The Senate unanimously adopted Bill 1425 on Monday, March 29, a month after the House approved the bill. A Burgum spokesperson declined to comment on the bill or whether the Republican governor would sign it.
The proposal sets a target for the State Investment Board to designate up to 10% of tax revenue going to the voter-approved Legacy Fund to create loans suitable for cities, counties and businesses in North Dakota. Another allocation of up to 10% would be intended to invest in stocks and other stocks of companies based in North Dakota.
The Legacy Fund, which derives from 30% of state oil and gas tax revenues, currently holds nearly $ 8.2 billion. Currently, only about 1% of the Legacy fund is invested in a North Dakota business loan program. Most of the rest of the money goes to investments in companies based out of state.
The idea of investing more in the locally fledgling fund gained momentum last year, with Insurance Commissioner Jon Godfread, a member of the investment board, lending his support to the cause.
The bill’s sponsor, Representative Mike Nathe, R-Bismarck, said the plan would provide much-needed capital to communities for infrastructure projects, while promoting emerging businesses in the state. Godfread said the legislation would help North Dakota achieve “the self-investing multiplier.”
Nathe notes that her bill only sets targets for investing up to one-fifth of the fund in the state and that the investment board may never reach that level.
Senate Majority Leader Rich Wardner R-Dickinson said the Legislature was taking “a small step” in investing the Legacy Fund in the state by passing the bill on Monday.
The board has already taken steps to direct more investment in the state, said Dave Hunter, director and chief investment officer of the State Retirement & Investment Office. Hunter said the board’s goal was to invest 5% of the Legacy Fund’s incoming income in a program through the Bank of North Dakota that provides low-interest loans to businesses in the State.
The board is also working on hiring one or two investment managers to oversee a new investment program in the state, Hunter said. This program would target 3% of the fund towards North Dakota-centric investments, but details are still being worked out. Hunter said the shift to more investment in the state will take a long time.
The bill adopted on Monday is one of the three main proposals concerning the Heritage Fund. The Senate will soon consider a massive collage package and the legislation which distributes the profits of the Legacy fund in the years to come.