It's a big deal, a fantastic accomplishment for Rep. Mike Nathe, R-Bismarck, and the other lawmakers who backed it, and a credit to Burgum as well. Insurance Commissioner Jon Godfread, a member of the State Investment Board, also deserves our congratulations for pushing this idea forward.
It's a bit of competent governance that stands in stark contrast to the very dumb anti-masking bill that got far more attention when it was approved by the Senate yesterday.
While the Fox News-addled "conservatives" who see the movement as nothing more than a culture war, where the primary objective is the Trumpian edict to "own the libs," were titillated at the opportunity to stick it to the rational and evidence-based case for masking, HB 1425 is the far more consequential legislation.
It's passage a sign that there are still some grownups in charge down in Bismarck.
The bill takes 20% of the Legacy Fund's principal balance -- about $1.4 billion as things stand now -- and directs it toward investments in North Dakota. Some of those investments will be into bonding infrastructure projects. These are projects -- things like sewage treatment plants, roads, flood control, and water supply -- that we need anyway and are currently financed through bonding. This bill would use Legacy Fund principal -- which is already routinely invested in bonding -- to finance bonds for in-state projects, allowing them to be financed and constructed faster and more cheaply.
I know that's all a bit down-in-the-weeds, but as a practical matter, what it means is that North Dakota's communities will be able to build the infrastructure needed to grow and diversify our state's economy using a unique tool not available to communities in other states.
That's called a "competitive advantage," and it's one we can give ourselves without really spending any money. The Legacy Fund dollars invested into these bonds will all be paid back, with interest, meaning the Legacy Fund will continue to grow, even as we save money by using it to finance projects.
HB 1425 will also allow investment of Legacy Fund dollars into "equity funds, venture capital funds, or alternative investment funds with a primary strategy of investing in emerging or expanding companies in the state," as the bill reads.
Excited to see this legislation signed into law and to start working with the State Investment Board to invest more of the Legacy Fund in North Dakota. Thanks to all of the bill sponsors and supporters! https://t.co/BGChl1Vwj6— Lt. Gov. Brent Sanford (@BrentSanfordND) April 8, 2021
One of our state's most chronic problems, a quandary that has persisted since statehood, is a paucity of capital available to be invested in our state. Our politicians have talked until their blue in the face about diversifying our economy beyond commodity-based industries like energy and agriculture (wonderful as they are), and we've tried a lot of things to achieve that goal, most of them being variations on economic incentive policy. Tax breaks and subsidies for companies willing to build and operate in North Dakota.
HB 1425 takes a different approach. It takes a pool of cash from the Legacy Fund's principal and makes it available for investment in our state's businesses. Real investments, mind you, with an expectation of returns, not the dopey sort of hand out "investments" the economic development crowd is always yammering about.
It's a "big f***ing deal," as Joe Biden might say.
This bill was passed over the obstinance of some entrenched bureaucrats and politicos who work on and around the State Investment Board. There was a mostly quiet, behind-the-scenes campaign to knee-cap this bill led by people who are satisfied with the Legacy Fund's status quo, which has just 1.2% of the fund invested in North Dakota, far less than is invested in companies with troubling ownership pedigrees.
The Legacy Fund's managers were happy to chase big returns, even if they came from investments in the Chinese communist state or Vladimir Putin's authoritarian regime.
Thankfully they lost the debate, and people who wanted to want to put North Dakota first won.
Again, this bill won't get as much attention as some of the culture war bills our lawmakers are considering, and that's a shame because it's almost certainly the most consequential piece of legislation that will come out of Bismarck this year.
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Rob Port, founder of SayAnythingBlog.com, is a Forum Communications commentator. Reach him on Twitter at @robport or via email at firstname.lastname@example.org.