Bill 1425 would order the State Investment Board to designate 10% of tax revenue going to the voter-approved Legacy Fund to create suitable loans for cities, counties and businesses in North Dakota. Another 10% would be allocated to investing in stocks and other interests in companies based in North Dakota.
Currently, only about 1.2% of the Legacy Fund’s incoming income is invested in North Dakota business loan programs. Most of the rest of the money goes to investments in companies based out of state.
Bismarck’s Republican Representative Mike Nathe, the bill’s main sponsor, said the plan would provide communities with much-needed capital for infrastructure projects, while promoting emerging businesses in the state.
“We have lost some great opportunities here due to the lack of access to capital,” Nathe said in a statement. “This bill would give the state the ability to direct capital to qualified projects in North Dakota, which in turn will have positive economic impacts that go beyond your basic return on investment. let’s talk about more jobs, higher wages and increased tax revenues. “
Insurance commissioner Jon Godfread, a member of the investment board, has proposed similar initiatives in the past and said Nathe’s proposal would help the state achieve “the multiplier factor of investing in oneself.” Some of the targeted investments could go to companies working in the state’s oil sector, while other capital could help burgeoning technology companies in the Red River Valley, Godfread said.
The Legacy Fund, which derives from 30% of state oil and gas tax revenues, currently holds nearly $ 7.9 billion, but Nathe’s bill is only based on future income from the savings account. For example, if Nathe’s plan were already in place, around $ 6.2 million of January’s deposit into the Legacy Fund would have gone into state-focused investments.
Senate Majority Leader Rich Wardner, a co-sponsor of the bill, has said he sees Nathe’s proposal in the context of other Legacy Fund-related laws in the works this legislative session. Republicans have already presented a An 800 million dollar bail bill which builds on revenues from the Legacy Fund, and proposals are materializing on how the revenues will be spent in the future. Budget writers can also use a portion of the revenue to balance state books later in the year.
“When you put it all together, the Legacy Fund has a huge impact on the state of North Dakota,” said Wardner, a Republican from Dickinson.
House Majority Leader Chet Pollert R-Carrington has said he supports Nathe’s efforts, but not enough to be a co-signer on the bill.
During the last budget cycle, part of the fund’s income was used to balance the state budget, replenish an education fund and increase a rainy day fund.
Investing more of the Legacy Fund in North Dakota is already a popular idea among residents. An October survey led by Jamestown Development Corp. found that 79% of probable voters in the state were in favor of investing more in the North Dakota savings account.
The 12-member investment board has yet to express an opinion on the bill, but Godfread said the group would likely discuss the proposal at its next meeting. A hearing on the bill has not yet been scheduled.