The North Dakota Legislature's Senate Industry and Business Committee convened on March 25, 2025, to discuss significant financial strategies and investment policies concerning the state's Legacy Fund. The meeting highlighted the importance of fostering business relationships both within the United States and with allied nations, as emphasized by Representative Satrim.

Jody Smith, the interim executive director for the Retirement and Investment Office, provided an overview of the Legacy Fund, which currently manages over $11 billion of the state's assets. Established in 2010, the fund receives 30% of all oil and gas revenues, with projections indicating it will generate $601 million in earnings for the state's general fund during the current biennium.

A key focus of the meeting was the in-state investment program, which mandates a portion of the Legacy Fund be invested in North Dakota businesses. Since its inception, over $450 million has been allocated to 40 local businesses and communities. Smith noted that the fund has also supported various loans through the Bank of North Dakota, aimed at attracting and retaining companies with strong investment ratings.

The committee discussed the implications of potential divestment from Chinese investments, which currently amount to approximately $22 million. Concerns were raised about the financial impact of such a move, as it could limit the state's ability to capitalize on returns from one of the world's largest economies. Smith clarified that while the fund is not currently invested in companies sanctioned by the federal government, the proposed legislation could restrict future investments in China, potentially leaving money on the table.

Senator Klein questioned whether the proposed amendments to the investment strategy were necessary, given that the advisory board already has the authority to make investment decisions. Smith responded that while the authority exists, the amendments could provide additional clarity and guidance for future investments.

The discussion also touched on the ethical considerations of investing in local enterprises, with some committee members expressing concerns about fairness and market saturation. Smith reassured the committee that investments would be carefully vetted through qualified investment firms to ensure they do not unfairly disadvantage competing businesses.

In conclusion, the meeting underscored the ongoing evolution of North Dakota's investment strategies, with a focus on balancing local economic growth with prudent investment practices. The committee's deliberations will likely influence future legislative actions regarding the management of the Legacy Fund and its role in supporting North Dakota's economy.