For the first time in the state’s history, Permanent Fund earnings will be used to help fund government spending.

On Tuesday, lawmakers approved a plan that will draw $2.7 billion from the earnings account for the upcoming fiscal year that starts July 1. The plan is an amended version of Senate Bill 26, which establishes a limit on how much can be drawn from the fund’s earnings.

The bill uses 5.25 percent of the fund’s average value over the past five years. This rate remains in place for three years. Afterward, the draw rate falls to 5 percent.

The bill does not affect this year’s $1,600 dividend payout approved by the House and Senate last month, nor does it change how future dividend payouts get calculated.

The plan was drafted to help Alaska fill a $2.3 billion budget gap.

A special committee met Tuesday morning and forwarded the plan to the House and Senate for a final vote. Senate Finance co-chair Anna MacKinnon (R-Eagle River) chaired the special committee and said the new plan is a good first step.

“There is still an operating budget that has yet to be determined,” she said. “That operating budget, even with the passage of Senate Bill 26, will still see the need from a constitutional budget draw from our savings accounts. So this moves us closer to solving Alaska’s problem, but it does not solve the problem in its entirety.”

For the last two years, Permanent Fund Corp. CEO Angela Rodell implored lawmakers to make sure that any draw from the earnings had structure.

“We have to put a big asset investment strategy together to make sure that the money stays at work and is for the benefit of both current and future generations,” Rodell said. “Having a planned, structured draw helps us know what our liability is going to be, what our time horizon is for portions of those assets so we can put an investment strategy together.”

The Senate approved the plan, 13-6; the House approved 23-17. It now awaits Gov. Bill Walker’s signature.

Afterward, Walker issued a statement, saying:

“This landmark legislation is a major step toward ensuring that the fund — and the dividend program — will remain permanent. By stabilizing revenues, we secure Permanent Fund dividends for our children and grandchildren, and ensure services provided by the Alaska State Troopers, road maintenance crews, and teachers will continue for generations.”

Copyright 2018 KTVA.