As governor during the biggest economic boom in Alaska's history, the construction of the Trans-Alaska Pipeline System, Hammond oversaw the creation of the Alaska Permanent Fund. The concept of the Permanent Fund, originally championed in 1969 by then-governor Keith Miller and "Anchorage Times" publisher and editor Robert Atwood on the eve of the Prudhoe Bay oil lease sale, lay dormant for years as a result of the legislature spending the proceeds of the lease sale and construction delays associated with the pipeline. During his first term as governor, Hammond, along with a young state representative from Kenai named Hugh Malone, conceived a program to invest oil royalties to cover future state budget shortfalls as well as create a long-term savings account. Alaska voters approved a constitutional amendment establishing the Permanent Fund in 1976, one of the rare exceptions to the constitutional intent of not dedicating funds for a specific purpose.