(a) A public official may transfer all or a portion of the official's assets to a blind trust for the duration of service in public office. The original assets placed in the blind trust shall be listed by the official in a statement filed under this section, together with a description of the actual or potential conflicts of interest, or appearance of conflict, that the official seeks to avoid by the use of the trust. A copy of the instrument creating the blind trust must be included with the statement.
(b) For a blind trust to qualify under this section, the following conditions must be met:
(1) the trust may not contain investments or assets in which the ownership right or interest is required to be recorded in a public office other than with the Alaska Public Offices Commission, or contain assets with permanency that makes transfer by the trustee improbable or impractical, including real estate, security interests in personal property, mortgages, and interests in closely held businesses;
(2) the trustee shall be a bank, trust company, or other institutional fiduciary;
(3) the trustee shall have full authority to manage the trust, including the purchase, sale, and exchange of its assets in accordance with fiduciary principles and, without exception under any circumstances, notwithstanding this section, the prudent investment rule set out in AS 13.36.230 - 13.36.290;
(4) the trust instrument shall contain a clear statement that its purpose is to remove from the settlor control and knowledge of investment of trust assets so that conflicts between the settlor's responsibilities and duties as a public official and the settlor's personal or financial interests will be eliminated;
(5) during the term of the trust, a settlor or other beneficiary of the trust may not communicate with the trustee except in writing and only regarding (A) a request for a distribution in cash or another unspecified asset of the trust, (B) the general financial requirements regarding distributions from the trust as a whole, (C) direction to the trustee that, because a law, executive order, or regulation prohibits the settlor from holding an asset, the asset may not be held by the trust, (D) direction to the trustee to sell all of an asset initially placed in the trust because the settlor has determined the sale is necessary to avoid a conflict of interest, the appearance of impropriety, or an ethical violation; quarterly the trustee may provide to the settlor a written report of the aggregate market value of the trust's assets and property but may not disclose to the settlor or other beneficiary of the trust, or any other interested party, any information about the identity and nature of any of the assets in the trust, and the trustee shall be required to report any known breach of this confidentiality;
(6) the trust shall terminate only upon order of the commission, the death or incompetence of the settlor, the termination of the settlor's status as a public official, or revocation approved in advance by the commission; the trustee shall be required to promptly report any termination of the trust to the commission;
(7) the trustee shall prepare the income tax return of the trust and may participate in the audit of the trust's returns with authority to compromise a tax liability of the trust, but may not disclose the return or information related to the return, except, promptly after the close of each taxable year of the trust, the trustee shall provide the settlor with an annual report summarizing information concerning the trust, including net income or loss, expenses, capital gains, and capital losses of the trust, as necessary to enable the settlor to prepare and file tax returns required by law; however, the summary may not directly or indirectly identify a security or other property that is an asset or former asset of the trust;
(8) the trustee shall be directed to avoid knowingly making any investment in a corporation, business, or venture over which the settlor is likely to take action by virtue of the settlor's official position;
(9) for the duration of the trust, a settlor or other beneficiary may not pledge, mortgage, or otherwise encumber a person's interests in an asset that is part of the trust, the settlor may not retain control over the trustee, and the settlor is not permitted to make any recommendations or suggestions as to the trust property;
(10) the trust instrument agreement must provide that the trustee will give the attorney general or personnel board access to any records or information related to the trust that is necessary when investigating or hearing an accusation alleging a violation of AS 39.52;
(11) the trustee shall report to the commission the beginning and ending value of the trust, and, if the commission requests, the trustee shall prepare under seal a detailed description of transactions and holdings of the trust; the document prepared by the trustee under seal is not public information unless an accusation under AS 39.52 relevant to the blind trust is filed by the attorney general or the personnel board; and
(12) the trust may not become effective until the trust instrument is submitted and approved by the commission.
(c) A quarterly report of aggregate market value under this section may include, in addition to the aggregate market value of the trust's assets and property, the percentage of that aggregate market value attributable to the settlor and each beneficiary, by name. Within 30 days after receipt from the trustee of the quarterly report of aggregate market value, the settlor may, notwithstanding the limitations on a communication's subject under (b) of this section, provide a written instruction to the trustee that, with respect to the trust as a whole and not a particular asset or property of the trust, the settlor prefers that the trustee adopt an investment approach that is conservative, moderate, or aggressive.
(d) A person initiating a written communication under this section shall cause a copy of the communication to be filed with the commission within five days after the date of the communication.
(e) The trustee shall maintain and make available for inspection by the commission at the commission's request the trust's tax returns, books of account, and other records and, on or before May 15 of each year, shall file with the commission a notarized document certifying compliance with this section for the preceding calendar year.
(f) Except as permitted by this section, the trustee shall make no accounting to the settlor until the date the trust terminates, and, following the termination, the trustee shall promptly make a full accounting to the settlor and turn over to the settlor all assets remaining in the trust at termination.
(g) The trustee may not at any time be held liable for an act or omission of the trustee or for any loss or depreciation of the value of an asset or property of the trust unless the trustee fails to exercise good faith, due diligence, and the ordinary skill, care, and judgment a prudent fiduciary would exercise.