Section 37.13.120. Investment responsibilities.

   (a) The board shall adopt regulations specifically designating the types of income-producing investments eligible for investment of fund assets. When adopting regulations authorized by this section or managing and investing fund assets, the prudent-investor rule shall be applied by the corporation. The prudent-investor rule as applied to investment activity of the fund means that the corporation shall exercise the judgment and care under the circumstances then prevailing that an institutional investor of ordinary prudence, discretion, and intelligence exercises in the designation and management of large investments entrusted to it, not in regard to speculation, but in regard to the permanent disposition of funds, considering preservation of the purchasing power of the fund over time while maximizing the expected total return from both income and the appreciation of capital.
   (b) The corporation may not borrow money or guarantee from principal of the fund the obligations of others, except as provided in this subsection. With respect to investments of the fund, the corporation may, either directly or through an entity in which the investment is made, borrow money if the borrowing is nonrecourse to the corporation and the fund.
   (c) The board shall maintain a reasonable diversification among investments unless, under the circumstances, it is clearly prudent not to do so. The board shall invest the assets of the fund in in-state investments to the extent that in-state investments are available and if the in-state investments
        (1) have a risk level and expected return comparable to alternate investment opportunities; and
        (2) are eligible for investment of fund assets under (a) of this section.
   (d) The corporation may enter into and enforce all contracts necessary, convenient, or desirable for managing the fund's assets and corporate operations, including contracts for future delivery to implement asset allocation strategies or to hedge an existing equivalent ownership position in an investment.
   (e) Before adoption of a regulation under (a) of this section, the regulation, in electronic format, shall be provided to the Legislative Budget and Audit Committee for review and comment. The board shall submit investment reports to the committee at least quarterly.

Authorities

37.13.145;37.13.206;37.13.300

Notes

Implemented As

15 AAC 137.410
15 AAC 137.420
15 AAC 137.430
15 AAC 137.440
15 AAC 137.450
15 AAC 137.460
15 AAC 137.470
15 AAC 137.480
15 AAC 137.490
15 AAC 137.500
15 AAC 137.510
15 AAC 137.520
15 AAC 137.530
15 AAC 137.990

References

15 AAC 137.410
15 AAC 137.530
AS 37.13.145 Disposition of income.
AS 37.13.206 Regulations.
AS 37.13.300 Corporation to manage certain assets of the mental health trust.

History

(Sec. 5 ch 18 SLA 1980; am Sec. 5 - 7 ch 81 SLA 1982; am Sec. 1 ch 83 SLA 1986; am Sec. 1 - 6 ch 4 SLA 1989; am Sec. 8 - 17 ch 134 SLA 1992; am Sec. 1 ch 56 SLA 1994; am Sec. 1 - 4 ch 104 SLA 1996; am Sec. 1 - 7 ch 60 SLA 1999; am Sec. 1, 2 ch 74 SLA 2004; am Sec. 1 ch 46 SLA 2005)