Alaska Permanent Fund - wikipedia Alaska Permanent Fund The Alaska Permanent Fund is a constitutionally established permanent fund managed by a state - owned corporation, the Alaska Permanent Fund Corporation ( APFC ). It 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. As of the end of 2016, the fund is worth nearly $55 billion that has been funded by oil revenues. Contents 1 History 2 Alaska Permanent Fund Corporation 2.1 Board of Trustees 3 Permanent Fund Dividend 3.1 Annual individual payout 4 Constitutional Budget Reserve ( CBR ) 4.1 Issues with the Constitutional Budget Reserve 5 Issues with the Permanent Fund 5.1 Dividends and spending 5.2 Percent of Market Value ( POMV ) Proposal 6 See also 7 References 8 External links History 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 an 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 includes neither 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 $53.7 billion as of July 9, 2015. 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. The fund is a member of the International Forum of Sovereign Wealth Funds and has therefore signed up to the Santiago Principles on best practice in managing sovereign wealth funds. The fund 's current CIO is Russell Read. Alaska Permanent Fund Corporation The Alaska Permanent Fund Corporation is a government instrumentality of the State of Alaska created to manage and invest the assets of the Alaska Permanent Fund and other funds designated by law. Board of Trustees The Board of Trustees are governor - appointed Bill Moran, Chair, reappointed 2014 Carl Brady, Vice-Chair, reappointed 2015 Larry Cash, appointed 2013 Gary Dalton, appointed 2012 Randall Hoffbeck, appointed 2014 Craig Richards, appointed 2015 Permanent Fund dividend The Permanent Fund Dividend ( PFD ) is a dividend paid to Alaska residents that have lived within the state for a full calendar year ( January 1 -- December 31 ), and intend to remain an Alaska resident indefinitely. This means if residency is taken on January 2, the `` calendar year '' would n't start until next January 1. However, an individual is not eligible for a PFD for a dividend year when : ( 1 ) during the qualifying year, the individual was sentenced as a result of conviction in this state of a felony ; ( 2 ) during all or part of the qualifying year, the individual was incarcerated as a result of the conviction in this state of a ( A ) felony ; or ( B ) misdemeanor if the individual has been convicted of ( i ) a prior felony as defined in AS 11.81. 900 ; or ( ii ) two or more prior misdemeanors as defined in AS 11.81. 900 The amount of each payment is based upon a five - year average of the Permanent Fund 's performance and varies widely depending on the stock market and many other factors. The PFD is calculated by the following steps : Add Fund Statutory Net Income from the current plus the previous four fiscal years. Multiply by 21 % Divide by 2 Subtract prior year obligations, expenses and PFD program operations Divide by the number of eligible applicants The lowest individual dividend payout was $331.29 in 1984 and the highest was $2,072 in 2015. However, in 2008 Governor Sarah Palin signed Senate Bill 4002 that used revenues generated from the state 's natural resources and provided a one - time special payment of $1,200 to every Alaskan eligible for the PFD. Although the principal or corpus of the Fund is constitutionally protected, income earned by the Fund, like nearly all State income, is constitutionally defined as general fund money. The first dividend plan would have paid Alaskans $50 for each year of residency up to 20 years, but the U.S. Supreme Court in Zobel v. Williams, 457 U.S. 55 ( 1982 ) disapproved the $50 per year formula as an invidious distinction burdening interstate travel. As a result, each qualified resident now receives the same annual amount, regardless of age or years of residency. One mathematical effect of an equal - amount dividend is that the dividend contributes a greater percentage of added income for people of lower incomes. Conversely, any cut, limit, cap, or end of the equal - amount PFD would mean low - income Alaskans would experience the greatest percentage loss of income. The PFD payout, which comes in or near October of each year, is acknowledged to have a substantial effect on Alaska 's economy, both in total and especially in rural Alaska where unemployment can reach 60 % and where cash is scarce. Annual individual payout This is the fund 's history of annual individual payouts, in nominal USD. Year Amount 1982 $1,000.00 $386.15 1984 $331.29 1985 $404.00 1986 $556.26 $708.19 $826.93 $873.16 $952.63 1991 $931.34 $915.84 $949.46 $983.90 1995 $990.30 $1,130.68 $1,296.54 1998 $1,540.88 1999 $1,769.84 2000 $1,963.86 $1,850.28 2002 $1,540.76 2003 $1,107.56 $919.84 2005 $845.76 2006 $1,106.96 2007 $1,654.00 2008 $2,069.00 + $1,200 Alaska Resource Rebate 2009 $1,305.00 $1,281.00 2011 $1,174.00 2012 $878.00 2013 $900.00 2014 $1,884.00 2015 $2,072.00 2016 $1,022.00 ( dividend was estimated to be $2,052 however Governor Walker 's veto reduced it ) 2017 $1,100.00 ( dividend was estimated to be over $2,300 however Governor Walker 's administration reduced it a second year in a row ) Constitutional budget Reserve ( CBR ) The Constitutional Budget Reserve is a companion fund to the Permanent Fund which was established in 1991 to deal with the problem of short - term oil revenue variability. Deposits into the CBR consist of settlements of back taxes and other revenues owed to the state. Draws from the CBR into the general fund require a 3 / 4 vote of each house of the legislature and must be repaid. To date, the general fund has amassed a debt of approximately $4 billion to the CBR to maintain a stable level of public spending. Issues with the Constitutional budget Reserve The size of the debt as related to that of the budget has spawned doubt over the probability of eventual repayment. The CBR is based on the assumption that the general fund deficit will remain constant over time ( allowing paybacks to balance draws ). Believing this to be mistaken, critics allege the state uses resources from the CBR to avoid reducing the budget, acknowledging debt, or increasing taxes. According to them, falling oil revenues and growing spending requirements will leave paybacks consistently lower than draws, causing the CBR to fail. Former state senator Dave Donley ( R - Anchorage ) recognized that the high vote requirement to spend CBR money ( 3 / 4 of each house ) had a perverse and unintended consequence, The high vote requirement was meant to ensure that draws from the CBR would be rare, but in fact such draws are common. Donley explained that the high vote requirement really empowers the minority party ( in the 2000 - 07 era, Democratic Party ), who can then get what they want in a Christmas tree bill ( presents for everyone, both majority and minority ) in exchange for their votes ( which minority votes would not be needed with the usual 51 % voting rule ). Donley thus explains why both parties can and do use the higher voting rule requirement to more frequently spend from the CBR. Issues with the Permanent Fund Dividends and spending While the Permanent Fund generally generated large surpluses even after payment of the Dividend ( PFD ), the state general fund operated at a substantial deficit. However, the consolidated account of both General and Permanent Funds usually shows a surplus. The Funds ' ultimate uses were never clearly spelled out at its inception, leaving no current consensus over what role Fund earning should play in the current and expected state budget shortfalls. However, some people argue that the original intent was to fund state government after the temporary oil riches ceased, while others note that the Fund 's intent changed from its 1976 origin when in 1982 the Dividend program began. Public opinion strongly favors the Dividend program. Indeed, in 1999, with oil prices going as low as $9 per barrel and Alaska 's oil consultant Daniel Yergin forecasting low prices `` for the foreseeable future '', the State put an advisory vote before Alaskans, asking if government could spend `` some '' part of Permanent Fund earning for government purposes. Gov. Knowles, Lt. Gov. Ulmer, and many other elected officials urged a `` yes '' vote. Campaign spending greatly favored the `` yes '' side. The public voted `` no '' by nearly 84 %. ( Oil prices rose dramatically, starting about two weeks after Yergin 's prediction, to above $60 per barrel, though the quantity produced continues to fall. ) Perceived support of the dividend program is so universally strong that it ensures the dividend 's continuity and the protection of the Fund 's principal, since any measure characterized as negatively impacting dividend payouts represents a loss to the entire populace. That is, legislators willing to appropriate the Fund 's annual earnings are constrained by the politically suicidal nature of any decrease in the public 's dividend. Percent of market value ( PoMV ) proposal In 2000, the APFC Board of Trustees proposed changing the Permanent Fund 's management system to a Percent of Market Value ( PoMV ) approach which would require an amendment to the state constitution. The PoMV proposal would limit withdrawals to five percent of the fund 's value each year, to be spent at the discretion of the Legislature. Currently the Legislature has authority to appropriate all of the fund 's realized earnings. Tentative, unapproved proposals indicate that half of this five percent withdrawal would go to the dividend and half to government spending -- but POMV died in the Legislature because most there saw POMV as unambiguously tied to such politically unpopular spending proposals. Most Alaskans ( 84 % in 1999 ) disapprove of allowing the government to tamper with the fund, especially if that means government might spend Fund income. See also Asset - based