Senate approves Legacy Fund money for university research

BISMARCK — The North Dakota Senate has passed legislation that would fund research at the state’s two largest universities in an effort to diversify North Dakota’s economy.

Senate Bill 2282 would transfer 15 percent of Legacy Fund earnings to an economic diversification research fund that would support work by the University of North Dakota and North Dakota State University. Funding for the program would be capped at $45 million under the bill.

Senators voted 43-4 in favor of the bill.

The bill now moves onto the House for consideration.

Sen. Ron Sorvaag, R-Fargo, the bill’s primary sponsor, spoke in favor of the bill on the Senate floor Wednesday.

Sorvaag said the bill is not about giving more money to universities but about helping to diversify the state’s economy through research.

Legacy Fund earnings are not available until after the biennium ends, however, a $45 million loan structure through the Bank of North Dakota is also built into the bill, including interest.

The bill also includes the creation of an advisory committee for the fund that would include the president of the Bank of North Dakota, the state commerce commissioner, the chair of the State Board of Higher Education and the University of North Dakota and North Dakota State University presidents, as well as four others.

The University of North Dakota President Mark Kennedy said he was excited that the bill passed the Senate, adding he is appreciative of the bill’s co-sponsors, including Sorvaag, Sen. Ray Holmberg, R-Grand Forks, Sen. Rich Wardner, R-Dickinson, and others who helped advance the bill.

“I think the wide distribution of the sponsors across the state was reflected in the wide distribution in the senators voting for the bill, reflecting a growing understanding that this a North Dakota priority,” Kennedy said, adding the vote also shows an understanding that economic diversification is not a west-versus-east issue.

Kennedy said the vote margin “gives it a lot of momentum” going into the House and he has high hopes that the bill will pass there.

Kennedy added he also appreciates the work of Steve Burian and Tammy Miller from the Valley Prosperity Partnership and North Dakota State University President Dean Bresciani for their work on the topic over the past several months.

House bill

House Bill 1333 contains similar language as Senate Bill 2282, but does not limit grants to just the state’s research universities. The funding is also lower, around $3 million.

The House bill, introduced by Rep. Mike Nathe, R-Bismarck, would create a Legacy Investment Fund for Technology that would support technology advancement in the state. Under this bill, a committee would be created that would also include the president of the Bank of North Dakota, with no specific higher education officials.

The fund would be administered by the Bank of North Dakota.

While the legislation passed the House 73-20 on Monday, Rep. Aaron McWilliams, R-Hillsboro, said he was not in favor of the bill, noting that public institutions often come in and take over these types of private-public funds.

McWilliams said if legislators want to create a fund for entrepreneurship or innovation in the private sector then it should be restricted as such.

Rep. George Keiser, R-Bismarck, said the House bill is designed to take intellectual property that has been developed to the point where a patent has been obtained, a business plan has been written and the business is ready to be launched. HB 1333 would give the funds to commercialize that business.

However, Keiser noted in some cases public entities may have part ownership of these patents, so the program is designed to work with both types of entities.

Next steps

Holmberg said legislators are looking to pass one research fund bill, rather than the two separate ones.

The House will now likely have a hearing on the Senate’s version of the fund, while the Senate will take up the House version, Holmberg said.

If both bills pass, the two chambers would likely go to a conference committee to hash out the differences together and find a compromise bill that could be passed in both houses.

The final version of the legislation would likely include a combination of the two bills, with the ultimate dollar amount falling somewhere in between $3 million and $45 million, Holmberg said.