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Alaska Ballot Proposition 2, Permanent Fund Amendment (1976)
| Alaska Ballot Proposition 2 | |
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| Election date |
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| Topic Public economic investment policy and Restricted-use funds |
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| Status |
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| Type Legislatively referred constitutional amendment |
Origin |
Alaska Ballot Proposition 2 was on the ballot as a legislatively referred constitutional amendment in Alaska on November 2, 1976. It was approved.
A "yes" vote supported creating the Alaska Permanent Fund (APF), including requiring:
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A "no" vote opposed creating the Alaska Permanent Fund (APF). |
Overview
The measure established the Alaska Permanent Fund (APF). The amendment required that 25 percent of the state's mineral, such as oil, lease rentals and royalties, along with federal mineral revenue sharing payments and bonuses, be deposited into the APF. This amount, known as the fund principal, was not allowed to be spent; rather, the amendment required the principal to be used for income-producing investments. The measure mandated that earnings from investments be placed in the state General Fund.[1]
Proposition 2 amended Section 7 and Section 15 of Article IX of the Alaska Constitution.[1] Section 15 created the Alaska Permanent Fund. Section 7 was designed to prohibit dedicated funds, meaning a state law could not require revenue from a tax or license to be saved or spent for a specific purpose. Therefore, Section 7 had to be amended to allow for an APF dedicated fund.[2]
Aftermath
Alaska Permanent Fund Corporation
In 1980, the Alaska State Legislature passed and Gov. Jay Hammond (R) signed a bill to create the state-owned Alaska Permanent Fund Corporation (APFC).[3] As of 2017, the APFC used the AFP principal to make investments in a diversified portfolio, including stocks, bonds, and real estate.[4]
Permanent Fund Dividend
Gov. Hammond and the state legislature also worked on a bill to establish the Permanent Fund Dividend (PFD) in 1980.[3] The PFD was designed to distribute some of the Alaska Permanent Fund's investment earnings directly to state residents as payments.[5]
The original version of the PFD program provided each state resident with $50 for each year he or she had been a resident after 1959; therefore, the dividend would increase each year that a person was a resident. On June 14, 1982, the U.S. Supreme Court ruled that the program violated the Equal Protection Clause of the Fourteenth Amendment. The court concluded that the state government had no valid interests in making a distinction between residents based on their lengths of residency.[6]
Two days after the U.S. Supreme Court's ruling, Gov. Hammond signed a different PFD program into law.[7] Under the new law, all Alaskans who had been residents of the state for at least six months were eligible for a dividend. In 1989, the state legislature increased the residency requirement from six months to 24 months. The Alaska Superior Court lowered the requirement from 24 months to 12 months in 1990.[8]
In 2016, voters in Alaska approved an initiative, Measure 1, to provide for the automatic voter registration of Alaskans who submit a dividend application.[9]
Wielechowski et al. v. Alaska and APFC
The Alaska Supreme Court decided Wielechowski et al. v. Alaska and APFC in a unanimous ruling on August 25, 2017. The court held that Proposition 2, which voters approved in 1976, did not exempt the state legislature's use of Alaska Permanent Fund earnings from the state constitution's clause prohibiting the automatic dedications of funds.[10]
Section 7 of Article IX, known as the anti-dedication caluse, of the Alaska Constitution prohibits the state legislature from passing bills to dedicate state revenue for specified purposes, meaning all appropriations are subject to the governor's veto power. To allow for revenue dedication, Section 7 would need to be amended. Proposition 2 amended Section 7 to allow for the dedication of mineral rents and royalties into the APF.
