North Dakota’s new state oil tax will place 30 percent of oil production revenues into a Legacy Fund.
Voters approved of this Legacy Fund idea in the last general election. The first deposit into the fund was made earlier this month and totaled $34.3 million. The fund is expected to grow to $300 million by the end of the year.
The initial $34.3 million went into an account in the Bank of North Dakota where it will earn less than 1 percent interest.
In addition to the poor interest earnings, the principal earnings cannot be spent until July 2017, and this is only if two-thirds approval is received from the North Dakota House of Representatives and the state Senate. Only 15 percent of the fund can spent during a two-year period.
An advisory board is deciding how the money should be invested. The board’s chairman Sen. Randy Christmann said he is reluctant to put much of the funds into the stock market.
"I think stocks would be pretty limited," Christmann said. "Preserving that principal is the priority."
The advisory board is keeping the Legacy Fund’s money in the bank until an investment policy is created.
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