# Title 21 — Governmental Finance

## Chapter 21-10 — State Investment Board

### § 21-10-01. State investment board - Membership - Term - Compensation - Advisory

council.
1. The North Dakota state investment board consists of:
a. The governor;
b. The state treasurer;
c. The commissioner of university and school lands;
d. The director of workforce safety and insurance;
e. The director of the office of management and budget;
f. Two members of the teachers' fund for retirement board or the board's designees
who need not be members of the fund as selected by that board;
g. Two members of the public employees retirement system board as selected by
that board;
h. Two members, each of whom by experience is familiar with institutional
investments, appointed by the governor. One initial appointee shall serve a term
of three years, one initial appointee shall serve a term of five years, and all
subsequent appointees shall serve five-year terms; and
i. Two members, one from the senate and one from the house of representatives,
or the member's designee, who serve on the legacy and budget stabilization fund
advisory board, as selected by that board to represent that board.
2. The director of workforce safety and insurance may appoint a designee, subject to
approval by the workforce safety and insurance board of directors, to attend the
meetings, participate, and vote when the director is unable to attend. The teachers'
fund for retirement board may appoint an alternate designee with full voting privileges
to attend meetings of the state investment board when a selected member is unable to
attend. The public employees retirement system board may appoint an alternate
designee with full voting privileges from the public employees retirement system board
to attend meetings of the state investment board when a selected member is unable to
attend.
3. The members of the state investment board, except elected and appointed officials
and the director of workforce safety and insurance or the director's designee, are
entitled to receive as compensation one hundred forty-eight dollars per day and
necessary mileage and travel expenses as provided in sections 44-08-04 and
4. The state investment board may establish an advisory council composed of individuals
who are experienced and knowledgeable in the field of investments. The state
investment board shall determine the responsibilities of the advisory council. Members
of the advisory council are entitled to receive the same compensation as provided the
members of the advisory board of the Bank of North Dakota and necessary mileage
and travel expenses as provided in sections 44-08-04 and 54-06-09.
### § 21-10-02. Board - Powers and duties.

1. The board is charged with the investment of the funds enumerated in section
### § 21-10-06. It shall approve general types of securities for investment by these funds

and set policies and procedures regulating securities transactions on behalf of the
various funds. Representatives of the funds enumerated in section 21-10-06 may
make recommendations to the board in regard to investments.
2. The board or its designated agents must be custodian of securities purchased on
behalf of funds under the management of the board.
3. The board may appoint an investment director or advisory service, or both, who must
be experienced in, and hold considerable knowledge of, the field of investments. The
investment director or advisory service shall serve at the pleasure of the board. The
investment director or advisory service may be an individual, corporation, limited
liability company, partnership, or any legal entity which meets the qualifications

established herein. The board may authorize the investment director to lend securities
held by the funds. These securities must be collateralized as directed by the board.
4. The board may create investment fund pools in which the funds identified in section
5. For purposes of investment of the legacy fund, the board shall give preference to
investment firms and financial institutions with a presence in the state.
### § 21-10-02.1. Board - Policies on investment goals and objectives and asset allocation.

1. The governing body of each fund enumerated in section 21-10-06 shall establish
policies on investment goals and objectives and asset allocation for each respective
fund. The policies must provide for:
a. The definition and assignment of duties and responsibilities to advisory services
and persons employed by the board.
b. Rate of return objectives, including liquidity requirements and acceptable levels of
risk.
c. Long-range asset allocation goals.
d. Guidelines for the selection and redemption of investments.
e. Investment diversification, investment quality, qualification of advisory services,
and amounts to be invested by advisory services.
f. The type of reports and procedures to be used in evaluating performance.
2. The asset allocation and any subsequent allocation changes for each fund must be
approved by the governing body of that fund and the state investment board. The
governing body of each fund shall use the staff and consultants of the retirement and
investment office in developing asset allocation and investment policies.
### § 21-10-03. Cooperation with Bank of North Dakota.

Repealed by S.L. 1987, ch. 190, § 14.
### § 21-10-04. Board - Meetings.

The state investment board shall select one of its members to serve as chair, one to serve
as vice chair, and shall meet at the call of the chair or upon written notice signed by two
members of the board.
### § 21-10-05. Investment director - Powers and duties.

