Legacy and Budget Stabilization Fund Advisory Board
The Legacy and Budget Stabilization Fund Advisory Board (LBSFAB) was created by the Legislature in 2011 to develop investment recommendations for both the Legacy Fund and the Budget Stabilization Fund.
State law sets the goal for investing the Legacy Fund: preserve and grow the principal while maximizing total return at an appropriate level of risk and invest a portion of the principal in ways that directly benefit North Dakota. Statute also requires that preference be given to qualified investment firms and financial institutions with a presence in the state.
The LBSFAB also has a role in the legislative process. When a bill or ballot measure would affect the Legacy Fund's asset allocation or investment policy, the Advisory Board must request a cost-benefit analysis, prepared by an independent consultant, estimating the impact over the next 20 years. A bill cannot go to committee without the analysis, so lawmakers can see the projected impact on the Legacy Fund before they vote.
The LBSFAB’s membership includes six state legislators, appointed by the House and Senate majority leaders, along with the State Treasurer, Tax Commissioner, President of the Bank of North Dakota, and Director of the Office of Management and Budget, or their designees. A legislative member serves as chair. The LBSFAB reports to the Legislative Management Budget Section at least twice a year.
The LBSFAB recommends investment goals and determines the Legacy Fund’s asset allocation, advised by Retirement and Investment Office staff and consultants. It does not manage or invest the Fund’s assets.
View the Legacy and Budget Stabilization Fund Advisory Board webpage
State Investment Board
Investment authority rests with the State Investment Board (SIB), which invests the Legacy Fund as a fiduciary under the prudent investor rule.
The SIB receives the LBSFAB's recommendations, approves the fund’s investment policy together with the LBSFAB, and oversees the investment of its assets.
The SIB has thirteen members. Five serve ex officio (by virtue of their office): the Governor, State Treasurer, Land Commissioner, and the Director of the Office of Management and Budget, and the
Director of Workforce Safety & Insurance. Six represent SIB client funds: two state legislators selected by the LBSFAB, two members of the Public Employees Retirement System Board, and two members of the Teachers’ Fund for Retirement Board. The remaining two are institutional investment professionals appointed by the Governor.
The SIB approves policy and oversees the fund’s investments. It does not decide what is spent.
Retirement and Investment Office
The Retirement and Investment Office manages the day-to-day operation of the SIB's investment program, implementing the investment policies recommended by the Legacy and Budget Stabilization Fund Advisory Board and approved by the SIB. It does not set the policy it carries out or decide what is spent.
Legislative Assembly
The North Dakota Legislative Assembly holds the spending decision.
Article X, Section 26 of the North Dakota Constitution establishes the rules governing the Legacy Fund's principal and earnings. The fund's principal may be spent only with approval by at least two-thirds of the elected members of each legislative chamber, and expenditures may not exceed 5% of the principal during a biennium. Neither the Legacy Fund Advisory Board, the State Investment Board (SIB), nor the Retirement and Investment Office (RIO) has the authority to appropriate funds.
In 2024, North Dakota voters approved Constitutional Measure 3, reducing the amount of principal available for spending each biennium from 15% to 5%. The amendment also changed how earnings are distributed. Rather than transferring earnings directly to the state's General Fund, the State Treasurer now distributes them to a separate Legacy Earnings Fund, from which the Legislature may appropriate funds under applicable law.
The Legislative Assembly appropriates funds and establishes the legal framework governing the Legacy Fund. It does not make individual investment decisions.