But people who were there when it all began say it is not the brainchild of just one man, but rather an idea nurtured to maturity by many.

"When you say, who is the real father? It's more like, who are the people that ultimately put a lot of time and effort over a lot of years and stuck with it?" said Terry Gardiner (D-Ketchikan), former House Speaker from 1979 to 1980 and co-sponsor of the first Permanent Fund bill. "Certainly Hugh was one of those people and Jay Hammond was too. I think there were fathers and mothers, sons and daughters. Those people deserve a lot of credit too."

Juneau Empire File Photo   Gov. Jay Hammond

Hillstrand's belief was that the Legislature would spend every dime it could get its hands on and the state would end up with far more employees than it could support when the oil money ran out, Tillion said.

"So it was he who wanted to lock it up. He planted the seed. And people like Hammond listened and said, 'He's right you know. If we don't do that, our children will have nothing.'" Tillion said.

In 1969 when the first large chunk of oil money - $900 million - landed in state bank accounts, politicians and businessmen gathered in various corners of Alaska to discuss the money's future. Hammond was elected as governor in 1974 and during the subsequent legislative sessions, Reps. Malone, Gardiner and Clark Gruening (D-Anchorage) met in the mornings before session, in the evenings and on Saturdays to discuss their ideas and strategies. Gruening served in the House from 1974 to 1978 and later on the Permanent Fund Corporation's Board of Trustees, from 1995 to 2003, and was twice elected chairman of the board.

"I remember it very clearly," Gardiner recalled. "It was a Saturday morning, we had these little Saturday morning meetings, and we were frustrated about what was going on and we had this idea."

Photo by Paul Helmar   Hammond signs the bill that created the Permanent Fund dividend in 1980. Looking on are Malone (left center) and staff to Gov. Hammond Fran Ulmer (far right).

Their idea turned into the first Permanent Fund bill, which gathered a host of bipartisan supporters before passing both houses and landing on Hammond's desk for his signature.

Hammond wanted to sign the bill into law, Gardiner recalled. But Attorney General Av Gross issued an opinion saying the bill was unconstitutional.

The organizers met with Hammond, who loved the idea, but said it was pretty hard for him to go against his own attorney general.

"So we made a political deal with Jay Hammond and we said, 'OK, next session when we come back there's going to be a new Legislature," Gardiner said. "You introduce the constitutional amendment, it'll be sponsored by the governor, and we will reserve the very first number, HJR 1 for you. It'll be kind of symbolic. And that's the piece of legislation that eventually passed both houses by a two-thirds vote and went to the voters."

With the establishment of the Alaska Permanent Fund in 1976, the state now had a huge bank account that needed managing.

Photo by Paul Helmar   Hugh Malone

"We all knew that oil was a finite resource, and they had graphs and charts as to when we would be in declining production," she said. "As the production declined we were looking at projections of the corpus of this fund increasing so that the income from it would be available to match the dropping revenues from the oil fields."

Tillion, who also served in the Legislature during these deliberations, said one of the goals was to convert a non-renewable resource to a renewable resource by investing at least 25 percent of the bonus and royalties.

"This was a dream that we were fairly successful at," he said.

"I think the genius of the permanent fund was the ability to set securely aside one-time oil wealth that would not necessarily come around again and that would benefit future generations," Gruening said.

In the end, they put the oil money into a fund in an array of investments, based on the prudent investor rule, with the income from those investments available to be used as the legislature saw fit, he said.

State leaders did not give unelected trustees the power to make political judgments or appropriations, or to give the money away in soft loans, he said. Instead they structured the governing body of the fund to focus strictly on how best to invest the oil revenue.

While legislators debated whether to spend or invest the money, a new idea came to the table. A cash distribution system would give each Alaskan money instead of services. The idea gathered public support and eventually became the Alaska Permanent Fund Dividend program.

"It was a strategy to try to keep the public from asking that all money be expended as it came in," Smith said. "We were looking for a way that the principal wouldn't be broken into. A lot of the concept of the dividend came out of how to protect the fund itself and allow it to grow. This was one of the schemes, that if people had a direct interest in the growth of that fund they would be less likely to ask the legislature to spend it, and that would build a constituency against special interests. And it worked. It's definitely worked," she said.

Malone and Hammond remained staunch protectors of the fund until their deaths in 2001 and 2005, respectfully. In their last years they still made trips to the Alaska Capitol whenever the subject of using or changing the Permanent Fund came before the legislature. Malone made it a point to visit new legislators' offices to brief them on the history and details of the fund. Hammond spoke against the controversial percent of market value, or POMV, plan, which was designed to protect the fund from highs and lows of the stock market, and former Senator Jerry Mackie's (R-Craig) plan to cash out every Alaskan with a one-time lump sum.

Who are the fathers of the Permanent Fund? Hillstrand, who first brought the idea to the table? Malone, Gardiner and Gruening, who developed the idea and passed the first Permanent Fund bill? Malone, who ushered the idea through its passage as a constitutional amendment? Or Hammond, who sponsored and signed the bill that, among other things, established the Permanent Fund Dividend program?

"None of this was done in a vacuum," Tillion said. "The fathers of the fund are those that sold it to the people on an initiative and there are many," he said. "We didn't have a majority, but we were able to get it on the ballot and the people made it very plain that they had a majority. So if you really want to say who formed the Permanent Fund, the people of Alaska formed the Permanent Fund the moment we gave them a chance to vote on it."

Smith remembered that the creation of the fund was a bipartisan effort and that there is no program like it in the United States. "The fact that these people put the state first, above partisan politics and above capital projects for their districts, they've given us a legacy that makes us really proud, and we know what government can do, and should do. It's the model," she said.