Legacy Fund Approaches $3 Billion

By The Bakken magazine staff | August 15, 2014

In 2010, North Dakota created the Legacy Fund to utilize, as well as save a portion of, state revenue created from oil and gas production. Under state law, 30 percent of state revenue created by oil and gas extraction and gross production taxes are deposited into the Legacy Fund each month. In July, the state received a record high deposit of roughly $112 million. According to Kelly Schmidt, state treasurer, the July deposit puts the Legacy Fund total at $2.207 billion.

The Fund is run by the State Investment Board. The board invests a certain percentage of the fund into a broad range of assets, including stocks, bonds, real estate and infrastructure.

Neither the principal nor the income of the Legacy Fund may be spent prior to July 1, 2017, according to the State Treasurers office. “The legislation establishing the fund requires that income earned after this date will be transferred to the state General Fund at the end of each two-year budget cycle,” she said. “To spend any principal of the fund will require a two-thirds majority vote of both the House and Senate.”

According to Schmidt, at its current pace, the Legacy Fund will receive $3 billion by the end of the 2013-15 biennium.