The Appropriations Committee adopted multiple amendments affecting the state’s retirement funding plan and the Legacy Fund’s in-state investment flexibility.

Senator Davidson moved an amendment that adjusts how the Strategic Investment Fund and an existing $65 million oil-stream appropriation will be used to provide a $90 million cash step-down to the Public Employees Retirement System. Derek Holbein, chief operating and financial officer of PERS, told the committee the $90 million in combined deposits would meet the minimum needed for the next biennium to avoid charging employers the additional actuarially determined employer contribution (ADEC) percentage that would otherwise increase agency payroll costs.

Holbein explained the difference between the larger one-time amounts discussed in prior work and the amendment’s more limited lump-sum approach: ‘‘What you're essentially saying is that instead of charging every state agency 6.02% as a contribution increase as a percent of pay, you're going to do this lump sum deposit instead of charging that additional 6.02%.’’ He added that the $90 million keeps the plan on the previously set funding path and that a larger deposit would only reduce future payments further.

Committee members noted that the $65 million oil-stream contribution is contingent on cash flows and may not be recognized by actuaries until it is actually deposited. The amendment states legislative intent that the $25 million from the Strategic Investment Fund together with the $65 million oil bucket be applied in lieu of charging the ADEC during the upcoming biennium; Holbein said the actuary is reviewing whether the contingent $65 million can be counted in the same way.

On the Legacy Fund and infrastructure side, the committee approved an amendment that increases the authorized in-state-investment access for infrastructure-related loans. Kelvin Hollett of the Bank of North Dakota explained that the Infrastructure Revolving Loan Fund makes low-interest loans to political subdivisions for projects such as streets, sewer and other public infrastructure; when the IRLF reaches its current limit, loans can be packaged into the Legacy Fund’s fixed-income sleeve. The amendment increases the maximum that may be accessed in that sleeve by $50,000,000 to provide additional liquidity for local loans if demand exceeds the IRLF balance.

Committee members voted to adopt the package of amendments and then recommended a due pass for House Bill 12 34 as amended; the amendment votes and the final due-pass were recorded in roll calls.

Ending

Senators asked staff and agency officials to monitor how contingent deposits are handled by the actuary and to report on the outcomes in advance of future rate calculations; sponsors said they expect to reconvene on implementation details if the funding streams do not behave as projected.