BISMARCK, N.D.-Attorney General Wayne Stenehjem has issued an opinion clarifying when North Dakota can start tapping earnings from the state's $4 billion Legacy Fund.
Stenehjem's decision, issued Wednesday, Nov. 23, concluded that earnings from the fund after June 30, 2017, can be transferred at the end of the biennium to the state's general fund. But earnings before that date are considered part of the fund's principal, and can only be spent by a two-thirds majority vote of both chambers of the state Legislature, Stenehjem wrote.
Kelly Schmidt, North Dakota state treasurer, sought the attorney general's opinion to make sure her office correctly applied the Legacy Fund law, passed in 2009.
"This is what we anticipated," Schmidt said of the opinion. "We wanted to affirm what we believed to be the case."
The Legacy Fund is a special fund financed by a portion of the state's oil and gas revenues, which have accrued since 2011. Deposits so far exceed $3.7 billion. The most recent monthly deposit, made Tuesday, was $29.3 million.
In his opinion, Stenehjem said legislative intent to "lock up" Legacy Fund earnings until June 30, 2017, was clear from discussions and votes by a legislative committee. There was a lengthy discussion of limitations to help preserve the fund, he said.
"The testimony largely focused on the desire to provide inter-generational equity among North Dakotans by preserving the wealth gained from the state's exhaustible resource for use by future generations," Stenehjem wrote.
One financial consultant has estimated that $120 million per biennium will be available from Legacy Fund earnings after June 30, 2017, Schmidt said.
"It's just a 'guestimate,' " she said. "Nobody really knows until we get to that point."
Given the state's budget crunch, the result of slumping oil and farm commodity prices, lawmakers likely will be interested in getting a financial boost from the Legacy Fund, she said.
"Our legislators, I'm sure, will be looking at that very closely," Schmidt said.