BISMARCK, N.D. (NewsDakota.com) – North Dakota Insurance Commissioner Jon Godfread called upon the State Investment Board (SIB) to begin investing a portion of the Legacy Fund in state economic development projects.

Godfread, who serves as one of three statewide elected officials on the SIB, proposed a new “strategic vision plan that will bring needed capital to new and existing North Dakota businesses.”

Godfread’s plan establishes a North Dakota Investment Advisory Committee (IAC) that will review and recommend viable investment opportunities within the state. Currently the $7 billion dollar Legacy Fund is invested almost entirely outside the state and outside the country. “This new advisory committee will welcome investments in North Dakota that can provide a market rate of return, assist in the diversification of our state’s economy and get a multiplier effect with monies circulating in our communities,” Godfread said.

“The time has come to adapt our investment strategy to better serve North Dakota.” Godfread said. “A North Dakota-based investment group will better understand our economy and how to grow it. I think it’s well past time to further invest in North Dakota and in our people and our projects.”

In 2010, the voters created the Legacy Fund by setting aside a portion of oil and gas taxes into this new fund. The constitutional language does not specify a purpose for the uses of the fund. The principal of the fund is invested by the State Investment Board and the state legislature can spend the earnings and principal of the fund. The Legacy Fund is not a state pension fund. It has no teacher or government employee retirement obligations against it.

Godfread said the new IAC will serve as a subcommittee of the SIB and will include the three statewide elected officials serving on the SIB, and the President of the Bank of North Dakota. This subcommittee will utilize existing structures with the state of North Dakota and rely on the expertise from both the private and public sectors to review proposals.

“We will be leveraging the expertise of our Department of Commerce, the Bank of North Dakota and a number of private sector experts to vet and review potential North Dakota-based investments. This structure will address the gaps that exist in the capital markets in North Dakota, while ensuring the Legacy Fund receives a market rate of return.”

Godfread noted that the SIB currently uses some 32 out-of-state money managers to invest the principal of the Legacy Fund. “We have to remember that the Legacy Fund is really the people’s fund,” Godfread said. “The voters established it in our Constitution ten years ago, with the intent to create positive legacies in their own communities. It’s time we maximized our efforts to do that.”

Godfread formally presented his plan at the State Investment Board meeting on September 25.