History

Drillers sinking a water well near Edgeley strike natural gas, the state's first hint of what lies underground.

Amerada Petroleum completes the Clarence Iverson No. 1 in a wheat field in Williams County, opening the Williston Basin to nearly continuous exploration.

High oil prices push North Dakota production to a record 52 million barrels for the year.

Prices crash to $10 a barrel. Seven of every ten wells shut down, companies close their offices, and North Dakota's budget takes years to recover.

New drilling technology and the Parshall field discovery unlock the shale play that remakes western North Dakota's economy.

Bakken production accelerates and state revenue surges again. This time, leaders recognize the pattern and move to lock part of the windfall away before it's absorbed into ongoing budgets.

The Legislative Assembly passes House Concurrent Resolution No. 3054, placing the creation of a permanent fund on the 2010 general election ballot.

About 63% of voters approve the measure, creating the Legacy Fund as Article X, Section 26 of the state constitution: spending locked until mid-2017, then capped at 15% of principal per budget cycle with a two-thirds vote in both chambers.

Oil tax revenue begins flowing into the Legacy Fund. The Legislature creates the Legacy and Budget Stabilization Fund Advisory Board to recommend how the money should be invested, and the State Investment Board is directed to invest it with a simple mandate – preserve principal, maximize returns.

Falling oil prices cut oil and gas tax revenue in half and general fund revenue by nearly 30% in a single two-year budget cycle. Because the Legacy Fund could not be touched, it kept growing while the rest of the budget contracted. 

On June 30, 2017 the Legacy Fund's no-spending period ends, and its earnings become available to the state for the first time.

More than $455M moves from the Legacy Fund to the state's general fund, $155M above the Legislature's estimate! Learn more about How the Legacy Fund is Used.

After four public meetings and a study of peer funds in Alaska, Texas, Wyoming, and Alabama, the committee's central finding isn't how to spend the money. It's that the transfer process itself needs fixing, because transfers based on realized earnings swing widely and could fall short if investment returns turn negative late in a budget cycle.

House Bill 1380 replaces the old realized-earnings method with a percent-of-market-value formula set at 7% of the Legacy Fund's five-year average value, and creates a new Legacy Earnings Fund to receive it.

House Bill 1379 directs how the $486M in the Legacy Earnings Fund will be used. The Legislature also passes House Concurrent Resolution 3033, putting Measure 3 on the ballot asking voters to cut the share of principal lawmakers may spend from 15% to 5%.

North Dakotans approve Measure 3, which cuts the spendable share of principal from 15% to 5%, converts pre-2017 earnings into protected principal, and directs the State Investment Board to invest the whole fund, not just the principal.

The Legislature raises the earnings definition to 8% of the five-year average valuation.

The $687M Legacy Earnings Fund distribution includes a $1,600 property tax credit, eliminating the bill for more than 50,000 North Dakota homeowners.

The Legislature redirects the state’s share of the coal conversion facilities privilege tax to the Legacy Fund, adding a new source of revenue to its constitutionally protected principal.

Energy taxes account for about $9.8B of the Fund's value; the remaining roughly $5B is investment returns, the compounding effect the Legacy Fund's framers hoped for.

A new public website allows anyone to sort the Legacy Fund investments by country and asset class. Sharing more information and offering more transparency than any comparable sovereign wealth fund.