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North Dakota lawmakers pass bill to reshape panel in charge of in-state Legacy Fund investments

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BISMARCK — North Dakota legislators and Gov. Doug Burgum approved legislation last week that will reconfigure a board tasked with forming a procedure for investing part of the state’s oil tax savings account in local companies.

The previously seven-member Legacy and Budget Stabilization Fund Advisory Board, which included four lawmakers, will now have 10 members: six lawmakers, the tax commissioner, insurance commissioner, state treasurer and the president of the Bank of North Dakota.

The board chaired by Rep. Keith Kempenich, R-Bowman, and the state Retirement and Investment Office recently drew criticism for perceived delays in the rollout of an in-state investment program using the voter-approved Legacy Fund.

Bismarck Republican Rep. Mike Nathe sponsored popular legislation earlier this year to invest up to 10% of the $8.3 billion Legacy Fund in North Dakota firms. About 3% of the fund is earmarked for emerging local companies, and managers of that program have already made their first investment.

But Nathe and other supporters of in-state investment, including bankers and economic development agencies, expressed frustration that the remaining 7% of the fund meant for North Dakota companies hasn’t been put to use more than six months after the legislation passed.

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Janilyn Murtha, the director of the Retirement and Investment Office, urged patience and said her understaffed agency has taken positive steps in laying the program’s foundation. State Securities Commissioner Karen Tyler said starting such a massive investment project is a significant undertaking, and she doesn’t believe the process has been slower than it should be.

Nathe proposed a bill last month to create a new panel made up of three statewide officials to circumvent Kempenich’s board, but lawmakers who felt the Legislature should still be in control of creating guidelines for in-state investment amended the proposal to expand the existing board.

Rep. Mike Nathe, R-Bismarck, at the North Dakota Capitol on March 19, 2021. Jeremy Turley / Forum News Service

Despite having his proposal altered, Nathe said it will be good to have more expertise on the board from Insurance Commissioner Jon Godfread and Treasurer Thomas Beadle, both members of the State Investment Board.

Party leaders will appoint the lawmakers on the board, but House Majority Leader Chet Pollert, R-Carrington, declined to comment on who will serve on the reconstituted panel.