egalitarianism Basic income guarantee Citizen 's dividend Permanent University Fund -- funds universities in Texas from oil revenue The Government Pension Fund of Norway References Jump up ^ `` About the Alaska Permanent Fund Corporation ( APFC ) ''. Alaska Permanent Fund Corporation. Retrieved September 27, 2012. Jump up ^ `` What is the Alaska Permanent Fund ? ''. Alaska Permanent Fund Corporation. Retrieved September 27, 2012. Jump up ^ `` Alaska State Constitution, 9.15 ''. State of Alaska. Retrieved September 27, 2012. Jump up ^ `` About the Alaska Permanent Fund Corporation ( APFC ) ''. Alaska Permanent Fund Corporation. Retrieved September 27, 2012. Jump up ^ Helman, Christopher. `` Biting the Hand that Feeds You ''. Forbes ( November 29, 2016 ). access - date = requires url = ( help ) Jump up ^ `` Why did Alaskans create the Fund ? ''. Alaska Permanent Fund Corporations. Retrieved September 27, 2012. Jump up ^ `` Alaska Permanent Fund - Balance Sheet '' ( PDF ). Alaska Permanent Fund Corporation. Retrieved September 27, 2012. Jump up ^ aiCIO. Alaska ! Retrieved June 13, 2011 Jump up ^ `` Alaska Permanent Fund goes Outside for new CIO ''. Juneau Empire. Retrieved April 17, 2012. Jump up ^ International Forum of Sovereign Wealth Funds. `` IFSWF Our members ''. Archived from the original on September 27, 2016. Retrieved 24 September 2016. Jump up ^ `` Alaska Permanent Fund Corporation ''. Jump up ^ Alaska Permanent Fund Corporation Bylaws ( PDF ). Alaska Permanent Fund Corporation. February 25, 2011. Jump up ^ `` About the Alaska Permanent Fund Corporation ( APFC ) ''. Alaska Permanent Fund Corporation. Retrieved September 27, 2012. Jump up ^ `` Alaska Permanent Fund Corporation - Board of Trustees ''. www.apfc.org. Retrieved 7 January 2016. Jump up ^ http://pfd.alaska.gov/Eligibility/EligibilityRequirements Jump up ^ `` How the PFD amount is calculated ''. Alaska Permanent Fund Corporation. Retrieved September 27, 2012. Jump up ^ `` $2,072 : 2015 Alaska Permanent Fund dividend amount announced ''. Alaska Dispatch News. Retrieved September 21, 2015. Jump up ^ `` Senate Bill No. 4002 ''. State of Alaska. Retrieved September 27, 2012. Jump up ^ `` Palin signs energy relief package ''. Capital Weekly. August 26, 2008. Retrieved September 27, 2012. Jump up ^ `` Annual Dividend Payouts ''. Alaska Permanent Fund Corporation. Retrieved October 12, 2014. Jump up ^ http://www.apfc.org/_amiResolutions/Res00-13MA.pdf External links State of Alaska - Department of Revenue - Alaska Permanent Fund Corporation State of Alaska - Department of Revenue - Permanent Fund Dividend Division Sovereign Wealth Fund Institute - Alaska Permanent Fund Page Basic income topics Topics Basic income pilots Citizen 's dividend List of basic income models Real freedom Right to an adequate standard of living Technological unemployment Organizations Basic Income Earth Network Enhet Green Party of England and Wales Pirate Party Germany Pirate Party of Finland Pirate Party UK ReCivitas Vivant Historic people Clifford Hugh Douglas Ailsa McKay Dennis Milner Thomas Paine Juliet Rhys - Williams Milton Friedman Anthony Barber Contemporary people Étienne Chouard Harry Dahms André Gorz Sepp Kusstatscher Guy Standing Eduardo Suplicy Philippe Van Parijs Claus Offe Katja Kipping Götz Werner Valter Mutt Annika Lillemets Osmo Soininvaara Li Andersson Susanne Wiest Birger Schlaug Christian Engström Yoland Bresson Björn Wahlroos Regional projects Alaska Permanent Fund Asignación Universal por Hijo Bolsa Família Iranian subsidy reform plan Omitara Quatinga Velho By region Brazil Canada Germany India Japan Netherlands Nordic countries United Kingdom Global Works Agrarian Justice ( pamphlet ) The Basic Income ( documentary ) Retrieved from `` https://en.wikipedia.org/w/index.php?title=Alaska_Permanent_Fund&oldid=803890636 '' Categories : 1976 establishments in Alaska Basic income Economy of Alaska Energy economics Government agencies established in 1976 Legal history of Alaska Political history of Alaska Public pension funds in the United States State agencies of Alaska Hidden categories : Pages using citations with accessdate and no URL Use mdy dates from October 2014 All articles with specifically marked weasel - worded phrases Articles with specifically marked weasel - worded phrases from February 2010 All articles with unsourced statements Articles with unsourced statements from December 2016 Talk Contents About Wikipedia Deutsch Español فارسی Français Nederlands Português Русский Svenska Українська Edit links This page was last edited on 5 October 2017, at 09 : 34. Text is available under the Creative Commons Attribution - ShareAlike License ; additional terms may apply. By using this site, you agree to the Terms of Use and Privacy Policy. Wikipedia ® is a registered trademark of the Wikimedia Foundation, Inc., a non-profit organization. About Wikipedia

Question: where does the permanent fund dividend come from
Answer: the fund's realized earnings