Alaska Permanent Fund
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The Alaska Permanent Fund was established by a constitutional amendment in 1976 to invest proceeds from the sale of minerals, especially oil through the Trans-Alaska Pipeline System, for the benefit of current and future Alaskans. In March 2005, the fund's value was over $30 billion.
In 1980, the Alaska State Legislature created the Alaska Permanent Fund Corporation to manage the Permanent Fund's assets as well as other state investments as designated by law.
Each year, the fund's realized earnings are split between inflation-proofing, operating expenses, and the annual Permanent Fund Dividend, which provides Alaskans who have resided in the state at least one calendar year an annual payment averaging $1,000 (although that has been substantially more in recent years). Some officials have proposed changing the Permanent Fund's management system to a more typical Percent of Market Value approach, but changing the fund's management system requires an amendment to the state constitution. The PoMV proposal would allow the state to withdraw up to 5% of the fund's value each year for the dividend program and government spending. Tentatively, the idea is that 50% of the earnings will go to the dividend program and 50% will go to the state as an additional source of revenue, but this has yet to be decided. Advocates say that the fund's average rate of return has historically been 8% and that the PoMV approach would self-inflation-proof the fund while allowing earnings to be used for more than just dividends. Critics are concerned that dividend amounts will go down, fear that money would be taken out of the principal in bad years, and ideologically believe that the state should not receive any money directly from the fund.
External links
The Alaska Permanent Fund Corporation webpage (http://www.apfc.org)
State of Alaska Permanent Fund Dividend Division (http://www.pfd.state.ak.us)