFD Online Signature Page

[ _ ]

 

Print, sign and mail this form to: Alaska Department of Revenue Permanent Fund Dividend Division PO BOX 110462 Juneau, Alaska 99811-0462

Applicant Information
Name:	XXXXXXXX
SSN:	XXXXXXX
DOB:	XXXXXXXX
Confirmation Number:	XXXXXXXX
Filing Date/Time:	XXXXXXXXX

Read the Following Statements and Sign Below

I certify that:

I am now and intend to remain an Alaska resident indefinitely. I was an Alaska resident for all of 2009 . I have not claimed residency in another state. I was in the state of Alaska for at least 72 consecutive hours in 2008 or 2009 .

I understand that if what I say is not true, it is a criminal offense and if I am convicted, in addition to any criminal penalties:

I will lose this and all future dividends. I will be required to pay back all dividends I have been paid.

I understand that if I deliberately misrepresent or recklessly disregard a fact, I am liable for civil penalties:

I could lose this dividend and my next five dividends. I may have to pay a fine of up to $3,000.

Release of Information: I authorize the Alaska Department of Revenue to obtain confidential information necessary to verify my eligibility. I authorize the release of confidential records necessary to verify my eligibility from any public agency including Social Security Administration; Internal Revenue Service; Alaska Department of Health and Social Services, Division of Public Assistance, and Office of Children's Services. I agree that a copy of this authorization is as valid as the original.

I certify that the information I am supplying on and with this form is true and correct.

Your Signature		Date:
By submitting this application with or without signature I am consenting to registration with the U.S. Selective Service System, if so required by law.

04XXX



We could have chosen to do it all online with an electronic signature, but we still like paper and we need to send in some more information as well, so we did the one where the information is now filed online, but we have to sign these forms and mail them in.

Although the original intent was to eventually be able to use the earnings on the fund to pay for state government, people have gotten so used to getting their checks in October that they now think of them as an entitlement.  We're still getting enough money from oil revenues (it was shaky when oil went down below $10 a barrel, but Alaskans are smiling with $70 and $80 per barrel prices) that we don't need to use the earnings yet to run government.  But when we get to that point, I suspect there's going to be a big, nasty fight. 

Two  state legislators have already begun to address this (from the Anchorage Daily News Jan 5, 2009):

Sen. Hollis French and Rep. Harry Crawford want to guarantee Permanent Fund dividend checks in the state Constitution, saying if the dividend isn’t protected the Legislature will eventually use the money to pay for state government spending.

“There are some who would spend the dividend on government, and I think those voices are going to rise in the next few years as budget pressures come on the state of Alaska. Keep in mind that the dividend has sponsored college educations - just ask my son - it’s built homes, paid for medical bills, it’s an enormous part of the Alaskan economy,” said French, who is running for governor in the fall election.

French and Crawford, both Democrats from Anchorage, said today they’ll introduce a resolution to enshrine the dividend. Such a constitutional amendment needs a two-thirds vote in the House and Senate and then a statewide public vote to pass. That is a huge hurdle.

Both these men are running for Statewide office (Governor and US House) next November, so one has to assume this has to do with that election.