Subject to the limitations contained in the law or the policymaking regulations or resolutions
adopted by the board, the investment director may sign and execute all contracts and
agreements to make purchases, sales, exchanges, investments, and reinvestments relating to
the funds under the management of the board. This section is a continuing appropriation of all
moneys required for the making of investments of funds under the management of the board.
The investment director shall see that moneys invested are at all times handled in the best
interests of the funds. Securities or investments may be sold or exchanged for other securities
or investments.
The investment director shall formulate and recommend to the investment board for
approval investment regulations or resolutions pertaining to the kind or nature of investments
and limitations, conditions, and restrictions upon the methods, practices, or procedures for
investment, reinvestment, purchase, sale, or exchange transactions that should govern the
investment of funds under this chapter.
### § 21-10-06. Funds under management of board - Accounts.

1. Subject to the provisions of section 21-10-02, the board shall invest the following
funds:
a. State bonding fund.
b. Teachers' fund for retirement.
c. State fire and tornado fund.
d. Workforce safety and insurance fund.

e. Public employees retirement system.
f. Insurance regulatory trust fund.
g. State risk management fund.
h. Budget stabilization fund.
i. Water projects stabilization fund.
j. Health care trust fund.
k. Cultural endowment fund.
l. Petroleum tank release compensation fund.
m. Legacy fund.
n. Opioid settlement fund.
o. A fund under contract with the board pursuant to subsection 3.
2. Separate accounting must be maintained for each of the funds listed in subsection 1.
The moneys of the individual funds may be commingled for investment purposes when
determined advantageous.
3. The state investment board may provide investment services to, and manage the
money of, any agency, institution, or political subdivision of the state, subject to
agreement with the industrial commission. The scope of services to be provided by the
state investment board to the agency, institution, or political subdivision must be
specified in a written contract. The state investment board may charge a fee for
providing investment services and any revenue collected must be deposited in the
state retirement and investment fund.
### § 21-10-06.1. Board - Investment reports.

The board shall annually prepare reports on the investment performance of each fund under
its control. The reports must be uniform and must include:
1. A list of the advisory services managing investments for the board.
2. A list of investments at market value, compared to previous reporting period, of each
fund managed by each advisory service.
3. Earnings, percentage earned, and change in market value of each fund's investments.
4. Comparison of the performance of each fund managed by each advisory service to
other funds under the board's control and to generally accepted market indicators.
### § 21-10-06.2. Investment costs.

The amounts necessary to pay for investment costs, such as investment counseling fees,
trustee fees, custodial fees, performance measurement fees, expenses associated with money
manager searches, expenses associated with onsite audits and reviews of investment
managers, and asset allocation expenses, incurred by the state investment board are hereby
appropriated and must be paid directly out of the funds listed in section 21-10-06 by the fund
incurring the expense.
### § 21-10-06.3. Legacy fund disclosure website.

1. The state investment board shall maintain a publicly accessible website containing
information regarding all legacy fund investments.
2. The website must list all companies, funds, and other financial mechanisms in which
the legacy fund is invested in accordance with state and federal laws.
3. Within the limits of legislative appropriations, the state retirement and investment office
may spend moneys necessary for the development and maintenance of the website.
### § 21-10-07. Legal investments.

The state investment board shall apply the prudent investor rule in investing for funds under
its supervision. The "prudent investor rule" means that in making investments the fiduciaries
shall exercise the judgment and care, under the circumstances then prevailing, that an
institutional investor of ordinary prudence, discretion, and intelligence exercises in the
management of large investments entrusted to it, not in regard to speculation but in regard to
the permanent disposition of funds, considering probable safety of capital as well as probable

income. The retirement funds belonging to the teachers' fund for retirement and the public
employees retirement system must be invested exclusively for the benefit of their members and
in accordance with the respective funds' investment goals and objectives.
### § 21-10-07.1. Prudent investor rule - Exception.

Notwithstanding section 21-10-07, for purposes of investment of the legacy fund, the state
investment board shall give preference to qualified investment firms and financial institutions
with a presence in the state.
### § 21-10-08. Reserves - Percentage limitations.

