BISMARCK – Thanks in large part to record oil production, a record high deposit of $112 million will be made into North Dakota’s Legacy Fund this month, pushing the rainy day fund’s balance past $2.2 billion, State Treasurer Kelly Schmidt said Thursday.
North Dakota voters approved the Legacy Fund in 2010. It receives 30 percent of the revenue generated by state taxes on oil and natural gas production and extraction.
Until this month, monthly deposits have ranged from $32 million to $93 million, according to the treasurer’s office.
The Legacy Fund was recently projected to hit about $2.68 billion by January 2015, though officials predict it will likely beat that projection.
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State lawmakers can’t begin to spend the fund’s principal or investment income before July 1, 2017. Spending the principal will require a two-thirds vote of both the House and Senate.
This month’s deposit of $112 million includes $23 million initially intended for the state’s Strategic Investment and Improvements Fund. By law, if the SIIF’s unobligated balance tops $300 million at the end of any month, 25 percent of the revenues received for deposit must go to the Legacy Fund.
That trigger was reached in January 2013, or about 19 months into the 2011-13 biennium, resulting in $148.7 million in additional deposits to the Legacy Fund. The trigger was reached again in June, just 12 months into the 2013-15 biennium, according to Andrea Collin, communications director for the treasurer’s office.
Schmidt said the reason for hitting the threshold faster is twofold: First, the SIIF was new in 2011-13, so it already had obligated dollars in it when the current biennium began, resulting in the trigger being reached faster. And North Dakota’s record pace of oil production, which topped 1 million barrels a month in April, has tax dollars streaming into state coffers in greater amounts every month.
For example, Schmidt noted that in the largest previous Legacy Fund deposits of nearly $93 million in both May and July 2013, about $65 million came from oil tax revenue, compared with over $83 million in this month’s deposit.
“It’s hitting the accounts now,” she said of the record production.
