BISMARCK, N.D. (AP) — Gov. Doug Burgum is signing a bill Thursday that's aimed at creating a broader investment policy for the state’s voter-approved oil tax savings account.
The bill which has overwhelming legislative support sets targets for investing a greater portion of the Legacy Fund principal in North Dakota and requires that the State Investment Board give preference to qualified investment firms with a presence in the state.
The legislation sets targets for 10% of the Legacy Fund principal to be invested in equity investments in the state and 10% in fixed income investments within the state.
Backers of the bill say only about 1% of the Legacy Fund’s principal is invested in North Dakota at present.
Voters in 2010 endorsed a constitutional amendment that requires setting aside 30% of state tax revenues on oil and natural gas production in the Legacy Fund, which is valued at about $8 billion. It’s expected to earn about $500 million over the next two-year budget cycle.
Under the proposed legislation, earnings from investments would be used to establish a revolving loan fund. Loans from the fund would have an interest rate of less than 2%. They would be administered by the state-owned Bank of North Dakota for projects such as flood protection and water systems. Cities, counties and other political subdivisions would be eligible for loans.
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