What's an Alaska Permanent Fund Dividend, and How Can I Get It?
The idea of the government paying its residents to live in a particular state sounds like a crazy dream to most Americans who pay extensive state taxes. Yet in Alaska, it's a reality, thanks to the Alaska Permanent Fund and its payment of annual dividends to those residents who qualify. Here's how you can claim your piece of Alaska's Permanent Fund Dividend pie.
The state of Alaska established the Alaska Permanent Fund in 1976 in response to an amendment to the state's constitution. The general idea was to create a financial investment fund that would compensate Alaska for the drilling and removal of oil and other natural resources for its borders, ensuring that the state wouldn't be under financial stress once its resources were depleted. Under the constitutional provision, at least 25% of mineral lease rentals, royalties, and associated payments are to be put in a permanent fund, with the principal invested in income-producing assets.
The Alaska Permanent Fund operates in a manner similar to that of an endowment fund in that spending is restricted to the income that the fund's assets generate, leaving the principal untouched for permanent investment. Most of the spending from the fund has gone to pay Permanent Fund dividends, which began in 1980.
Source: Fool.com
