Bill approved for website with Legacy Fund investments

JAMESTOWN, N.D. — A bill has been approved that would require the State Investment Board to maintain a publicly accessible website containing information regarding all Legacy Fund investments.

The Senate approved House Bill 1319 without any amendments on Wednesday, April 2.

The bill — sponsored by Reps. Mitch Ostlie and Bernie Satrom and Sen. Cole Conley, all R-Jamestown — will require the website to list all companies, funds and other financial mechanisms in which the Legacy Fund is invested in accordance with state and federal laws.

“This is a step forward, but I suspect that we’re going to be back at it again next session just to make sure that we’re on the right course,” Satrom said. “This is too important. Our future, our economic future and the future of our state is, I think, riding on how this is handled.”

The fiscal impact of building the new website and hiring an additional full-time employee would be $476,000 for the 2025-27 biennium. For the 2027-29 biennium, the fiscal impact would be over $55,000.

In 2010, North Dakota voters approved a measure that created the Legacy Fund, which is a perpetual source of state revenue from the finite national resources of oil and natural gas, according to the Office of State Treasurer’s website. Thirty percent of the taxes on petroleum produced and extracted in North Dakota are transferred to the Legacy Fund monthly, according to the North Dakota Retirement and Investment Office’s website.

The Legacy Fund has over $12 billion as of Jan. 31. It has earned over $600 million for the 2023-25 biennium.

The State Investment Board has statutory responsibility for the administration of the investment programs of several funds including the Legacy Fund, according to the Retirement and Investment Office’s website.

Satrom previously said the Legacy Fund is or has been invested in over 60 foreign countries, including Argentina, China, Columbia, Kazakhstan, Kenya, Mexico, Togo and Turkey. He said the Legacy Fund was also invested in Russian government bonds before it invaded Ukraine. He said those investments were divested after Ukraine was invaded.

Satrom said Thursday, April 3, that the bill doesn’t give the full disclosure of all Legacy Fund investments.

“One of the additional components that I had asked for in the meeting was to have it so that we disclose how much was being invested in North Dakota as a percentage,” he said. “Also, we wanted to get more disclosure as far as what was in these funds, of these intermingled funds that, you know, where they’re not telling us what’s in the investment. We got all these commingled funds, and we have no idea what’s in them.”

He said there is $3.1 billion invested from the Legacy Fund where the underlying investments are hidden from public view.

“This is not really going to help that problem,” he said, referring to the bill.

Satrom said the bill’s approval is the first step to more transparency of Legacy Fund investments.

“We’re not there yet,” he said. “We need to start rethinking how we invest as a state and start making North Dakota investments a priority. One of the investment officials recently said that this is for our great-grandchildren for 100 years from now … Basically, I don’t think we can wait for 100 years to diversify our economy. We need to diversify now so that in 10 or 20 or 30 years from now, if our energy is not wanted, that we’ve diversified our economy and it won’t matter.”

Jodi Smith, interim executive director of the Retirement and Investment Office, previously said what can be disclosed is where the Legacy Fund is invested, the country of origin and how much each fund manager has. She said disclosing the information about the $3.1 billion that Satrom says are underlying investments hidden from public view would lose some investors.

She also said the website would cut down on the open records requests regarding the Legacy Fund. She said the Retirement and Investment Office is only receiving open records requests for the Legacy Fund.

Masaki Ova joined The Jamestown Sun in August 2021 as a reporter. He grew up on a farm near Pingree, N.D. He majored in communications at the University of Jamestown, N.D.