North Dakota Legacy Fund

The North Dakota Legacy fund is a sovereign wealth fund. Contributions to the fund are calculated from a thirty percent tax on oil extraction and production.[1] The fund was established by ballot initiative in 2010. The fund is modeled after the Norwegian Sovereign Wealth Fund.[2] As of November 2020, the fund has a principal balance of $6.252 billion.[3] The fund is projected to have assets worth approximately $90 billion by 2039, $150 billion by 2050, and $250 billion by 2060. The fund intends to diversify wealth obtained from oil extraction into other sectors.[2] Money in the fund could not be spent by the state legislature until 2017.

Background

North Dakota is a commodity-based economy. North Dakota experienced an uptick in oil extraction from 2008-2014.[4] The legacy fund was established to ensure that the financial windfall gained from the Bakken Oil Boom would benefit the state in the long-run, even if oil prices collapse.[5]

References
  1. North Dakota State Constitution, Art. X, sec. 26.
  2. https://www.betterenergy.org/wp-content/uploads/2018/03/North_Dakota_Legacy_Fund_Recommendations.pdf
  3. "Legacy Fund". Retirement Investment Office.
  4. https://www.theatlantic.com/business/archive/2015/06/north-dakota-oil-boom-bust/396620/#:~:text=Though%20many%20native%20North%20Dakotans,that%20the%20boom%20would%20last.&text=Just%20over%20a%20year%20ago,seemed%2C%20things%20would%20be%20different.
  5. https://www.betterenergy.org/wp-content/uploads/2018/03/North_Dakota_Legacy_Fund_Recommendations.pdf p. 14


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