North Dakota Senate defeats Legacy Fund reinvestment proposal
BISMARCK — The North Dakota Senate rejected a House-backed resolution seeking to make it harder for lawmakers to tap earnings from the state's oil tax piggy bank Thursday, April 25.
House lawmakers had insisted on pushing some form of the proposed constitutional amendment, but it found little support across the hall in the session's final days. As introduced by Grand Forks Democratic Rep. Corey Mock, it would have required earnings from the Legacy Fund to be transferred back to its principal rather than the state's general fund, where it's up for grabs in the Legislature.
The resolution, which would have required voter approval in 2020, would have also required a two-thirds vote of the Legislature to spend the earnings.
Mock has argued the Legislature should be required to take "positive action" to spend Legacy Fund earnings rather than letting the money spill into the state's checkbook.
But the Senate rejected the proposal in a 42-5 vote Thursday.
Senate leaders indicated that lawmakers would instead pursue a study on how to use the Legacy Fund during the interim period between legislative sessions. Voters created the fund in 2010 by stashing away 30% of oil and gas tax revenue, and it has ballooned in the years since.
As of the end of February, the Legacy Fund had generated $415 million in earnings for this biennium, a state investment official previously said. Earnings are transferred to the general fund at the end of the budget cycle, which is June 30, so the final figure could change.
"What we do with these earnings is a very important issue," said Mandan Republican Sen. Dwight Cook, who chairs the Senate Finance and Taxation Committee. "I think we have to be very deliberative how we make that decision."
Senate Majority Leader Rich Wardner, R-Dickinson, said lawmakers should avoid keeping the money "locked up" but called the interim study an important step toward determining the Legacy Fund's purpose. Some lawmakers have already expressed concern that the fund could be vulnerable to ballot measures seeking to tap it for imprudent purposes.
"There are people out there already very frustrated that we have a large amount of money and we're not doing anything with it," Wardner said. "We've got to do something that is very relevant to the people."