ND lawmaker proposes foundation to manage Legacy Fund
BISMARCK -- A bill debated in a North Dakota Senate committee would set the first biennial priority for a new foundation: developing a comprehensive plan for building a top-notch primary and secondary education system for the state.
BISMARCK - A bill debated in a North Dakota Senate committee would set the first biennial priority for a new foundation: developing a comprehensive plan for building a top-notch primary and secondary education system for the state.
Senate Government and Veterans Affairs Committee members heard all favorable testimony on Senate Bill 2344, which would create a private nine-member North Dakota Legacy Foundation.
Prime bill sponsor Sen. Mac Schneider, D-Grand Forks, said the new board, which would be appointed by the governor, would be tasked with addressing one major initiative each biennium using fund earnings.
The foundation and education system plan were recommendations made by a bipartisan group called the Legacy Fund Initiative that met for more than a year and released its report in the fall. The group studied potential uses for the Legacy Fund to invest and spend the fund, the principle of which could be as much as $230 billion by 2060.
“We can learn much from the recommendations of this group as we work to address what is arguably the biggest long-term public policy issue facing our state: how we turn a one-time collection of natural resource revenue into a permanent investment in future generations of North Dakotans,” Schneider said.
Sen. Dwight Cook, R-Mandan, wondered whether the legislation was necessary since any group could gather and form recommendations for use of the fund.
“I think having this public component is important,” Schneider said. “This Legacy Fund Foundation could serve as a clearinghouse for ideas.”
The Legacy Fund, approved by voters in 2010, had risen to $2.4 billion as of September. Thirty percent of all oil and gas production and extraction tax revenue go into the Legacy Fund, which can’t be accessed until June 30, 2017.
A two-thirds vote of both houses of the Legislature will be required to spend any of the fund’s principle, capped at 15 percent per biennium. Earnings after June 30, 2017, are to be deposited into the state general fund at the end of each biennium by the state treasurer.
“This should be invested in future generations. The group was unanimous that we do not want to go down the route that Alaska has,” Schneider said.
Alaska has what is known as the Alaska Permanent Fund created in 1976. State residents receive annual checks from its interest earnings.
North Dakota University System interim chancellor Larry Skogen testified in favor of SB2344, echoing much of Schneider’s testimony.
Skogen, who participated in the Legacy Fund Initiative, said the proposed foundation was a strong vehicle to drive the discussion on future spending.
“I think it’s a valuable venue,” Skogen said.