The petitioners—Sen. Wielechowski (D), former Sen. Halford (R), and former Sen. Tillion (R)—brought the case forward after Gov. Walker (I) used a partial veto to decrease the size of the Permanent Fund Dividend in 2016. According to Wielechowski et al., Proposition 2 gave the legislature the power to create dedications for Permanent Fund earnings; therefore, the governor could not veto the dividend. The defendants—the State of Alaska and the Alaska Permanent Fund Corporation—disagreed, stating that Proposition 2 provided for the dedication of specific revenue into the APF, but not earnings out of the APF. The Alaska Supreme Court agreed with the position of the defendants.[10]
In May 2016, the Alaska State Legislature passed an appropriation bill that included using $1.362 billion, or $2,052 per state resident, of the APF's earnings for dividends, consistent with the statutory formula. Gov. Walker used a partial veto to decrease the amount set aside for dividends to $695.65 million, or $1,022 per state resident. The state legislature did not override the governor's veto.[10]
Gov. Walker said he used a partial veto to decrease the APF earnings amount going toward dividends to reduce the state deficient and provide funds for government services. Rep. Charisse Millett (R-25), state House majority leader, responded to the veto, saying, "We heard from our constituents during session and we're still hearing from them now: 'Don't take the PFD to pay for government.'"[11]
Election results
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Alaska Ballot Proposition 2 |
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| Result | Votes | Percentage | ||
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75,588 | 66.24% | ||
| No | 38,518 | 33.76% | ||
Text of measure
Ballot title
The ballot title for Ballot Proposition 2 was as follows:
| “ | This proposal would amend Article IX, Section 7 (Dedicated Funds) and add a new section to Article IX, Section 15 (Alaska Permanent Fund) of the Alaska Constitution. It would establish a constitutional permanent fund into which at least 25 percent of all mineral lease rentals, royalties, royalty sale proceeds, federal mineral revenue sharing payment and bonuses received by the State would be paid. The principal of the fund would be used only for income-producing investments permitted by law. The income from the fund would be deposited in the State's General Fund and be available for appropriation for the State unless law provided otherwise. | ” |
Constitutional changes
- See also: Article IX, Alaska Constitution
The measure amended Section 7 and Section 15 of Article IX of the Alaska Constitution. The following underlined text was added:[1]
The proceeds of any state tax or license shall not be dedicated to any special purpose, except as provided in section 15 of this article or when required by the federal government for state participation in federal programs. This provision shall not prohibit the continuance of any dedication for special purposes existing upon the date of ratification of this section by the people of Alaska.
Section 15 of Article IX
At least twenty-five per cent 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, the principal of which shall be used only for those income-producing investments specifically designated by law as eligible for permanent fund investments. All income from the permanent fund shall be deposited in the general fund unless otherwise provided by law.[12]
Path to the ballot
- See also: Amending the Alaska Constitution
A two-thirds vote in each legislative chamber of the Alaska State Legislature during one legislative session to refer a constitutional amendment to the ballot. That amounts to a minimum of 27 votes in the Alaska House of Representatives and 14 votes in the Alaska State Senate, assuming no vacancies. Amendments do not require the governor's signature to be referred to the ballot.
The Alaska State Legislature voted to refer House Joint Resolution 39 (HJR 39) to the ballot. HJR 39 was featured on the ballot as Proposition 2.[13]
See also
- Alaska 1976 ballot measures
- 1976 ballot measures
- List of Alaska ballot measures
- History of Initiative & Referendum in Alaska
External links
Footnotes
- ↑ 1.0 1.1 1.2 Alaska Lieutenant Governor, "Alaska Constitution," accessed August 27, 2017
- ↑ Alaska Legislature, "Alaska's Constitution: A Citizen's Guide," accessed August 27, 2017
- ↑ 3.0 3.1 Alaska Permanent Fund Corporation, "Landmarks in Permanent Fund History," accessed August 27, 2017
- ↑ Alaska Permanent Fund Corporation, "What is the Alaska Permanent Fund?" accessed August 27, 2017
- ↑ Permanent Fund Dividend Division, "About Us," accessed August 27, 2017
- ↑ U.S. Supreme Court, "Zobel v. Williams (1982)," accessed August 27, 2017
- ↑ New York Times, "Alaska Mailing $1,000 Checks from Oil Income Fund to Residents," June 18, 1982
- ↑ Permanent Fund Dividend Division, "Historical Timeline," accessed August 27, 2017
- ↑ Bloomberg, "Alaska's Oil Cash Now Comes With Automatic Voter Registration," November 10, 2016
- ↑ 10.0 10.1 10.2 Alaska Supreme Court, "Wielechowski et al. v. Alaska and APFC," August 25, 2017
- ↑ Alaska Dispatch News, "Gov. Walker's veto cuts Alaska Permanent Fund dividends to $1,022," September 23, 2016
- ↑ Note: This text is quoted verbatim from the original source.
- ↑ Alaska Lieutenant Governor, "List of Alaska Constitutional Amendments," accessed August 27, 2017
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