In order to meet claims and liabilities, reserves must be established and maintained in each
of the funds in accordance with the investment policy and asset allocation established for each
fund.
### § 21-10-08.1. Social investment - Prohibition.

1. As used in this section, "social investment" means the consideration of socially
responsible criteria and environmental, social, and governance impact criteria in the
investment or commitment of public funds for the purpose of obtaining an effect other
than a maximized return at a prudent level of risk to the state.
2. Except as otherwise provided in a state investment policy relating to the investment of
the legacy fund and unless the state investment board, or any other state entity
investing public funds, can demonstrate a social investment would provide an
equivalent or superior rate of return compared to a similar investment that is not a
social investment and has a similar time horizon and risk, the state investment board,
or other state entity, may not invest state funds for the purpose of social investment.
### § 21-10-09. Personal profit prohibited - Penalty.

No member, officer, agent, or employee of the state investment board may profit in any
manner from transactions on behalf of the funds. Any person violating any of the provisions of
this section is guilty of a class A misdemeanor.
### § 21-10-10. State investment board fund - Cost of operation of board.

Repealed by S.L. 1989, ch. 667, § 13.
### § 21-10-11. Legacy and budget stabilization fund advisory board.

1. The legacy and budget stabilization fund advisory board is created to develop
recommendations for the investment of funds in the legacy fund and the budget
stabilization fund to present to the state investment board.
2. The goal of investment for the legacy fund is principal preservation and growth while
maximizing total return for an appropriate level of risk and to provide a direct benefit to
the state by investing a portion of the principal in the state. Preference must be given
to qualified investment firms and financial institutions with a presence in the state for
investment of the legacy fund.
3. The board shall determine the asset allocation for the investment of the principal of the
legacy fund including:
a. A target allocation of seven hundred million dollars to fixed income investments
within the state, including:
(1) Up to one hundred fifty million dollars for infrastructure loans to political
subdivisions under section 6-09-49.1. The net return to the legacy fund
under this paragraph must be fixed at a target rate of one and one-half
percent;
(2) A minimum of four hundred million dollars for the Bank of North Dakota's
certificate of deposit match program with an interest rate fixed at the
equivalent yield of United States treasury bonds having the same term, up
to a maximum term of twenty years; and

(3) Other qualified fixed income investments within the state based on
guidelines developed by the legacy and budget stabilization fund advisory
board.
b. A target allocation of six hundred million dollars to equity investments in the state,
including:
(1) Investments in one or more equity funds, venture capital funds, or
alternative investment funds with a primary strategy of investing in emerging
or expanding companies in the state. Equity investments under this
paragraph must:
(a) Be managed by qualified investment firms, financial institutions, or
equity funds which have a strategy to invest in qualified companies
operating or seeking to operate in the state and which have a direct
connection to the state; and
(b) Have a benchmark investment return equal to the five-year average
net return for the legacy fund, excluding in-state investments; and
(2) Other eligible investments under this subdivision based on guidelines
developed by the legacy and budget stabilization fund advisory board.
4. The board consists of three members of the senate appointed by the senate majority
leader, three members of the house of representatives appointed by the house
majority leader, the president of the Bank of North Dakota or designee, the tax
commissioner or designee, the director of the office of management and budget or
designee, and the state treasurer or designee. The board shall select a member from
the senate or house of representatives to serve as chairman for no more than one
consecutive year and must meet at the call of the chairman.
5. The board shall report at least semiannually to the budget section.
6. Legislative members are entitled to receive compensation and expense
reimbursement as provided under section 54-03-20 and reimbursement for mileage as
provided by law for state officers. The legislative council shall pay the compensation
and expense reimbursement for the legislative members.
7. The legislative council shall provide staff services to the legacy and budget
stabilization fund advisory board.
8. The staff and consultants of the state retirement and investment office shall advise the
board in developing asset allocation and investment policies.
9. The board may develop a process to select a member of the board who is not a
member of the state investment board to serve on the state investment board in a
nonvoting capacity.
### § 21-10-12. Legacy fund definitions.

Repealed by S.L. 2025, ch. 555, § 25.
### § 21-10-13. Legacy earnings fund - State treasurer - Transfers.

Repealed by S.L. 2025, ch. 555, § 25.
